wisconsin INDEPENDENT AGENT NOVEMBER 2019
IIAW 2019-2020 BOARD MEMBERS
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wisconsin INDEPENDENT AGENT Independent Insurance Agents of Wisconsin
CONTENTS
725 John Nolen Drive Madison, Wisconsin 53713 Phone: (608) 256-4429 Fax: (608) 256-0170 www.iiaw.com
4.............. New Board Member Profiles 5.............. Sales The Producer’s Best Version Possible 8.............. Insurance Bartender Customer Behavior Insights: Using behavioral economics to increase revenue
2019-2020 EXECUTIVE COMMITTEE
13............ Risky Business Making Time for Customer Service
President-Elect: Darrel Zaleski Spectrum Insurance Group, Eau Claire
President: Chris Costakis Avid Risk Solutions, Middleton
14............ Commentary from Counsel Supreme Court Holds That Employers Forfeit EEOC Charge
Secretary-Treasurer: Marc Petersen A merican Advantage - Petersen & Assoc., Inc.,
16............ Virtual University Ask An Expert
Chairman of the Board: Jason Bott Robertson-Ryan & Associates, Milwaukee
20............ Agency Operations 6 Personality Traits that make an Impact on Top Performing Teams
State National Director: Steve Leitch Leitch Insurance, River Falls
23............ Government Affairs DOL Overtime Rule Basics for Big ‘I’ Members
2019-2020 BOARD OF DIRECTORS
New Berlin
24............ Virtual University Bird Flu, Swine Flu, Just the Flu and Pandemics: How Workers’ Compensation Responds 28............ Dealing with Public Adjusters 33............ Members in the News 33............ Agency Operations Grow Your Agency Book 34............ Food for Thought
ADVERTISERS & INFORMATION 25......... AAA Wisconsin 31......... ACUITY 12......... Agency Solutions 7........... Arlington Roe 15......... Badger Mutual 2........... Berkshire Hathaway/Guard 23......... IIAW Pre-licensing Classes 19......... IIAW CE 32......... Internet of Insurance 18......... Iroquois Group 34......... JM Wilson 27......... Keystone Insurers Group 26......... Penn National Insurance 15......... Robertson Ryan & Associates 36......... SECURA 11......... Society 18......... The IMT Group 35......... West Bend 22......... Western National Wisconsin Independent Agent is the official magazine of the Independent Insurance Agents of Wisconsin (IIAW) and is published monthly by IIAW 725 John Nolen Drive, Madison WI 53713. Phone: 608.256-4429. IIAW does not necessarily endorse any of the companies advertising in publication or the views of the writers. IIAW reserves the right, in its sole discretion, to reject advertising that does not meet IIAW qualifications or which may detract from its business, professional or ethical standards. © 2019 For information on advertising, contact Ashley Hale, 608.210.2977 or ashley@iiaw.com.
Mike Ansay Ansay & Associates, Port Washington Nick Arnoldy Marshfield Insurance Agency, Inc., Marshfield Mike Harrison R&R Insurance Services, Inc., Waukesha Ryan Leitch Leitch Insurance, River Falls Aaron Marsh Marsh Insurance Services, Inc., Rice Lake Joanne Lukas Szymaszek Johnson Insurance Services, LLC, Racine Chad Tisonik HNI Risk Services, LLC, New Berlin Andrea Nelson Unisource Insurance Associates, LLC, Wauwatosa
IIAW STAFF Matt Banaszynski Chief Executive Officer 608.256.4429 | matt@iiaw.com Mallory Cornell Vice President and Director of Risk Management 608.210.2975 | mallory@iiaw.com Kim Kramp Association and Agency Accounting Manager 608.210.2976 | kim@iiaw.com Trisha Ours Director of Insurance Services 608.210.2973 | trisha@iiaw.com Ashley Hale Graphic Designer and Creative Marketing Manager 608.210.2977 | ashley@iiaw.com Evan Leitch Technology and Risk Advisor 608.210.2971 | evan@iiaw.com Jennifer Petersen Membership Engagement and Events Coordinator 608.210.2972 | jennifer@iiaw.com Diana Banaszynski Education Coordinator 608.256.4429 | diana@iiaw.com
On The Cover... IIAW 2019-2020 Board of Directors. Back Row, Left to Right, Chad Tisonik (HNI Risk Services- New Berlin), Nick Arnoldy (Marshfield Insurance Agency- Marshfield), Ryan Leitch (Leitch Insurance- River Falls), Aaron Marsh (Marsh Insurance ServicesRice Lake), Marc Petersen, Secretary/Treasurer (American Advantage- Petersen Agency, New Berlin), Mike Ansay (Ansay and Associates- Port Washington). Front Row, Left to Right, Mike Harrison (R&R Insurance Services- Waukesha), Chris Costakis, President (Avid Risk Solutions- Middleton), Andrea Nelson (Unisource Insurance Associates- Wauwatosa), Steve Leitch, IIABA Director (Leitch InsuranceRiver Falls), Joanne Lukas Szymaszek (Johnson Insurance- Racine), Jason Bott, Chairman (Robertson Ryan & Associates- Milwaukee). Not pictured- Darrel Zaleski, President- Elect (Spectrum Insurance Group- Eau Claire). wisconsin INDEPENDENT AGENT
NOVEMBER 2019 3
2019-2020 IIAW New Board Members Welcome to the Board Ryan Leitch Leitch Insurance
Andrea Nelson Unisource Insurance Associates, LLC, A little about you: (hobbies, family, position, education, ext.): Husband (Bob, 21 Years Married), Mom of 3, two girls (18, 15 and boy 8), 18 year old Daughter, Lila, has Autism, Autism Society of Southeastern Wisconsin Board Member(4 Years), 1993 St. Norbert Grad (BA), Wauwatosa native, live in Brookfield (have also lived in Chicago and Denver), President Of Unisource (2nd Generation), Travel, Cross-Fit, Book Club, Downhill Skiing, HR Professional – SPHR (Senior Professional of Human Resources). What do you hope to accomplish while on the IIAW Board of Directors? The first 18 years of my career in various industries with a focus in Human Resources. I will bring strong HR, Operations and Strategic Planning background to the board and apply recruitment and retention skills to attracting new talent to the industry. What do you see as the biggest challenge and opportunity facing the IA channel currently or in the future? Commoditization Any life advice or favorite quote? “The future starts today, not tomorrow.” Or “Freedom consists not in doing what we like, but in having the right to do what we ought.” Saint Pope John Paul II A book that you recommend people read? Malcolm Gladwell’s The Outliers, Mary Doria Russel’s, The Sparrow Non-insurance prediction for 2020? Packers win the Super Bowl
A little about you: I graduated from the University of Wisconsin-Madison with a BA in Economics in 2010. I spent a little over 3 years doing commercial underwriting on the company side before making the planned jump to the agency side. I am a third generation agent at our family’s agency in River Falls, WI. I’m currently the chair of the Emerging Leaders committee, and am excited for the board position. My partner, Andrea, and I have three beautiful daughters, Morgan (5), Cameron (2), and Brynn (newborn). I love sports, with football being my favorite. I play softball in the summer and golf when time allows. I should note, I’m a huge pro-wrestling nerd, so if you happen to be a fan yourself, I would be happy to talk about that! What do you hope to accomplish while on the IIAW Board of Directors? I hope to familiarize myself with how the IIAW Board works, provide a voice for the younger agents in the association, and maintain support from the Board for our ever-evolving Emerging Leaders Committee. What do you see as the biggest challenge and opportunity facing the IA channel currently or in the future? Sifting through insuretech is tricky—what’s for real, what is a dud, when is it too early or late to jump on something new. I think technology is changing ever quicker, so we have to stay on our toes, but not necessarily overreact to changes. Just because something is invented doesn’t mean it’s going to be successful. Google didn’t take my job…yet. Any life advice or favorite quote? Put in the work and good things will happen. A book that you recommend people read? The Brett Favre biography, Gunslinger. Any football loving Wisconsinite would enjoy it. Non-insurance prediction for 2020? The Kansas City Chiefs will win the Super Bowl in February!
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NOVEMBER 2019
wisconsin INDEPENDENT AGENT
SALES
The Producer’s Best Version Possible
Recently I introduced The Agency’s Best Version Pyramid (BVP). It was so well received that I’ve expanded on the concept and applied it to the all-important role of producers. Net new revenue may not solve all your problems, but I firmly believe that it solves most of them! I continue to be very concerned about our distribution system, the Independent Insurance Agency channel. Even with organic growth rates climbing from 4.5% in 2017 to just above 6% today, there’s still so much unrealized potential among independent agencies. “Potential” is a word I hesitate to use because I’ve always disliked it. No matter the endeavor—sports, music, theater or sales—that word is almost always attached to those who have fallen short of success or missed some great opportunity. Often, the word is associated with someone past their prime and usually is prefaced by the word “oh.” “Oh, they had so much potential,” suggests they haven’t done all they could have or should have. They’re going to have regrets at the end of their career unless they make changes now. If you’re an owner, why not create a culture in your agency that prides itself on overachieving? If you’re a producer, why not constantly do those things that not only increase your potential, but also help you exceed it? The Best Version Pyramid can help you do just that: achieve more than you ever thought possible. One of the things I always stress is that your numbers (results) are the outcome of the behaviors and strategies you make normal in your agency. The Producer’s BVP focuses on those behaviors and strategies that create predictable and guaranteed results.
