Insurance Journal West 2014-08-18

WEST UnitedHealth Fine a P/C Insurers Worry?

San Diego Comic-Con’s Trademark Suit Fitness Tests for Ski Resort Workers

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August 18, 2014 INSURANCE JOURNAL-NATIONAL | 5

WEST

Inside This Issue

On The Cover

Special Report:

101 Sales, Marketing & Management Ideas

August 18, 2014 • Vol. 92 No. 16 • West

W2

W6

32

34

NATIONAL COVERAGE

WEST COVERAGE

IDEA EXCHANGE

10 Flood Insurance Premium Refunds

in Process

W2 Aspen Skiing Co. Initiates Fitness

Tests to Reduce Workplace

Injuries

30 Minding Your Business: Catherine

Oak & Bill Schoeffler

16 Agent Survey: Not All Carrier

Training Is Created Equal 18 E&O Insights: ‘Just Duplicate What

I Have’ 22 Special Report: 101 Sales,

Marketing & Agency Management

Ideas

W2 Boating, Rafting Operators

at Tahoe Put Out by Drought W6 UnitedHealth’s $173M Fine May

Be Warning to P/C Insurers W10 San Diego Comic-Con Files

Trademark Suit Against Utah

Convention

32 Tech Talk: How to Protect Your

Agency’s Digital Security 34 Growing Your Property Casualty

Agency: Alan Shulman 38 Closing Quote: Hopeful Outlook

for Workers’ Comp

DEPARTMENTS 8 W4 12 12 14 21

6 | INSURANCE JOURNAL-WEST August 18, 2014

Opening Note People Declarations Figures Business Moves MyNewMarkets

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NATIONAL COVERAGE

Opening Note

Publisher Mark Wells | mwells@wellsmedia.com

Mickey Mouse Ideas “I only hope that we don’t lose sight of one thing — that it was all started by a mouse.”

S

o, according to the Internet, said high school dropout Walt Disney.

As an avid drawer as a kid, then as a commercial artist as a young adult, Walt Disney was always experimenting with the camera. This interest resulted in him launching his own animation studio. In 1928, he debuted a short film, Steamboat Willie, in which he introduced Mickey Mouse. Mickey became a huge hit. And after Mickey, so did Donald Duck, Pluto and Goofy.

Disney won more than 20 Academy Awards producing Snow White and the Seven Dwarfs, Pinocchio, Fantasia, Cinderella, Sleeping Beauty, 101 Dalmatians and many more films. In all, his studio produced more than 101 features.

Of course, Disney was much more than a filmmaker. On the back of that little mouse, Disney and his brother Roy grew their little art studio into a multinational entertainment and leisure industry giant, Walt Disney Productions.

How did he do it? He tried many different things.

Disney hired merchandising agents to increase licensing fees. He published comic strips to boost revenues. He launched Mickey Mouse Clubs to promote Disney’s films and products.

A believer in technology, Disney was among the first to use Technicolor.

In 1950, he ventured into television, which many in films feared, in order to cross-promote his characters and films. Disney was one of the first filmmakers to conduct audience research during and after film production.

He invested in the theme parks Disneyland and Walt Disney World to further extend his brand. He built alliances between his theme parks and other businesses including ABC-TV and publishers. Thus the theme parks, films, TV shows, comic books and coloring books all promoted one another. He convinced major corporations including TWA, American Motors and Pepsi-Cola to become sponsors of Disneyland rides and exhibits.

Diversifying revenues, cross-promotion, building alliances, employing new technology…. Hmmm.

This issue of Insurance Journal has 101 sales, marketing and agency management ideas. Walt Disney did not contribute to these directly but he did in spirit. These 101 ideas have been contributed by agents and consultants, CSRs and CEOs, and Insurance Journal magazine readers and website visitors. The 101 ideas are published in random order.

Some of these ideas may not fit your circumstances; others may address an immediate or future opportunity. Many are big ideas that merit serious consideration. Some of our favorites are the smaller ideas like custom logo cookies, a charity event, or a video introducing newcomers to your town.

We are frequently asked why we publish 101 ideas; why not just 100? That would be like making 100 Dalmatians! We publish 101 because that extra one could be YOUR Mickey Mouse idea. We sinAndrea Wells cerely hope you find it.

Editor-in-Chief

8 | INSURANCE JOURNAL-NATIONAL August 18, 2014

EDITORIAL Editor-in-Chief Andrea Wells | awells@insurancejournal.com V.P. Content Andrew Simpson | asimpson@insurancejournal.com East Editor Young Ha | yha@insurancejournal.com Southeast Editor Michael Adams | madams@insurancejournal.com South Central Editor/Midwest Editor Stephanie K. Jones | sjones@insurancejournal.com West Editor Don Jergler | djergler@insurancejournal.com International Editor Charles E. Boyle | cboyle@insurancejournal.com Senior Editor Susanne Sclafane | ssclafane@insurancejournal.com ClaimsJournal.com Editor Denise Johnson | djohnson@claimsjournal.com MyNewMarkets.com Associate Editor Amy O’Connor | aoconnor@mynewmarkets.com Columnists Catherine Oak, Curtis Pearsall, Bill Schoeffler, Alan Shulman Contributing Writers Stephen Klingel, Paul J. Weber, Nomaan Merchant SALES V.P. Sales & Marketing Julie Tinney (800) 897-9965 x148 | jtinney@insurancejournal.com West Dena Kaplan (800) 897-9965 x115 | dkaplan@insurancejournal.com South Central Mindy Trammell (800) 897-9965 x149 | mtrammell@insurancejournal.com Midwest Lauren Knapp (800) 897-9965 x161 | lknapp@insurancejournal.com Southeast Howard Simkin (800) 897-9965 x162 | hsimkin@insurancejournal.com East Dave Molchan (800) 897-9965 x145 | dmolchan@insurancejournal.com New Markets Sales Manager Kristine Honey | khoney@insurancejournal.com Classifieds, Jobs, Agencies Wanted/For Sale Ly Nguyen (800) 897-9965 x125 | lnguyen@insurancejournal.com MARKETING/NEW MEDIA Marketing Administrator Gayle Wells | gwells@insurancejournal.com Advertising Coordinator Erin Burns (619) 584-1100 x120 | eburns@insurancejournal.com V.P. of Media Bobbie Dodge | bdodge@insurancejournal.com DESIGN/WEB V.P. of Design Guy Boccia | gboccia@insurancejournal.com V.P of Technology Joshua Carlson | jcarlson@insurancejournal.com Audience Development Elizabeth Duffy | eduffy@wellsmedia.com Marketing Director Derence Walk | dwalk@insurancejournal.com Web Developer Jeff Cardrant | jcardrant@insurancejournal.com Web Developer Chris Thompson | cthompson@insurancejournal.com IJ ACADEMY OF INSURANCE Online Training Coordinator Barbara Whiffen | bwhiffen@ijacademy.com ADMINISTRATION Chief Executive Officer Mitch Dunford Chief Financial Officer Mark Wooster | mwooster@wellsmedia.com

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insurancejournal.com/subscribe Insurance Journal, The National Property/Casualty Magazine (ISSN: 00204714) is published semi-monthly by Wells Media Group, Inc., 3570 Camino del Rio North, Suite 200, San Diego, CA 92108-1747. Periodicals Postage Paid at San Diego, CA and at additional mailing offices. SUBSCRIPTION RATES: $7.95 per copy, $12.95 per special issue copy, $195 per year in the U.S., $295 per year all other countries. DISCLAIMER: While the information in this publication is derived from sources believed reliable and is subject to reasonable care in preparation and editing, it is not intended to be legal, accounting, tax, technical or other professional advice. Readers are advised to consult competent professionals for application to their particular situation.

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NATIONAL COVERAGE

News & Markets Flood Insurance Premium Refunds in Process

T

Older commercial properhe Federal Emergency Management ties, non-residential propAgency (FEMA) is being praised for erties, severe repetitive loss moving quickly and ahead of schedule to properties and buildings get $100 million in flood insurance premium that have been severely damrefunds into the hands of the one million aged that now have subsipolicyholders who “overpaid” under the dized rates will continue to Biggert-Waters Act that hiked premiums see up to a 25 percent annual for many last year. Write Your Own (WYO) increase until they reach flood insurers are to begin mailing checks their full-risk rate, according Oct. 1 and should be done by the end of the to FEMA. year under the FEMA administrative orders.

Sen. Mary Landrieu, The refunds are required under the D.-La., chaired a Homeowners Flood Insurance Affordability recent hearing of the Act (HFIAA), which Congress passed in Senate Appropriations March in response to complaints about Craig Fugate Subcommittee on Homeland Biggert-Waters reforms. HFIAA backtracks Security on improving the accuracy of flood on the fiscal reforms of Biggert-Waters and maps that presented an opportunity to stops many of the increases, restores the report on the HFIAA. subsidies and mandates refunds for about Those testifying included Sen. Robert one million policyholders.

Menendez, D-N.J.; Fugate, FEMA adminis FEMA said the refunds will range from a trator; Patricia Templeton-Jones, executive few dollars to a high of $10,000 or more but vice president of Wright National Flood the average refund will be $100.

Insurance Co. representing the Property The refunds under HFIAA will be going Casualty Insurers Association of America; to people who purchased new homes after and Donna Smith, chair of the National Biggert-Waters became law in July 2012, Association of Realtors flood insurance task or who didn’t have flood insurance before force. The Independent Insurance Agents that date, or whose insurance lapsed. Their and Brokers of America (Big “I”) also subrevised premiums will be based on premimitted testimony. um schedules in effect Oct. 1, 2013.

FEMA was also praised Not everyone gets refunds Lawmakers are for moving quickly to restore or reduced rates under pleased with the “grandfathering” of propHFIAA. Close to 80 percent of NFIP policyholders paid a implementation erties and suspending the full-risk rate prior to either of the refund law. “triggers” that caused immediate loss of subsidies under Biggert-Waters or HFIAA Biggert-Waters. Also, NFIP staff was heraldand are “minimally impacted” by either ed for holding regular conference calls with law, according to Craig Fugate, the adminindustry stakeholders on HFIAA and often istrator for FEMA, which administers the implementing technical advice provided National Flood Insurance Program (NFIP). during these calls.

HFIAA requires gradual rate increases “In stark contrast to the uncertainty and of five to 15 percent (but no more than 18 confusion during the initial implementation percent for any individual policyholder) on of Biggert-Waters, we are happy to report properties now receiving subsidized rates to the committee that, to date, the roll-out instead of immediate increases to full-risk of HFIAA has gone rather smoothly,” said rates as happened under Biggert-Waters.

Charles Symington, Big “I” senior vice presiThese gradual rates will start Oct. 1 2014. dent for external and government affairs.

However, there are some exceptions to “FEMA seems determined to get the law’s these general rules and limitations, too.

10 | INSURANCE JOURNAL-NATIONAL August 18, 2014

implementation right, this time,” said NAR’s Smith, who is a broker with Berkshire Hathaway Home Services, C. Dan Joyner Realtors in Greenville, South Carolina.

Smith said that within a month of HFIAA’s enactment, FEMA issued rate-relief guidelines to insurers so that homebuyers would not have to pay more than current owners would at the time of their next flood insurance policy renewal. The relief also applies to current homeowners who bought a new policy or let one lapse, not just to owners who bought property after the Biggert-Waters act went into effect last year.

Within two months of implementation, FEMA announced its intention to hold 2013 rates constant through 2015 and in some cases even reduce rates. NAR, which said it has received no real consumer complaints since HFIAA passed, also thanked FEMA for providing timely guidance to insurers on the refunds.

Sen. Landrieu, who said she was happy to learn of the positive reports from the businesses interests, pressed FEMA’s Fugate on the need for more accurate flood maps.

