Insurance Journal West 2017-08-21

WEST REGION Small Business Insurance Discontent California’s Wells Fargo Investigation Pet Sitting Law Insurance Quagmire

APPLIED PROTECTS THE TITANS OF INDUSTRY. ®

IT PAYS TO GET A QUOTE FROM APPLIED® ©2017 Applied Underwriters, Inc., a Berkshire Hathaway company. Rated A+ (Superior) by A.M. Best. Insurance plans protected U.S. Patent No. 7,908,157.

Accepting large workers’ compensation risks. Most classes. All states, all areas, including New York City, Boston, and Chicago. Few capacity and concentration restrictions.

Simplified financial structure covers all exposures.

EXPECT THE WINNING DEAL ON LARGE WORKERS’ COMPENSATION. Call (877) 234-4450 or visit auw.com to get a quote.

Contents August 21, 2017 • Vol. 95 No. 16 • West

West W1 California Commissioner Launches Investigation Into Wells Fargo

W1 CALIFORNIA COMMISSIONER LAUNCHES

INVESTIGATION INTO WELLS FARGO

National 10 21 States See Drop in Longer Term Opioid-Related Workers’ Comp Claims: WCRI

W2 Is Colorado’s Pet Sitting Law Another Insurance Quagmire Waiting to Unfold?

12 The Smaller the Small Business, the Bigger the Insurance Discontent: J.D. Power

Idea Exchange

13 2017 Corporate Profiles – Special Advertising Supplement 14 EZLynx 16 CTC Transportation Insurance Services 18 Great American Insurance Group 20 South & Western 22 K&K Insurance Group

38 TAILOR YOUR TALENT BRAND TO

FIT TODAY’S CANDIDATES

38 Tailor Your Talent Brand to Fit Today’s Candidates

28 Special Report: 101 Sales, Marketing & Agency Management Ideas

40 Minding Your Business: The Tale of Two Values

36 M&A Review: Activity Outpacing Prior Years

42 Closing Quote: High Net Worth Insurance Needs More Specialists

Departments

11 Declarations

11 Figures 24 Business Moves

40 THE TALE OF TWO VALUES 4 | INSURANCE JOURNAL | WEST AUGUST 21, 2017

26 MyNewMarkets

INSURANCEJOURNAL.COM

Join us at AonPrograms.com

THERE’S AN ART TO SMALL COMMERCIAL

This insurance is underwritten by Hartford Fire Insurance Company, Inc., and its property and casualty affiliates, Hartford, CT. In TX, this insurance is written by Sentinel Insurance Company, Ltd., Twin City Fire Insurance Company, Hartford Accident and Indemnity Company, Hartford Fire Insurance Company, Hartford Insurance Company of the Midwest and Trumbull Insurance Company. In CA, this insurance is written by Hartford Fire Insurance Company (CA license #7268) and its property and casualty insurance affiliates.

16-0470 Š 2017 The Hartford. All rights reserved.

THAT BRINGS YOU BIGGER RETURNS WITH LESS EFFORT.

At The Hartford, we’ve designed small commercial with the big picture in mind — yours.

We go well beyond products, tools and technology working seamlessly together. We bring you people who have mastered the details that can help you build your small commercial book with greater speed and efficiency. These are experts in the art of the volume business that’s small commercial. See how we make it happen at THEHARTFORD.COM/ROI.

Prepare. Protect. Prevail.®

Property Liability Workers’ Comp Business Auto

OPENING NOTE

Write the Editor: awells@insurancejournal.com

What About the Introverts?

I

The widely accepted assumption that extroverts make the best salespeople is ‘an incorrect dynamic.’

Publisher Mark Wells mwells@wellsmedia.com

EDITORIAL

SALES

Editor-in-Chief Andrea Wells awells@insurancejournal.com

West Sales Dena Kaplan (800) 897-9965 X115 dkaplan@insurancejournal.com

East Editor Elizabeth Blosfield eblosfield@insurancejournal.com

Romeo Valdez (800) 897-9965 X172 rvaldez@insurancejournal.com

Chief Content Officer Andrew Simpson asimpson@insurancejournal.com

Southeast Editor/MyNewMarkets Amy O’Connor aoconnor@insurancejournal.com South Central Editor/ Midwest Editor Stephanie K. Jones sjones@insurancejournal.com West Editor Don Jergler djergler@insurancejournal.com International Editor L.S. Howard lhoward@insurancejournal.com Columnists Catherine Oak, Bill Schoeffler