The 10 building blocks of the producer’s BVP
As with the Agency’s BVP, the Producer’s BVP consists of 10 foundational stones. For each of them, rate yourself on a scale of 1 to 10 (with 10 being the best).
1 9
Future Ideal Client Pipelines. I know you’ve heard this before, but it bears repeating: You want to work exclusively with future ideal clients—not suspects or prospects. This means you’ve not only determined what a future ideal client looks like for you, you’ve also identified the specific people or businesses that match that profile. Next, you implement the Reverse Referrals Prospecting system that
begins filling up your pipelines. The goal, of course, is to have pipelines that are overflowing with more opportunities than time. Who’s in your pipeline and what are you doing to keep your pipeline overflowing?
29
The Ultimate Marketing Strategy. Round Out, Retain and Replicate your A&B clients (the top 20% that generate 80% of your income) while trading down your C clients (the bottom 80% that generate only 20% of your income). Note: This doesn’t mean the agency gets rid of the bottom 80% of its customers! Obviously, the agency should and can make a profit on every account. However, the producer is the one who must systematically trade down their C customers. As a result, these customers either go to a new producer who’s being mentored or to a service center. Incidentally, I’ve never had a producer make less money by trading down accounts. Rounding Out: You or your agency writes 100% of the clients’ insurance policies. Retaining: You keep 99% of the clients you want to keep. Replicating: You provide a world-class experience for your clients, which wows them to the point that they gladly give you referrals and introductions to accounts similar to them. By implementing this strategy, the producers we work with can expect to grow their books of business by 60% in three years, while reducing the number of clients they have by 60%. We refer to this as the +60% and -60% Strategy. For example, let’s say a producer has $1 million of commission on their book of business and 100 accounts. If they replicate the top 20% of their customers, they’ll grow by 80%, so their book of business will grow from $1 million to $1.8 million, and from 100 to 120 accounts. At the same time, they must trade down the bottom 80% of their customers, which means they’ll lose 20% or $200,000 of their revenue for a total of $1.6 million of commission vs. $1 million. In the process, they’ll have to eliminate 80 customers, leaving them with 40 customers vs. 100.
39
Relationship Management. Yes, it’s still a relationship business. You’re not in the insurance business; you’re in the relationship business! The best producers have pivoted from the day-to-day transactions, which are all getting digitized anyway, and focusing on relationships. What’s more, wisconsin INDEPENDENT AGENT
NOVEMBER 2019 5
they understand the five types of relationships that need to be proactively managed: Clients, Future Ideal Clients, Insurance Carrier key people, Team Members, and Centers of Influence.
4 9
SHO and HPT. This stone represents the strong division between sales and service known as the Service Hand Off (SHO) and the High-Performance Team (HPT). The purpose is to facilitate the agency’s exclusive focus on Retaining and Obtaining Ideal clients (ROI). Establishing this clear division enables producers to invest 80% of their time in sales and sales-related activities.
59
Continuations, Not Renewals. This is a matter of
eliminating the dreaded annual renewal process. As we’ve discussed a thousand times, we don’t renew accounts, we continue relationships. Developing these relationships starts at the policy delivery or installation meeting when we identify the client’s specific expectations, and provide a services calendar.
69
Unique Selling System. If this sounds familiar it
should, as it is part of the Agency’s BVP that we explained in last month’s blog. Just as hope is not a strategy, Look, Copy, Quote and Pray is not a Unique Selling System! If that’s your sales method, at best you’re winging it and getting away with it. But as you know, the problem with winging it is that you can’t replicate it, so any success will be sporadic. As I’ve often asked you before: What are the unique and appealing ideas and things that distinguish you from your competitors? What are the things that get you out of the commodity game?
79
TSS and PPS. One of the true performance drivers for producers is their Time Spent Selling (TSS). If you’ve followed me at all, you know about The 12% Factor: 168 hours per week, 40 hours at work = 24% of the week. The goal is for producers to spend or invest at least 20 hours per week in sales-related activities. That’s just 12% of the total week! This low percentage of TSS strongly suggests that most producers are part-timers. The Producer’s Perfect Schedule (PPS) creates a platform for them to have 10 appointments per week with clients, future ideal clients, and centers of influence. It’s really pretty simple.
89
Relentless Preparation. This is arguably the ultimate
unfair competitive advantage. Those who practice get better; those who don’t won’t. But if you’re still not convinced, look no further than Tiger Woods for proof. The ultimate exemplar of relentless preparation, Woods says he began preparing for his comeback victory at this year’s Masters Tournament six months before. Love him or hate him, you have to admire him for persevering. Just two years ago he was out of the game, suffering from chronic back pain and questioning whether he’d ever be able to play, let alone win again. He knew he had to be relentlessly prepared in order to perform at the highest level and win. His victory in Augusta proves that he was, indeed, prepared. Now compare his approach to that of most producers, the majority of whom are rehearsing their presentations during the actual presentation. They almost never practice or rehearse in front of their team, and most have never recorded themselves giving a presentation. The goal is to never lose a sale to someone who is more prepared than you!
9 9
Ultimate Sales Playbook. A true playbook is an invaluable guide to follow. Ours consists of three sections—Prepare, Play and Stay—that address the following questions: • How do you Prepare to play the game at a very high level? • How do you actually Play the game (e.g., make sales)? • How do you Stay in the game for the long term (equating to a 99% effective retention rate and more opportunities than time)?
10 11
Personal Accountability. As with the Agency’s BVP, the capstone of the Producer’s BVP is accountability. It’s holding yourself personally accountable to do exactly what you said you were going to do. Who is your accountability partner? To whom do you hold yourself accountable on a daily, or at least a weekly basis? This can be another producer, your spouse or anyone other than you. The bottom line
To know how you rate on the Best Version Pyramid, first go back and review the 10 stones. Next, rate yourself on each one using a scale from 1 to 10, with 10 being the best. A score of 5 means you’re unequivocally average, and 1 or 2 is absolutely unacceptable. What is your overall Producer’s Best Version Pyramid score? Here’s how you performed on the Sitkins Scale: 80+ = Excellent! You’re doing a great job, just continue fine-tuning. 60 – 79 = Pretty good. But don’t get complacent and start coasting. 40 – 59 = Mediocre. You’re an average producer with average results; watch out for regrets later in your career. 20 – 39 = Going Downhill. You’re staying busy with Hysterical Activity on the Way to the Grave. You confuse activity with results and, consequently, accomplish very little on a daily basis. 0 – 19
= Come on, really?
Remember, nothing changes if nothing changes! Your best version possible is out there just waiting to emerge. Once that happens, you’ll be able to look back on your career with no regrets. Why would you accept anything less?
Roger Sitkins is the CEO of Sitkins Group, Inc., and developer of The Sitkins Network and The Better Way Agency program. Roger began his career by working in his parents’ insurance agency in Wyandotte, Michigan, and after nearly 40 years has truly become an icon in the industry. He has trained and mentored thousands of insurance professionals. Producers, CEOs, and sales managers with diverse levels of experience have benefited tremendously from his training and leadership.
> Roger Sitkins CEO of Sitkins Group, Inc.
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INSURANCE BARTENDER
CUSTOMER BEHAVIOR INSIGHTS USING BEHAVIORAL ECONOMICS TO INCREASE REVENUE For independent agents, understanding the decision process of consumers is more important today than it ever has been. The relationship between how they shop for and purchase insurance and where those behaviors intersect is essential to marketing and selling products. Thanks to advances in technology specifically around data, analytics, artificial intelligence and machine learning it is easier to map and act on behavior economics insights. Regardless if you or your agency are technologically savvy, much of this can be applied by making a few simple adjustments to your current workflows, processes and conversations with insureds. In this article, I will explore what behavioral economics is, why it matters and how its applied (specifically to your business). Behavioral economics is a method of economic analysis that applies psychological insights into human behavior to explain economic decision-making (Dictionary.com). Buzz words such as data and analytics get thrown around a lot, but how do data science and behavioral science differ? Data science can help identify “what” behaviors need to be changed, while behavioral science focuses on “how” to change them. Understanding the difference between the two is important because once an agent has identified the behavior (or non-behavior) that needs to be changed, the next step is understanding what is driving it. This requires an analysis of decision-making factors, both internal (mental) and external influences such as incentives and/or environmental factors. The sales process can significantly benefit from harnessing behavioral economic insights. According to research cited by McKinsey, organizations that leverage customer behavior data to generate behavioral insights outperform peers by 85 percent in sales growth and more than 25 percent in gross margin. Customer interactions involving too many options, complex products and convoluted conversations can cause a failure for the customer to complete the buying or decisionmaking process. Agents can directly improve the customer experience while increasing revenue by using techniques such as simplification, bringing value forward, and reinforcing decision-making.