FEMA’s Fugate said that about 50 percent of all flood maps are current, 40 percent are in need of review, and 10 percent are out of date. Landrieu vowed to get FEMA the money it needs to update all maps by 2017, when NFIP is up for renewal. www.insurancejournal.com

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News & Markets Aspen Skiing Co. Initiates Fitness Tests to Reduce Workplace Injuries

S

ome Aspen Skiing Co. workers are hitting the weights and sharpening agility skills this summer to get ready for new annual fitness tests ahead of ski season.

About 1,500 ski instructors, lift operators and ski patrollers will be required to take fitness tests starting Oct. 1. Previously, fitness tests were administrated only to new employees, not returning employees.

It’s part of a broader wellness initiative to encourage health and fitness and to reduce workplace injuries, said Jim Laing, Skico vice president of human resources and retail operations.

The fitness test has eight components, which change slightly depending on department. Ski patrollers, for example, have a repetitive weight lifting drill.

Workers will have 40 or 50 opportunities over the next two months to meet with fitness experts hired by the company to do a “dry run” of the fitness test.

“I think there’s a full range of perceptions over this,” Laing said of the fitness test.

The reaction probably follows a classic bell curve, with most employees in the middle. They don’t mind taking the test and will likely pass with varying degrees of preparation, he said.

A small number of employees won’t give the test a second thought and will be able to pass it easily just by following their usual fitness and outdoor regimens, he said. And an equally small number objects to the test as irrelevant to their job, according to Laing.

The fitness test represents a change, he said, and some people don’t like change.

Corporate brass and administrative workers who spend more time behind a desk

Boating, Rafting Operators at Tahoe Put Out by Drought

A

fter first putting a damper on skiing and snowboarding in the winter, the drought now is taking a toll on boating and rafting around Lake Tahoe.

Larry Boerner, owner of the paddlewheeler Tahoe Gal, said he can offer sightseeing cruises when the lake is a foot below its natural rim, but operations would prove difficult if water levels fall beyond that point. Tahoe’s water level stood at 6,223.98 feet above sea level as of early August, barely above its natural rim of 6,223 feet.

Boerner said he usually operates from mid-May to mid-October, but the drought may cut his season short.

“The east shore has a lot of little rocks, and there’s a lot of obstacles starting to

W2 | INSURANCE JOURNAL-WEST August 18, 2014

show now, so you’ve got to be much more careful,” he said.

Owners of the Truckee River Rafting Co. and IRIE Rafting Co. say low flows won’t permit rafting on the upper Truckee in August, one of their most profitable months. The season usually lasts into October.

“After Aug. 1, unfortunately, the water master has informed us that the resource is no longer there, so we’re going to get much lower flows that we’re not going to be able to raft on,” said Frank Wohlfahrt, president of IRIE Rafting. “I’m not going to lie. It is financially painful for us to lose a third of our season, but it is what it is.”

Jim Phelan, general manager of the Tahoe City Marina, said he has seen more boat-propeller damage caused by lower water levels.

“I really feel for the boaters as the launch ramps close down,” he said.

Copyright 2014 Associated Press.

than on the slopes technically don’t have to take the test. However, many of those employees help load lifts during busy times of the season, so they will also be required to prove their fitness, Laing said.

Probably the most rigorous component will be repeatedly stepping up onto an elevated platform for five minutes, Laing said. Other components include 15 push-ups, standard or from knees, in one minute; hopping sideways; and balancing on one foot on a foam pad.

The “Work Ready” program has been thoroughly tried and tested and has been put into use by all sorts of employers, Laing said.

Vail Resorts follows a similar program.

Copyright 2014 Associated Press.

Oregon Family of DUI Victim Settles with Driver, Restaurants

A

settlement agreement in a Lane County, Ore., drunk driving lawsuit appears to award slightly more than $180,000 to the victim’s heirs.

The mother and two children of a Cottage Grove woman killed by a drunken driver in 2012 have settled for just over $60,000 each in a wrongful death lawsuit The suit was filed against the driver and two restaurants that allegedly served him alcohol on the night of the wreck.

Forty-year-old Teresa Grondona died April 8, 2012, while driving to her job at a Cottage Grove convenience store. Her car was struck on Highway 99N by an oncoming pickup that drifted into her lane.

The pickup’s driver, Jeremy Christopher Henry, is now serving a 10-year sentence for first-degree manslaughter and driving under the influence.

Copyright 2014 Associated Press. www.insurancejournal.com

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People Keith Braxton

Salt Lake City, Utah-based The Buckner Co. is making several leadership changes.

Terry H. Buckner, formerly the president and CEO, will now serve as chairman and CEO. Buckner plans to focus more of his attention now on external growth and the strategic direction of the company going forward. He took over the reins from his father and uncle in 1988.

Mark Oligschlaeger has been promoted from executive vice president and COO to president and COO. He has spent the past four years streamlining the company’s operations and will continue to do so as he takes on the additional day-to-day management responsibilities in this new role.

Christian Deputy has been named chief sales officer, a new position for The Buckner Co. Deputy will continue working with his insurance clients, but will also now be managing his colleagues in the sales force and be responsible for the organic growth of the company.

Additionally, The Buckner Co. has opened new Denver, Colo., office and named Keith Braxton president.

As head of the Salt Lake City, Utah-based commercial insurance brokerage’s Colorado office, Braxton is charged with recruiting talent, building the company’s brand in the market and seeking acquisition opportunities.

Braxton previously served as president and CEO of Colorado Casualty and Indiana Insurance Co. in addition to other executive roles in the insurance industry.

The Buckner Co. now has six offices throughout the West.

IIABCal Past President Stan Loar received the association’s Ramsden-Sullivan Memorial Award last week.

The award is the highest IIABCal gives, and a recipient is said to exemplify the highest caliber of service to the independent agency system, the insurance industry and the community.

Loar is chairman of San Francisco-based WoodruffSawyer & Co., a firm he joined in 1976. He served as the firm’s CEO for 13 years before to transitioning to vice chairman of the board in 2008. He became chairman in 2013.

Loar has 38 years of experience in the insurance industry, and has served in a number of central roles across his career. He has extensive international experience, including working in the United Kingdom and Germany.

He is the incoming chairman of the World Federation of Insurance Intermediaries, a board member of the Council of Insurance Agents & Brokers and an underwriting member of Lloyd’s of London. He also serves on the board of Bermuda captives PAR Ltd. and AGP. In addition to being past chairman of Assurex Global and its international executive committee, Loar was pres-

W4 | INSURANCE JOURNAL-WEST August 18, 2014

ident of the Western Association of Insurance Brokers and also served as a director of the Insurance Brokers & Agents of the West (later named IIABCal). He was a board member and treasurer of the National Association of Insurance.

First American Property and Casualty Insurance Group has named James J. Court president of the company.

Court is based in the company’s office in Santa Ana, Calif. Dirk McNamee assumes the role of vice chairman.

Court has served as senior vice president and chief operating officer since 2007 and has been with the company since 1999.

Before joining First American Property and Casualty, Court held operations and information technology leadership positions with Printronix Inc. and MGE UPS Systems.

First American Property and Casualty is a wholly-owned subsidiary of First American Financial Corp.

American Modern Insurance Group named Elvia Alaniz vice president of the sales west region.

Alaniz has more than 18 years of insurance experience in marketing, underwriting and sales. She previously served as director of marketing for American Modern and assistant vice president of underwriting at ICW Group/ Explorer Insurance.

American Modern offers products and services for residential property, including mobile homes and specialty dwellings, and for consumers in the recreational market, including owners of boats, personal watercraft, classic cars, motorcycles, ATVs and snowmobiles.

IFG Cos. named Dennis P. Doyle as managing director in its property department.

Doyle will be based in the Los Angeles, Calif., area and will participate in the opening of IFG’s new office in that region. He will help lead IFG’s commercial property initiatives nationally and oversee a team of property underwriters.

He was previously with Colony Specialty. Before that, Doyle worked as a senior vice president at Arrowhead General Insurance Agency. Prior to Arrowhead, he worked at Munich Re/American Re in various property-related underwriting positions, and he worked as a property/casualty underwriter at Aetna early in his career.

IFG provides property/casualty insurance on both a non-admitted basis and an admitted basis. Coverages are underwritten by IFG’s affiliated insurers: The Burlington Insurance Co., First Financial Insurance Co., Alamance Insurance Co. and Guilford Insurance Co. www.insurancejournal.com

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News & Markets UnitedHealth’s $173M Fine May Be Warning to P/C Insurers

By Don Jergler

The insurer has acknowledged that the claims paperwork inherited from decision by California Insurance PacifiCare was bungled, but Commissioner Dave Jones to fine that all the claims in quesUnitedHealth Group $173.6 million for tion were paid. violations having to do with the Unfair While the size of the Business Practices Act, the Unfair Insurance fine is unprecedented, also Practice Act and unfair claims settlements unprecedented is the way may be a wakeup call not just for health in which the decision aggreinsurers, but life and property/casualty gates the violations and insurers, experts say. fines the insurer for each A recent market conduct examination letter that wasn’t properly by the California Department of Insurance mailed out. showed UnitedHealth, the nation’s larg “He’s looking at a $10,000 est health insurer, committed more than fine per letter that we 900,000 violations after its $8.2 billion takedidn’t send out, which is over of Cypress-based PacifiCare in 2005. ridiculous,” Randolph said.

Jones’ June 9 decision is based on that The decision appears to examination, and his decision overrode a indicate just how far Jones ruling last year by an administration law is willing to go to punish judge that said UnitedHealth should be those he considers bad fined no more than $11.5 million. actors, and it’s an efficient Jones rejected the ruling and imposed way to make sure carria penalty more than 15 times larger. ers dot their “i”s and “t”s, Although, under Insurance Commissioner experts say.

Steve Poizner four years ago California Experts also say Jones’ decision can be sought a penalty of nearly $10 billion extended to other lines. against the insurer, a fine that didn’t stand.

“If I was a property/casualty insurer in UnitedHealth in July sued Jones to block California, I would pay attention to this,” the massive fine, which is considered said Jay M. Feinman, a Rutgers School of unprecedented in size.

Law professor whose areas of expertise The suit, which was filed in Orange include insurance law. “It indicates what County Superior Court, alleges that Jones the commissioner is willing to do.” was abusing his power and setting a prece Because Jones oversees the entire industry dent by seeking such a large fine for what and his decision are essentially paper‘He’s looking at a $10,000 fine sets a precedent work violations. for what is within The insurer argues per letter that we didn’t send his purview and that by treating out, which is ridiculous.’ how he can calcuerrors in standard late and issue fines, all insurers should conhealth insurance paperwork more severesider themselves subject to the aggregate ly than errors that directly affect patient fines laid out in the UnitedHealth decision, health or the integrity of their policies, Feinman Jones’ decision threatens to make the state’s “This is not just health insurers, any healthcare system slower, less efficient and insurer is subject to the jurisdiction of the more expensive. insurance department,” he added.

“It does have implications going forward,” Other experts say the way Jones fined said PacifiCare spokeswoman Cheryl UnitedHealth is the only way to ensure Randolph. “It’s setting new standards.”

A

W6 | INSURANCE JOURNAL-WEST August 18, 2014

companies with deep pockets act in good faith.

Having aggregate fines in which individual violations can be piled up and applied to make up one big fine means Jones feels PacifiCare knowingly acted in bad faith by farming out its claims offshore and taking other cost cutting steps that Jones believes resulted in a convoluted claims process, said Daniel Schwarcz, associate professor of law at the University of Minnesota Law School.

“It’s obvious that the department feels that that the carrier acted in bad faith,” said Schwarcz, whose research primarily focuses on consumer protection and regulation in the property/casualty and health insurance markets. “In light of that determination, I think it’s appropriate to aggregate penalties in the manner that the department did.”

The decision cites Insurance Code section 790.03, subdivision (h), which prohibits insurers from knowingly committing or continued on page W8 www.insurancejournal.com

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News & Markets continued from page W6 performing any unfair or deceptive acts with such frequency as to indicate a general business practice.