Chief Marketing Officer Julie Tinney (800) 897-9965 X148 jtinney@insurancejournal.com

South Central Sales Mindy Trammell (800) 897-9965 X149 mtrammell@insurancejournal.com Southeast and East Sales (except for NY, PA and CT) Howard Simkin (800) 897-9965 X162 hsimkin@insurancejournal.com Midwest Sales Lisa Whalen (800) 897-9965 X180 lwhalen@insurancejournal.com East Sales (NY, PA and CT only) Dave Molchan (800) 897-9965 X145 dmolchan@insurancejournal.com Advertising Coordinator Erin Burns (619) 584-1100 X120 eburns@insurancejournal.com

Contributing Writers

Insurance Markets Manager David Coons, Jennifer Kay, Sarah Kristine Honey (619) 584-1100 X132 Lucas, Heather Posner khoney@insurancejournal.com IJ ACADEMY OF INSURANCE Director Patrick Wraight pwraight@ijacademy.com Associate Director Barbara Whiffen bwhiffen@ijacademy.com

ADMINISTRATION

Chief Financial Officer Mark Wooster mwooster@wellsmedia.com

MARKETING

Marketing Director Derence Walk dwalk@insurancejournal.com Marketing Administrator Gayle Wells gwells@insurancejournal.com

NEW MEDIA

n the world of sales and marketing, introverts are not usually the top performers.

Introverts make up roughly one-third to one-half of the average company’s leadership and staff yet their contributions often go unnoticed in favor of easy-going extroverts. The experts say that’s just not good business.

The power in introverts is demonstrated by some highly successful introverted leaders today, including Warren Buffett, Elon Musk, and Bill Gates, to name just a few.

Quiet Revolution, a consultancy and advocate of the “power of introverts” co-founded by speaker, author and consultant Susan Cain, provides services to industries looking to improve team efforts including harnessing the power of the hidden introvert.

Surveys by Quiet Revolution show that the majority of people believe their organization fails to harness the unique strengths of their introvert workforce, Cain told Carrier Management in a recent article. This means roughly half of a company’s genius ideas are not being voiced.

The widely accepted assumption that extroverts make the best salespeople is “an incorrect dynamic,” said Catherine Theroux, assistant vice president and director of public relations for LIMRA and LOMA in Windsor, Conn.

No example can top that of the late Joe Gandolfo, a self-proclaimed introvert, philanthropist and legendary life insurance agent from Lakeland, Fla. He remains the only salesperson to sell a billion dollars’ worth of life insurance in a single year. His 10-year average annual production was about $800 million.

Introverted and extroverted people do operate differently and knowing that could make a huge difference in the sales success rate of an introverted employee.

Patricia Weber, an internationally known introvert authority in print, radio and online offers three tips for the introverted sales leader: Be yourself. For introverts to sell effectively, be your thoughtful, reflective and inquisitive self. This builds trust, and when others trust you, they will buy.

Focus on your listening. Introverts can make better listeners. By being a quieter, more reflective type, they have more opportunity to practice listening. The real key in sales FOR QUESTIONS is understanding another person’s needs and REGARDING SUBSCRIPTIONS: Call: 855-814-9547 knowing why your products or services can Outside the U.S., call 847-400-5951 or you may subscribe or change your address online at: help those needs. insurancejournal.com/subscribe Use your planning tendency for good. To Insurance Journal, The National Property/Casualty Magazine (ISSN: 00204714) is published semi-monthly by Wells Media help your success rate, be sure to take advanGroup, 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 tage of your natural ability to prepare. Make per special issue copy, $195 per year in the U.S., $295 per year all other countries. DISCLAIMER: While the information in this pubnotes about what you want to ask, and plan lication is derived from sources believed reliable and is subject to reasonable care in preparation and editing, it is not intended out objections and responses. to be legal, accounting, tax, technical or other professional advice. Readers are advised to consult competent professionals for application to their particular situation. Copyright 2016 Wells To read the full article, Introverts in the Media Group, Inc. All Rights Reserved. Content may not be photocopied, reproduced or redistributed without written permission.