Simplification
Independent insurance agents should focus on optimizing choices, not presenting a wealth of options. Using customer information in your automation system to identify and present the right set of choices can help prevent consumer confusion and save agents time and an occasional headache or two.
Using the behavioral economic concept of the Bandwagon Effect, insurers and agents can put consumers at ease with a tool that shows “what customers like you” have chosen. This can reinforce that they’re on the right track and encourage them to stick with the process to find the best solution. (Insurance Journal, Behavioral Economics and Insurance by Marik Brockman and Jamie Yoder | July 5, 2010) In today’s digital world, behavioral data drives personalization which is the foundation of a successful yet simplified customer (centric) experience journey. Salesforce’s 2017 State of Marketing Report underscores the extent of that customer demand for personalization: • 52% of consumers are likely to switch brands if a company doesn’t personalize communications • 65% of business buyers are likely to switch brands if a vendor doesn’t personalize communications to their company Netflix and Amazon are among the best at creating a customer experience focused on personalization. Gary DeAsi writes in How to use Customer Behavior Data to Drive Revenue, “Just how effective are these customer behaviorbased recommendation engines? • 75% of Netflix viewer activity is driven by recommendation (Source) • Netflix’s recommendation system saves the company an estimated $1Billion per year through reduced churn (Source) • 35% of Amazon’s sales are generated through their recommendation engine (Source) Of course, the key is to introduce the right offers to the right customers at the right times, not everything to everyone all the time.” When it comes to up-selling and cross-selling few companies do it better than Amazon.
Armed with these valuable insights, agencies can: • Optimize the path to purchase through personalization. • Clone your sales and engagement process for high value customers. • Boost customer acquisition. • Increase retention. • Grow revenue. • Improve Customer Experience. • Maximize Customer Lifetime Value. • Increase Marketing ROI. • Make smarter bets with your acquisition budget. • Proactively engage customers and prospects For its product suggestions, Amazon’s recommendation algorithm (responsible for driving 35% of their revenue) uses customer behavior data such as: • A user’s purchase history • Items in their shopping cart • Items they’ve rated and liked • What other customers have viewed and purchased This concept of simplification by recommendation/call-toaction can easily be adopted by independent insurance agents to increase their upsell and cross sell opportunities. I know many agencies include options that compliment what they are quoting such as additional lines of coverage, higher limits, etc. But the question is do you do it in a manner that harnesses behavioral economic insights to create a visually appealing, simplified, and highly personalized proposal? If so, congratulations. You aren’t? Don’t worry. The IIAW can help you with this. There are a variety of behavioral data points and sources that agents can leverage to provide a similar, yet personalized customer experience. Most of these data points are accessible in your agency management system. Agents need to make sure they are collecting, inputting and sourcing the proper data. Look for trends within your customer segments. When clients reach a certain life milestone, you can proactively engage with them on their evolving insurance needs. Monitor the social media accounts of your clients and pay attention to and record trends and behaviors of certain customer segments. For example, perhaps you are monitoring a business owner’s Facebook page and this business owner shares a post about a large corporation experiencing a data breach and they are concerned about their personal information falling in the wrong hands. Agents could use this insight to proactively reach out to their insured to discuss the risks of not having a data breach policy on their business. If they do have one, this could be an opportunity to upsell higher limits. This provides the perfect opportunity to cross sell and/or up sell. Patterns in behavioral data emerge to explain why and how those successes and failures happened in the purchasing process, and why certain outcomes were reached for some and not for others. Over time, you can map customer trends and create customer segments thus leading to a better understanding of the customer journey/path to purchase.
Bringing Value Forward
In his book Thinking Fast and Slow, Nobel prize winner Daniel Kahneman asserts that we typically fear loss twice as much as we relish success. This means price decrease has a bigger impact than price increase. According to Professor George Loewenstein from Carnegie Mellon, curiosity creates an information gap. Whenever we perceive a gap between what we know and what we want to know, we can’t help but seek to close the gap. This is an important point that agencies should consider in their sales and marketing process. Great companies across time have made use of stories to draw people’s attention and bring their point across. Stories work so well because, unlike blatant sales messages, it provides the impetus to continue reading/watching. The ups and downs experienced by the protagonist in the story create an information gap that we can’t help but follow. (Ted Chong, Boost Sales with Behavioral Economics) Perhaps you see a lot of people harnessing the power of video on Facebook, LinkedIn, or in marketing materials or proposals to clients. More and more insurance agents are turning to storytelling to differentiate themselves from the competition. Storytelling, using behavioral economic insights, can be a powerful tool to ensure your message resonates with your audience. Ted Chong goes on to say, “As a web content auditor, the most common problem I have seen in clients’ website copy is the excessive use of the word “we” instead of “you.” Businesses boast about their achievements and life stories, forgetting that people are primarily interested only in themselves. Seek to understand the needs of your audience and convince them based on their need, not yours.” Savvy insurance agents can harness these principles. Sometimes it’s as easy as changing the way you present information, a quote, policy features, or exclusions. If done in the proper manner, a modified narrative to your value proposition may be just what you need to close the sale.
Reinforcing Decision-Making
According to an article title, Behavioral Economics and
Insurance published by the Insurance Journal, “Consumers in a non-stimulated (cold) state make different decisions than those in an emotionally stimulated (hot) state.” Agents should consider casually conversing with their clients during the intake process to identify unique behavioral data/insights that can be used to help the agent tailor their conversation and sales technique. In his timeless classic How to Win Friends and Influence People, Dale Carnegie said, “You can make more friends in two months by becoming interested in other people than you can in two years by trying to get other people interested in you.” Ancient philosophers concur, with Plato and Socrates arguing for psychological egoism, the idea that humans are always motivated by self-interest. (Ted Chong, Boost Sales with Behavioral Economics) Understanding the consumer mentality and the irrationality (or rationality) of the human decision-making process is key to developing winning value propositions and product features. In the Behavioral Economics and Insurance article it went on to note that, “Respondents in a survey were asked to choose between a pair of insurance options, with varying combinations of price, coverage level, agent relationship, and claims service. About half of respondents were first asked (primed) about their beliefs in having adequate protection. Lower price was less of a decision factor for respondents first asked about adequate protection: 42 percent of those primed vs. 51 percent of those not primed chose the lower price.
Matt’s Mixology Sparkling Apple Punch A smoked honey syrup and spicy bitters lend subtle heat to this tequila-based party punch that serves eight to ten people and is sure to be a hit at the Thanksgiving Table.
When key information is presented can also affect outcomes. Lower price was less of a decision factor for respondents shown price first (vs. last): 43 percent who saw price first, vs. 51 percent who saw it last chose the lower price.” The power of this kind of relative positioning explains why insurance agents sometimes benefit from offering a few clearly inferior options. Even if they don’t sell, they may increase sales of slightly better products. For example, many restaurants find that the second-most-expensive bottle of wine is very popular—and so is the second cheapest. Customers who buy the former feel they are getting something special but not going over the top. Those who buy the latter feel they are getting a bargain but not being cheap. Agents should consider deploying these tactics. It is important for independent agents to understand how, when and where people make decisions and use behavioral economic insights to personalize and simplify the purchasing process. Agents should explore new technology innovations to harness the power of data and analytics. As Steve Jobs once said, “a lot of times, people don’t know what they want until you show it to them.”
> Matt Banaszynski CEO of IIAW
Steps to Make It 1. Combine all ingredients except sparkling wine in a punch bowl with two cups of ice. 2. Stir to combine and chill. 3. Top with sparkling wine and apple slices for garnish.
Ingredients
4. Add large chunks of punch ice to the bowl to keep it cold while minimizing dilution.
1 l Patrón Silver 11 ¼ oz Lemon juice 16 ½ oz Smoked honey* 22 ½ oz Grapefruit juice Bitters (to taste) 1 bottle Sparkling wine
* Smoked honey syrup • 8 oz Lapsang tea • 2 cups Honey Steep the tea until a prominent flavor has developed. While the tea is still hot, stir in honey until dissolved. Refrigerate the syrup until cool.
