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JULY 2017
RENEW YOUR MEMBERSHIP AT IIAW.COM NEW YORK CYBER RULES COULD IMPACT YOUR AGENCY PAGE 5
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INDEPENDENT AGENT JULY 2017 Eric Schwartz, Editor
Open Door Policy New York Cybersecurity Rules Could Impact Your Agency. . . . . . . . . . . . . . . . . . . . . 5 Government Affairs Will Wisconsin Finally Take Action to Repeal the Personal Property Tax?. . . . . . . . 7 Industry Leader IIAW Joins Health Care Discussion with Vice President. . . . . . . . . . . . . . . . . . . . . . . . 11 Commentary From Counsel Cyber-Crime: You Need a Plan to Avoid and Manage the Risk . . . . . . . . . . . . . . . . . 13 Technology The Rise of AI and EI in Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Virtual University Deleting a Car and Canceling a Homeowners Policy. . . . . . . . . . . . . . . . . . . . . . . . . . 16
On The Cover…
The IIAW’s agency and supporting company members are the best in the country and we thank you for
Data Breach Would Your Agency Need Help in the Event of a Ransomware Attack? . . . . . . . . . 19
your membership. We never take
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your membership for granted and
Agency Management TrustedChoice.com Improves Its Agency Referral System . . . . . . . . . . . . . . . . . . . . 23 Errors & Omissions Lost In Translation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Marketing The Key to ROI & Retention from Your Agency’s Marketing. . . . . . . . . . . . . . . . . . . 26
it’s why we strive to provide high quality services every day. Unlock your benefits today! Renew your membership online at IIAW.com.
Members in the News. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 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 2016-2017 Executive Committee President....................................................... Matt Weimer Diversified Insurance Solutions - 100 North Corporate Dr., #100, Brookfield, WI 53045 President-Elect................................. Lise Meyer Kobussen Meyer Insurance - P.O. Box 633, Sauk City, WI 53583 Secretary-Treasurer............................................ Jason Bott Robertson-Ryan & Associates - 330 East Kilbourn Ave., Milwaukee, WI 53202 Chairman of the Board.................................. Steve Leitch Leitch Insurance - P.O. Box 85, River Falls, WI 54022 State National Director ................................Linda Steiner 2016-2017 Board of Directors Mike Ansay, Ansay & Associates 101 East Grand Ave. #11, Port Washington, WI 53704 Cindy Burns, Burns Insurance 500 South Central Ave., Marshfield, WI 54449 Gerald Couri, Couri Insurance 379 West Main Street, Waukesha, WI 53186 Jack Demski, Ansay & Associates 101 East Grand Ave. #11, Port Washington, WI 53074 Ryan McClone, McClone Agency 150 Main St. Suite 102, Menasha, WI 54952 Marc Petersen, American Advantage-Petersen Group 15171 W. National Ave., New Berlin, WI 53151 Jack Riesch, R&R Insurance Services P.O. Box 1610, Waukesha, WI 53187-1610 Pam Utpadel, Universal Insurance Advisors 100 West Lawrence St. Suite 313, Appleton, WI 54911 Darrel Zaleski, Spectrum Insurance Group 4233 Southtowne Drive, Eau Claire, WI 54701 WISCONSIN INDEPENDENT AGENT
2016-2017 Committee Chairs Agency Services ............................................Kim Dandrea M3 Insurance - N19 W24200 Riverwood Dr., Waukesha, WI 53188 Automation/Technology ...............Cathleen Christensen Hierl Insurance - P.O. Box 949, Fond du Lac, WI 549360949 Emerging Leaders ...........................................Jack Demski Ansay & Associates - 101 East Grand Ave. #11, Port Washington, WI 53074 Employee Benefits.......................................... Mike Farrell David Insurance - 1300 South Green Bay Rd., Racine, WI 53406 Government Affairs .......................................Skip Hansen Diversified Insurance Solutions - 100 North Corporate Drive #100 Brookfield, WI 53045 Carrier Relations ......................................... Kevin Murray Johnson Insurance Services - 525 Junction Road, Madison, WI 53717 Marketing & Membership Development .......... Jeff Thiel R&R Insurance Services - P.O. Box 1610, Waukesha, WI 53187-1610 Technical...............................................Timothy Kakuska Robertson-Ryan & Associates - P.O. Box 547, La Crosse, WI 54602-0547
> A DVERTISERS & INFORMATION AAA Wisconsin................................................. 30 Acuity Insurance.............................................. 31 Amerisafe........................................................ 15 Badger Mutual................................................. 29 Berkshire Hathaway/Guard.............................. 12 Burns & Wilcox.................................................. 4 ePayPolicy ......................................................18 Erickson-Larsen, Inc......................................... 17 IIAW Prelicensing Classes................................ 24 IIAW Online CE................................................. 22 Integrity Insurance........................................... 8 InVEST................................................Back Cover J.M. Wilson...................................................... 25 Pekin Insurance............................................... 27 Robertson Ryan & Associates........................... 17 SECURA Insurance............................................10 Society Insurance............................................. 9 The IMT Group.................................................. 21 West Bend......................................................... 2 Western National............................................... 6 JULY 2017 | 3
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OPEN DOOR POLICY
NEW YORK CYBERSECURITY REGULATIONS
COULD IMPACT YOUR AGENCY
Earlier this year, the New York Department of Financial Services finalized its cybersecurity regulations titled, Cybersecurity Requirements for Financial Services Companies (23 NYCRR 500). It applies to all New York licensed insurance agencies and agents, both resident and non-resident. Failure to comply will result in fines. If you are an agent or agency that resides outside of the state of New York but holds a non-resident license, some or all of the regulations will apply to your agency. A limited exemption may apply to certain agencies if you meet the prescribed guidelines as outlined below. The graphic below and on page 15 illustrates the
The cybersecurity regulation effective March 1, 2017, provides for a limited exemption from some of the requirements for agencies meeting certain criteria. The Department of Financial Services (DFS) recently made available an online process for filing for the limited exemption through a secure portal. On the home page for the DFS (dfs.ny.gov), look for the link or go to dfs.ny.gov/ es dlin Regulation Dea Cybersecurity t follow ALL ENTITES mus about/cybersecurity.htm. ion 500.19(a) regulation that Exemption Sect the ted of s Limi part the ions indicate qualifying for Highlighted sect Covered Entities s NOT apply to You will need to create an account requirement doe ** Indicates that and a temporary password will be sent to you. Using the temporary password to gain access you will then be asked to establish your own password. Click on “Submit Cybersecurity Notice of Exemption� and complete the information to complete the filing process. You will receive an email confirmation from the DFS and we Continue to New York Cybersecurity suggest you keep that as proof that Regulation Deadlines on page 15 to see full-sized version of this graphic. you filed. The limited exemption needs to only be filed once. In the event you various cybersecurity regulation no longer qualify for the limited exemption as deadlines. Highlighted sections indicate parts of your most recent fiscal year you would then of the regulation that all entities must follow. have 180 days to comply with all applicable The parts labeled with ** indicate that the requirements of the regulation. The limited requirement does not apply to covered entities exemption filing should not be confused with qualifying for the Limited Exemption Section the annual certificate of compliance filing that 500.19(a). is required on February 15, 2018, and every Important: If your agency does not do business February 15 thereafter. This filing will also be in the state of New York these regulations do not available through the DFS secure portal but is apply to you or your agency. not available yet. Please note, a limited exemption does not get you Agencies With a Limited Exemption completely off the hook, but it drastically reduces An agency qualifies for a limited exemption to the number of required actions. the law if it has:
March 1, 2017 of Effective date regulation
February 15, 2018
August 28, 2017 180 days
Section 500.02 rsecurity Maintain cybe program
Section 500.17(b) Submit annual certification of compliance to t Superintenden
Section 500.03 tain Implement & main policy cybersecurity
2018 September 3, 18 months
March 1, 2018 One year
** Section 500.04(b) ide annual CISO must prov d or report to boar of agency governing body 1) Section 500.05(a)( Conduct annual g penetration testin
Section 500.06** trails Establish audit
**
2) ** Section 500.05(a)( Conduct bi-annual vulnerability ts assessmen Section 500.09 dic risk Conduct perio assessment
** Section 500.04(a) Designate Chief rity Information Secu Officer (CISO) Section 500.07 s Limit user acces of privileges as part ram cybersecurity prog Section 500.10** Utilize qualified personnel cybersecurity
Section 500.11 en policies and Implement writt of ensure security procedures to mation that is nonpublic infor held by, third accessible to, or iders party service prov
Section 500.15** data both in Encryption of nal networks transit over exter and at rest
** Section 500.14(b) Provide regular awareness cybersecurity personnel training for all
Section 500.16** en Establish a writt nse plan incident respo
Section 500.17(a) ndent of Notify Superinte events as cybersecurity required 9(d) 500.1 on Secti ption File Notice of Exem ndent with Superinte
a
Fewer than 10 employees (including independent contractors)
a
Less than $10 million in year-end total assets
All Agencies (Including Those With Limited Exemption) All agencies must engage in the following:
a a
a
Less than $5 million in gross revenue
WISCONSIN INDEPENDENT AGENT
Limit and periodically review access privileges
a
Provide notice to Superintendent of a cybersecurity event, if one occurs
Agencies Without Exemption Agencies without exemption must also:
a
Develop an incident response plan
a
Employ cybersecurity personnel
March 1, 2019 Two years
Section 500.08** dures, Establish proce standards for guidelines and in-house development of cations developed appli Section 500.13 ies and Establish polic data retention procedures for & disposal ** Section 500.14(a) users d orize Monitor auth
Section 500.12** Multi-factor if needed authentication
a
Get started with a risk assessment
Establish a security program and implement cyber security policies
Our IIA affiliate association in New York, IIABNY, has worked very hard to provide valuable resources such as guidance and cybersecurity policy templates. To view related information and documents, visit iiabny.org/resources/mac/mac/ cybersecurity/default.aspx. In addition, they have vetted and endorsed cybersecurity professional firms to aide independent agencies on this topic. The IIABNY has graciously allowed us to provide these resources and guidelines to our members. If this new law applies to your agency, please contact me today and I can assist you in determining the correct course of action to ensure your agency is in compliance with New York law.