Schwarcz’s interpretation of Jones’ decision is that he feels the insurer had “constructive knowledge” that the claims weren’t being properly handled, meaning that they were “offshoring claims activity to inflate the bottom-line at the expense of reasonable claims handling.”

“When you’re talking about a corporation, a large entity, the concept of knowing takes on a different meaning than when you’re talking about an individual,” Schwarcz said.

No other insurance voice beside UnitedHealth has stepped forward to say Jones has extended his Dave Jones reach, or express concerns about what appears to be a precedent-setting decision.

The Property Casualty Insurers Association of America, which is typically one of the first groups to charge in when there’s even a perceived threat to insurers, has been mum on the decision.

A PCI spokesperson declined to offer comment for this article, and declined to answer questions about whether the group knows there’s a potential impact for its members.

A person attending the Association of California Insurance Association’s General Counsel Seminar in Las Vegas sat in on a speech by Adam Cole, CDI’s general Counsel, who told attendees the decision applies to all lines of insurers. ACIC is part of PCI. “Adam Cole made it clear that it applied to property/casualty insurers, and not just health insurers,” said the person, who asked not to be identified.

He said attendees he spoke with afterward were previously unaware the decision applied to all lines of insurance.

“People were just shocked,” he said.

Asked to detail to whom the decision applies Deputy Insurance Commissioner W8 | INSURANCE JOURNAL-WEST August 18, 2014

Byron Tucker would only confirm that outsource all mail handling to its vendor, Jones was sending a message to bad actors.

Lason, a document provider with mail oper “If insurers follow the law they will be ations in Salt Lake City, Utah. Once in Salt fine,” Tucker said.

Lake, the correspondence was separated Tucker said the fine isn’t excessive, from “keyable” claims, scanned and emailed particularly in this case, which he called to Lason’s facility in India. unprecedented.

According to the decision, employees in “In this case PacifiCare’s conduct was so India coded correspondence by document appalling that two separate elected insurtype then routed the document to the ance commissioners found these violations proper mail queue for additional processing. absolutely reprehensible,” Tucker However, if the correspondence was inacsaid. “This is about a billion-dollar curately coded documents would go to the out-of-state company that purchased wrong PacificCare department. a much smaller well-functioning Additionally, in May 2006 PacifiCare haltCalifornia insurer and systematically ed the practice of having mail room employsucked it dry without thought for ees manually sort and scan all in coming the consequences to patients or docpaper claims to determine eligibility and tors.” coverage and began routing all scanned According to Tucker, UnitedHealth paper claims to Lason’s Mexico facility, following its takeover of PacifiCare where employees entered claims into a parmade business decisions that knowticular database depending on whether they ingly put consumers and doctors at were PPO or HMO claims. risk.

But if employees couldn’t determine “They willfully engaged in large-scale whether a claim pertained to a PPO or an decisions to use broken and unreliable HMO claim, the claim was entered into methods to process claims,” Tucker said, the HMO database by default or it was sent adding that these decisions led to nearly back to PacifiCare’s offices. Misclassified 1,800 improper claims denials. “The entire claims “could loop between PacifiCare’s time they continued to collect premiums data platforms several times before landing from customers.” in the correct queue,” the decision states.

Jones’ 225-page deciThe decision sion alleged that shortly ‘They willfully engaged in faults what it after UnitedHealth’s portrays as a conlarge-scale decisions to takeover of PacifiCare, voluted process of use broken and unreliable routing claims corUnitedHeatlth execumethods to process claims.’ respondence for the tives began a cost-savings push that called for violations. $50 million to $75 million in savings during “In October 2006, less than a year after the first year of integration between the the merger, CDI noticed an increase in two carriers and $350 million in savings consumer and provider complaints about over the next two to three years.

PacifiCare’s claims-handling practices,” the A year after consolidation efforts began decision states. “Between July 2006 and PacifiCare announced the layoff of 600 March 2007, CDI processed 44 justified employees and its intent to close its regioncomplaints regarding PacifiCare’s practices, al mail centers, claims, customer service and identified more than 188 violations of and its quality and training departments in the Insurance Code and the California Code Southern California, according to the deciof Regulations, title 10, section 2695.1 et seq. sion.

As a comparison, CDI received only two jus Before the takeover PacifiCare employees tified complaints against PacifiCare during manually routed incoming correspondence, the entire preceding year.” but in February 2006 PacifiCare began to continued on page W10 www.insurancejournal.com

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News & Markets San Diego Comic-Con Files Trademark Suit Against Utah Convention

O

rganizers of the biggest comic-book convention in the nation sued their counterparts in Salt Lake City over the event’s name, saying it confuses fans into thinking the two are affiliated.

San Diego Comic-Con’s lawsuit, which was filed early August in U.S. District Court in Southern California, says the use of “comic con” in Salt Lake Comic Con’s name constitutes federal trademark infringement.

Utah organizers have been capitalizing on San Diego’s “creativity, ingenuity and hard work” through unauthorized use of its trademarks to promote their own convention, said the complaint, which seeks damages and an injunction.

The conventions have become a pop-culture phenomenon and feature the best in movies, television shows, gaming, sci-fi/ fantasy and comic books. Many attendees dress up as their favorite characters.

Salt Lake Comic Con’s “actions have caused, and will continue to cause, irrepa-

rable harm to (San Diego Comic-Con) and to the public which is deceived as to the source and sponsorship of (San Diego’s) goods and services,” the suit said.

Salt Lake City organizers say dozens of similar conventions across the country brand their events as comic cons and they are prepared to defend themselves against the lawsuit. They refused to back down after receiving a cease-and-desist letter from San Diego organizers last month.

“We really feel like they don’t have a basis for this,” Salt Lake Comic Con co-founder Bryan Brandenburg told The Salt Lake Tribune. “We thought there might be some more ammunition with a formal lawsuit, but they still don’t have a leg to stand on.”

He thinks the Utah event’s instant popularity helped prompt the action. Salt Lake Comic Con drew 72,000 people to its inaugural event last fall and 100,000 to its FanX convention in April.

“A lot of comic cons start up every year, but we’re the first to have the largest (firsttime) comic con in North American history in little Salt Lake City,” Brandenburg told the Deseret News. “We got on their radar and we grew out of nowhere to become the third-largest comic con in our first year, so that really got a lot of attention.”

Copyright 2014 Associated Press.

California Windshield Repairer Ordered to Pay Insurer $1.4M

T

he owner of a Sonoma County windshield repair business accused in a fraudulent billing scheme has been ordered to pay Allstate Insurance and the state of California more than $1.4 million.

Court records allege Alkayisi engaged in an elaborate scheme to create multiple bogus auto-glass replacement businesses.

He is accused of using fake names and identities and then deceiving insurers by submitting fraudulent claims. Several of his W10 | INSURANCE JOURNAL-WEST August 18, 2014

family members had their names used without their consent or knowledge.

Allstate charged in court that Alkayisi submitted at least 118 fraudulent claims to the company out of the 162 it examined.

Alkayisi could not be located for comment. He was reported to be is probation for a felony check forgery in a separate case.

Copyright 2014 Associated Press.

continued from page W8 Following an investigation CDI found that PacifiCare violated the insurance code and its applicable regulations more than 900,000 times over the course of the investigation.

CDI broke up the violations into 20 separate categories including allegations it failed to: maintain certificates of coverage; give providers notice of their appeal rights; correctly pay claims; acknowledge receipt of claims; maintain complete claim files; timely respond to claimants; thoroughly investigate claims.

“CDI contends PacifiCare’s push for savings resulted in a total breakdown in customer service and claims administration,” the decision states. “CDI argues PacifiCare failed to properly vet and oversee outside vendors, resulting in poorly planned integration and thousands of violations. CDI further argues PacifiCare refused to invest in operational infrastructure and employee retention, causing corrupted provider data and a lack of institutional knowledge and consistency. Lastly, CDI asserts PacifiCare failed to adequately remediate the rampant corporate defects, demonstrating a callous indifference to California consumers and regulators.”

Using an “aggregate penalty” Jones’ decision calculates that the number of violations per category and the “per-act” penalties result in the aggregate penalty of $173.6 million.

The brunt of the penalties are from failure to give medical providers notice of a right to CDI appeal ($30 million), failure to provide notice of a right to independent medical review ($22.75 million), failure to timely pay claims ($55 million) and failure to correctly pay claims ($22.2 million).

In a statement over the lawsuit it filed PacifiCare noted that the case involved largely technical and administrative issues that the carrier had self-disclosed.

“This ruling threatens to paralyze the health care system in the state, resulting in more costs and bureaucracy for Californians,” Stephen Scheneman, president of PacifiCare, said in a statement. www.insurancejournal.com

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FIGURES

$1.2 Million

The settlement amount to which the family of a girl who was critically wounded two years ago when a gun went off inside a classmate’s backpack at her Washington state elementary school has agreed. The Bremerton School District is paying $900,000, while the gun owner’s homeowner’s insurance pays the rest.

DECLARATIONS

$97,266 The amount Austin Mutual Insurance Co. has agreed to reimburse its North Dakota policyholders for certain types of crop/hail policies. The agreement resolves an issue over whether Austin Mutual used rates that were not approved by the state insurance department.

The company also must make a $10,000 settlement payment to the department.

$27.8 Million Is how much outstanding debt Stockton, Calif., and Assured Guaranty have reached an agreement on to restructure and help the city exit from bankruptcy.

Bad Drone

“These unmanned aircraft are becoming very popular with people, and there’s a possibility we will see more of them.”

— California Department of Forestry and Fire Protection spokeswoman Lynne Tolmachoff said a private drone trying to record footage of a Northern California wildfire in July nearly hindered efforts to attack the flames from the air.

Wild, Wild West

“New York City has become the wild, wild west for commercial and hobby drones. Until clear, smart regulations are put in place by the federal government, they will continue to threaten the privacy and safety of New Yorkers.”

— U.S. Sen. Charles Schumer (D-N.Y.) on private drone use. Schumer said that while civilian drones have beneficial uses they can pose a hazard to other aircraft or pedestrians. He also said there have been incidents in which drones were used by private investigators to spy on people.

Able to Pay

“The State Fire and Tornado Fund is financially strong and is more than able to pay any potential claims. … When policyholders work with the F&T management to reduce risk and therefore claims, policyholders should benefit.”

$1.13 Billion The amount of public assistance funding that New York University’s Langone Medical Center is receiving from Federal Emergency Management Agency (FEMA) for Superstorm Sandy repair work and mitigation projects. FEMA’s funding authorization was announced on July 29.

— North Dakota Insurance Commissioner Adam Hamm. The fire and tornado fund is waiving insurance premiums for policyholders this year.

10,000

The number of emails oil giant BP sent to employees urging them to take action regarding a lawsuit filed by Houston and Harris County, Texas, officials over the 2010 Deepwater Horizon Oil Spill. As a result, one government employee reported receiving 1,200 emails from BP employees. County Attorney Vince Ryan, County Judge Ed Emmett and three of four county commissioners collectively received more than 5,000 emails encouraging them to drop the lawsuit against BP.

Attention Getting

“We’re trying to get their attention.”

— Lenny Davis, plaintiffs’ attorney in a new lawsuit filed against Chinese drywall manufacturers and China’s State-Owned Assets Supervision and Administration Commission. The suit was filed after U.S. District Judge Eldon Fallon held Taishan Gypsum Co. Ltd. and related defendants in contempt of court for ignoring court proceedings over harm done by the drywall.

No Legal Requirement

“There is no legal requirement for testing at all for salmonella. … Kellogg’s never tested for salmonella in any of their products.

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12 | INSURANCE JOURNAL-NATIONAL August 18, 2014

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Business Moves Oklahoma, Louisiana and Arkansas, with plans to expand its footprint nationally.