2024
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RISKY BUSINESS
MAKING TIME FOR CUSTOMER SERVICE In working with independent agencies across Wisconsin, I’ve had the pleasure of spending time with individuals at all levels of the organization. The conversations with agency leadership usually focuses on organizational goals, emerging risks and industry trends. There is another group though that I enjoy speaking to; the agency support staff. These roles are comprised of hard-working, no nonsense employees who handle data entry, phone calls and manage a neverending list of activities in the agency management system. Their strongest attribute though? They have a passion for customer service. An agency is commonly challenged with providing good customer service in an efficient and effective way. Customer service is a top priority on the agency website and in agency advertising, but do internal practices match the level of customer service you say you offer? Are support staff given the right tools and workflows to match the level of care you’re committed to providing every customer? Here are just a few quick reminders for providing top customer service: 1. D efine your customer service goals. Involve everyone from the agency in a discussion regarding what level of service you are going to provide to each customer. It is important to segment the business so that more time is spent in higher revenue generating accounts. 2. M atch workflows with job descriptions. Consistent levels of customer service are essential. If the activity does not have an owner, it is likely to be missed or completed at varying levels of quality. This could create an unwanted E&O exposure for the agency. 3. R einforce your value. Customers appreciate the one-on-one service you provide and trust that you are helping them protect their assets. This creates a unique selling opportunity as well as an opportunity to strengthen the relationship by providing education and conducting risk exposure reviews. There is much more that goes in to providing best in class customer service, but these three recommendations are a quick and easy starting point to get you on the right path. Of course, there
are some important internal procedures that accompany these recommendations. 1. O utline your customer service goals. Every agency should have a single page document which outlines the level of service that will be provided to individual customer segments. Included in this document are response times for inquiries, claims and change requests as well as renewal timelines and touchpoints. 2. E nsure that workflows include designated roles. Oftentimes agency workflows do not identify what role/person within the agency is responsible for completing the task. It is not a good practice to simply know who “usually does it,” it should be clearly documented and consistently executed. 3. C reate/Update Educational Materials and Exposure Checklists. Whether an agency uses them or not, most know that risk exposure checklists are a good E&O risk mitigation tool. But they are also a great customer service tool. By reviewing a customer’s exposures, you create an opportunity to provide them with education regarding their exposures or where they may need higher limits. You can also create quick and easy information sheets that provide answers to common questions about certain lines of coverage. By starting the internal conversation with these three tips, it can trigger additional important discussions. Agency staff should talk about where you may need to update workflows or customer-facing materials you use (or don’t use!). The key is to involve everyone in the agency, especially those individuals who are working with and speaking directly to the customers. Check for consistency among staff as well as any pain points they might be experiencing. Talk about balancing technology with personal touchpoints. There is no one-sizefits-all approach, so take the time to figure out what works best and meets your needs as an agency. As always, if you need help reviewing your workflows or implementing new ones feel free to reach out to any of the staff at the IIAW. We want to be your first call and your partners in providing top notch customer service!
> Mallory Cornell,
IIAW Vice President and Director of Risk Management
COMMENTARY FROM COUNSEL
Supreme Court Holds That Employers Forfeit EEOC Charge-Rule Defense If Not Timely Raised Many of your agencies and even more of your clients have no doubt had to deal with discrimination claims filed under Title VII. The usual arc of such a case is the filing of a charge with the U.S. Equal Employment Opportunities Commission (“EEOC”) and the state counterpart, the Wisconsin Equal Rights Division (“ERD”), followed later by filing the case in federal court. In fact the filing of a charge with the EEOC prior to filing a case in federal court is mandatory in most circumstances. However, the U.S. Supreme Court recently resolved a circuit split concerning when employer-defendants can seek dismissal of a Title VII suit based on the employee-plaintiff’s noncompliance with the requirement that, prior to suing, the employee identify the challenged employment practice in a charge filed with the EEOC. In Fort Bend County, Texas v. Davis, the Court that the chargefiling rule is not jurisdictional and can be forfeited, a reminder to employers to promptly assert defenses based on an employee’s failure to satisfy Title VII’s charge requirement. Title VII requires that an employee seeking redress under the Act first file a charge with the EEOC or a state or local equivalent that identifies the allegedly unlawful employment practice. The EEOC then notifies the employer of the charge, investigates, and has the first option to sue. Whether or not the EEOC acts, the employee is entitled to receive a “right-tosue” letter within 180 days of the charge’s filing, at which point the employee can proceed to court. The employee in Fort Bend County initially filed an “intake questionnaire” and then a charge with her state employment commission claiming sexual harassment and retaliation. While the charge was 14
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pending, she was fired after failing to report to work so that she could attend a church event. The employee then added a religious discrimination claim to her intake questionnaire, but she did not formally amend her charge. The employee received a right-to-sue notice, and years of civil litigation followed. After a trip up to the Court of Appeals on a summary judgment ruling and remand to district court, only the religious discrimination claim remained. Only then did the employer move to dismiss for lack of jurisdiction because the employee did not include a religion claim in her charge. The district court agreed and dismissed the complaint. However, the Fifth Circuit reversed, holding that the charge-filing requirement is not jurisdictional and can be waived, thereby adopting the majority view endorsed by seven other federal Circuit Courts of Appeal. But because three other Circuits – the Fourth, Ninth, and Eleventh Circuits – had held that the chargefiling rule is jurisdictional, the Supreme Court granted certiorari to resolve the split. Writing for a unanimous Court, Justice Ginsburg held that the charge-filing requirement is not jurisdictional but rather a “claims-processing rule” designed to promote the orderly progress of litigation. Though the charge requirement is mandatory and non-compliance provides a basis for dismissal when timely raised, the defense may be forfeited. According to the Court, the charge requirement is not jurisdictional simply because it promotes Congress’s objective of allowing the EEOC the first option to bring suit on the claim. The Court also observed that employees have
little incentive to skirt the rule whether or not it is jurisdictional because defendants have good reason to seek early dismissal of lawsuits filed against them. Because the Court upheld the majority view that the charge-filing requirement is not jurisdictional, the Fort Bend County decision does not create a sea change in this area of law. However, the decision reaffirms that defendant employers in Wisconsin and across the country should promptly review charge filings after being sued under Title VII and not delay in seeking dismissal based on the employee’s failure to identify a challenged employment practice in the charge.
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> Josh Johanningmeier IIAW General Counsel
badgermutual.com
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ASK AN EXPERT
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Q:
Resident Relative in Adjoining Duplex Units If the named insured owns a duplex where she lives in one unit and her son and his wife live in the other unit (no rent involved), do the son and his wife have coverage for their contents and liability under the mom’s HO 3 policy? I wasn’t sure if they would be considered a resident relative under mom’s policy and would not need to purchase the HO 4 for their protection?
A: If there are two separate units and two separate households, the son and his wife need their own policy. Depending on how listed with the county, there are two separate residences (although connected) and thus they are not residents of the same household. An HO-4 is needed. Relatives are insureds if they reside in the same household with the named insured. However, since it’s a separate unit, it is likely they maintain separate households, which I’m sure they do. They need an HO-4 policy. The general answer is no” with most carriers without looking at any out of the box forms or endorsements. It’s a 2-family home meaning each unit is a separate residency and the children living in the separate unit that has separate methods of entrance and egress and a separate cooking area would make the children not insured under mom’s HO-3 form. The 1991 ISO form states: (bold for emphasis added) “3. “Insured” means you and residents of your household who are:” It also goes on; “8. “Residence premises” means: a. The one family dwelling, other structures, and grounds; or b. That part of any other building; where you reside and which is shown as the “residence premises” in the Declarations. “Residence premises” also means a two family dwelling where you reside in at least one of the family units and which is shown as the “residence premises” in the Declarations. The form does not define what is a household, but wiki does; “A household includes all the persons who occupy a housing unit. A housing unit is a house, an apartment, a mobile home, a group of rooms, or a single room that is occupied (or if vacant, is intended for occupancy) as separate living quarters. Separate living quarters are those in which the occupants live and eat separately from any other persons in the building and which have direct access 16
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from the outside of the building or through a common hall.” So; separate family unit...separate insurance needed for the children. Email your carrier claims department insuring the dwelling their opinion? You may get lucky! I don’t see any coverage here: COVERAGE C Personal Property We cover personal property owned or used by an “insured” while it is anywhere in the world. At your request, we will cover personal property owned by: 1. O thers while the property is on the part of the “residence premises” occupied by an “insured”; 2. A guest or a “residence employee,” while the property is in any residence occupied by an “insured.” That being said, I’ve seen case law like this: The insured resided in one side of a duplex and his sister and her two daughters resided in the other side. The sister paid him rent, but they generally shared meals, household expenses, and his telephone. The insured’s insurance company denied coverage for fire damage to his sister’s contents and her additional living expenses. The court ruled that a “household” existed, even though the parties otherwise lived independently in the same structure, and admonished the insurer for denying the claim by stating, “[T] he defense advanced in this case is the kind of defense that makes policyholders justifiably mad and leads them to take actions such as were taken in California . . . . One would think that if there are any responsible officials left in the insurance industry (as they self-style their business), they would seek to correct this type of activity by their claims departments before it is too late.” - Denn v. Vanguard Insurance Company, West Virginia Court of Appeals, 1989.
Q:
Insuring Commercial Property at 100% Coinsurance What is the risk if I select to insure commercial property at 100% coinsurance? What is the advantage?
A: The advantage is a lower rate. The disadvantage is, if the limit selected is less than the actual value, the insured is going to be penalized on just about every claim.
property on an agreed value basis may well be a better option for some insureds, as it eliminates the possibility that a coinsurance penalty will be invoked.
No risk as long as the limit of liability equals the actual cash value or replacement cost. The advantage is lower premium and happier client if there is a loss.