Workplace, visit: CarrierManagement.com.

Insurance Journal is a publication of Wells Media Group, Inc.

Social Media Manager Ly Short (619) 890-7735 Lshort@insurancejournal.com Classifieds, Jobs, Agencies Wanted/For Sale Sr. Sales & Marketing Coordinator Kelly De La Mora (800) 897-9965 X125 kdelamora@insurancejournal.com

DESIGN/WEB

Chief Technology Officer/ Chief Innovation Officer Joshua Carlson jcarlson@insurancejournal.com V.P. of Design Guy Boccia gboccia@insurancejournal.com Senior Web Developer Chris Thompson cthompson@insurancejournal.com

New Media Producer Bobbie Dodge bdodge@insurancejournal.com

Web Developer Jeff Cardrant jcardrant@insurancejournal.com

Videographer/Editor Ashley Waldrop awaldrop@insurancejournal.com

Web Developer Terrance Woest twoest@wellsmedia.com

CIRCULATION

Circulation Manager Elizabeth Duffy eduffy@wellsmedia.com

Andrea Wells Editor-in-Chief

8 | INSURANCE JOURNAL | NATIONAL AUGUST 21, 2017

POSTMASTER: Send change of address form to Insurance Journal, Circulation Department, PO Box 708, Northbrook, IL 60065-9967 ARTICLE REPRINTS: For reprints of articles in this issue, contact: Kelly De La Mora at 1-800-897-9965 ext. 125 or kdelamora@wellsmedia.com Visit insurancejournal.com/reprints/ for more information.

INSURANCEJOURNAL.COM

------------------------

------------------------

------------------------

------------------------

$125,000,000

$170,000,000

$300,000,000

$170,000,000

Senior Secured Credit Facilities Joint Lead Arranger, Joint Bookrunner and Administrative Agent

Senior Secured Revolving Credit Facility Joint Lead Arranger and Joint Bookrunner

Senior Revolving Credit Facility Joint Lead Arranger and Joint Bookrunner

Senior Secured Credit Facilities Joint Lead Arranger and Joint Bookrunner

THE EXPERIENCE TO DELIVER SOUND ADVICE. THE TEAM TO MAKE IT HAPPEN. Regions Securities® is focused on providing insurance and financial services companies with high-quality service and advice from talented, relationship-oriented bankers. That means your business gets our dedicated “A Team” every time. Our seasoned team of bankers understands your business and marketplace, and our capital markets experience enables you to receive creative, customized solutions tailored to meet your company’s strategic and financial objectives.

From capital raising in the debt and equity markets to mergers and acquisitions advice, our bankers are here to help you and your company take the next step.

Tom Dierdorff | Financial Services Group Head 404.279.7436 | thomas.dierdorff@regions.com

regions.com/securities

Corporate Banking | Capital Markets & Advisory Services | Comprehensive Financing Solutions | Industry Expertise Investment, Annuities and Insurance Products Are Not FDIC Insured | Are Not Bank Guaranteed | May Lose Value Are Not Deposits | Are Not Insured by Any Federal Government Agency Are Not a Condition of Any Banking Activity

Securities activities and Merger and Acquisition advisory services are provided by Regions Securities LLC, 1180 W. Peachtree St. NW, Suite 1400, Atlanta, GA 30309, 404-279-7400. Member FINRA and SIPC.

Banking products and services, including lending, financial risk management, and treasury and payment solutions, are offered by Regions Bank.

Deposit products are offered by Regions Bank, Member FDIC. © 2017 Regions Bank. All rights reserved. Regions Securities is a registered service mark of Regions Bank and is used under license for the corporate and investment banking services of subsidiaries of Regions Financial Corporation. Regions, the Regions logo and Regions Securities are registered trademarks of Regions Bank and are used by its affiliates under license. The LifeGreen color is a trademark of Regions Bank.

% Point Change in the Prevalaence of Longer-Term Opioid Dispensing between 2010/2012 ad 2013/2015

National

21 States See Drop in Longer-Term Opioid-Related Workers’ Comp Claims: WCRI

A

s states institute opioid policies to address the opioid epidemic, a new study has found considerable decreases in the prevalence of longer-term dispensing of opioids to injured workers in a number of states studied.