Buckley brings more than 25 years of insurance experience including surplus lines, specialized programs, primary and reinsurance. Prior to the founding of B&H Risk Services, Buckley served as president and CEO of G.J. Sullivan Co., an excess and surplus lines brokerage in Orange County, Calif.

B&H Risk Services offers all forms of property, casualty, workers’ compensation, umbrella, professional and risk management products and services.

MarshBerry, Gill & Roeser MarshBerry has acquired the assets of Gill & Roeser Inc., a New York City-based boutique investment banking and reinsurance intermediary firm. Terms of the transaction were not disclosed.

Gill & Roeser is an independently owned capital management advisor to the insurance industry. The firm offers capital management strategies and reinsurance services such as reinsurance brokering, program structures, alternative markets, risk pooling, valuations, capital raising, and merger and acquisition consulting services.

As part of the acquisition, MarshBerry is hiring the staff of Gill & Roeser including Dale A. Myer, chairman, and Steven K. Bolland, president and CEO. The deal will allow MarshBerry to expand its knowledge in the insurance carrier and managing general agent marketplace, and offer a broader portfolio of services to the insurance industry.

B&H Risk Services Dallas-based CPro Associates has spun off its binding authority and programs unit as a new company, B&H Risk Services Inc. The new company is headed by William E. Buckley, who joined CPro in late 2013 to form and develop the new business unit.

The company now writes in Texas, 14 | INSURANCE JOURNAL-NATIONAL August 18, 2014

Insurance Network of Texas, The Nitsche Group Insurance Network of Texas, an independent insurance agency based in Giddings, Texas, is operating under a new name: The Nitsche Group. It has a redesigned web site, www.TheNitscheGroup.com. Today, The Nitsche Group has more than 125 employees at nine locations across Texas.

Safety National Casualty Corp.

Safety National Casualty Corp., a provider of excess workers’ compensation insurance and large casualty multi-line offerings, has opened a regional office in Dallas. The Dallas office is the sixth regional office opened by Safety National in the past five years.

Safety National’s other regional offices are located in New York, Atlanta, Chicago, San Francisco and Los Angeles, with corporate headquarters located in St. Louis, Mo. Arthur J. Gallagher, Insurance Point Itasca, Ill.-based Arthur J. Gallagher & Co. has acquired Insurance Point LLC in St. Charles, Ill., and Salt Lake City. Terms of the transaction were not disclosed.

Insurance Point offers employee benefit consultation and insurance brokerage services for healthcare systems and hospitals throughout the United States. Along with traditional life and disability insurance

programs, the company also specializes in voluntary benefits, medical stop-loss insurance, leave and sick plan programs, benefit administration systems and executive benefit programs.

Led by Michael Greco in St. Charles, Insurance Point will continue to operate in its current locations and will be under the direction of William Ziebell, head of Gallagher’s North Central employee benefit consulting and brokerage operations.

Hilb Group, Martin Agency The Hilb Group has acquired The Martin Agency Inc. with offices in Danville, Ky., and Celebration and Ormond Beach, Fla. TMAI will continue to operate at its current locations under the leadership of John Carrithers.

TMAI represents Hilb Group’s continued expansion in Florida and its initial expansion into Kentucky.

Founded in 1989, TMAI serves both commercial and personal lines clients.

The Hilb Group was founded in 2009

by Robert H. Hilb, the former founder and CEO of Hilb, Rogal and Hobbs, and Robert J. Hilb, a former corporate vice president of HRH. The Hilb Group makes targeted acquisitions in the middle market insurance brokerage space. It is headquartered in Richmond, Va., with offices in Virginia, Georgia, Florida, North Carolina, Tennessee, Maryland, Kentucky and New York.

Hub International, Ballard Insurance Chicago-based global insurance broker Hub International Ltd. has acquired the assets of Ballard Insurance Agency, a Melbourne, Fla.-based insurance brokerage with coastal personal lines experience.

Terms of the acquisition were not disclosed.

Ballard will become part of the Hub International Florida operations (Hub Florida). Hub Florida will relocate its Melbourne office to Ballard’s existing Melbourne location.

The Melbourne office will report into Latimer Farr, president of Hub Florida’s current locations, and roll into the larger Hub Southeast operations under CEO Mike Chapman. www.insurancejournal.com

© 2014 American Institute For Chartered Property Casualty Underwriters

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NATIONAL COVERAGE

News & Markets Agent Survey: Not All Carrier Training Is Created Equal

I

ndependent agents say product training (used by 50 percent) and technology systems training (used by 41 percent) were the most common types of insurance carrier-provided training they attended last year.

However, when the subject turned to the types of training that agents say they really want going forward, there are two that stand out: • Courses that qualify for continuing education credits or industry designation (desired by 28 percent), and • Training/Consulting on how to use the agency website to bring in business (desired by 24 percent).

This is among the many findings in a new national survey of agents conducted by Channel Harvest Research and sponsored

by Insurance Journal.

More than one in four (26 percent) of agents want carrier training to be delivered in multiple ways: live webinars, e-learning and videos, for example.

In the category of carrier-provided funds for lead generation, co-branded advertising was used in 2013 by 50 percent of agencies, while 40 percent of agencies received leads generated by third-party online insurance marketing websites. But going forward, the most-desired types of carrier support in this category are paying for agents to attend industry networking events (desired by 27

16 | INSURANCE JOURNAL-NATIONAL August 18, 2014

percent) and funds for co-branded advertising (26 percent).

In 2013, direct mail programs were the most-used type of carrier support in the area of management and marketing (cited by 15 percent), followed by cross-selling, agency management, shareable content, and social media support (each cited by 11 percent).

Going forward, agents expressed higher levels of interest in all of the listed management and marketing services as compared with the percentage that used those services last year. This indicates that carriers should offer more of these services and/ or increase agent awareness of currently offered services, noted Jess McLaughlin, research director for Channel Harvest.

Respondents expressed the most interest in support for their social media presence (desired by 25 percent). More than 20 percent desire direct mail, agency management support, and shareable content.

More than one in four (26 percent) would like carrier training to be delivered in multiple ways: live webinars, eLearnings, videos, etc.

Home: Where the Agent Is? Among other subject areas, respondents were asked where they spend their time working.

Nearly three-quarters of independent agents spend at least some of their typical workweek involved with in-person client and prospect visits, sales calls or presentations (71 percent). Nearly two-thirds (62 percent) do some traveling to and from client and prospect locations. Nearly 50 percent perform at least some work from their personal home offices in a typical week.

About the Research The study, “2014 Survey of Agent-Carrier Relationships: Agents Left to Their Own Devices,” is the seventh in a series examining independent agents’ views on marketplace issues. More than 1,400 agents completed the survey.

The survey instrument covers dozens of questions in a number of unique subject areas, including the top-three personal and commercial lines carriers (and reasons for switching No. 1 carriers), use of mobile apps and social media platforms, and carrier support services agents desire most. The report explores differences between agents focused on personal and commercial lines.

Carriers can purchase the data set to further explore cross-tabs.

For information on obtaining the survey report, contact John Campbell at john@channelharvest.com or 202-363-2069, or visit www.channelharvest.com.

www.insurancejournal.com

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SPOTLIGHT

Errors & Omissions E&O Insights: ‘Just Duplicate What I Have’

F

rom a producer’s perspective, the words in the headline are dangerous when spoken by a customer or prospect. Simply duplicating what the insured currently has, whether the account is commercial or personal, can and has caused more than its fair share of errors and omissions (E&O) claims. In essence, what is the account really saying? Probably something to the effect of: “I’m paying too much. Just give me the same coverage

By Andrew Simpson I have now, but at a lower premium.” It sounds like the customer’s focus is primarily on the price, not the coverage.

What’s the Problem?

There are a number of problems with a producer/account manager “honoring” the customer’s wishes in this case. One of the more significant issues when duplicating what the customer currently has is that it heavily assumes the prior agent has done a professional job of performing an in-depth

evaluation of the various exposures of the is tremendous likelihood that because the account — and has provided the customer policy did not respond the way the customwith options, for both coverage and limer thought it would, he or she will pursue its, to consider. It probably also assumes legal action against your agency. that the customer understands his or her You may be asking, “What did I do insurance program in sufficient and necwrong? I was simply asked to duplicate essary detail. These are prior coverage.” If Never just duplicate the the assumptions fraught you are thinking the coverage — always take problem is not yours, with problems.

Consider the scenario a fresh look at what the well, think again. The that your agency is asked customer’s needs. plaintiff’s attorney, repto “quote” or “write” an resenting the customer account based on the customer’s current suing you, will look to prove that because coverages and limits. Suppose the customer this is now your account, it is now “your has a building insured for $1.5 million at 80 mistake.” Clearly, duplicating the mistakes percent co-insurance, along with business of the prior agent does not relieve you and interruption coverage. Your agency quotes your agency from any liability. the account using the same building and business interruption limits. A major fire A Tremendous Investment occurs and the carrier determines that the How can this situation be avoided and, building was significantly underinsured therefore, minimize the potential of facing and, thus, there will be a substantial co-insome type of E&O litigation? To begin, surance penalty. In addition, because of the advise the customer you will not simply growth of the business, the business interduplicate what he or she has now and that ruption limit is significantly less than what you are not a “quoting machine.” Then, it should have been. Your customer is irate. advise the customer you will treat him or Who is the customer likely to blame for her as a new customer, do the proper job this shortfall? You and your agency! There of evaluating the customer’s exposures and will make various suggestions and recommendations of how his or her program can be strengthened. You will also review the customer’s insurance program with the customer to assist him or her in better understanding how it works. What’s the best way to do that?

This is where the effective use of exposure analysis checklists comes in. Consider using products or software that most often easily integrate with your agency management system. These tools provide the basis to assist agents in many areas. Among them: • Checklists provide a tremendous amount of knowledge/information on more than 650 SIC codes and all of the applicable lines of business. They will enable the agency staff to significantly enhance their knowledge on virtually any class of business you can think of. continued on page 20

18 | INSURANCE JOURNAL-NATIONAL August 18, 2014

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SPOTLIGHT

Errors & Omissions continued from page 18 For newer producers, this will allow them to get up to speed more quickly and, thus, achieve greater success for themselves and your agency.

• Checklists will identify coverages that may not currently be in the customer’s

insurance program — coverages such as cyber liability, employment practices, business interruption, etc.

• Checklists include the definitions of key insurance terms. It is highly recommended that these be included on the

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proposal as these definitions will help the customer to better understand his or her insurance program and how it works. It’s also a great E&O loss prevention initiative.

• Checklists provide an efficient means of gathering and organizing the data.

Some of the systems will then enable the application to be pre-filled with much of the necessary information.

• Checklists will provide a record of your agency offering of the various coverage options and what the customer ultimately decided. If the customer declines certain coverages you proposed, the proposals will prompt you to secure the customer’s signature acknowledging his or her decision. If an uninsured claim were to arise in the future, this could certainly aid in the agency’s defense.

These checklists are a tremendous investment in your future, are a great E&O prevention tool and will pay for themselves many times over in increased sales. Not a bad combination!

Selling More Insurance When providing the customer with a proposal, it is always best to offer options, especially for liability/umbrella limits, as this will essentially force the customer to decide which limit he or she wants and, thus, he or she does not want.

Bottom line: don’t look to duplicate what the customer currently has.

As an independent agent, this approach heavily removes the value you provide. Take a fresh look at the customer’s insurance program and identify ways to help the customer better understand the coverage and how it works.

You may just find yourself selling more insurance along the way.

Pearsall is president of Pearsall Associates Inc., a risk management consulting firm specializing helping agents protect themselves. He is also a special consultant to the Utica National Agents E&O program. Phone: 315-768- 1534. Email: curtis@ pearsallassociates.com. Blog: www.agentseotips.com.