Annual Convention Recently, the IIAW held its 118th Annual Convention. During the course of the event, there were a few remarks that some found to be offensive or misleading. The views and opinions expressed during IIAW sponsored events are those of the speakers/authors and do not necessarily reflect the official position or thoughts of the Independent Insurance Agents of Wisconsin > Matt Banaszynski is and its members. We strive the Executive Vice President of the to provide educational Independent Insurance forums that encourage Agents of Wisconsin. respectful and constructive Contact him at matt@ iiaw.com. conversations.
JULY 2017 | 5
GOVERNMENT AFFAIRS
WILL WISCONSIN FINALLY TAKE ACTION TO
REPEAL THE PERSONAL PROPERTY TAX? An effort to repeal Wisconsin’s personal property tax (PPT) is gaining momentum in the state legislature as lawmakers continue to debate passage of a two-year state spending plan. More Republican state lawmakers, who currently control both houses of the legislature, are publicly lining up behind an aggressive push to once and for all, finally do away with this onerous, outdated tax burden aimed at Main Street. Recent reports coming out of the State Capitol indicate that repeal of the PPT is on the table for inclusion in the state budget by the legislature’s 16-member Joint Finance Committee. To make this happen, the committee would need to amend the budget bill, possibly as part of a larger tax reform package still being discussed by committee members. Such a move would come at substantial price tag to the tune of approximately $261 million annually, if the tax is fully repealed. This is the total amount the nonpartisan Legislative Fiscal Bureau (LFB) estimates that is collected each year by local municipalities on businesses that pay these taxes.
If a full repeal prevails this session, it would likely include a hold harmless provision to require the state’s general fund to cover any lost revenues to local units of government as a result of eliminating the tax. Without the state backfilling lost revenues, local governments have said this will force them to raise property taxes, something that lawmakers do not support politically. While the substantial price tag for such a move has me suspect about its ultimate passage in light of other legislators’ budget priorities and limited resources, there is no question that WISCONSIN INDEPENDENT AGENT
the issue of repealing the PPT has never been more front and center than it is today with the current state budget talks. I am pleased to report that your Association has been closely involved in the effort on your behalf and I am hopeful that this issue is finally receiving the attention it deserves. State Senator Duey Stroebel of Saukville, State Representatives Bob Kulp of Stratford and Dan Knodl of Germantown, all should be credited with introducing legislation again this session that would fully repeal the personal property tax starting in January 2018. Their legislation had public hearings earlier this month in both Senate and Assembly committees. These legislators are largely responsible for the high level of attention the issue is receiving by certain legislative leaders, media, and key members of the Joint Finance Committee. The IIAW joined 48 other state organizations and individuals at the hearings who participated in supporting the legislation. Many of them testified with unique and sometimes outrageous stories about how the tax penalizes growth and creates a disincentive for business owners to invest more into growing their business. One particular business owner from northern Wisconsin testified how he had found some old furniture items that had been thrown out. He repurposed that furniture for use in his place of business, only to find out from the local assessor that those items were now subject to the personal property tax. His story and many others outraged committee members. Brookfield State Representative Dale
Kooyenga, who is vice-chair of the Finance panel tweeted, “Locked myself in the office this evening to develop a plan to eliminate the state’s personal property tax!” If only all members of the legislature were as committed to the cause as Rep. Kooyenga. He is also the point person for the Assembly Republican transportation and tax plan that was announced in May. Representative Kooyenga appreciates the importance and urgency to the business community for ending the tax now while the opportunity presents itself. It also is no secret that the Senate Republican caucus, led by veteran Senate Majority Leader Scott Fitzgerald, has a strong desire to include repeal as part of their budget negotiations with the Assembly and Governor. Governor Walker has indicated that he is generally supportive of repeal, but that he’s not willing to do so at the expense of increasing property taxes on homeowners. The Assembly leadership also has said publicly that they would like to do something on the PPT, but they have made solving the transportation budget deficit as its number one priority. July 1 is the statutory deadline for lawmakers to pass a balanced budget, but with negotiations still stalled on key areas such as public education, transportation and taxes, the deadline is unlikely to be met. However, unlike the federal government, Wisconsin state government will continue to operate without any interruptions. In fact, I was reminded visiting with a capitol office recently, that each day a budget isn’t passed is another day of savings to Wisconsin taxpayers. As budget > Misha Lee is Owner/ deliberations continue, Founder of Lee Government Relations, let’s hope Wisconsin LLC and lobbyist for lawmakers finally take the IIAW. Follow Lee action to repeal the Government Relations on Twitter@mishavlee. personal property tax.