The frequency of claims that received opioids on a longer-term basis decreased more than four percentage points in Kentucky and New York, according to the study, Longer-Term Dispensing of Opioids, 4th Edition, by the Workers Compensation Research Institute (WCRI). The study examined trends in 26 state workers’ compensation systems.

The study found the frequency of claims decreased two to three percentage points in several other states (Kansas, Massachusetts, Michigan, Minnesota and Tennessee). Noticeable decreases in the longer-term dispensing of opioids were also seen in several states, including California, Florida and Texas, with reductions of one to two percentage points.

Among claims with injuries in 2013 observed over a two-year period ending March 2015, longer-term dispensing of opioids was most prevalent in Louisiana.

Compared with most study states, the number was also higher in California, Georgia, North Carolina, Pennsylvania, South Carolina and Texas. By contrast, about 1 in 25 injured workers with opioid prescriptions received them on a longer-term basis in Indiana, Kansas, Missouri, Nevada, New Jersey and Wisconsin.

The study also found fewer than expected injured workers who received opioids on a longer-term basis had certain services (drug testing, psychological evaluation and treatment, etc.) recommended by treatment guidelines for chronic opioid management.

“Research finds high doses and prolonged use of opioids may lead to addiction, increased disability or work loss, and even death,” said Ramona Tanabe, WCRI’s

10 | INSURANCE JOURNAL | NATIONAL AUGUST 21, 2017

executive vice president and counsel.

This study used data comprising more than 400,000 nonsurgical workers’ compensation claims with more than seven days of lost time; more than two million prescriptions are associated with these claims from 26 states. These claims had injuries in 2010 and 2013 and received on average up to 24 months of medical treatment. The sample of claims in the study represents 36-69 percent of workers’ compensation claims in each state.

The 26 states in the study are Arkansas, California, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and Wisconsin.

The Workers Compensation Research Institute (WCRI) is an independent, notfor-profit research organization based in Cambridge, Mass.

INSURANCEJOURNAL.COM

West

California Commissioner Launches Investigation into Wells Fargo

C

alifornia Commissioner Dave Jones has ordered an investigation into recent allegations that Wells Fargo and National General Insurance improperly charged consumers for “force-placed” auto insurance for consumers who had auto loans with Wells Fargo.

Wells Fargo in a July news release acknowledged the company failed to properly manage the program and announced it was taking steps to refund and compensate consumers affected INSURANCEJOURNAL.COM

by the improperly placed insurance, and assisting with correcting those consumers’ credit reports, which were negatively impacted by the force or lender-placed insurance.

“These most recent revelations by Wells Fargo are particularly troubling,” Jones said in a statement. “The department will investigate fully to determine the extent to which California consumers were affected by improper placement of force or lender-placed auto insurance and seek corrective

action and penalties in the event that California’s consumer protection laws were violated.”

The California Department of Insurance also has an investigation underway regarding allegations that Wells Fargo signed consumers up for life insurance without their consent.

Jones also directed the department to work with other state insurance regulators who might be opening investigations of Wells Fargo and National General Insurance.

AUGUST 21, 2017 INSURANCE JOURNAL | WEST | W1

WEST | News & Markets

Is Colorado’s Pet Sitting Law Another Insurance Quagmire Waiting to Unfold?

By Don Jergler

I

f it barks like a dog…

A new Colorado law that enables people to sit up to three pets without needing a license looks pretty much like just another piece of the growing gig economy.

People can sell their services though an app to others who have a pet or pets that need sitting without going to a fullfledged kennel or boarding facility.

And just like its ridesharing and rental property gig economy cousins, this new business segment will likely have a few growing pains — including the typical insurance issues that arise when someone takes the risk of running a business of any size.

Colorado recently updated the state’s Pet Animal Care Facilities Act to allow people to care for three or fewer pets without the licensing required to be carried by kennels or dog day care businesses.

One of the driving forces behind the change was dog care app provider Rover, which, much like Uber with ridesharing and Aribnb with rental properties, provides a virtual marketplace for would-be entrepreneurs.

Unlike the order of the process that unfolded when Uber and Airbnb were starting out, where insurance came far after those industries were established, requiring pet sitters to carry insurance was among the first issues being discussed.

However, for now, insurance requirements have largely been relegated to the dog house.