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20 | INSURANCE JOURNAL-NATIONAL August 18, 2014

6/30/14 3:15 PM

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MyNewMarkets Cyber & Privacy Protection Market Detail: ELM Insurance Brokers (www.e-o.com) offers cyber security coverage featuring: same day quote bind and issuance capabilities for more than 90 percent of cyber security submissions; minimal application information required in order to obtain a quote; and competitive terms and conditions with premiums starting at $300. Coverage features include: $1 million limits with $250,000 breach notification costs (and higher limits are available). All professional service providers both large and small are eligible, including : social services organizations; home healthcare; behavioral healthcare and addiction treatment providers; hotels and motels; temporary/ permanent staffing firms; construction contractors; landscapers; accountants; architects; engineers; charities; consultants; insurance brokers; lawyers/attorneys; real estate agents; school/colleges; surveyors; therapists; physicians; nurses; early childcare centers; and all miscellaneous professions.

Available limits: Minimum $1 million, maximum $10 million Carrier: Multiple, admitted and non-admitted available States: All states Contact: ELM Insurance at 310-322-1301 or e-mail: mainofc@e-o.com

Carrier: Unable to disclose, admitted States: All states Contact: Patti Abbott-Bozzo at 908-233-8040 or e-mail: pat@ ardavisagency.com

Combined GL + CPL + Professional Liability Market Detail: American Risk Management Resources Network LLC (ARMR Network) (www.armr.net) specializes in environmental insurance and risk management. Wholesale access is available to all of the major environmental underwriters, with custom crafted insurance for contractors, property owners and consultants.

Available Limits: As needed Carriers: Berkley Specialty Underwriting Managers States: All states Contact: Ron Anderson at 608-836-0551 or e-mail: Anderson@armr. net

General & Artisan Contractors Market Detail: Victor O. Schinnerer & Co. (www.schinnerer.com)

Motor Truck Cargo Market Detail: American Team Managers Insurance Services Inc.’s (www.atminsurance.com) motor truck cargo market targets truckers with one to 25 power units, more than three years CDL experience, and hauls general commodities with values less than $100,000 per load. New ventures are welcome for dry goods/flatbed. Reefer available for experienced risks. Gross receipts available.

Available limits: Minimum $25,000, maximum $100,000 Carrier: Aspen States: All states Contact: Tammy Shea at 714-414-1251 or e-mail: tshea@atminsurance. com

Employment Practices Liability Market Detail: IPA Risk Management LLC (www.ipariskmanagement.com) offers instant quotes for all classes of EPLI and a newsletter to lessen an agency’s E&O exposure.

Available limits: Minimum $500,000, maximum $1 million Carrier: AIG, Philadelphia States: All states Contact: Greg Heitmann at 201-797-1215 or e-mail: g.heitmann@ ipariskmanagement.com

10 + One Vacant Builders Risk Market Detail: Anthony R. Davis Agency (ADA) (www.ardavisagency.com) works with a market for homebuilders who cannot extend their builders risk. Coverage can be written for property and liability for these homes in a reporting form package format. Builder has to have at least 10 active builds in any one policy year.

Available limits: As needed www.insurancejournal.com

offers coverage for all types of construction contractors including: errors & omissions insurance for artisan contractors; professional liability insurance for general contractors; pollution liability insurance for both general and artisan contractors; and a combined policy that includes professional or E&O and pollution liability insurance.

Available limits: Maximum $10 million Carrier: Columbia Casualty, CNA States: All states Contact: Annette Stefani at 301-961-9884 or e-mail: annette.m. stefani@schinnerer.com

StarrBOP Market Detail: Security Underwriting Managers Inc.’s (SUM) (www.securityunderwriting.com) BOP program offers: property up to $5 million; casualty up to $2 million/$4 million; wind coverage; special form; theft; blanket additional insured; enhanced coverage endorsement; and a minimum premium of $500.

Available limits: Maximum $15 million Carrier: Unable to disclose, admitted States: Fla. only Contact: Javier Naranjo at 305-263-6650 or e-mail: jnaranjo@securityunderwriting.com August 18, 2014 INSURANCE JOURNAL-NATIONAL | 21

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into your clients’ businesses and examine their current insurance policies line by line so you can develop tailored insurance programs to both fit their needs and deliver a positive financial impact. — Michael Tiagwad, Conner Strong & Buckelew 6 - Videography Create a video introducing newcomers in your town to its amenities and services.

7 - Welcome Committee Serve as welcomers to newcomers who move into your town or region. Organize a welcome “party” with information and introductory offers from various services including your own, other businesses, recreational activities, etc. Do not hold it in your agency — do it on neutral ground.

8 - Meet and Greet Organize an informational workshop and networking meeting for new businesses in your community or in a sector of the regional economy that your agency targets.

Insurance Journal has listened to readers, spoken with experts, combed through columns and articles and even searched outside insurance circles to find the best sales and marketing tips for independent agencies today. Here are 101 ideas, in no particular order.

1 - Hold Producers Accountable To increase profitable sales agency owners have to execute their producer management plans. This means absolutely holding producers accountable to make new quality sales. If the business model bypasses producers, then make sure producers are truly bypassed and your sympathy does not result in paying them anyway. — Chris Burand, Burand & Associates LLC 2 - Name Change Change your agency’s name to something modern. Or better yet, use different names depending on the target audience.

3 - Snappy Tags Reconsider your agency’s tagline. Make it 22 | INSURANCE JOURNAL-NATIONAL August 18, 2014

snappy and unusual, not boring. Then use it everywhere.

4 - Survey Customers Conduct immediate follow-up surveys with customers. Send an email to any customer who visits the agency or meets with an associate thanking them and asking for feedback in a survey.

5 - Dig Deeper Don’t just understand risk itself.

Understand risk in the full context of your clients’ businesses. Think of it like an iceberg, just as 90 percent of an iceberg’s mass lurks below the water, so does business risk — and it takes relentless focus and concentration to uncover these hidden risks. Delve

9 - Special Needs Every industry has special needs when it comes to managing risk. Understand those needs and provide unique solutions for your clients. This approach will deepen your client relationships, strengthen retention and produce an increased flow of referral business. — Leonard Scioscia, Cook Maran & Associates 10 - Avoid Clutter Focus your ads on one simple message and one only. Avoid a clutter of competing ideas and images.

11 - Survey Results Conduct a substantive survey on topics of interest to your target market or community and share the results in a special report to customers and prospects, website articles, press releases, media interviews, contributed columns and wherever you can. www.insurancejournal.com

12 - Be an Expert Become an expert on your community’s economy, growth opportunities, business services and/or on a target market. Share your knowledge with others on your website, in speeches and with the media.

13 - Sponsor a Charity Event Sponsoring a charity event is a win-winwin. The key is to get VIP clients and prospects involved. This ensures success and promotes interest from others. The charity clearly benefits from the fundraiser, while the agency and the VIP guests get some recognition. — Catherine Oak, Oak & Associates 14 - Befriend Leaders Befriend the most successful local business owners and ask them to share secrets of their success.

They will be flattered you asked. They may even introduce you to others.

15 - Best Employees Be proactive to retain your best employees by raising their salaries and providing extra perks and educational opportunities.

16 - Education Be proactive in providing educational opportunities for employees. You will learn which employees are career-minded and want to be true professionals.

17 - Go Retro There are 72 million U.S. baby boomers, all of whom are old enough to recall the everyday objects of bygone decades. Feature 1950s images of these items and individuals to evoke warm feelings for the past. Build them into “Time Capsule” marketing campaigns that contrast the relatively modest insurance limits of the ‘50s to the much higher numbers of today. — Alan Shulman, www.agencyideas.com www.insurancejournal.com

18 - Bring Associates Whenever you go to an industry or business luncheon or seminar, bring along an associate. Two people can work a room better than one.

19 - White Papers and Reports Include objective white papers and research reports on your website to help consumers educate themselves and send out links to them on occasion to customers.

20 - Promotional Giveaways When selecting promotional giveaways, get creative. Move beyond pens and mouse pads.

How about colorful rain slickers, pens that record conversations, cutting edge knives, etc.

21 - Social Media Q&As Visit LinkedIn groups and answer questions others ask about insurance.

Keep your replies informative and low key; sell your expertise, not your products or services.

22 - List on MyNewMarkets.com List your company with mynewmarkets.com. This is a website that is powered by Insurance Journal.

The website is designed to match the needs and wants of client companies, agents, brokers, and insurance carriers. New companies are listed on an email to all of their subscribers. I listed my company and our website received over 200 page views ... for free! We received about 10 quality leads from client companies and agencies looking to utilize our specific niche of workers’ comp and payroll solutions for contractors. — Mike Smith, Eagle Employer Services 23 - Leverage News Events Position your agency as the authority when news events break that are related to insurance. For example, when Russians

recently were accused of the largest data breach in history, we were talking about cyber coverage and how to protect your data. We also promoted our upcoming cyber security seminar to give customers and prospects practical guidance on this critical topic. — Tony Payne, Clark Insurance 24 - Custom Logo Cookies for Clients They never fail! Find a good vendor — someone who makes the cookies fresh.

Have an SEO audit done for your website. It’s well worth the money to find out how you can enhance your website with some very simple, yet very effective changes. You’ll see a noticeable difference in visitors almost immediately. — Lynn Mason-Small, Rogers & Gray Insurance 25 - Create Positive Interaction How a person feels when interacting with you, your website, and your products and services are extremely important to your brand, and even more important to your sales and marketing efforts. Design, usability, accessibility, marketing and performance all affect user experience, and are there for the perception of your company.

An overall positive user experience implies a responsive company, enabling the company to attract new clients. — Ashley Thorpe, WEBCBG 26 - Focus on a Niche It differentiates your agency, defines you as an expert, and is the most efficient marketing method to drive organic new business growth. Niche marketing allows you to develop a highly focused prospecting process that generates significantly higher hits ratios. Once you begin to establish yourself in a niche, you’ll get more and better qualcontinued on page 24 August 18, 2014 INSURANCE JOURNAL-NATIONAL | 23

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continued from page 23 ity referrals that will generate a consistent flow of new organic new business. –– John K. Tiene, Agency Network Exchange (ANE) 27 - Be Pinteresting Have you tried to be Pinteresting?

Pinterest has been an incredible marketing tool in my social media team’s arsenal. We have more ROI from Pinterest than from any other social media platform. Pinterest has more than 70 million users who spend an average of 98 minutes on the site. The major users are hyper-engaged ladies in their prime buying years. What better way to get to them than to be where they already are? The Ash Brokerage boards cover different lines of business: life insurance; disability income; long-term care insurance and annuities; as well as ancillary topics such as social media, retirement, thought-leadership and underwriting. We reach out and introduce ourselves as people, not as a business, and foster a relationship that is more personal. We are able to develop new partnerships with professionals who we may not have necessarily been able to meet otherwise. — Sheryl Brown, Ash Brokerage Corp.

28 - 5 Calls at 5:00 Having trouble reaching the decision maker? Make five phone calls at 5:00. Why? Because the gatekeeper is gone and the decision maker is likely to pick up thinking it is a personal call. In addition, they will be more relaxed. — Patrice Winovich, Insurance U 29 - A Thank You Is Always Right We always send a thank you letter, including a $10 Target gift card to the referral party, whether or not we write the business. We are rewarding the behavior, which we want repeated. Then those names go into a basket and one time per month we send a $50 restaurant gift certificate to one of our insured restaurants, and don’t pay 24 | INSURANCE JOURNAL-NATIONAL August 18, 2014

for those until they are turned in! — Tom Larsen, Larsen Insurance Agency 30 - Use Prezi, not PowerPoint We’ve all heard of death by PowerPoint; don’t let it catch your audience too! To better grasp your audience’s attention, use Prezi to bring the audience on a ride. With Prezi, the content can be simultaneously edited from multiple computers. No longer will only one user be allowed to edit the PowerPoint, with other team members waiting for access. Also, a Prezi link can be shared that will enable you to present remotely with a group. This can be helpful if you are trying to present the material to an employer beforehand. — Meret Steves 31 - Market in Person Nowadays, most mailed solicitations are viewed as junk mail. The person who answers the phone (the gatekeeper) usually views you as a cut-rate telemarketer. Many social media avenues can create brand awareness, but don’t seem to motivate people to call/email for insurance. I feel that business owners appreciate meeting you faceto-face and I prefer to market myself in person.