JULY 2017 | 7
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INDUSTRY LEADER
IIAW JOINS HEALTH CARE DISCUSSION WITH VICE PRESIDENT Matt Banaszynski, IIAW’s Executive Vice President, and Chris Hanson, president of Hanson Benefits, Inc. and a member of the IIAW Employee Benefits Committee, were part of a select group of Wisconsin business leaders that met with Vice President Mike Pence in Milwaukee on June 10. Pence held a listening session for about 150 supporters at Direct Supply, Inc. regarding the Affordable Care Act (ACA) and the GOP’s plan to have an Obamacare replacement approved by the end of this summer. The main premise of his remarks was that Obamacare is failing and needs to be overhauled. Pence said the new health care bill would give consumers more choices with expanded health savings accounts and tax credits to help consumers buy insurance at an affordable price. The vice president also talked how Wisconsin had a relatively healthy and stable insurance market before Obamacare was enacted. He vowed to return control of health care back to the states because local governments understand the complexities of the individual marketplace better than the bureaucrats in Washington. Prior to the vice president’s nearly 30-minute talk, he met with a group of about ten business executives who shared their thoughts about their first-hand experiences in dealing with President Obama’s health care law. Vice President Pence also met briefly with a local couple struggling to pay for their health insurance due to skyrocketing coverage costs. During the private meeting, the group discussed how Obamacare has destabilized the marketplace, caused prices to increase, and how these consequences have impacted small businesses and individuals. Also touched on was the importance of implementing meaningful and comprehensive reforms, such as repealing the “Cadillac Tax” and the Medical Loss Ratio requirements, and the need to have a system that involves and promotes agents and brokers. “The ACA is health insurance reform and not health care WISCONSIN INDEPENDENT AGENT
(From top to bottom): The IIAW had two representatives at the meeting with Vice President Pence – Matt Banaszynski, Executive VP (2nd from left) and Chris Hanson, president of Hanson Benefits (4th from right). Thumbs up from one VP to another - Vice President Pence with IIAW Executive VP Matt Banaszynski. Vice President Mike Pence met with business leaders and Wisconsin politicians in Milwaukee on June 10 to talk about the Affordable Care Act. Chris Hanson and the Vice President Pence. Chris represented the IIAW Employee Benefits Committee at the meeting. Governor Scott Walker and Vice President Mike Pence meet with business leaders in Milwaukee.
reform,” said Matt Banaszynski, who was invited to the event by Governor Walker. “True health care reform would focus on controlling rising medical costs.” Matt also mentioned the IIAW’s opposition to capping the tax exclusion for employer sponsored health benefits. There was also a brief discussion about how Wisconsin can be a national leader in establishing a Health Insurance Risk Sharing Plan (HIRSP). Representatives from Direct Supply, Therm-Tech, Vector Technologies, medical professionals, and others joined the IIAW. Also part of the panel were Governor Scott Walker (who introduced Pence), Wisconsin Republican Congressmen Jim Sensenbrenner and Glenn Grothman, and State Sen. Alberta Darling (R-River Hills).
JULY 2017 | 11
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>>COMMENTARY FROM COUNSEL
CYBER-CRIME: YOU NEED A PLAN TO AVOID AND MANAGE THE RISK Newspaper (or more likely, website news agency) headlines are filled with horror stories about hacking and other cyber-crimes. If you’re an avid follower of this column (and I know you are), you will recall an article from a while ago regarding one of the new frontiers of insurance coverage: cyber liability. The Independent Agent frequently includes contributions from authors on the subjects of data breach and ransomware attacks and, of course, the IIAW has partnered with Arlington/Roe to offer IIAW members a cyber policy focused on avoiding or managing data breaches, as well as the consequences of ransomware attacks. Beyond your own agency operations, you may well have heard from your own clients regarding threats or attacks to their businesses, as cyber-crime has become a major threat to virtually every type of business. One particularly troublesome type of cybercrime—the business email scam—has been the subject of recent insurance coverage litigation. Beyond the garden-variety “I am the crown prince of Somewheristan and need to transmit $40,000,000 to the USA” type email scam which certainly would not dupe any regular reader of this column, the more sophisticated (and increasingly more typical) business email scam involves a hack into a corporate email server. Once breached, the perpetrator has the ability to access the company’s emails and to send emails that look like they legitimately originated from an employee—typically a highlevel officer or manager. The hacker then sends emails to the company’s clients or other third parties requesting wire transfers of large sums of money. The unsuspecting recipient then may fulfill the request but, instead of helping out a client, the money disappears into an often-untraceable offshore account. In Taylor & Lieberman v. Federal Insurance Company, a case decided by the Ninth Circuit Court of Appeals on March 9, 2017, the appellate panel analyzed whether insurance coverage existed under a crime policy for an accounting firm that fell victim to a business email scam. The firm had received two emails purporting to be from a long-standing client requesting wire transfers of nearly $200,000 to overseas accounts. The accounting firm instructed the client’s bank to transfer the money as requested. When a third request WISCONSIN INDEPENDENT AGENT
arrived, the firm called the client to confirm the amount of the transfer and was shocked (likely mortified) to learn that the client had not requested the wire transfers. The accounting firm filed a claim with its insurer under its crime policy. The insurer denied the claim. The Ninth Circuit upheld the denial of the claim because, although the policy covered losses “resulting from Forgery or alteration of a Financial Instrument by a Third Party,” the wire transfer emails were not financial instruments and, therefore, coverage was not triggered. The fraudulent emails also did not trigger coverage under the policy’s computer fraud coverage because the emails did not constitute an “unauthorized entry into the recipient’s computer system.” The Court also found no funds transfer fraud coverage because the wire transfers were made voluntarily and the funds transfer fraud provision only provided coverage for fraudulent transfers made without the insured’s “knowledge or consent.” In a case currently pending in the Southern District of Texas, Quality Sausage Company v. Twin City Fire Insurance Co., the insured’s vice president and chief administrator received an email from a scammer posing as a client that requested the transfer of $1 million to an out-of-state bank account. She transferred the funds and two days later, after she received a similar email, she called the client and learned that the client had not requested either transfer. The company sought coverage from its insurance carrier under a policy that includes D&O coverage, an Entity Liability insuring agreement, and a Crime Coverage part that includes a Computer and Funds Transfer insuring agreement. The insurer denied coverage under the professional services exclusion and refused to accept liability under the Crime Coverage part, prompting the lawsuit. We will be monitoring this case as well. These recent cases present important lessons for insureds looking to secure insurance
coverage for business email compromises. A standard crime policy with computer fraud and funds transfer fraud coverage may not be enough to protect against a business email compromise scam. Crime insurance is typically designed to protect against theft and malicious damage and not the intentional (although inadvertent) transfer of funds in response to a scam. Many commercial policies also do not provide coverage for business email compromise scams because these crimes involve the insured wiring funds voluntarily. Some cyber policies cover business email scams but others do not and so it is critically important to scrutinize the terms of your agency’s and your insureds’ policies and to discuss the specific risks so that the right type and level of coverage is obtained. A 2015 survey conducted by the Betterley Report concluded that only 8 of 31 leading cyber insurance providers covered fraudulent wire transfers. A social engineering fraud endorsement may be an important supplement for those policyholders looking to protect against business email compromises and other increasingly common cyber-crimes. This coverage endorsement is gaining popularity as the number of business email compromises involving large losses continues to rise. Managing the balance of risk and opportunity present in the use of electronic files, email and the Internet requires a real plan—including a combination of prevention, best practices and insurance. Resources in this area are readily available through the IIAW and its various programs, so do not wait until your system is locked down by ransomware, or you’ve been hacked or suckered > Josh Johanningmeier is the IIAW’s General into transferring Counsel. Call the Legal information or funds that Services Hotline at (877) cannot be retrieved. 236-1669.
JULY 2017 | 13
TECHNOLOGY
THE RISE OF AI AND EI IN INSURANCE As part of its “Watson at Work” campaign, IBM in early April released a series of videos showing cognitive systems helping people do their jobs. One video shows Watson, IBM’s cognitive computing powerhouse, working with an insurance adjuster to compare claims to coverages and work through claims audit reports. The adjuster is also trying to shake off a coworker hanging out by her desk to urge her to attend the company picnic. “Too much work to do,” she reports. Watson objects. “Piece of cake. My APIs will fly through these tasks. No need to miss the picnic,” he says. “Watson, you’ve got to learn how to take a hint,” the exasperated adjuster tells the overzealous computer. “I love to learn,” Watson replies. But can Watson learn to take human cues? To be
On the other, they have to reshape human workforces, dealing with questions of culture and employee morale in the process. And they have to decide whether machines or people are more in tune with their customers. As today’s workers and leaders prepare to interact and play nice with their robotic coworkers, the idea that machines lack EI traits is one of the accepted beliefs helping us deal with the new reality of working side-by-side with them. A computer can’t possibly respond to a policyholder with a claim like insurance
On the one hand, industry executives need to keep pace with competitors who are adopting AI to pore through documents and images faster than humanly possible. On the other, they have to reshape human workforces, dealing with questions of culture and employee morale in the process.
intuitive? To energize and inspire? To feel empathy for insurance customers and human co-workers? It’s unlikely that the video creator intended to prompt these or any questions linking the concepts of artificial and emotional intelligence, but the dual themes of the latest edition of Carrier Management magazine brought them to mind. Inside, we present articles about the initial forays of P/C insurers into AI adoption and some basics of EI—a combination of personal traits like empathy and self-regulation that distinguish leaders who can understand how their decisions impact others. Industry executives now face at least two competing sets of challenges. On the one hand, they need to keep pace with competitors (including industry outsiders) who are adopting AI to pore through documents and images—and learn from them—faster than humanly possible and those who are using automated systems that kick customer service responses into high gear.