Additional homeowners insurance, general liability or some type of business insurance, none of that is required, according to Nick Fisher, program manager at the state Department of Agriculture, which overW2 | INSURANCE JOURNAL | WEST AUGUST 21, 2017

sees the Pet Animal Care Facilities Act and all it encompasses.

One reason is because insurance isn’t required for licensed pit sitting businesses either.

“Currently with pet animal facilities, we don’t really require they have to have insurance,” Fisher said. “That’s incumbent on the facility to do that.”

The preference is to avoid overregulating businesses, he said, adding that the department is focused on ensuring these businesses maintain at least the minimum standards for safety, cleanliness, having proper enclosures and other aspects of the physical facilities.

“We don’t get into people’s financial records or insurance records or anything,” Fisher said.

Having the benefit of having seen the swell of interest and insurance issues that Uber and Airbnb created, however,

the topic of insurance was at the forefront of conversations when the folks at Rover first approached the state to change the laws to permit the firm to operate in Colorado, according to Fisher.

It was initially proposed that the company would be responsible for requiring people offering pet sitting services through apps like Rover to have proper insurance. The idea was that the app maker would provide $25,000 of insurance for each person who was registered, and the company would provide additional liability, according to Fisher.

That turned out to be easier said than done.

Creating insurance regulations, and hiring investigators and others to ensure

continued on page W4

INSURANCEJOURNAL.COM

You’ll Get the Royal Treatment

MonarchExcess.com

At Your Service

Helene Briskin, VP Personal Lines / Special Risk heleneb@monarchexcess.com // 818-249-0100 x1248

Commercial Lines // Personal Lines // Special Risk // Professional Liability // Brokerage

La Crescenta 818-249-0100 / Simi Valley 805-577-6800 / San Diego 619-521-2170 / Rancho Mirage 760-779-5555 San Marcos 760-891-2811 / Fresno 559-226-0200 / Arizona 877-406-8026 / Hawaii 818-425-9847 / Lic. #0697233

WEST | News & Markets continued from page W2

the regulations are followed and that bad actors are dissuaded, turns out to be a costly prospect.

Fisher said estimates showed it could cost taxpayers up to $2 billion.

“As they went along, they realized we would have had to create a whole new program for it,” he said.

As a bill to update the law to enable pet sitting wended its way through the legislature, the idea of having a fiscal note attached to it made its prospects of passing look much less promising, so the insurance aspect was dropped and the number of pets an unlicensed person could sit was limited to three, Fisher said.

A spokeswoman for Rover declined to comment for this article, but pointed to a section of the company’s website containing information about “Premium Insurance.”

The coverages listed are for “Owner Pets,” valid for injuries to the pet owner’s pet in the sitter’s care, “Sitter or Dog Walker Pets,” valid for injuries to the sitter’s resident pet as a result of contact with the pet owner’s pet, and “General Liability,” for claims for bodily injury to a person other than the sitter or pet owner.

The webpage details claim filing procedures and coverage exceptions, which include damage to the sitter’s personal property, injuries to the sitter, treatment costs for medical or veterinary bills as a result of pet illness and pet sitting bookings made outside Rover.

But it doesn’t include information about the carrier, limits or premium costs.

Just because Rover appears to be encouraging insurance coverage, doesn’t mean people will buy it.

And that means someone like Carole Walker, executive director of the Rocky Mountain Insurance Information Association, may eventually have to go

around educating Coloradans who are pet sitting to earn a few extra bucks on the importance of insurance.

Just like she did when the app-based ridesharing and vacation rental crazes cropped up.

“If you’re the pet sitter and you’re taking dogs into your home, that raises issues like what kind of liability do you have,” Walker said.

When Uber came to her state and others, local insurance associations often took it upon themselves to put out messages to the public that personal auto insurance doesn’t cover a driver who is conducting ridesharing activities. It was a similar situation when Airbnb came along.

Walker said she hasn’t yet heard concerns raised over the new pet sitting law

by RMIIA’s homeowners insurer members, but she is already on point with the message that consumers must consider the risks when running a pet sitting business.

“Any small business that you’re running out of your home, you need to

‘In this shared economy, as we’re just trading out services and starting out businesses though apps and online, we need to understand that there are insurance consequences that affect you.’

W4 | INSURANCE JOURNAL | WEST AUGUST 21, 2017

look at separate business insurance for that,” she said. “In this shared economy, as we’re just trading out services and starting out businesses though apps and online, we need to understand that there are insurance consequences that affect you.”