Good questions. I think people too often elect 100% coinsurance without considering the questions you’ve asked. The risk of using 100% coinsurance is in those situations when -- at the time of the covered loss -- the value of the Covered Property (either Replacement Cost or ACV) times 100% is greater than the limit of insurance on the property. This can occur during times of inflation in building materials. For example, assume you set a building limit at $1,000,000 at 100% coinsurance on a Replacement Cost basis at the January 1, 2018 policy inception of the policy. When the building sustains a covered $300,000 loss on November 20, 2018, it is determined that the actual Replacement Cost of the building at the time of the loss is not $1,000,000, but $1,100,000. Under the coinsurance formula (“amount you did insure” divided by the “amount you should have insured” times the loss), the calculation becomes 1,000,000 divided by $1,100,000 (.909) times the $300,000 loss. In that hypothetical case, the insurer would pay $272,700 for the loss, leaving your client a “co-insurer” to the tune of $27,300. Not good! As you can see, this risk can be a real issue during times of inflationary pressure. We often see this phenomenon after major property catastrophes, such as hurricanes and tornadoes. The major advantage of using 100% coinsurance is in pricing. Under ISO Property rules, a credit of 10% is applied to the published 80% Property Loss Costs. It is well to keep firmly in mind that -- in the coinsurance calculation -the limit of insurance is compared to the value of the property AT THE TIME OF LOSS, not the effective date of the policy.
Risk is if you do not insure to value there will be a serious penalty at the time of a loss. Add Agreed Value Optional Coverage - 5% additional - 100% coinsurance will generate 10% credit. Great idea. Don’t ever do this. Yes, you should insure at 100% TIV; but never use 100% coinsurance on property. The disadvantage is, what if you are wrong at the time of the loss (which is when the value is calculated)? Don’t subject the insured to such an onerous condition as 100% coinsurance. Insure at 100% TIV and use 90% coinsurance. The risk is that you have no cushion if your RC figures are not accurate. There is a discount on the rate. It would be best to insure for 100% and use an 80% coinsurance percentage to have a 20% cushion. Better yet, use agreed value and suspend coinsurance. Coinsurance is a warranty to the carrier that the amount of insurance carried is equal to at least the stipulated percentage of replacement cost, assuming the replacement cost option is selected. The risk of using a 100% provision is that that may be a high burden on the insured, leaving no room for any variance and potentially exposing the insured to a coinsurance penalty. On the other hand, if you use a 100% clause in conjunction with an agreed value endorsement, there is no risk except whether or not a sufficient amount of coverage was purchased to actually replace the property. The advantage is that as the coinsurance percentage increases, the rate decreases. The obvious risk is that at time of loss (not application) was the 100% requirement met. That puts a large burden on the insured. The advantage is the savings in premium. Advantage is the 100% coinsurance rate is a lower rate than at 90% or agreed amount. Disadvantage of 100% is there is no wiggle room in values and no protection of agreed amount and it increases the chance that your client will suffer a penalty at a time of loss. For over 40 years I have avoided 100% coinsurance. I have seen too many nasty losses and prefer to give the client better odds by not using 100%. The simplest explanation of how coinsurance operates that I’ve seen is: HAS/NEEDS x WANTS = GETS. In the case of 100% coinsurance, if a property insurance limit is lower than what the value of the insured property is, a proportional penalty will be assessed after a loss. A typical 80% coinsurance clause leaves more leeway for undervaluation, and thus less chance of a penalty in a claim situation (although, of course, the needs” part of the equation, or 80% of the value, should still be insured). Insuring
In a total loss situation, the advantage is immense. It’s interesting to see people argue about deductibles on the front end and then insure buildings for 80% and 90% of their RC. When they have a total loss they are down 10% or 20% immediately. Then they discover Debris Removal in a total loss averages 12% to 15% of the cost to build new - assuming the site is not congested or obstructed. This puts the insured down 25% to 35% of RC. If the site is congested or obstructed the Debris Removal may be 25% or 40% of RC and the policy Debris Removal supplement is $10,000. Now the insured is down 45% to 60%. Then they learn about Credit Risk. The lender is named in the Mortgagee Clause and named on the check. As lenders are required to post much larger reserves on any loan with damaged collateral, so they take insurance proceeds to pay off the loan. The insured receives the difference between the loan amount and the policy limit - which is often a very modest sum - and often not enough to remove the debris. Insure property for 100% of RC using an Agreed Amount Endorsement. When coverage is specific, always add Increased Debris Removal coverage in anticipation of a total loss.
>C hris Boggs
Big “I” Virtual University Executive Director
LET US UN-SHATTER THAT BAY WINDOW FOR YOU. HOMEOWNERS INSURANCE THAT’S DESIGNED TO BE WORRY FREE A home is one of the most valuable assets. Whether it is a current homeowner, someone looking to own, or someone renting a home, financial protection is needed for the important things in life. A homeowners policy from IMT Insurance can help your policyholders Be Worry Free. Learn how you can represent IMT Insurance at imtins.com/contact.
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EDUCATION IIAW ONLINE EDUCATION & CE CLASSES DATE
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Workers’ Compensation When the Child Becomes the Parent - Aging Parents and Insurance Decisions Contractors Liability Exposures ... Risk Analysis to Coverage Solutions Business Auto Coverages 4 Key Personal and Commercial Lines Exposures Every Agent Must Understand Protecting Your Most Valuable Asset Ethical Dilemmas ... Making the Right Choices Top 10 Countdown of Personal Lines Coverages & Current Issues Insuring Trusts - Protecting Your Clients Wishes Insuring Toys and Collectibles E&O: Roadmap to Policy Analysis - Part One E&O: Roadmap to Policy Analysis - Part Two An Agent’s Guide to Insuring Nonprofits
12 PM - 3 PM 12 PM - 3 PM 8 AM - 11 AM 12 PM - 3 PM 12 PM - 2 PM 8 AM - 11 AM 12 PM - 3 PM 12 PM - 3 PM 8 AM - 11 AM 12 PM - 3 PM 8 AM - 11 AM 12 PM - 3 PM 12 PM - 3 PM
OCTOBER
NOVEMBER
04 05 12 12 13 13 14 18 19 19 20 21 25
Businessowners Policy (BOP) ... Planning for the Unexpected Condominiums Additional Insureds and Certificates of Insurance Life Insurance ... Benefits for the Living Homeowners Hot Topics ... What You Need to Know 4 Key Personal and Commercial Lines Exposures Every Agent Must Understand Unlocking the Secrets of D&O Insurance NEW! The Insured, Additional Insured vs. Named Insured Debate E&O: Roadmap to Policy Analysis - Part One E&O: Roadmap to Policy Analysis - Part Two Commercial Property Coverages Exploring Key Concepts Ethics and Agent Liability The Dirty Dozen Twelve Great Commercial Insurance Mysteries
DECEMBER
04 05 09 10 10 11 11 12 12 16 16 16 17 17 18
It’s Not My Fault, or Is It? - Liability Issues in Personal Lines Policies Fiduciary Liability, ERISA Bonding, and Employee Benefits Liability The Affordable Care Act contains significant responsibilities for benefit plan decision makers Business Income - Coverage Analysis through Claims Insuring Hobby and Small Farms Contractors Property Exposures Income After Retirement - Where Does the Money Come From? Personal Lines Checkup - What’s New and What’s Changed ... What It All Means E&O: Roadmap to Policy Analysis - Part One E&O: Roadmap to Policy Analysis - Part Two 4 Key Personal and Commercial Lines Exposures Every Agent Must Understand Commercial General Liability Coverages 4 Key Personal and Commercial Lines Exposures Every Agent Must Understand Cyber Liability Ethics and the Law Who Is An Insured
12 PM - 3 PM 12 PM - 3 PM 8 AM - 11 AM 12 PM - 3 PM 8 AM - 11 AM 10:30 AM - 12:30 PM 12 PM - 3 PM 12 PM - 3 PM 8 AM - 11 AM 12 PM - 3 PM 12 PM - 3 PM 12 PM - 3 PM 12 PM - 3 PM
12 PM - 3 PM 12 PM - 3 PM 12 PM - 3 PM 8 AM - 11 AM 12 PM - 3 PM 8 AM - 11 AM 12 PM - 3 PM 8 AM - 11 AM 12 PM - 3 PM 9 AM - 11 AM 12 PM - 3 PM 12 PM - 2 PM 8 AM - 11 AM 12 PM - 3 PM 8 AM - 11 AM
TO REGISTER, PLEASE GO TO IIAW.COM
AGENCY OPERATIONS
6 PERSONALITY TRAITS THAT MAKE AN IMPACT ON TOP PERFORMING TEAMS Building mentally tough teams requires mentally tough employees. In our latest whitepaper, our research team defines the psychological advantage of six essential personality traits that make up mental toughness. And while some people are more naturally inclined to possess these traits, mental toughness is also a skill that can be developed by honing in on these key characteristics and building upon them over time. Sharpening your team’s skill sets can improve their performance and outcomes in the workplace, so let’s dig into the six personality traits associated with mental toughness. We’ll use our research to show you how to spot mental toughness in your employees and how to further develop these traits on your team.