Yes, it takes time and energy, that is why we are selective about whom we approach. Many brokers and agents are not doing this — it seems to work for us. — Steve Shockley, Shockley Insurance Solutions 32 - Client’s Position Make it a win/win. Try to put yourself in your client’s/insured’s/agent’s position by asking questions and understanding the uniqueness of their needs. We talk about partnering with our clients/carriers and employees. –– Lisa Doherty and Linda Boborodea, Business Risk Partners

33 - Be Persistent Persistency is not a bad thing. If you “drip” your prospects with credible and timely information they will eventually pick up the phone and call you with an opportunity or take your call. There are many ways to “drip” a prospective client.

If you are not their broker, you need to be right there at the ready to pick up the ball when the current broker drops it. It is all about timing and you never know which drip will trigger your opportunity! — Janette L’Heureux 34 - Customize Introductory Letters Take the extra time to learn about your prospects before sending a boilerplate letter. Complimenting them on a recent accomplishment or demonstrating that you’ve researched their organization will separate your letter from the numerous solicitations they receive on a daily basis. — Matt Hammer, Baldwin Krystyn Sherman Partners 35 - Management/ Leadership

An insurance agency’s E&O culture starts with its management. Is management clearly and frequently showing its E&O commitment by “walking the walk” and “talking the talk?” Without this commitment from leadership, it is highly questionable whether the staff will embrace a strong E&O culture and achieve the desired level of commitment. — Curtis Pearsall, Pearsall Associates Inc. 36 - Think Successful, Be Successful Think successful, act successful and you will be successful! Believe in yourself and your firm at all times, and back up that belief with great tools and information.

— Florence Conlan, Baldwin Krystyn Sherman Partners 37 - Plan for New Hires Have a strategic plan in place prior to www.insurancejournal.com

beginning your search for a new producer.

Determine if you are going to hire an insurance veteran or hire a good salesperson from another industry. Based on this, develop a complete training plan before you even interview anyone. Develop and verify that you have a quality producer contract ready to go before beginning your search. Finally, develop your producer management plan. Even good producers need overt management. — Chris Burand, Burand & Associates LLC 38 - Prospect New Business Daily We all get very busy but we also should always be thinking of the future, so it is a great idea to block out a certain amount of time to prospect for new business each day. This could be as little as 15 minutes but it should be done on a daily basis. — Craig Rice, Baldwin Krystyn Sherman Partners 39 - Empathy Put yourself in the customer’s shoes so you can truly understand what they are feeling. — Craig Rice, Baldwin Krystyn Sherman Partners 40 - Solicit Micro Businesses Micros are smaller than the traditional small business and consist mainly of digital-only operations along with a variety of incubated start-ups. Some are financed through crowd-funding, others by cities and venture capitalists. The best of these firms can grow rapidly along with their insurance needs. — Alan Shulman, www.agencyideas.com 41 - Be Social on Social Media Social networks offer an excellent opportunity to inform and interact with your customers. The goal is to get them to think about you when they think insurance, not for them to feel like they are constantly www.insurancejournal.com

being sold. — Kevin Obrien, Willis Personal Lines 42 - Think From Client’s Perspective Approach your responsibilities as if you were an owner/partner in your client’s operations. Identify what your questions, concerns and expectations would be and then set your plan accordingly. — Shane Finley 43 - Make It Easy to Understand Too often in the insurance world we tend to use big words and overcomplicate things for our clients. This can create a major disconnect between you and your client, or prospect. Go out of your way to keep it simple, and your clients will be thankful for it in the long run. — JS Gagnon, Baldwin Krystyn Sherman Partners 44 - Road to Perpetuation As an agency principal approaches retirement and wants to perpetuate the agency, he or she needs to think strategically to build agency value and consider key people who can step in to help grow the business and ultimately make the transition to keep your legacy alive. Agency owners must invest time and resources in hiring, training and developing the right producers soon rather than later! — Robert Pettinicchi, InsurBanc 45 - Car Washes I like to work out deals with local car washes that I have commercial policies on to provide free car washes at their locations

for getting an insurance quote. During the summer sending an agent over to the location and asking for minor information, we can usually hammer out an auto quote before they get out of the drive. There is little out of pocket, I’m supporting an existing client’s business and it’s an easy way to get some business. — Shawn King, The Assurance Center 46 - ‘Never Count the Other Guys’ Money’ This is an old poker players tip that also carries weight in the insurance world. I have seen otherwise professional and experienced brokers lamenting over the 10 or 20 percent split they sent to a referral source.

Our objective is to build a vast and powerful internal referral network that allows us the opportunity to serve our clients at every turn. The referral may be a benefits advisor wrangling a commercial prospect, or a private risk management advisor asking the right question and generating a client for our wellness or loss control teams. — Scott Robertson, The Villages Insurance 47 - Remote Work About one in five American workers works at home, according to the U.S. Department of Labor.

Each year more and more agency staff and producers work remotely, thanks to mobile technology and progressive management. Remote work offers key business benefits: Reduced costs; Improved recruitment and retention; Increased productivity; Improved customer service and employee health; Improved business continuity during natural disasters; and Reduced environmental footprint. — Sharon Emek, Work At Home Vintage Employees continued on page 26 August 18, 2014 INSURANCE JOURNAL-NATIONAL | 25

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continued from page 25 48 - Communicate Proactively All too often clients only hear from their insurance agents at renewal. Your clients need to hear from you on a regular basis — that’s partly what social media is about.

Don’t try to master all channels, but be active on one or two of them. Use email to deliver a monthly or quarterly newsletter.

Offer tips, reviews and some fresh ideas.

Regular communication cements your relationship with a client. — Doug Coombs, SIAA

on a personal level about their passions or hobbies, they know you care about them as an individual, you are acting in their best interest and they are much more likely to be a raving fan. — Laura Sherman, Baldwin Krystyn Sherman Partners

49 - Go Mobile Convenience is a critical factor that potential policyholders consider which agency to get their insurance through.

Policyholders need to know that if an emergency occurs, they will have easy access to their information at a moment’s notice. A mobile app is an excellent way to provide that level of convenience to clients. Mobile apps can provide policyholders with access to look up an electronic proof of insurance, contact an agent, file a claim, review their policy information, pay a bill, and find close repair shops. — Jake Oliversen, Myriad Mobile

52 - Virtual Platforms for Conversation Get into the habit of treating social media sites such as Twitter and Facebook as platforms for conversation rather than advertising. Try to make followers feel as though they can pull up a chair and connect with you in a virtual context. — Tammy Southin

50 - Power of Positivity Poll agents or customers to learn one positive thing you’ve done for them. Can be as simple as one line or a story about how you helped. Turn those into a jar of positivity to show your staff they’re doing a good job. (As opposed to nitpicking on the negatives.)

If you’re a large company it could be set up as a company-wide email blast weekly or daily.

Also use select replies to market to customers and agents on product flyers or specially designed promos like notepads, pens, etc. — Kristy Mabe 51 - Get Engaged By engaging the client 26 | INSURANCE JOURNAL-NATIONAL August 18, 2014

53 - Eye-Catching Infographics Use an infographic to get your message across. It’s perfect for posting on social media and is eye-catching. — Anonymous 54- ‘Then and Now’ Photos If you’ve been in business a long time, a “then and now” photo side-by-side is cool, preferably if the photos are taken in roughly the same place/background. — Anonymous 55 - Handwritten Thank You’s Send a handwritten thank you card to clients when they send referrals and let them know that the sincerest form of flattery to us is a referral from them! Remember to enclose a few of your business cards. — Rhonda Kinley 56 - You Never Walk Alone Clients need to know who is going to take care of them. Sell the value of the team from the start. In a presentation, have the team succinctly articulate what

each member will do for the client. Follow that up with why they are best qualified to fill that role. — Elizabeth Krystyn, Baldwin Krystyn Sherman Partners 57 - Prospect’s Expectation When meeting with a prospect and conducting a formal broker presentation, go around the room and ask each prospective client attendee what their expectations are for the meeting. Take notes and then after the meeting circle back with each one and utilize information in the meeting to confirm you met their expectations. This can be very powerful and you can refer to the expectations throughout the presentation.

This shows that you care about their team and what each person is interested in hearing about and it helps to gain knowledge about their role in the organization. — Janette L’Heureux 58 - Value Proposition Develop a unique selling proposition or what we call a “value proposition.” I find this to be especially important when there are so many similar firms offering the same product. Make it exciting and set yourself apart from the competition. You will be surprised at how well the clients/prospects will remember you! — Rhonda Kinley 59 - Follow 3 A’s To improve client relationships, follow these three A’s. Ask – Always ask your clients how you can improve your service, www.insurancejournal.com

not what you can do better. Action – Take action on their suggestions and keep them informed on your progress. Accept – Accept that perfection isn’t valued as much as continual improvement and the desire to get better. — Elizabeth Krystyn, Baldwin Krystyn Sherman Partners 60 - Have a Plan/Work the Plan Know exactly what you need to do to reach your objectives, and continually evaluate how you’re progressing on that plan.

Having goals by themselves won’t get you there. — Brad Tamulski 61 - Be Yourself Instead of trying to be someone you think the client wants, be yourself. People instinctively recognize when others are genuine, and this allows relationships and trust to develop more easily. — Brad Tamulski 62 - Have Fun Sounds easy, but too often we focus on the little things. Sales is a transfer of emotion, and if you can have fun at what you’re doing it’s much easier to transfer that enthusiasm to others. — Brad Tamulski 63 - Analyzing Banking Relationships Well-managed agencies analyze many different facets of their operations on a continual basis including their producer team, agency management system, carrier contracts and book of business. What many agency owners overlook is an analytical, dispassionate look at their banking relationship and its cash management program.

They need to understand the importance of carrying operating balances effectively every month to not only offset service charges, but also to manage both the unique liquidity and rate of return on the dollars.

A proper combination of operating accounts and investment accounts, coupled with a state-of-the-art online banking and reporting system — can help the agency enhance revenues, reduce expenses and streamline efficiencies. — Anthony Arsenault, InsurBanc 64 - Small Commercial Value Consider creating your own small commercial department rather than using www.insurancejournal.com

company service centers. Three keys exist to developing a small commercial department successfully. First is a good workflow and compliance with procedures. Second is to staff it with high quality people and do not cut corners. Third, accounts that are commonly considered small commercial are often small because the agency has not sold or written them properly. Agencies are leaving a lot of money on the table by not writing small commercial correctly. Why let the companies get your profit? — Chris Burand, Burand & Associates LLC 65 - Bring in New Blood Hire recent college graduates who can learn the industry by processing endorsements and shadowing more experienced colleagues. While it may take longer to train them, you will be building the next generation of insurance professionals! Hire passionate, intelligent employees! Their passion will make a simple transactional call into a memorable experience for your clients.

— Laura Sherman, Baldwin Krystyn Sherman Partners 66 - Right Work, Right Person Agency staff gets frustrated when the work that they’re paid to do (and is important to them, their boss and their clients) is postponed because they have to process paperwork or clean up back-office tasks.

Looking at the workflow for the agency and assigning it to the right people using the right system is the solution. Producers and other highly paid staff then can invest their time in the value-added work of customer contact. — Sharon Emek, Ph.D., Work At Home Vintage Employees (WAHVE) 67 - What’s the Attraction?