14 | JULY 2017
professionals trained in EI. A growing body of online articles on AI and EI (not addressing insurance specifically) suggest that humans need to work on greater EI development in order to stay employed as smart machines take on the tasks of data gathering, analyzing and interpreting results. “A smart machine might be able to diagnose an illness and even recommend treatment better than a doctor. It takes a person, however, to sit with a patient, understand their life situation (finances, family, quality of life, etc.), and help determine what treatment plan is optimal,” wrote Barry Libert and Megan Beck of Open Matters, a digital consultancy, in a recent article for Harvard Business Review. In a second article in Forbes, the same writers build on their advice to invest in EI skills and play to human strengths of being motivators, managers, listeners (and innovators). Likewise, University of Virginia Professor Edward D. Hess (author of “Humility Is the New Smart”) advised during an
interview with Knowledge@Wharton: “Define yourself as the quality of your thinking, listening, relating and collaborating” as smart machines outprocess our human brains. But while these thinkers assert that EI traits are uniquely human, others suggest that training machines to show empathy could be part of a new skillset for human workers. In their March 2017 article in the MIT Sloan Review, Accenture’s H. James Wilson, Paul R. Daugherty and Nicola Morini-Bianzino introduce the idea of “empathy trainers,” which teach AI systems to show compassion rather than delivering canned responses. Interestingly, a USC study in 2014 found that in a clinical setting, patients are more willing to disclose personal information to virtual humans than actual human health professionals. “The researchers were careful to emphasize that the virtual human could supplement—not replace—trained clinicians,” opening up the potential for reduced costs, screening patients in remote areas or creating “role-playing partners for training health professionals,” a media statement said at the time. Taking that last idea of machines training humans to interact with humans one step further, School of Life Founder Alain de Botton suggested the idea of artificial emotional intelligence—technology providing self-knowledge that is akin to an emotional Fitbit, coaching wearers when they sense angry outbursts or inappropriate emotional responses. (See WIRED U.K., “Six areas that artificial emotional intelligence will revolutionize,” Oct. 21, 2015 and related School of Life video, “Emotional Technology.”) Whether you believe in AI teaching EI to humans or humans teaching EI to machines, the ties between the two forms of intelligence are worthy of attention from leaders and professionals in all > Susanne Sclafane is industries, including the executive editor at insurance. Wells Media Group. WISCONSIN INDEPENDENT AGENT
Cybersecurity Regulation Deadlines regulation that ALL ENTITES must follow Highlighted sections indicate parts of the d Exemption Section 500.19(a) to Covered Entities qualifying for the Limite apply NOT does ement requir that tes ** Indica March 1, 2017 Effective date of regulation
February 15, 2018
August 28, 2017 180 days Section 500.02 Maintain cybersecurity program
Section 500.17(b) Submit annual certification of compliance to Superintendent
Section 500.03 Implement & maintain cybersecurity policy Section 500.04(a) ** Designate Chief Information Security Officer (CISO) Section 500.07 Limit user access privileges as part of cybersecurity program Section 500.10** Utilize qualified cybersecurity personnel Section 500.16** Establish a written incident response plan
March 1, 2018 One year
September 3, 2018 18 months
Section 500.11 Implement written policies and procedures to ensure security of nonpublic information that is accessible to, or held by, third party service providers
Section 500.04(b) ** CISO must provide annual report to board or governing body of agency
Section 500.06** Establish audit trails
Section 500.05(a)(1) ** Conduct annual penetration testing
Section 500.08** Establish procedures, guidelines and standards for development of in-house developed applications Section 500.13 Establish policies and procedures for data retention & disposal Section 500.14(a) ** Monitor authorized users
Section 500.05(a)(2) ** Conduct bi-annual vulnerability assessments Section 500.09 Conduct periodic risk assessment Section 500.12** Multi-factor authentication if needed
OPEN DOOR POLICY
March 1, 2019 Two years
Section 500.15** Encryption of data both in transit over external networks and at rest
Section 500.14(b) ** Provide regular cybersecurity awareness training for all personnel
NEW YORK CYBERSECURITY REGULATIONS
COULD IMPACT YOUR AGENCY
Section 500.17(a) Notify Superintendent of cybersecurity events as required Section 500.19(d) File Notice of Exemption with Superintendent
Arborist Construction Lumber Roofing Trucking Wholesale
. WISCONSIN INDEPENDENT AGENT
. JULY 2017 | 15
VIRTUAL UNIVERSITY
DELETING A CAR AND CANCELING A HOMEOWNERS POLICY I recently had dinner with a risk advisor who works at a Florida independent agency. We have been friends for more decades than we care to discuss and she is an “insurance nerd.” We had dinner with music played on a grand piano by a local musician. With a nice meal and music, the conversation naturally turned (of course) to insurance! She said to me, “I have to educate people (staff and customers) that if you sell a car or house you don’t delete the car that day or cancel the homeowners policy that day; you do it the next day. I’ve never heard you talk about that in a class.” My reply was, “You need to attend even more of my classes because I routinely discuss this!” Remember, if you remove an automobile from a policy or cancel a homeowners policy, it is effective at 12:01 a.m. In other words, one minute after midnight. So, if the customer called you at 4:00 p.m. on Tuesday saying they just sold the car, and the automobile was removed that day; coverage ceased 16 hours earlier. In one case I am familiar with, the customer was going to make a vehicle change. At about 9:00 a.m. the car dealer called the agency saying, “Mr. Smith is trading in his Honda for a Toyota so please make the change.” The agency staff made that change upon the request of the dealer. (That’s the subject of another article maybe! Never take policy changes from anyone other than the insured.) The vehicle was removed that day so it’s effective just after midnight. In the category of “you can’t make it up,” after lunch, the customer was driving to the dealer and was involved in an accident. A literal reading of the policy says that the loss is not covered because the vehicle is no longer a “your covered auto” under the policy. Amazingly, the insurer initially denied coverage. It took a call to the claims manager who agreed that while the policy technically
did support a claim denial, the loss would be paid. (Kudos to the claims manager!) The agency staff member should have consulted with the customer and made the change effective the next day. Under the standard ISO personal auto policy (read yours because they all differ) a replacement auto is covered for 14 days for the broadest coverage of any auto on the policy. Even if no auto on the policy has physical damage coverage, that coverage is provided for four days subject to a $500 deductible. Turning to the standard ISO homeowners policy, suppose the customer called at 4:00 p.m. saying, “I just left a real estate closing and we sold our house effective today. It’s final so please cancel my policy effective today. We are moving tomorrow.” The same concept applies here, too. Don’t cancel the policy effective that day. The earliest you cancel the policy is the next day. There is, however, a better answer to the question of when a homeowners policy should be canceled: cancel the policy the day after the customer obtains a replacement homeowners policy. No one should ever go even one day without being covered under some type homeowners (HO-3, HO-4, HO-6) policy. For example, assume the customer said they sold the house and they were all moving from Point A to Point B, and would stay in a hotel for a week while they looked for an apartment to rent. Some might argue “no insurable interest if you keep the HO-3 on the Point A house in effect.”