1. LEVEL-HEADEDNESS
“A measure of emotional expressivity, [level-headedness] relates to the tendency to effectively manage the expression of one’s emotions. Individuals who manifest higher levels tend to remain composed in a variety of stress-inducing situations. Those who score lower tend to react more emotionally.” You know the saying “cool heads prevail?” When it comes to highperforming teams, it’s true. The employees on your teams must possess level-headedness to ensure the long-term success of the organization. So, how do you know if your team members have it? When the going gets tough, look for those who remain composed and can stabilize their emotions and reactions. They will continue to work towards solving the issues and not let downfalls blind them with emotions. Not everyone on your team will have this in high levels, and that’s okay. You can help other employees develop compensating behaviors by teaching and practicing different habits and techniques. Emphasize to your employees how important it is for them to stay calm, especially around other employees who may be more emotionally expressive. Showing your employees the long-term benefits of managing their emotions at work will not only benefit your bottom line, but it will also help their careers grow in a healthy manner.
2. STRESS TOLERANCE
“A measure of the capacity to remain unworried about possible negative consequences. Those showing high scores may remain unconcerned when faced with events beyond their control. People 20
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displaying low scores tend to focus on what might go wrong or potential negative consequences before moving to action.” All employees experience stress at some point, especially when things get busy or timelines get tight. During that time, you’ll notice that the employees who can maintain a cool, calm, and collected mindset will focus on the task at hand and worry less than their counterparts. Stress can make some individuals single-minded, making negatives seem catastrophic. This can make employees frustrated and disengaged. Here are some tips to help you develop those who show a lower tolerance for stressful situations: 1. Help them find the silver lining when they’re overwhelmed and coach them on how to continue this practice for themselves. Once they’ve discovered the positive, help them create a plan to move forward. Often, stressed employees are just suffering from work paralysis, which can in turn cause more stress. 2. Keep an optimistic attitude yourself. Lead by example, and you will be able to better coach your team in maintaining positivity in stressful situations when things get chaotic. 3. Look for new opportunities that recurring issues reveal. That might come in the form of gaps in efficiency or the need for improved communication methods. An employee who always struggles at the end of the month due to poor reporting may need technology support or better time management from her team to avoid this in the future. Coaching and reinforcing these strategies with your employees will help them learn to manage their stress levels when they start to feel overwhelmed. Practicing and maintaining a level of calmness in the face of negative pressures will allow employees to develop endurance towards stress in the future.
3. RESILIENCY/EGO-STRENGTH
“A measure of one’s capacity to handle setbacks, criticism, and rejection. High scores indicate that one is less negatively impacted by failure and setbacks. Those who score low tend to internalize failure, criticism, and rejection, and often have trouble bouncing back and re-establishing self-confidence.”
Employees who are emotionally resilient adapt more easily to workplace change, manage workloads more effectively, and foster better working relationships in their teams. Those who show lower levels of resilience, however, might need a boost to help them bounce back.
Do you have a team member who can set goals for themselves, both short- and long-term? Do they have the ability to make strategic decisions? These employees likely prefer to work with little management oversight and exhibit a strong propensity for self-structure.
One way you can encourage them to build stronger emotional resilience is by offering skills training, such as communication courses, technical skills development, soft skills classes, and more. Learning new tools and skills to help them carry out their daily role shows your employees that you care and support their overall well-being.
It’s not uncommon, however, for some employees to struggle with organizational skills and time management on their own. Encourage them to develop proficiency in self-structure by offering continuous coaching in project management competencies. Learning how to properly prioritize task work and manage deadlines will help them learn valuable organization skills they can apply to their workload and job function as a whole.
Because resiliency is so dependent on security and egostrength, offer employees the chance to share in meetings, present on a topic in which they feel confident, or lead a project they can master. When employees feel more secure in their role, it improves resilience and they recognize and respond to stress better. Now your employees are emotionally proactive when faced with difficult situations.
4. ENERGY/PERSISTENCE
Many leaders are learning to maximize this trait with technology. From efficiency platforms to project management platforms, these tools are created to help employees communicate, organize their days, and collaborate better. Since one of the fundamental skills to self-structure is communication, these platforms are helping teams build great communication practices and organize their structure internally.
6. THOROUGHNESS
“A measure of one’s potential to sustain a high level of activity over extended periods. High scores relate to being active and persistent in overcoming obstacles. Those with lower scores tend to be less energetic with respect to tasks and may not always persist when necessary to achieve a goal.”
“A measure of one’s tendency to be concerned with details and to take full ownership of tasks, jobs, and roles. Those that score high tend to take responsibility and can, at times, be perfectionistic. Those who score low tend to be a bit less conscientious and may not always attend to the details required to continue to develop skill sets.”
Employees who show a strong drive towards goals are fueled by high levels of persistence, and it will show in their work. They take ownership of their work and will persist to accomplish tasks to their best abilities, regardless of outlook.
Mentally tough employees take pride in their work. Your detailoriented employee focuses not only on the big picture, but also on the small facets of the assignment and the minor adjustments that need to take place in order to accomplish the goal.
But not all employees exhibit persistence when times get tough, so how do you avoid this and cultivate energy and persistence on your team?
So, how do you develop those who aren’t as thorough? Start by incorporating lists and getting organized. Prioritize major tasks and coach them on how to rank the importance of each part as it relates up the whole. This will help your employees understand which tasks need particular care and how the quality of each piece can affect the greater project. By understanding the value of the task, employees learn to accept ownership and responsibility for their work. Reinforce this practice and make it routine. Part of thoroughness is consistency. Embracing routine makes for a process that has a built-in priority for thoroughness.
Set clear goals and milestones so employees can get on board, stay focused, and remain energized. Many leaders assume the team is already committed, but motivation must also come from the top-down. Uncommitted and disengaged workers may just be going through the motions, but managers have an opportunity to win back an employee who has become disengaged. Ask employees what you can do to help them push through a difficult task or offer to support them during a project. Give your team a long-term goal and map out the key marks they need to hit in order to reach it. Break down their workloads into smaller, more manageable parts that they can use to stay on track. Communicate with them continuously on their progress, hold them accountable for reaching their goals, and acknowledge them when they reach a milestone. The more markers they meet, the more encouraged they feel to persist.
Mental toughness coaching will provide your team members with better skills and insights for their individual roles and provide them the support they need to take challenges head-on and finish strong. You’ll see a better overall performance and more consistent outcomes from those who employees who practice mental toughness, and they will be able to continue to develop those skills on their own throughout their career. Need a little more data to understand how these work? Download our Mental Toughness whitepaper today!
5. SELF-STRUCTURE
“A measure of one’s preference for independently determining work methods. A high score indicates the motivation to work independently. A low score indicates one is unlikely to define one’s own work habits and methods.”
> Ricardo Roman
Director of Association Management, Caliper
PL_Selfie.pdf 1 5/8/2018 9:29:02 AM
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GOVERNMENT AFFAIRS 2019 Prelicensing Class Schedule Conducted at State Association Headquarters, IIAW prelicensing classes fulfill the study requirements for life, health, property and casualty. Full course materials are included with registration. The classes are: • • • • •
Designed to help you pass your state licensing examination The quickest way to meet the WI 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 Commissioners of Insurance
REGISTER AT IIAW.COM To register, click the Education tab on IIAW.com. For WI exam info, visit Prometric.com. IIAW Member Pricing: $340 Pricing given for full class registration Non-Member Pricing $355 You may also take individual classes Contact Kim@iiaw.com for multi-registration discounts. For any other questions please contact Diana@iiaw.com.
LIFE & ACCIDENT/HEALTH
PROPERTY & CASUALTY
January 7-10 February 4-7 March 4-7 April 1-4 May 6-9 June 3-6 July 8-11 August 5-8 September 9-12 October 7-10 November 4-7 December 2-5
January 14-17 February 11-14 March 18-21 April 15-18 May 20-23 June 17-20 July 15-18 August 19-22 September 16-19 October 21-24 November 18-21 December 9-12
The course fee includes all class materials. Materials are distributed on the first day of class. You receive: • Life & Accident/Health or Property & Casualty Insurance Study Manual • The Intermediary’s Guide to Wisconsin Insurance Law • The State of Wisconsin Ins. Licensing Candidate Handbook (This provides all the information to obtain a license)
DAILY SCHEDULE
Day 1 (Monday) > Ham EATHER EILERS-BOWSER 8:30 - 4 pm ($85) Section Principles of Insurance & General WI Ins. Law Ethics BigA:“I” Counsel, Federal Government Affairs Day 2 (Tuesday) 8:30 am - 4 pm ($90) Section B: Life Policies, Terms & Concepts or Section B: Property Policies, Terms & Concepts Day 3 (Wednesday) 8:30 am - 11:30 ($45) Section B: Life Policies, cont. & WI Life Insurance Law or Section B: Property Policies, cont. & WI Property Insurance Law Noon - 4 PM ($45) Section B: Accident & Health Policies, Terms & Concepts or Section B: Casualty Policies, Terms & Concepts Day 4 (Thursday) 8:30 am - 4 pm ($90) Section B: Accident & Health, cont. & WI Health Insurance Law or Section B: Casualty Policies, cont. & WI Casualty Insurance Law
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 pre-licensing is canceled for the day. Canceled classes are made up on Friday.