U.S. workers value compensation, health benefits, stability and work-life balance, in that order, when considering an employer, according to the CEB (Corporate Executive Board) 2013 Q3 Global Labor Market Survey. Those rank ahead of the rest of the top 10 factors: location, respect, retirement benefits, ethics/integri-

ty, future career opportunity, and vacation.

— Sharon Emek, Ph.D., Work At Home Vintage Employees (WAHVE.com) 68 - Employee Referral Bonus Great people are generally friends with like-minded individuals. If your firm has an employee referral bonus in place, your employees are incentivized to help you find more great employees! — Laura Sherman, Baldwin Krystyn Sherman Partners 69 - Be Adapters Insurance agents need to change with technology or become obsolete. Embrace change as a challenge to become more customer-centric. Your systems and processes should be focused on meeting needs in the manner your clients choose: in-person, on the phone or online. — Matt Masiello, SIAA 70 - Do It Again Marketing tactics are not one-and-done.

If you try something, commit to it for an adequate trial period. A direct mail campaign is not one mailing; it’s a series of mailings over a period of time. If you send email, don’t think one blast will do it.

Thoughtful repetition is often a good thing.

— Doug Coombs, SIAA 71 - Pay Well Pay your employees well and, using industry salary surveys, let them see how much better than their peers they are doing.

72 - Become a Problem Solver

Think of yourself as a problem solver and this will prevent you as coming across like you are just pitching a product. And ask open-ended questions that cannot be answered with a simple yes or no answer. This will make the customer think and set you apart from the competition. — Craig Rice, Baldwin Krystyn Sherman Partners continued on page 28 August 18, 2014 INSURANCE JOURNAL-NATIONAL | 27

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continued from page 27 73 - Advertise Internally Cross-sell and upsell selected policies and endorsements to existing insureds by employing your agency’s existing media.

“Free” digital advertising venues include staff email signatures, promotional emails, ads on your own website/blog, and creative social media postings with enticing links back to you. — Alan Shulman, www.agencyideas.com 74 - Start a Mini-Department “Promote” producers who focus on particular industries or policies to the head of that department. This unit may consist only of them, but it’s good for their ego, business card, and LinkedIn profile.

Send news releases announcing its formation to regional business and trade publications, blogs, websites, relevant social media influencers, etc. — Alan Shulman, www. agencyideas.com 75 - Colorize Pick a color for your agency’s brand and stick to it.

76 - Cross-Functional Set up a cross-functional agency team to design, implement and oversee your digital marketing plan. — Rick Morgan, Aartrijk 77 - Be Content What is content marketing? It’s you providing insights about what you know: risk and how to manage it. You can do that on your agency website (e.g., blog and/or video) and then link to those places from your social media outposts (Facebook, LinkedIn, Twitter, Google+). Plus, mix in 28 | INSURANCE JOURNAL-NATIONAL August 18, 2014

some of what makes you and your agency tick as people. If people buy from people they know, they’ve got to know you. — Charles Wasilewski, Aartrijk 78 - Facebook Rewards Reward new employees with $5.00 for each new follow they get to the agency’s Facebook Page (for the first 30 days). — Rick Morgan, Aartrijk 79 - LinkedIn Required Require all employees (especially producers) to have a fully completed and well-written LinkedIn profile.

Make sure they “follow” your agency LinkedIn Page. — Rick Morgan, Aartrijk 80 - Charitable Efforts Find out what charity the CEO of a prospect supports and consider supporting that same charity.

81 - T-Shirt Marketing Design a t-shirt with a creative, clever or bold slogan to give to employees and

that help people, their families, their businesses and their communities. Why hide that intellectual capital under the proverbial bushel basket? Let it out. Sit down for a couple hours with a capable writer and come up with a couple dozen topics that you can write about over the next year.

Then, use your blog, website and social networking outposts to share what you know.

— Charles Wasilewski, Aartrijk 85 - Keep Hashtags Short Keep your hashtags short and relevant. #LongHashtagsAreFunButNotVeryEffective 86 - 2% Investment If you’re not spending at least 2 percent of annual commission/fee revenue on customer and prospect marketing, you are under-investing in your agency’s future. — Peter van Aartrijk, Aartrijk 87 - Communications Plan You must have a written customer and prospect communications plan that has the following components: your brand strategy, audience sets, key messaging, media selections, timeline of activity, funding levels, responsible parties, and metrics. — Peter van Aartrijk, Aartrijk

customers.

88 - Reach Out Consistently reach out to current customers. It is more important to reach the people who count than to count the people you reach. And customers count for a lot.

— Peter van Aartrijk, Aartrijk

82 - Sharability Use photos to increase interest and “sharability” of blog and social site posts. — Rick Morgan, Aartrijk

89 - Goal Setting Stop making resolutions to “do more” of something. Drill down into the numbers and get specific. — Nick Kormos, MarshBerry

83 - Talk about ‘The Why’ Stop reciting the litany of services you provide and start telling prospects “why” they should care about them. — Nick Kormos, MarshBerry

90 - Proactive Renewal Process Build a proactive renewal process for your high net worth personal insurance clients that include risk management counsel to help clients prevent losses before they occur. Include additional ways for clients to reduce premiums, offer additional coverage options and insurer services. Treat them like a commercial client. — Laura Sherman, Baldwin Krystyn Sherman Partners

84 - Agency Know-How There is intellectual capital (e.g., knowledge) tied up in you, your producers and your staff. All of those people know things

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91 - Care for Your Leads You can care for your leads in groups (i.e., follow up with, communicate with, learn from, and then serve). These “groups” can even be as small as one person or company.

Marketing automation makes it possible — even simple — to create campaigns to send the right messages to the right people. — Michael Jans, AgencyRevolution.com

known to your team, and put forth consistently in online and offline conversations.

Defining your message in your social channels combats these problems. — Michael Jans, AgencyRevolution.com

92 - Prospecting Diversification Stop looking for the magical prospecting method that will “make it rain.” Diversify and rotate your efforts amongst multiple methods and strategies to keep yourself engaged and seeing results. — Nick Kormos, MarshBerry

94 - 1-2-3 Go beyond the traditional “call the client” method of communication. Think about a three-step process that feeds clients and gives the impression that you are there for them when their needs change: 1. Add value by providing information and perspective. 2. Craft your message with care.

3. Communicate with enough frequency to create an authentic conversation. — Michael Jans, AgencyRevolution.com

93 - Who Are You? The question of “message” — who you are, what you stand for, your values, and your story — always has been important. But the social marketing age makes it more so now for two reasons: 1. You are less in control of your message, so you must be more vigilant to it.

If your agency doesn’t know what it stands for and can’t articulate that, the marketplace will be confused or apathetic about you. 2. A newcomer, disrupter or aggressive competitor can storm social media with a compelling message — which takes attention away from yours. Make sure yours is well-defined,

95 - Think Like Betty Crocker When the industry’s products are commoditized, who you are can be your best marketing advantage.

At the turn of the 20th century, scores of companies sold wheat flour. Then Betty Crocker came along. She wasn’t born. She was invented to surround the commodity (wheat flour) with words of leadership, advice, guidance and advocacy. She wrote newspaper articles, published a monthly recipe magazine, and created the first cooking radio show in history. Housewives wrote to this imaginary person asking for advice. People follow thought leaders. And thought leaders de-commoditize the commoditized. — Michael Jans, AgencyRevolution.com

www.insurancejournal.com

96 - 1:5 One in five people now access the internet through their smartphones. Make sure your website is mobile friendly.

97 - Referral Mining Producers and agencies will always state that referrals are their primary source for new leads, but few are proactive in trying to find more of them. Identify your sources of referrals and put lists of leads in front of them to see if they can introduce you. — Nick Kormos, MarshBerry 98 - Create Referral Groups Create a referral group that has the same “ideal client.” Then, develop a joint educational based marketing campaign. Each member of the group will invite several clients and prospects to a workshop where one or more members puts on a presentation. The referral group members will then have access to a room full of warm leads. — Catherine Oak, Oak & Associates 99 - Systemize Client Contact Create a schedule for regular clients contact. This can include newsletters, birthdays, anniversary days, mid-term policy review, and especially notes related to items of personal interest. Keep track of hobbies, interests and family news. Think of how special it would be to send a note to a client when their alma mater wins a bowl game. — Catherine Oak, Oak & Associates 100 - Be Upbeat Talk to everyone in a positive and upbeat approach.

101 - Listen August 18, 2014 INSURANCE JOURNAL-NATIONAL | 29

IDEA EXCHANGE

Minding Your Business Creating Key Performance Indicators

H

ow is the best way to measure the business’ success?

Often business owners have a good grasp of the financial indicators and sales of their business. Knowing sales is important — owners might know off the top of their head the sales figures

By Catherine Oak for the month. They know the revenues, expenses and profit for the previous year.

This is a good start.

However, most agency owners look at past results to manage their business. This & Bill Schoeffler

is reactive and not proactive management.

The typical agency owner doesn’t take the time to collect and analyze the important numbers that will make a difference in the success and growth of their business.

One cannot change the past, but one can influence the future. Instead of having a rough idea of what has happened in the past, the focus must be on current and predictive indicators. Managing the activities that lead to success will create success.

Key Performance Indicators A Key Performance Indicator (KPI) is commonly used by an organization to evaluate its success in reaching its strategic goals by measuring the performance of the critical activities toward a goal.

There are all sorts of KPIs. There are some basic ones that can apply to most

businesses, such as financial ratios and sales growth rates. Others are industry-specific, such as sales per square foot for retail or a defect ratio for manufacturing.

Choosing the right KPIs starts with a clear understanding of key drivers to success, but it’s important to note that key drivers will depend on the department measuring the performance. For example, the KPIs used by the commercial lines service staff will be quite different from the KPIs to analyze producers.

Many things are measurable. That does not make them key to the organization’s success. It is critical to limit KPIs to keep everyone’s attention focused.

KPIs and Organizational Goals Every business is unique. There are no “right” KPIs for an agency’s management to

Being in the insurance industry feels great.

But helping to cure cancer feels even better.

Tony Markel To learn more about the National Insurance Industry Council, contact Ken Birkett at kenbirkett@coh.org or 866-905-HOPE or visit our group site at www.cityofhope.org/niic

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track. The KPIs that are tracked must be a reflection of the goals of that agency.

An agency that has a goal related to customer retention will have a KPI that tracks customer satisfaction or customer service by department.

If the agency tracks its customer retention rate, they would be tracking past performance, which will not allow for proactive management. However, getting customer satisfaction feedback will allow management to make adjustments close to real-time.

• Zero receivables over 30 days; • Accuracy rates; and • Speed in closing agency financials.

KPIs for agency financials are important KPIs, but they are a reflection of the past.

They are important to know, but they are a retrospective look at the performance of the agency.

Financial KPIs might include: • Growth rates by department and by line of business; • Expense ratios for each major expense category; • Contingent commissions to total commissions ratio; • Reported profit margin; • Pro forma profit margin (EBITA); • Trust ratio; • Current ratio; • Age of receivables; and • Agency cash flow.

It is also important to track investment in new people, especially producers.

KPIs for Insurance Agencies When choosing KPIs, it is best to work with real-time or predictive KPIs. Knowing the firm’s profit margin from last year is good, but it does not help with real-time management decisions.

What are some examples of KPIs that an agency might track? The key is to track activities that lead to success. Tracking a producer’s sales performance for last month Collecting Data and is reactive management. Tracking a producCreating a KPI Dashboard er’s weekly call log is proactive.

The data required for the chosen key Examples of KPIs for sales might include: KPIs by department can usually come from • Number of new prospects contacted; firm’s accounting • Closing ratio; Most agency owners look the system, agency man• Average size of sale; agement system, Excel • Number of referrals; at past results to man• Connections with age their business. This is spreadsheets, handclients; reactive and not proactive written notes, logs, surveys, etc.

• Customer satisfacmanagement.

Based on the cirtion; cumstances the data can be collected daily, • Retention of business rates; and weekly, monthly, or even yearly.