Certainly, there is no insurable interest in the dwelling itself, but the customer still needs coverage for their contents as well as liability. The HO-3 should be canceled the day after the customer obtains an HO-4. There have been several instances of agents telling me that the underwriter wanted the customer to sign the “LPR” to cancel the HO-3 policy the date after closing. In one case, when the agent explained the situation and said they would have the customer sign the LPR in a few weeks, the underwriter went so far as to say, “We will send direct notice of cancellation today then.” Well, that’s fine, because under Florida statutes (other states differ) the insurer owes a 120-day notice of cancellation in this situation (45 days in surplus lines) to cancel a homeowners policy that has been in effect for more than 90 days. So, even with a notice of cancellation sent, coverage typically remains in effect for long enough for a replacement policy to be obtained. One final point: removing an automobile or cancelling any policy should be confirmed in writing with the customer. That could be via a signed request > David Thompson is a by the customer or an full-time instructor for the Florida Association email exchange back of Insurance Agents and and forth stating that one of the top personal ownership has been lines technical experts in the country. transferred.
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 IIAW and IIABA do not assume and have no responsibility for liability or damage which may result from the use of any of this information.
16 | JULY 2017
WISCONSIN INDEPENDENT AGENT
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Learn More: Gary Burton I gburton@robertsonryan.com I 800.258.0277 I RobertsonRyan.com
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>>DATA BREACH
WOULD YOUR AGENCY NEED HELP IN THE EVENT OF A DATA BREACH OR RANSOMWARE ATTACK? Do you know what to do if your computer files are breached? What if they are locked and held for ransom? Do you know how to comply with State and Federal Notification Laws? These are some of the questions that your agency has to answer in the event of a data breach. Does your agency have cyber liability coverage? Businesses are breached every day. Too often owners do not handle the breach correctly, resulting in even greater damage to operations,
needs to satisfy legal requirements within the mandated deadlines and to protect its reputation. There are currently 47 different state notification laws with varying requirements. Notification is potentially a large cost in the event of a data breach. The Cyber Secure insurance product, available only to IIAW members, helps with State and Federal notification compliance. The coverage can include reimbursement for notification costs based on the number of affected individuals and not capped by a dollar amount. The Cyber Secure insurance product can also cover another high expense event associated with a data breach: a cyber extortion. It can also make handling a cyber extortion crisis more manageable. Cyber extortion is generally
The cybercrime of extortion is caused by what is known as ransomware. Criminals use ransomware to lock computer systems. Both business and customer private information is then held hostage for ransom. profitability and customer trust. But the Independent Insurance Agents of Wisconsin (IIAW) and Arlington/Roe have partnered to offer IIAW members a solution: a cyber policy that focuses on helping independent insurance agents avoid or manage a data breach. Coverages include coordinating the services that an agency WISCONSIN INDEPENDENT AGENT
the crime of locking computerized operations and then demanding a ransom to unlock them. Businesses and their customers are affected by ransomware daily – cyber criminals can hold the business and customer private information to force a ransom for its return. This is a growing threat and the FBI has reported cyber extortion at an all-time high. In fact, cyber extortion events grew in number by about 400% last year. A specialist’s support in the event of a breach is crucial. Your agency can get that with the Cyber Secure product, now offered at a reduced rate as a benefit to IIAW members. This protection for your agency helps with the step-by-step procedures in the event of a breach and gives you risk management tools to mitigate future losses. The first step to take is to contact the IIAW and find out how you can access this Cyber Liability product. For more information, contact Mary Morrison, IIAW Administrator of Insurance Services, at mary@iiaw.com.
JULY 2017 | 19
SALES
GET TO THE POINT: BRIEF EMAIL MESSAGES COULD GENERATE LEADS & SALES According to a McKinsey & Co. study, the average worker spends 13 hours a week — 28 percent of his office time — on email. This multiplies out to (yikes!) 650 hours a year writing and sending emails. This begs the question, what does it look like when you total all those words over the course of one year? According to Cue, a hub and app for services such as contacts, calendars and email, this is about a novel’s worth of email you send every year. Wow!
the reader. Your goal is to encourage a reply or start a dialogue. That’s it. Here’s an example of a traditional email (in other words, what not to do):
with the constant flow of responses!” And all she did was take a very personal, one-on-one approach. In that one day, she closed eight deals for a total of $8,000 in commissions.
Hi, John. So why does it feel as if we’re getting very few results from this massive effort? The answer could be in the way we write them.
The problem with email Most of the emails insurance agents write today are not only filled with terms that are difficult for the consumer to understand, but many are way too long and require too much time and effort to read and digest. Nobody wants to sit and read through a sales pitch. They want to grab little pieces of content here and there. They want people to get to the point. But most of us were trained to write long, formal emails — the same way we used to write letters and faxes. My suggestion to you is — wherever appropriate — use short emails. Very short.
Copy this email template right now: Hope you’re doing well. I’m following up on our conversation from three weeks ago to see [how your evaluation process is going with your workers’ comp, cyber liability, etc.]. The last time we met, we reviewed your needs as gaining more [INSERT DESIRED OUTCOME]. I have taken the time to review your [INSERT PLAN YOU’RE REVIEWING] plan, and explored what would happen if your company suffered a breach. I’d love the opportunity to have a follow up call with you to discuss further. Sincerely, John Smith, Osmond Insurance
I’m going to give you a nine-word template for the highest-converting email you’ll ever send. To date, it’s generated well over $500,000 in commissions for those who have used it.
Tip: Use one question to start a conversation The technique is simple: Ask one question of
20 | JULY 2017
But there’s a much better way…
The $8,000 email One agent, Annette, tried this strategy and sent the email I recommended to her list of prospects at 9:05 a.m. At 11:53 a.m., she texted me, “Please, stop the madness. I can’t keep up
Subject Line: John John, do you still need help with your [blank]? Jeremiah In the blank, you can put insurance, workers’ comp, benefits — whatever. BAM! That’s your 9-word email! Remember: Don’t change a thing! Send it exactly as shown above. Don’t add anything underneath it or above it, other than what normally appears in the personal email template you send from Outlook or Gmail. One carrier I consulted with sent this to 10,000 people, but decided to get clever. (In other words, he didn’t follow my advice.) After the question, he wrote, “Because we’ve got a whole bunch of great products. We’ve got life insurance, we’ve got dental, we’ve got disability, we’ve got...” And it didn’t work. It didn’t look like it came WISCONSIN INDEPENDENT AGENT
SALES my nine-word email to a few B2B prospects they hadn’t heard from in a while. The same day, they got two responses that led to two meetings. Fast-forward 60 days, and those two meetings brought in $240,000 in commissions in the commercial lines space. All from one little email.
personal communications. Using tools such as MailChimp, GetResponse, and others, you can personalize a thousand emails at once, making each one look as if it’s being sent from one individual to another.
The takeaway There are many reasons why this nine-word email works:
a
It doesn’t look like spam.
a
I t offers help rather than a product or a service.
In conclusion, do the following: > Send the nine-word email to a list of prospects you’ve targeted before but who have never responded. Test the subject line “quick question” (yes, all lower case). > Use an automated tool to personalize the
a I t’s personal and implies a previous interaction.
name in the email.
a
It’s non-threatening.
a I t seems to continue a conversation already in progress. from a human being. It looked like it came from a marketer trying to engage—and it failed.
Why this email works every time One commercial lines agent had her team send
But the number-one reason is this: It doesn’t require any effort to mentally process this email. In today’s screen-obsessed society, most people don’t take the time to reflect and think—but they do value brief, meaningful,
BE WORRY FREE WITH IMT
> Fill in the blank with the product or service you provide. > Don’t change anything else or add any other content.
> Jeremiah D. Desmarais is an award-winning financial marketer, TED Speaker and philanthropist. The IIAW does guarantee the results that Mr. Desmarais mentions in this article.