HOTEL INFORMATION
Student requiring lodging will receive a special rate at the Home2 by Hilton and Clarion Suites. Home2 by Hilton, 2153 Rimrock Rd. in Madison. Please call the hotel directly at 608.949.9650, and ask for the “Independent Insurance Agents of Wisconsin” discount. Clarion Suites, 2110 Rimrock Rd. in Madison. Please call the hotel directly at 608.284.1234, and ask for the “Independent Insurance Agents of Wisconsin” discount.
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Bird Flu, Swine Flu, Just the Flu and Pandemics: How Workers’ Compensation Responds A pandemic is defined as, an outbreak of a disease that occurs over a wide geographic area and affects an exceptionally high proportion of the population.” Because news outlets live by the moto, If it bleeds, it leads,” anytime more than 27 people contract a disease, the media dub it a pandemic. My apologies, my intent is not necessarily the denigration of the news media by accusing them of blowing things out of proportion to attract viewers, my purpose is to answer the question, what makes an illness an occupational illness” and compensable under workers’ compensation? Two tests must be satisfied before an illness or disease qualifies as occupational and thus compensable under workers’ compensation: 1. The illness or disease must be occupational,” meaning that it arose out of and was in the course and scope of the employment; and 2. The illness or disease must arise out of or be caused by conditions peculiar” to the work. Whether an illness arises out of and in the course and scope of employment is a function of the employee’s activities. The simplest test toward determining whether an injury arises out of and in the course and scope of employment” is to ask: Was the employee benefiting the employer when exposed to the illness or disease? Be warned, this test” is subject to the interpretations and intricacies of various state laws. Qualifying as occupational” is the low hurdle. The higher hurdle is whether the illness or disease is peculiar” to the work. If the illness or disease is not peculiar to the work, it is not occupational and thus not compensable under workers’ compensation. An illness or disease is peculiar” to the work when such a disease is found almost exclusively to workers in a certain field or there is an increased exposure to the illness or disease because of the employee’s working conditions. For example, black lung disease in the coal mining industry is a disease that is peculiar to the work of a miner. Coal miners are subject to prolonged exposure to higher-than-normal concentrations of coal dust leading to black lung disease. This makes the disease peculiar to the coal mining industry. Another example of an exposure peculiar” to the work is a healthcare worker contracting an infectious disease such as HIV or hepatitis as a result of contact with infected blood. The worker’s unusual or peculiar” exposure to such diseases results in an illness that is occupational and compensable. 24
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Qualifying an illness or disease as occupational and, more importantly, peculiar to the work (and thus compensable) may ultimately require industrial commission or court intervention to sort medical opinion from legal facts. No one test” is available to declare an illness or disease compensable or non-compensable; each case is judged on its own merits and surrounding circumstances. Concluding that an illness is occupational, peculiar to the work and ultimately compensable is not necessarily based on the disease in question but on the facts surrounding the worker’s illness. Factors investigated and considered by medical professionals and the court include: The timing of the symptoms in relation to work: Do symptoms worsen at work and improve following prolonged absence from work (in the evening and on weekends); Whether co-workers show or have experienced similar symptoms; The commonality of such illness to workers in that particular industry; An employee’s predisposition to the illness (an allergy or other medical issue); and The worker’s personal habits and medical history. Patients in poor medical condition (overweight, smokers, unrelated heart disease, etc.) and/or with poor family medical histories may be more likely to contract a disease or illness than others in similar circumstances. Bad habits and poor medical history (and heredity) cloud the relationship between the occupation and the illness. For example, smokers may be illequipped to fight off the effects of illnesses to which others may have no problem being exposed. What About (the latest Pandemic or Flu) Judged against the qualifying factors presented, does any disease declared a pandemic create a true workers’ compensation exposures? The short answer is, no, not likely.” Other than the fact that a particular disease garners intense media attention, most pandemic” diseases are no more occupational in nature than the flu.
Unless!
true in the face of a pandemic real or fabricated.)
If it is proven that the employee has an increased risk of contracting any illness, sickness or disease due to the peculiarity of his or her job, then such diseases/viruses might be considered occupational and thus compensable. Remember, compensability as an occupational illness requires something about the job that increases the risk of exposure and illness.
The workers’ compensation policy specifically states that the policy in effect at the employee’s last exposure responds to the illness even if the employee is working for another employer or even retired at the time the disease manifests itself.
As intimated earlier, healthcare workers may be able to prove the necessary peculiarity face-to-face with sick people ALL day to assert a compensable injury.
A particular disease may be a humankind exposure rather than one peculiar to most employments. Contracting a specific ailment at work is not sufficient to trigger an assertion of occupational illness. To be occupational and compensable requires something peculiar about the work that increases the likelihood of getting sick. It is unlikely that both the occupational” and peculiar” thresholds will be satisfied to make most illnesses compensable” for the vast majority of individuals.
Which Policy Responds to Qualifying Occupation Illnesses and Diseases? Occupational illnesses and diseases often have long gestation” periods. Employees may be exposed to the harmful condition for many years before the illness manifests. It is also possible that the employee doesn’t contract the disease until years after the exposure ends. (None of these is
Pandemics Aren’t Special
>C hris Boggs
Big “I” Virtual University Executive Director
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supports its agency partners in their industry endeavors. We encourage and help facilitate intellectual capital sharing among partners. One way we do this is with an agency-led group called Emerging Leaders. Their focus is progressive, innovative solutions in technology, perpetuation, and sales management. We pride ourselves on building a platform that will sustain independent insurance agencies over the long haul. Because independence works better together. Contact JoAnn Hartung: 570.473.4340 | jhartung@keystoneinsgrp.com keystoneinsgrp.com
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DEALING WITH PUBLIC ADJUSTERS
Hurricanes and other communal disasters draw public adjusters to the affected areas like sharks are drawn to the smell of blood. Another public adjuster likened the influx to a pack of wolves stalking their prey. Insureds (our customers) deal with adjusters” following a loss, but they probably don’t know the differences among the three types of adjusters they may encounter. As the agent, you may want to give your clients a cheat sheet” to help them understand the differences. The information you need to provide is minimal: • Staff Adjusters: An adjuster employed directly by the insurance carrier. • Independent Adjusters: Adjusters contracted by and representing the insurance carrier but not employed by the insurance carrier. These adjusters may work for independent adjusting firms or as one-man shops contracted by the insurance carrier as the carrier’s representative. • Public Adjusters: Adjusters hired by the insured (the you”) to assist in settling the claim. They offer expertise in preparing, filing and adjusting insurance claims. Public adjusters purport to manage every detail of the claim, working closely with the insured to provide the most equitable and prompt settlement possible. Essentially, a public adjuster represents the insured AGAINST the insurance carrier.
Now Let’s Focus on Public Adjusters
Public adjusting firms often have very persuasive (or sometimes crooked) sales teams who depend on your insured not knowing or understanding the differences among the various types of adjusters. We must educate our insureds so they know who represents whom and at what cost. Don’t misunderstand, a good and ethical public adjuster can be a beneficial ally following a property loss in certain circumstances. Because most insureds have never suffered a loss, they don’t know or even understand all the requirements or nuances of the claims process. Further, many agents don’t know all the ins and outs” of property loss adjustment and may not be the best 28
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advocate for the insured. Agents are also hampered by the fact that they contractually represent the carrier not the insured. Public adjusters know and are practiced in the claims process and aren’t hampered by a contractual relationship with the insurance carrier. In reality, a good and ethical public adjuster can be a strong advocate for the insured. But not every public adjuster is good and even fewer are ethical. Some might say that only a few are both good and ethical. When a major natural disaster strikes, count on at least some of your insureds being contacted by a public adjuster. Know also that a few of your insureds will contract with these adjusters for good or bad. Agents must seize upon this opportunity to properly serve those clients who are approached by a public adjuster, mainly to help them choosing a BAD public adjuster. As the agent, you are the primary contact following a loss. You must take the opportunity when the insured reports the claim to disseminate key information to them, including what to prepare for when approached by a public adjuster. While it is the insured’s choice to hire or not hire a public adjuster, don’t let them contract blindly without knowing key facts regarding public adjusters, particularly which ones to avoid. When your insured reports the property loss, warn them that public adjusters will soon be calling and advise them to notify you immediately if they are talking with a public adjuster. This gives the agency the opportunity to advise the insured regarding the: 1) need to even hire a public adjuster; and 2) keys to choosing the best public adjuster if the insured wants to hire one. Arm your insureds with the 11 key questions to ask when considering a public adjuster: • Does the adjuster have a state-issued public adjuster license? Public adjusters are generally required to be licensed in the state in which the property is located. Make sure the insured gets or sees a copy of the license.