Walker and her association counterparts in other states may find themselves pretty busy if they feel compelled to get the message out about pet sitting as a gig.

Pet services are growing tremendously, according to the American Pet Products Association.

The pet services category was $5.76 billion last year, which includes grooming, pet sitting, boarding, walking, yard services and training.

The services sector of the pet industry is expected to experience the biggest growth next year as well.

“As people increasingly treat their pet like family members it makes sense that interest in the professional services, such as pet sitting, offering quality care for our canine companions is on the rise as well,” Tierra Bonaldi, with the APPA said.

“We certainly have taken note of the increased popularity of Rover.com specifically and all the news surrounding it and would say that it appears to be hitting the pet space with tremendous acceptance and recognition.”

INSURANCEJOURNAL.COM

PRIVATE BANKING | FIDUCIARY SERVICES | INVESTMENT MANAGEMENT FINANCIAL PLANNING | SPECIALTY ASSET MANAGEMENT | INSURANCE

Is Premium Financing Right For Your Clients?

A plan tailored to help your customers reach their long-term goals can’t exclude what they’re looking to accomplish today. Unfortunately, the cost of a large-scale life insurance policy can sometimes greatly affect their short-term liquidity. That’s why Premium Financing is a convenient option to giving your customers the large-scale life insurance they need without a negative financial impact today.

Nicole Pierce | 303.524.3152 | www.csbt.com

© 2017 Colorado State Bank and Trust, a division of BOKF, NA. Member FDIC. Equal Housing Lender.

NA and its various affiliates and subsidiaries.

The Private Bank at Colorado State Bank and Trust provides products and services through BOKF,

BOK Financial Corporation (BOKF) offers wealth management and trust services through various affiliate companies and non-bank subsidiaries including advisory services offered by BOKF, NA and its subsidiaries BOK Financial Asset Management, Inc. and Cavanal Hill Investment Management, Inc. each an SEC registered investment adviser. BOKF offers additional investment services and products through its subsidiary BOK Financial Securities, Inc., a broker/dealer, member FINRA/SIPC, and an SEC registered investment adviser and The Milestone Group, also an SEC registered investment adviser.

Investments and insurance are not insured by the FDIC; are not deposits or other obligations of, and are not guaranteed by, any bank or bank affiliate. All investments are subject to risks, including possible loss of principal.

Need a market?

FIND IT. FAST!

352 results for “trucking”

Figures

Declarations

50,000

TVA Coal Ash Ruling

“While the decision to build the Ash Pond Complex is in the past, the consequences of that decision continue today, and it now falls on the Court to address them.”

The number of tourists evacuated from the North Carolina Outer Bank islands of Ocracoke and Hatteras after a construction company working on Bonner Bridge hit an electric transmission cable and inadvertently cut off power to the islands for more than a week. The incident occurred at the height of the area’s tourist season, leaving many businesses and visitors in the lurch. Several lawsuits have been filed by local business owners, and vacationers have been working with property owners and travel insurance underwriters to recoup their losses.

10

The number of commercial buildings in a Tulsa shopping district that have been condemned after being severely damaged by a tornado on the morning of Aug. 7. According to the Tulsa Area Emergency Management Agency, 173 businesses and 25 homes were damaged by the EF2 twister. At least three other tornadoes touched down in the Tulsa area — EF1 tornadoes in Broken Arrow, at Oologah.

$18,000 That’s what a California woman who sued her plastic surgeon after photographs of her breasts surfaced on the internet has been awarded. She sought $300,000, contending that a Fresno surgeon was negligent and violated her duty to keep a patient’s medical information confidential.

INSURANCEJOURNAL.COM

— U.S. District Judge Waverly Crenshaw in Nashville, in a ruling requiring public utility Tennessee Valley Authority to dig up coal ash at its Tennessee power plant and move it to a lined waste site. Environmental advocates successfully argued the coal ash had been leaking pollutants into the Cumberland River for decades in violation of the Clean Water Act. TVA has said the cost to excavate and truck out the ash will be roughly $2 billion.

Motorists Insist

$1.1 MILLION

The number of bushels of corn left on the ground when a grain bin collapsed in southern Nebraska. The estimated value of the corn spilled at the Ag Valley grain elevator site is between $4 million and $5 million.