• Percentage of cross-sold accounts.

Once the data is collected, it needs to be Examples of KPIs for customer service organized and displayed in a way that will might include: help the user evaluate the situation and • Client satisfaction; make decisions.

• Problem resolution rate; Excel is a great way to collect, analyze • Calls handled per day and within and display the data. There are many sys24-hours; tems that will also help in the analysis • Mail handled in 24-hours; of the data, such as the firm’s computer • Claims turnaround; and system, SalesForce, Constant Contact, • Number of cross-sold accounts.

BaseCamp, or any of a whole slew of soft Examples of KPIs for administrative and ware tracking systems that can be puraccounting departments might include: chased.

• Meeting monthly budget; www.insurancejournal.com

The most important thing is to track the data. If it makes sense, the data can also be converted into some sort of graphic representation.

A dashboard is a collection of charts and graphs that display the information.

Some software systems automatically create reports and dashboards.

Others, such as Excel, will need somebody to develop the dashboard.

There are many companies that offer dashboard plugins for Excel, QuickBooks or ACT. Take Action with KPIs Now it’s time to take action. It is important to maintain the real-time data collection, creation of the dashboard and a review of the information that will lead to the success of the agency.

When the KPIs show the firm is off track, realtime changes can be made and then reevaluated at the next measurement.

Creating systems that will track the key drivers of the business will allow the owners to make timely decisions that will improve the business and help attain the firm’s goals and manage proactively.

Oak is the founder and Schoeffler is a consultant for Oak & Associates, an international consulting firm specializing in valuations, financial management, mergers and acquisitions for the insurance brokerage industry. Phone: 707-935-6565. Website: www. oakandassociaties.com.

August 18, 2014 INSURANCE JOURNAL-NATIONAL | 31

IDEA EXCHANGE

Tech Talk How to Protect Your Agency’s Digital Security

By Tom Wetzel

M

ost agencies can’t afford to employ an information technology (IT) specialist. Luckily when it comes to most security and privacy issues, they may not need one.

Most agency systems have built-in protections. However, agents need to stay vigilant, focused and use common sense to address the most common and preventable threats.

“Agents will get slaughtered if they don’t pay attention,” says Steve Aronson of Aronson Insurance of Needham, Mass.

Aronson is a tech expert and serves on several national committees (Agents Council on Technology (ACT), Association for Cooperative Operations Research and Development (ACORD), ACORD Users Group Information Exchange (AUGIE) and NetVU) and lectures at insurance conferences around the country.

“For example, it’s critical to change passwords every 60 days,” he says. “All desktops should have their own individual password, and they should all be different — not as part of a pattern.”

Aronson also suggests an online tool to manage passwords if they are secure.

“Agents need to think about the ways that information comes into an agency, the way it is used, and then how it is stored — they all present challenges,” says Jason Hoeppner of agency consultant B.H. Burke & Co. Inc. “The most pressing area is how well agents protect information when it is in transit. For example, is their

32 | INSURANCE JOURNAL-NATIONAL August 18, 2014

email or text secure? Are they protecting any paper documents they take outside of their controlled environment (his/her office)? What technology and best practices are they using to protect it?”

Hoeppner is a member of the CT ASCnet (Applied Systems Community Network) and active in AUGIE and ACT. Hoeppner says “given enough time and enough intent and regardless of how buttoned up an agency’s internal security is, anyone can cause a security breach.

The good news is that if you are more protected than the next agency, or any other business that deals with personal information, you are much less of a target.”

“It’s not just someone hacking into a website,” says Ted Joyce of Richmond, Va.-based Insurance Agency Services LLC. “I don’t have a big staff, so I’m scared to death of an employee doing something they shouldn’t.

I am concerned that we are not throwing sensitive information into the dumpster or a producer losing their laptop with all their information.”

“I use a shredder for everything, “ Joyce says.

“I don’t have sensitive information lying around in open files. We discuss security and privacy issues at every staff meeting, even if it’s a small issue, so everyone understands that it’s a top priority.”

Joyce also reviews and updates the agency’s own insurance coverages to avoid gaps.

Hoeppner says at a minimum, agencies must keep up-to-date on their management systems, rating platforms, operating system, antivirus and malware software, and any other support platforms they use.

Agencies also should conduct a selfassessment on how well they protect their information, including procedures and their physical security. Any problems should be addressed and fixed as quickly, and as economically feasible, as possible.

Ample resources are available, including ACT and AUGIE, and, depending on the type of technology, system and software vendors and an agency’s carriers as well.

This is the fourth of a series on technology issues facing agents. The focus is on practical solutions on many fronts, including the customer experience, privacy and security.

Wetzel is owner of Thomas H. Wetzel Associates, an insurance marketing firm specializing in social media programs for agents. Phone: 708-524-4944.

Email: twetzel@wetzelandassociates.com.

www.insurancejournal.com

I’M A SUPERHERO Founded in 1997, Oasis Insurance has 23 locations and is widely considered the number one non-standard agency in Arizona.

Before ITC’s TurboRater, we were using another rating system that required us to have a complicated network and server system.

We switched to TurboRater because it is entirely web-based, which we found appealing because we no longer experience system outages, reboots and costly needs for upgrades.

Also, we liked the integration between TurboRater and ITC’s agency marketing system AgencyBuzz because every quote is followed up on automatically. The reporting features in TurboRater help us determine where our production is going and why and helps us track which agents are closing better than others.

ITC has saved us money on IT and improved our follow up process.

Jimmy Goodman, Oasis Insurance Want to be a superhero like Jimmy? Visit us online at www.GetITC.com/IJGoodman.

Or, call us at (800) 383-3482.

IDEA EXCHANGE

Growing Your Property Casualty Agency How a Bad Attitude Can Harm a Good Agency

Y

ou can’t grow your agency without the right attitude. No, I’m not talking about a “proactive” sales stance. This cheerleading concept has been floating around the industry ever since the word was invented. Rather, I am referring to the attitude of one person to another. From CSRs to insureds and prospects, from producers to staffers, from agency principals to carrier personnel, from back room employees to vendors, etc. It’s interBy Alan Shulman personal attitudes and actions such as these that determine whether an agency stagnates or grows.

Attitude Versus Marketing Have you ever entered a retail store to purchase something of value and then walked out, empty-handed, due to the unprofessionalism or indifference of the staff?

Skillful marketing got you in there, but unacceptable behavior made you leave. A bad attitude trumps good marketing every time.

Consumers and businesses leave insurance agencies for similar reasons. Price is typically the primary cause for departure, yet attitude is an important consideration as well. Here’s how a poor one can manifest itself.

Negativity Versus Leadership Policyholders seldom appreciate the amazing value of their contracts until a covered event occurs. Essentially, an unwanted bill Hubris Versus Humility requires an unwanted event to return the Ego is an essential ingredient in the sales insured to their pre-event condition, all success mix. However, if it filters down without financial gain. This profusion of from management, unfettered, into the negativity means that agency owners and agency as a whole, complications can arise. employees must work extra hard on their Possible attitude problems include: attitude to avoid being swallowed up by it.

• Treating new business inquiries from Superior service and multiple carrier potential buyers as interruptions representation are the dual pillars of the instead of opportuindependent agency system.

A positive attitude, as Without a business-friendly, nities.

• Producers dealing stri- cliché as it is, makes a agency-wide attitude, quality dently with compa- real difference. service is impossible, which ny underwriters and in turn, slices your marketing marketing reps, which can adversely advantage in half. impact agency- company relations.

Everything filters down from the top, including • Failure to respect current clients by perspective. A positive attitude, as cliché as it using voicemail as a call filter and not is, makes a real difference, especially in a negapromptly replying to email and other tive-driven business like insurance. online communications.

Growing a property/casualty agency is as • Unnecessarily threatening vendors (such much about leadership as salesmanship. Use your as management system providers and position to influence and encourage enthusiasm website hosts) can damage key supthroughout your office and don’t let a bad attitude plier-buyer relationships, resulting in ruin your day — or your business. delays during emergency situations.

• Displays of attitude also can generate Shulman is the publisher of Agency Ideas, a subscripintra-office outbursts as well, creating tion-only sales and marketing newsletter. He is also friction between agency employees the author of the many tools posted on the Agency who need to work closely together.

Ideas Instant Download Store. Phone: 800-724-1435.

• Failing to say or send thank yous when Email: alan@agencyideas.com. Website: www. it’s business appropriate. agencyideas.com. call for a new quote, while asking current insureds to leave messages or to call back the next day.

Service Versus Sales Be watchful of the messages that your website, social media posts, mobile app, and voicemail deliver to visitors. Make certain that these communication tools don’t demonstrably prioritize new business over serving existing insureds. Of course you want to write new accounts, but it benefits sales in the long-run if prospects see that they’ll get priority attention after they buy from you.

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www.insurancejournal.com

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August 18, 2014 INSURANCE JOURNAL-NATIONAL | 35

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IDEA EXCHANGE

Closing Quote

Hopeful Outlook for Workers’ Comp

A

By Stephen J. Klingel

s we pass the halfway point of 2014, the National Council on Compensation Insurance (NCCI) is relatively optimistic about the outlook for the workers’ compensation market in America.

Industry costs remain largely contained. There is a reasonable expectation of some level of profit. The system in most states (but not all) is operating efficiently. In short, the market is operating as it should, in a balanced fashion.

On a cautionary note, our optimism does not mean that we are unaware of the uncertainties that lay ahead of us.

Issues such as terrorism risk insurance (TRIA) renewal, rising health care costs, pending state judicial decisions and the Affordable Care Act all may impact workers’ comp in ways we can’t yet foresee.

As history has shown, good results can unravel fast and there are too many existing uncertainties to accurately predict the future health of this line. For now, however, results continue to improve.

Overall Positive Results NCCI’s 2014 State of the Line report indicates that the workers’ compensation calendar combined ratio was 101 in 2013, a seven-point decrease from 2012 and a 14-point decline since 2011.

Other positive indicators include: • Accident year results showed notable improvement in

38 | INSURANCE JOURNAL-NATIONAL August 18, 2014

2013, falling eight points to a combined ratio of 99.

• Lost-time claim frequency maintained a path of decline in 2013, down 2 percent, on average, in NCCI states.

• For the fourth consecutive year, the ratio of investment gains on insurance transactions to premium remained surprisingly robust given the sustained low interest rate environment.

• This investment gain outcome, combined with underwriting results, produced the highest workers’ compensation pretax operating gain since before the recession.

• In NCCI states, the average indemnity cost per losttime claim increased by a modest 2 percent, following increases of about 1 percent in both 2011 and 2012. The average medical cost per lost-time claim increased by 3 percent.

Workers’ comp • Premium grew for the third participants are consecutive year, driven primarily by an increase in starting to see carrier estimated payroll and real cause for a decrease in carrier discountoptimism. ing.

• NCCI’s estimate of the industry’s net reserve deficiency declined from $13 billion as of Dec. 31, 2012 to $11 billion as of Dec. 31, 2013.

Yet even with these improvements, workers’ compensation is faced with some ongoing challenges: • Slow growth in employment, particularly in the manufacturing and construction industries, is impeding additional premium growth.

• The rapidly approaching expiration of TRIA introduces uncertainty regarding capacity and the possible impact on markets of last resort.

• The effect of the ACA on workers’ comp also continues to cause uncertainty.

• A continuing low-interest-rate environment threatens investment results from the industry’s bond portfolio over the long term.

• Workers’ compensation participants are finally starting to see real cause for optimism with the 2013 results.

Going forward, however, challenges remain, and there are many reasons to be cautious with regard to the long-term outlook for the industry.

While we remain encouraged by the latest results, NCCI will continue to monitor and report on known and unexpected market challenges. As always, we invite you to visit ncci.com to view our latest reports on industry results and trends.

Klingel is president and CEO of the National Council on Compensation Insurance (NCCI).

www.insurancejournal.com

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