We understand the importance of partnerships and take great pride in building strong, stable relationships with our agents and policyholders. Through experienced claims expertise and hightouch customer service, we are there when we are needed most. Learn how you can represent IMT Insurance & Wadena Insurance at imtins.com/contact_us.
imtins.com | west des moines, iowa WISCONSIN INDEPENDENT AGENT
JULY 2017 | 21
CONTINUING EDUCATION
ABEN ONLINE CE CLASSES
E&O Risk Management: Meeting the Challenge of Change 6 CE Credits Approved Date: August 1, 2017 Location: ABEN Online – iiaw.aben.tv Time: 8:00 AM – 2:45 PM Ethics in Today’s Changing Times 4 CE Credits Approved Date: August 1, 2017 Location: ABEN Online – iiaw.aben.tv Time: 2:00 – 6:00 PM Insuring Condominiums 2 CE Credits Approved Date: August 16, 2017 Location: ABEN Online – iiaw.aben.tv Time: 9:00 – 11:00 AM From Medicaid to the Exchange: What Every Agent Should Know 4 CE Credits Approved Date: August 17, 2017 Location: ABEN Online – iiaw.aben.tv Time: 12:00 – 3:20 PM Cyber Gaps, UASs and TNCs 3 CE Credits Approved Date: August 17, 2017 Location: ABEN Online – iiaw.aben.tv Time: 1:00 – 4:00 PM Premium Financing 2 CE Credits Approved Date: August 21, 2017 Location: ABEN Online – iiaw.aben.tv Time: 10:00 AM – 12:00 PM Certificates of Insurance: Emerging Issues & Other Stuff That May Scare You! 3 CE Credits Approved Date: August 21, 2017 Location: ABEN Online – iiaw.aben.tv Time: 10:00 AM – 1:00 PM
IIAW ONLINE CE CLASSES
Ethics and Agent Liability 3 CE Credits Approved Date: July 25, 2017 Location: IIAW Webinar – iiaw.com/events Time: 12:00 – 3:00 PM Farm Property Coverages 3 CE Credits Approved Date: July 26, 2017 Location: IIAW Webinar – iiaw.com/events Time: 12:00 – 3:00 PM Homeowners Hot Topics: What You Need To Know 3 CE Credits Approved Date: July 27, 2017 Location: IIAW Webinar – iiaw.com/events Time: 12:00 – 3:00 PM Income After Retirement: Where Does the Money Come From? 3 CE Credits Approved Date: August 7, 2017 Location: IIAW Webinar – iiaw.com/events Time: 12:00 – 3:00 PM Workers Compensation 3 CE Credits Approved Date: August 14, 2017 Location: IIAW Webinar – iiaw.com/events Time: 12:00 – 3:00 PM E&O: Roadmap to Policy Analysis, Part 1 3 CE Credits Approved Date: August 15, 2017 Location: IIAW Webinar – iiaw.com/events Time: 8:00 – 11:00 AM E&O: Roadmap to Policy Analysis, Part 2 3 CE Credits Approved Date: August 15, 2017 Location: IIAW Webinar – iiaw.com/events Time: 12:00 – 3:00 PM Cyber Liability 3 CE Credits Approved Date: August 17, 2017 Location: IIAW Webinar – iiaw.com/events Time: 12:00 – 3:00 PM
FFOORR M MOORREE CCLLAASSSSEESS AANNDD TTOO RREEGGIISSTTE ERR PPLLEEAASSEE G GOO TTOO IIIIA AW W..CCOOM M
AGENCY MANAGEMENT
TRUSTEDCHOICE.COM
TrustedChoice.com’s upgrades allow agencies to target what types of consumers get to each of its producers. Producers can now receive referral notifications by text rather than email.
IMPROVES ITS AGENCY REFERRAL SYSTEM Independent agencies continue to ask TrustedChoice.com to improve their ability to attract and write the business they want. Over the past two months, the Advantage profile has improved dramatically with the following:
a
NAICS codes have been expanded to six digits. We have expanded the North American Industry Classification System (NAICS) to six digits from three, allowing a more refined definition of exactly which types of business your agency prefers. Rather than just saying you want generic construction, perhaps you want to write New Single Family Construction, but not Residential Remodeling. It’s a simple as toggling them on and off.
a
Agencies can choose to work with (or decline to work with) consumers who don’t have current insurance. This can keep experienced producers from spinning their wheels in working with difficult to place or new businesses. We recognize that agency staff is made up of individuals with differing levels of experience and capabilities.
wants to focus all personal lines opportunities to a young producer.
Having an Advantage Profile subscription is like adding a second
Now you can just provide that producer with personal lines of business, and send incoming opportunities to the producer’s cell phone. Or perhaps another producer prefers to work with contractors, while another may want to talk to light manufacturing risks. The producer level appetite engine selections make this possible.
digital door to your agency, connecting real online prospects to the right agent at the right digital moment.
Agencies have told us that getting the right referrals to the right producer in the agency is key to successfully writing the business. These new changes are designed to allow you to target what types of consumers get to each of your producers. These enhancements are designed to provide a foundation for additional powerful benefits exclusively available to members of the IIABA. If you would like to know more about an Advantage subscription, please call 1 (855) 372-0070 and press 1 for sales.
a
Individual producers can be listed with their own email and phone numbers, and now have the ability to receive referral notifications via text rather than email. Perhaps the agency WISCONSIN INDEPENDENT AGENT
> Marty Agather is senior VP of client development at TrustedChoice.com.
JULY 2017 | 23
2017 PRELICENSING CLASS SCHEDULE
Conducted at State Association Headquarters, IIAW prelicensing classes fulfill the study requirements for life, health, property and casualty. Full course materials — not just an outline — are included with registration. The classes are:
REGISTER AT IIAW.COM 2017 CLASS DATES L IFE & A CCIDENT /H EALTH
P ROPERTY & C ASUALTY
July 10-13
July 24-27
August 7-10
August 21-24
Sept. 11-14
Sept. 25-28
October 9-12
October 23-26
Nov. 6-9
Nov. 13-16
December 4-7
December 11-14
To register, click the Education tab on IIAW.com. For Wisconsin exam info, visit prometric.com.
CLASS SITE/DIRECTIONS
The IIAW is located at 725 John Nolen Dr. in Madison, WI. When traveling south on John Nolen, it’s the last driveway before Highway 12/18 (Beltline). Located near the Alliant Energy Center and Sheraton Hotel.
INCLEMENT WEATHER
If weather conditions are questionable, use your own judgment regarding your personal safety. If Madison public schools are closed, the IIAW is closed and prelicensing is canceled for the day. Canceled classes are made up on Friday.
HOTEL INFORMATION
Students requiring lodging will receive a special rate at the Clarion Suites, 2110 Rimrock Rd. in Madison. Please call the hotel directly at 608.284.1234, and ask for the independent insurance agent’s discount.
!Designed to help you pass your state licensing examination. !The quickest way to meet the Wisconsin education hours requirement. !Taught by experienced insurance professionals who know the business. !Conducted in a comfortable classroom with free parking. !Approved by the Office of the Commissioner of Insurance.
IIAW MEMBER PRICING: $340 - Pricing given for full class registrations.
NON-MEMBER PRICING: $355
You may also take individual classes.
DAILY SCHEDULE
Life & Accident/Health
Day 1 (Monday) 8:30 a.m. - 4:00 p.m. ($85) SECTION A: Principles of Insurance & General WI Ins. Law Ethics Day 2 (Tuesday) 8:30 a.m. - 4:00 p.m. ($90) SECTION B: Life Policies, Terms & Concepts Day 3 (Wednesday a.m.) 8:30 - 11:30 a.m. ($45) SECTION B: Life Policies, cont. & WI Life Insurance Law Day 3 (Wednesday p.m.) Noon - 4:00 p.m. ($45) SECTION B: Accident & Health Policies, Terms & Concepts Day 4 (Thursday) 8:30 a.m. - 4:00 p.m. ($90) SECTION B: Accident & Health, cont. & WI Health Insurance Law
Property & Casualty
Day 1 (Monday) 8:30 a.m. - 4:00 p.m. ($85) SECTION A: Principles of Insurance & General WI Ins. Law Ethics Day 2 (Tuesday) 8:30 a.m. - 4:00 p.m. ($90) SECTION B: Property Policies, Terms & Concepts Day 3 (Wednesday a.m.) 8:30 - 11:30 a.m. ($45) SECTION B: Property Policies, cont. & WI Property Insurance Law Day 3 (Wednesday p.m.) Noon - 4:00 p.m. ($45) SECTION B: Casualty Policies, Terms & Concepts Day 4 (Thursday) 8:30 a.m. - 4:00 p.m. ($90) SECTION B: Casualty Policies, cont. & WI Casualty Insurance Law ! Please contact Katie@IIAW.com for information about multiple registration discounts. The course fee includes all class materials. Materials are distributed on the first day of class. You receive: • The Life & Accident/Health or Prop. & Casualty Insurance Study Manual. • The Intermediary’s Guide to Wisconsin Insurance Law. • The State of Wisconsin Ins. Licensing Candidate Handbook. This provides all the necessary information to obtain a license.