“Despite laws to ban cellphone use while driving, some motorists still continue to insist on texting behind the wheel – placing themselves and others at substantial risk.”

— New York Gov. Andrew Cuomo said in a statement provided to The Associated Press regarding New York state’s plans to study the use of a device known as the “textalyzer” that would allow police to determine whether a motorist involved in a serious crash was texting while driving. Cuomo announced that he would direct the Governor’s Traffic Safety Committee to examine the technology, as well as the privacy and constitutional questions it could raise.

Expanding Regulatory Authority

“The self-aggrandizement by state agencies expanding their regulatory authority threatens the very nature of our republican form of government by undermining the representative democratic foundations upon which it is laid.”

$200 MILLION

The amount the Pennsylvania Professional Liability Joint Underwriting Association, a nonprofit organization created by state law to offer medical malpractice insurance, is required to hand over to the Pennsylvania state government, according to legislation passed by the Pennsylvania State Senate. The bill is pending in the House and would abolish the association if it doesn’t hand over the money by Nov. 1. The bill says the money doesn’t belong to association members, people or groups covered by its policies but instead belongs to the state. The organization is threatening to sue if the state tries to take the money.

— The Wisconsin Dairy Business Association, in a lawsuit alleging state officials are over-regulating large livestock operations, imposing pollution requirements that are tougher than federal law and arbitrarily changing runoff standards without going through the rule-making process.

No Room for Error

“We had 1,400 acres, and we were able to salvage 150 (acres). … The rest of it failed.

— Lynn, Arkansas, farmer Jerry Morgan says insurance will cover losses from spring flooding that significantly damaged that state’s rice crop, but it will be almost impossible to make a profit. With all of the recent flooding, Morgan said there is no more “room for error” for farmers.

Oil Money

“The oil industry sees the writing on the wall. Their interest was to make compliance as affordable as they could.”

— Ann Notthoff of the National Resources Defense Council, which supported a bill to reduce carbon emissions by charging polluters, said the oil industry didn’t score an outright victory on cap and trade. California Assembly members considered swing votes on the bill were among the top recipients of donations from oil companies, an analysis of campaign finance filings shows.

AUGUST 21, 2017 INSURANCE JOURNAL | NATIONAL | 11

NATIONAL | News & Markets

The Smaller the Small Business, the Bigger the Insurance Discontent: J.D. Power

N

ot all small businesses are the same when it comes to customer satisfaction with commercial insurance. There are widening satisfaction gaps among small businesses of different sizes, according to the J.D. Power 2017 U.S. Small Commercial Insurance Study. The study found the gaps in overall satisfaction among micro- (fewer than five employees) or smaller-size (five-10 employees) small businesses and larger-size (11-50) small businesses have never been wider. While there has been year-over-year improvement in overall satisfaction among customers in the larger-size group, there have been declines in satisfaction among customers in both

smaller-size groups.

“The small business market has been the best growth area for property and casualty insurance carriers in a stagnant, soft cycle marketplace,” said Greg Hoeg, vice president of U.S. insurance operations at J.D. Power. “While looking at the small business market in aggregate shows relatively steady levels of customer satisfaction year over year, the serious gap between very small businesses and larger small businesses could present an opportunity for those carriers that get the small business formula just right.”

The study, now in its fifth year, examines overall customer satisfaction among small business commercial insurance customers with 50 or fewer

Overall Customer Satisfaction Index Scores (Based on a 1,000-point scale)

Farmers Allstate Chubb Erie Insurance AIG State Farm Auto-Owners Insurance Industry Average Zurich American Family Liberty Mutual The Hartford Nationwide Travelers CNA

J.D. Power.com Power Circle Ratings For Consumers 838 5 833 4 830 4 830 4 828 3 827 3 826 3 825 820 3 819 3 817 2 814 2 813 2 813 2 807 2

employees. Overall satisfaction is comprised of five factors (in order of importance): interaction; policy offerings; price; billing and payment; and claims. Satisfaction is calculated on a 1,000-point scale.

These are some of the study's findings: • Overall satisfaction scores belie discontent: Overall customer satisfaction in small commercial insurance increased two index points in 2017 to a high of 825.