• Where is the public adjuster based? Even if the public adjuster has a license issued by the state in which the property is located, is the adjuster domiciled in the state? There are state-to-state variations in coverage, if the adjuster does not commonly work in the affected state, he/she may not know all the laws and requirements. • Is the adjuster a member of the National Association of Public Insurance Adjuster (NAPIA) or another professional association? Although membership in NAPIA does not guarantee the ethics of the public adjuster, members of the association are required to follow a strict code of ethics. • Were references and qualifications provided? Yes, the insured’s life is in chaos following a catastrophic loss, but it’s still important to check references when considering a public adjuster. As the agent, you may want to check references on the insured’s behalf; in fact, this may be preferable because the same public adjusting firm may contact many of the agency’s clients. If the agency checks the firm’s references, every insured contacted by that firm must only call the agency for information. Again, make this about the services the agency provides. Report only what you are told by the references, do not slander the adjusting firm. • Did the public adjuster attempt to pressure the insured into signing the contract? Statements such as, Just sign this and we will take care of the whole thing for you,” sound innocuous, but this is actually a type of hardsell.” Remind the insured that even if a public adjuster is involved, the insured must still participate in developing the proof of loss. They still must do some of the work. • Did the adjuster fully explain the contract? Remember, public adjusters charge a fee for their service, often between 10 percent and 15 percent of total claim payment. If this and other provisions of the contract were not clearly explained, this is a red flag. One public adjuster interviewed said that fees over 10 percent are unacceptable. Some states have a limit of adjustment fees. • Did the adjuster ask for money up front? This is in NO way proper. If the public adjuster asks for money up front, do not contract with them. • Did the adjuster make any guarantees about the amount the insured will get paid? There is no way a public adjuster can guarantee anything, warn insureds against contracting with any public adjuster who guarantees a specific outcome. • Is the person who sold” the service the same person who will work with the insured to adjust the loss? This is not an ethical consideration, but the actual adjuster and the sales person may have very different personalities. Also, is the sales person just a sales person or do they understand coverage and the claims process? The insured needs to know the qualifications of the assigned adjuster.
• Does the contract address monies received prior to the hiring of the public adjuster? If the insurance carrier pays the insured emergency money” or some other payment before the public adjuster was hired, that amount should not be a part of the payment calculation. • Does the public adjuster seem honest? This may be a hard judgement to make, but some public adjusters may give themselves away by telling the insured things they can or will do to make sure” the insured gets a certain amount of money. An ethical public adjuster wants to assure the insured gets everything they are owed, and no more. They are not in the business to increase the loss for sake of a little greater payout. Once a public adjuster is hired, the agent must still provide guidance to the insured, not necessarily through the claims process (as that becomes the public adjuster’s role), but through the relationship with the public adjuster. Encourage the insured to notify the agency if a public adjuster is hired and get to know the adjuster, if possible. And most importantly, keep track of what the public adjuster is doing. An ethical public adjuster will welcome the relationship and happily converse with the agent as time allows; an unethical one will avoid agent involvement and any conversation with another insurance professional working for/with the insured. Keep your insured informed as well. If the public adjuster appears to be harming the insured, inflating the loss or otherwise acting in an unethical or illegal manner, contact the department of insurance. The agent’s job is to protect the client, even when the client hires a third party. Even though a public adjuster is involved, the insured is still your client. The public adjuster will eventually leave and will likely never again have contact with your insured. You are left to pick up the pieces if the public adjuster handles the claims process poorly or the hoped-for result didn’t occur. If you stay involved in the process even after your insured has contracted with a public adjuster, you are properly serving your client and hopefully helping them enjoy a better outcome. Remember, who your insured hires is their decision; how you service your insured is your decision. Provide the service they need even if they don’t yet see the need. And lastly, don’t take the presence of a public adjuster personally, good ones are actually a valuable resource (and I know one really good one but not many others).
> Chris Boggs
Big “I” Virtual University Executive Director
wisconsin INDEPENDENT AGENT
NOVEMBER 2019 29
News Members in the
BEST PRACTICES 2019 WINNERS
Emily Marker, INS, AINS, was named Vice President, Property Practice Leader. She most recently served as a property broker after joining the Arlington/Roe brokerage team in 2015. She has been in the insurance industry since 2001, gathering experience at an insurance company as well as at a large wholesale broker, with a focus on property and inland marine. Emily holds designations in General Insurance (INS) and Associate in General Insurance (AINS). Sonyia Townsend was named Vice President Professional Liability, Practice Leader. She joined Arlington/Roe in 2008. Before moving to Indianapolis, she worked for recreational vehicle manufacturers in warranty and human resource departments. Sonyia has a degree from Lipscomb University and is working toward her Registered Professional Liability Underwriter (RPLU) designation. About Arlington/Roe Arlington/Roe is a family-owned managing general agency and wholesale insurance brokerage headquartered in Indianapolis, Indiana with offices also in Ohio, Michigan, Illinois, Kentucky, Tennessee, Missouri, Minnesota and Wisconsin. Arlington/Roe was founded in 1964. Arlington/ Roe’s specialty departments include Aviation, Bonds, Farm, Personal Lines, Commercial Lines (Underwriting and Brokerage), Transportation and Garage, Professional Liability, Workers’ Compensation and Healthcare & Human Services. The company writes in excess of $220 million in annual premium.
The Best Practices agencies are recognized as the country’s leading agents and brokers. The Best Practices Study uses data from these agencies to provide industry benchmarks and operational information on growth, profitability, productivity and financial stability. The IIAW wishes to recognize our Best Practice Agency members, Alongi Santas Moss and M3 Insurance. Keep up the great work!
ARLINGTON/ROE PROMOTES HAWKINS, MARKER AND TOWNSEND TO VICE PRESIDENT Indianapolis – Julie Hawkins, Emily Marker, and Sonyia Townsend have been promoted to Vice Presidents at Arlington/Roe according to James A. Roe, president and CEO of the company, an independent family owned managing general agency and wholesale insurance broker. Hawkins, Marker and Townsend joined the company in 2013, 2015 and 2008, respectively. Julie Hawkins was named Vice President, Casualty Practice Leader. She began her Arlington/Roe career in 2013 as a senior broker. Her prior experience includes work for insurance companies as a multiline broker, reinsurance broker and commercial underwriter. She has also worked for large brokerage firms.
ACUITY’S ECONOMIC IMPACT RECOGNIZED BY DELOITTE PRESS RELEASE Acuity is named to the Deloitte Wisconsin 75, the annual program honoring the state’s largest closely held firms for their impact on Wisconsin’s economy. In Acuity’s 13th year on the list, the insurer is ranked at number 19. Private companies play a critical role in Wisconsin’s economy, providing a stable and strong foundation. Each year, Deloitte recognizes the largest and most successful companies in the state. Acuity continues its strong business growth and expansion in 2019. The insurer has doubled its revenue in the past eight years and is on track to record $1.65 billion in revenue this year. Acuity is ranked as the 54th largest property-casualty insurance company in the nation out of 2,600 carriers and the 11th largest Super Regional Property-Casualty (P&C) Insurer. The company also earned the Economic Driver Award from the Wisconsin Economic Development Association (WEDA) for its operations that have a significant economic impact in the state.
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UNDERSTAND THE IMPORTANCE OF THE QUALIFIED LEAD RATIO Agencies calculate and make financial decisions based on many ratios including liquidity ratios, the retention ratio, the quote-to-bind ratio and the closing ratio. But the one ratio agencies often ignore is the Qualified Lead Ratio. It is ignored because few understand the long-term importance of knowing how reliable the agency's pipe line" really is. The qualified lead 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. Let's first understand how the qualified lead ratio is calculated; then let's define what constitutes a qualified lead."
Qualified Lead Ratio Calculation
# of Qualified Leads" / Total # of Prospects in Database = Qualified Lead Ratio The calculation is easy to understand; the difficulty lies in defining a qualified lead." And remember, the lower the ratio, the worse the agency's key source of future revenue.
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 or what percentage 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 more important than just a prospect list is a prospect list made of a high percentage of qualified leads." What constitutes a qualified lead"? A qualified lead is one: • For which the agency has a market: Every agency has prospects in its list that none of its carriers will write, ever. These are not good prospects and are certainly not qualified leads; • T hat 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; • W ith whom the agency wants to do business. Some people are just hard to deal with and aren't worth the heartache regardless of the income; and • T hat falls within the agency's or producer's niche. The most successful agencies don't shotgun" their prospect or client operations, they become very good at one or a few types of businesses. To be a qualified lead, it must be one of the types of operations the agency writes. 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 in place, the key to recognizing whether a prospect is a qualified requires honest review. If any of the qualifiers is missing, the lead is not a qualified lead and should be discarded.
Why This is Important
Undertaking the investment in time and effort needed to research the database and calculate this ratio is absolutely essential. Developing the qualified lead ratio requires the agency to define its focus - not just its niche, but its focus. An agency with a defined focus is not distracted by shiny objects, squirrels and jingling keys. Knowing who and what fits the agency gives the agency the freedom to invest time in pursuing those leads, that business and those people. The result - improved closing ratios and increased income.
A For Instance"
For instance, if the agency's database of 1,000 prospects/suspects contains 200 restaurants yet none of its carrier markets writes restaurants those 200 prospects are simply a distraction and taking up space. Likewise, if the agency calculates that an account must generate at least $2,000 in revenue to be profitable for the agency, yet 300 of the 1,000 prospects produce less than $200 in revenue, 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 is not a once and done" review, it requires ongoing 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 lead generating entity 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 (not qualified), 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.
GIGO
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
Big “I” Virtual University Executive Director
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