ERRORS & OMISSIONS
LOST IN TRANSLATION
DON’T LET LANGUAGE GAPS CAUSE E&O HEADACHES As the U.S. population becomes more multicultural, the needs of non-English speaking clients will change the way agents and brokers service their customers. Lack of communication and poor documentation present significant E&O exposures for insurance professionals—risks compounded by a language barrier between agent and client. Clients who do not speak English fluently often bring an interpreter when visiting an agency. In this case, agents should:
a
Obtain the interpreter’s full contact information.
a
Ensure that the interpreter fully communicates to the client what is and is not covered by the policy in question. This may require frequent checks to confirm nothing is lost in translation, especially when using insurance terminology.
a
Include notes in the file to document discussions with both the interpreter and the client.
a
Never let an interpreter complete and/or sign an application. The client is the person who should complete and sign the insurance contract. If the insurer’s application is written in English, clients should
not sign non-English documents. Multiple dialects across various languages leave room for misunderstanding. Language diversity is here to stay. Particularly in multilingual communities, agencies should consider hiring bilingual staff to better serve their clients’ needs. Remember, the same best practices apply for bilingual staff in terms of file documentation. Even when an agent speaks the client’s native tongue, the agent should still include notes in the file when communicating with the client. What if the client does not have an interpreter and the agency does not have bilingual staff? Consider referring the client to another agency that can assist. If agents cannot communicate with potential clients because of a language barrier, it is best to refer the client to an agency that can service their needs in their native language. > Alison VanDyke is an Agencies that address language issues early and assistant vice president, often will position themselves as multiculturally claims specialist with friendly—and reap the rewards of new business and Swiss Re Corporate Solutions. repeat customers.
PROFESSIONAL LIABILITY BROKERAGE PROPERTY & CASUALTY GARAGE LIABILITY TRANSPORTATION SURETY PERSONAL LINES
(800) 666-5692 | JMWILSON.COM
MARKETING
THE KEY TO ROI & RETENTION FROM YOUR AGENCY’S MARKETING Return on Investment or ROI. I remember learning about ROI in my high school economics class but when you’re a business owner you really start thinking about ROI. In marketing your agency, there are a few considerations to make to truly track your ROI. First, similar to your phone system or your building, you can’t do business without them. It would be silly to think, “What’s the ROI of my phone system?” Well, in today’s world, it’s silly to not have a website, business cards and LinkedIn profile. We need to treat these items as have-to-haves to be in business. What we can measure is how we enhance our presence and make it ridiculously amazing. To really dive deep into tracking your marketing returns you need to first identify your measuring stick. We recommend every agency start by getting a baseline measurement of your marketing. To track marketing success today we need to change our thinking from dollar for dollar growth to paying for gains. Lead generation now happens after a series of activities occur. Sixty percent of new leads
Awareness is literally making sure people know you exist. You could have the best service, team and rates in the world, but if people can’t find you it won’t make any difference. will have already researched you before picking up the phone. In order to generate an opportunity you need to be found. (Editor’s note: Go to IIAW.com for a lead ROI calculator template in Excel. Go to Member Resources, Agency Operations, then Lead ROI Calculator.)
26 | JULY 2017
Once you have your baseline you can now set your strategy. You need a marketing strategy for the following activities within your agency:
> New Client Onboarding
You need to be out and about where people can see you, interact with you and learn about you. Your awareness marketing ROI needs to be calculated very simply. Website traffic. In today’s world, to just get your phone number, potential clients will Google you. If your awareness is working your website traffic starts to increase. Each month you should see your website hits increase and grow so you can own your community.
> Engagement
Sales Process
> Awareness > Sales Process
a
Networking Events
a
SEO
a
Online Reviews to Drive Traffic
a
Website
a
Direct Mail
Awareness should lead to hot leads. The more people who are researching you the more opportunity you have. Part of insurance marketing today is strictly a numbers game. The more awareness you generate the more leads you will obtain. During the sales process you need a technology assisted sales process. This means your automation must help drive closing ratios and help to promote you as the winner of the policy. However, all the automation in the world will not replace a shoddy sales process. We need to get sharp on quoting over the phone, asking for the business and moving quickly to solve the needs of the lead. To measure your sales process it’s simple: number of quotes vs. number of sales. Then you keep forcing this number as high as it can go.
a
Cold Calls
New Client Onboarding
a
Canvassing
Even the best sales process can’t begin to cover all the reasons your agency is
> Retention Awareness is literally making sure people know you exist. You could have the best service, team and rates in the world, but if people can’t find you it won’t make any difference. Awareness activities should include:
WISCONSIN INDEPENDENT AGENT
MARKETING ridiculously amazing. Even if it could, you still need to remind people. Your new client onboarding process should introduce the service team, your markets, your products, your people, and your referral program. New client onboarding, when done right, solves three main problems:
While I do think mail and email are critical to a new client onboarding process, I think it’s
Let’s be honest a second. No one likes buying your product. No one. I’m sorry but you’re up there with taxes, the dentist, and oil changes. Now even these businesses can be cool if they try. For example, my dentist is open until 8 p.m. and has a picture of the beach on the ceiling. I dig that. They are determined to give me a great experience. So how does your agency do this? Please don’t say we answer the phone — that is expected in 2017. You need to define your client experience.
keeping people happy with their insurance when Geico is spending $1 billion dollars to take your business is not simple any longer. We retain customers when we build valuable relationships with them. Only 13% of your book of business is loyal to you, and I mean truly loyal. We need to continue to drive loyalty and turn our customers into evangelists. Your metrics on this are the number of referrals and online reviews. Yes, you now have about 20 new metrics to track but it’s critical you understand tracking varies
more important to schedule a 30-day follow up phone call. You simply make sure everything went smoothly, intro the service team, and then follow up on referrals and policies. Part of sales is following a smooth process so you don’t have to remember everything. Remember, simple is OK. You can track your
Don’t follow the herd, be you. You should include monthly email touch points, birthday and anniversary memories, thank yous and more. Your metrics to track your client engagement should be emails opened and social media likes. Retention is the ultimate in tracking,
based on what area in the pipeline you are looking at. When all of your marketing metrics rise, your agency thrives.
> Generating post sale referrals > Introducing the service team > Selling any additional account rounds that were not sold at the point of sale
new client onboarding process by referrals generated and additional post sale policies sold.
Client engagement and experience are critical
> Kelly Donahue-Piro, founder of Agency Performance Partners (agencyperformancepartners.com), has helped hundreds of insurance agencies boost revenues, profits and efficiency.
Sometimes things are just clearly
BEYOND THE EXPECTED
®
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BUSINESS
LIFE
HOME
AUTO
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2505 Court Street Pekin, Illinois • 61558 800-322-0160 Extension 2394 www.pekininsurance.com
WISCONSIN INDEPENDENT AGENT
JULY 2017 | 27
News Members in the
J.M. Wilson Acquires Brokerage Assets from Klinger Associates J.M. Wilson’s brokerage business continues to grow with the acquisition of assets from Klinger Associates, Inc., an Indianapolis-based wholesale broker. The acquisition will allow J.M. Wilson to increase its brokerage business. The J.M. Wilson brokerage department has the expertise to focus on writing this type of business and looks forward to servicing the acquired accounts. Taking pride in quick response time and knowledge, the brokerage department has over 50 combined years of experience. The acquisition was made effective May 26. For more about J.M. Wilson, please visit jmwilson.com.
Integrity Honored in 12th Annual New North Corporate Wellness Awards
SECURA shovelers (left to right) are: SECURA President & CEO Dave Gross; Clint Dusenbery, Facilities Manager and Project Manager for the construction project; Dan Ferris, VP, General Counsel and Corporate Secretary; Garth Wicinsky, SVP & Chief Administrative Officer; Cathie Tierney, SECURA Board of Directors; Wayne Micksch, SECURA Board of Directors; Rich Tennessen, Eppstein Uhen Architects; Mike Krolczyk and Dave Supple, both of CD Smith; and George Dearborn, Village of Fox Crossing.
SECURA Breaks Ground on Construction of New Facility SECURA Insurance kicked off construction of its new home office facility on the property it owns along County Highway CB in the Village of Fox Crossing with a groundbreaking dedication June 22, 2017. “We’re excited to have reached this milestone after planning and exploring many options,” said SECURA President & CEO Dave Gross. “During all of this, our long-term commitment to our policyholders, agents, employees and the Fox Valley community held strong. We will continue growing our operations and creating jobs in the Fox Valley area so all can maintain their trust in us.” Sixty people representing SECURA, their Board of Directors, Fox Crossing, Winnebago County, contractors CD Smith, and Eppstein Uhen Architects, are expected for the short dedication ceremony. SECURA’s vision is to bring its people-focused culture, environmental heritage, and spirit of wellness to life under one roof. The initial facility will be approximately 300,000 square feet with capacity for 900 employees. Growth potential is incorporated into the master plan of the site, as well as the modular building design. Construction will be complete in late 2019. For more about SECURA, please visit secura.net.
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Integrity Insurance is proud to be recognized in the June 2017 edition of New North B2B magazine as one of four 2017 Corporate Wellness Award Winners, recognizing healthy employers in northeast Wisconsin. Integrity captured the attention of the awards panel for its high participation by employees in the wellness program and the organization’s outstanding performance on its health risk assessments. Integrity’s average HRA score across all participants during 2016 reached almost 90, far above the industry average. “We’re proud of this recognition as it demonstrates our commitment to promote a healthy work environment and improve the quality of life for our associates,” said Integrity’s VP, Human Resources and Administration Katey Smith. “Investing in associates health and well-being is a foundation to our success as it promotes a healthy, positive and productive workforce that in turn, better serves our agency partners and customers.” The Corporate Wellness Awards were initiated by B2B in 2006 to encourage a competitive environment among employers in northeast Wisconsin to become known as a healthy place to work. For better or worse, the current climate of health care management in the U.S. dictates employers educate and provide programming for employees to lead healthier lives and become smarter consumers of health care. B2B’s Corporate Wellness Awards – sponsored by Network Health of Menasha – honor those local firms who boast a track record of success achieving healthy workforce goals. To be considered for the 2017 Corporate Wellness Awards, companies were nominated by themselves or by a third party outlining their wellness initiatives and the impact of those initiatives in recent years. A panel of experienced health benefits experts selected winners based on various factors including ability to demonstrate improved health of its workforce and implementation of innovative wellness benefits. To read the article in its entirety, visit newnorthb2b.com.
Integrity Earns “A” Excellent Rating from A.M. Best Integrity Insurance remains a financially stable company, according to A.M. Best. The global credit rating agency, which focuses on the WISCONSIN INDEPENDENT AGENT
insurance industry, recently affirmed Integrity Mutual Insurance Company and its subsidiaries, in conjunction with affiliate partner Grange Mutual Insurance Company, a financial strength rating (FSR) of “A” (Excellent) with a stable outlook. The FSR is the most important component of A.M. Best’s rating because it indicates a company’s ability to pay its policyholders’ claims. In addition, Integrity’s Issuer Credit Rating (ICR) remains an “A+” (Excellent) with a stable outlook. This rating indicates an excellent ability to meet ongoing senior financial obligations and places Integrity among the top tier of insurance companies nationally.
Moving QBE’s Small Commercial products to Arrowhead’s robust technology platform delivers key benefits: • Saving you time and expense by making business with us easier to transact • Accelerating product innovation and niche specialization in the small commercial segment • Broadening your access to a complementary set of Arrowhead products, making it easier to provide holistic solutions to your clients.
“We’re delighted with the continued recognition by A.M. Best,” said Integrity President Jill Wagner Kelly. “Being a mutual company, we pride ourselves on our financial strength. This rating confirms our stability, reliable operational performance and risk management discipline which provides confidence to our agency partners and customers.”
Teams of QBE and Arrowhead employees have already made substantial progress updating our Small Commercial products and forms and getting the new platform up and running to prepare for a state-by-state rollout. The first states will launch January 2018 for new business and April 2018 for renewals. The plan is to complete the rollout to all states by the end of 2018.
In A.M. Best’s press release, they highlighted Integrity’s “solid risk-adjusted capitalization, strong product management focus and well-established regional market presence.” Integrity has received an “A” financial strength rating from A.M. Best for 15 years and financial strength is a critical consideration when it comes to purchasing insurance.
For other books of business with QBE, such as Corporate, Personal and Specialty, it will remain “business as usual.” For more about QBE, please visit qbena.com.
For more about Integrity, please visit integrityinsurance.com.
Arrowhead New Administrator for QBE’s Small Commercial Business Effective July 1, Arrowhead General Insurance Agency, Inc. will expand its already extensive relationship with QBE to become program administrator for QBE’s Property & Casualty Small Commercial business, giving agents access to enhanced products through an easy-to-use technology platform. Headquartered in Sun Prairie, WI, the new business will be named Arrowhead Core Commercial, and it sets the stage for growth based on the companies’ strengths: QBE’s risk management expertise, “A” rated capacity and highly rated claims service will be combined with Arrowhead’s customercentric policy underwriting and issuance technology, complementary product set and excellent reputation for working with agents. As the insurance provider, QBE will retain full financial responsibility for premiums and losses and manage the products and appetite for risk. As program administrator, Arrowhead will perform all underwriting and servicing responsibilities on behalf of QBE, with the exception of claims management, which will remain with QBE. QBE’s Small Commercial underwriting and operations team will join Arrowhead so there will be continuity of business. Walter Grote, who is currently SVP, Small Commercial, QBE North America, will also join Arrowhead to lead the new Arrowhead Core Commercial business. Agents will also experience continuity in compensation. WISCONSIN INDEPENDENT AGENT
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FOOD FOR THOUGHT Walt Disney with two of his children in the Disneyland apartment.
WALT DISNEY: MORE THAN A MOUSE
Disneyland construction started in July 1954 and opened to the public in July 1955. The opening ceremony was broadcast on ABC, which reached 70 million viewers. Walt Disney was already a legend when the theme park opened but the man still can surprise with details about his life. Consider the following: The final words ever written by Walt Disney were “Kurt Russell.” Really, no joke. In 1966, as Disney was suffering from lung cancer and nearing the end of his life, he scrawled the name “Kurt Russell” on a piece of paper and died soon after. At the time, Kurt Russell was a child actor for the studio and had just signed a lengthy contract. To this day, no one knows what Disney meant or intended, including Russell himself. ◗
Walt still has a home at Disneyland. During the construction of Disneyland in the 1950s, Walt moved into a one-bedroom apartment above the theme park’s Fire Station on Main Street in order to work and watch his dream come to life. The apartment still exists and has been left largely untouched. During his stay there, Walt lit a lamp in the window to alert the staff of his presence. This lamp is now permanently ablaze in his honor. ◗
Mickey and Minnie Mouse actually got married. Wayne Allwine and Russi Taylor are not well-known names, even among Disney aficionados, but their animated personas are seared into most people’s minds. In 1991, Allwine, who was the voice of Mickey Mouse for 32 years, married Taylor, the voice of Minnie Mouse, and the couple remained happily married until Allwine’s death in 2009. ◗
Source: Biography.com & Wikipedia.org
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