Satisfaction improves 13 index points among larger businesses (11-50 employees), but declines 18 points among smaller businesses (five-10 employees) and remains steady among the smallest businesses (fewer than five employees).

• Service interactions drive rift: Service interactions saw the sharpest declines this year, driven by customer dissatisfaction with agent/broker interactions. The claims factor has the most year-over-year improvement in satisfaction.

• Multi-channel approach to servicing is key to small business market: The preferred service interaction channels for small business insurance customers are split between agent in-person/phone (61%) and website (57%). These are followed by agent e-mail/text (39%); customer service e-mail/ text (27%); customer service phone (26%); and

mobile app (9%).

• Demand for self-service grows and outpaces actual usage: Preference for self-service has grown by 28% since 2015 (61% in 2017 vs. 48% in 2015), and continues to outpace actual usage (43%). Micro businesses have the greatest disparity between preference and usage; their preference for self-service is nearly twice the rate of actual usage (60% vs.

36%, respectively).

“There is a notable opportunity for insurers of companies in the very small business segment, which are clearly not being serviced at the same level as their slightly larger counterparts,” said Colleen Cairns, senior analyst in the insurance practice at J.D. Power.

J.D. Power Rankings

Farmers ranks highest among small commercial insurers at 838, a 20-point improvement from 2016. Allstate ranks second at 833, up 6 points from 2016. Chubb and Erie Insurance tied for third at 830, up 20 points and 1 point, respectively, from 2016. The 2017 U.S. Small Commercial Insurance Study is based on 3,312 responses from insurance decision-makers in businesses with 50 or fewer employees who purchase general liability and/or property insurance. The study was fielded from April through June 2017.

Power Circle Ratings Legend: 5 – Among the best; 4 – Better than most; 3 – About average; 2 – The rest 12 | INSURANCE JOURNAL | NATIONAL AUGUST 21, 2017

INSURANCEJOURNAL.COM

Dear Readers:

Every business has a story to tell. For many corporations, small and large, that story ties closely to the personal lives of their founders. Throughout Insurance Journal’s history, we have come to know and appreciate many of the unique stories in our industry. And year after year, we have watched as our advertisers’ and readers’ companies have grown and changed.

As a leading industry news and information source, we are not able to profile all of the corporations that cross our path. Our position as journalists sometimes makes it difficult as well. Consequently, we have created this special supplement to allow our clients, and some of the corporations you may work with on a daily basis, to tell their story ... in their own words.

We hope you find this supplement interesting and informative.

Best wishes from all of us at Insurance Journal.

Julie Tinney Chief Marketing Officer, Wells Media Group Inc. jtinney@wellsmedia.com

INSURANCEJOURNAL.COM

AUGUST 21, 2017 INSURANCE JOURNAL | NATIONAL | 13

â„¢

C

M

Y

CM

MY

CY

CMY

K

Brighton – the South & Western mascot

Built on the pioneering spirit of its founder in 1952, K&K Insurance has grown from its original focus on motorsports to become one of the largest and most respected providers of insurance services to the sports, leisure and entertainment industries.

Every year, K&K offers coverage for exciting events and organizations from fairs and festivals to sports teams and tournaments. Join over Amateur Sports Arenas & Stadiums Bowling Facilities Camps & Campgrounds Civic Centers Collegiate Sports Community Centers

8,000 agents across the U.S. and Canada who choose the sports and recreation expert for their clients—K&K Insurance.

In addition to the traditional application process for complex specialty risks, K&K provides agents with instant access to coverage online. Our growing collection of e-commerce websites allow agents to easily purchase coverage immediately for many programs

Entertainment Event Cancellation Fairs & Festivals Family Fun Centers Franchised Powersports RV Dealers Fitness Instructors

Fraternal Orders Gaming Health & Fitness Clubs Horse & Dog Tracks Hunting, Fishing Guides Motorsports Teams & Facilities

that traditionally require less underwriting. Agents using our online application process earn commission without the hassle of completing paper applications and waiting for a response.

Visit our website for underwriting guidelines and applications.

kandkinsurance.com

K-12 Insurance Movie Theaters Pari-mutuel Racing Performing Arts Centers Professional Sports Products Liability Resorts

Skating Facilities Special Events Sports Facilities Tourist Attractions Whitewater Rafting Guides Trade Shows Zoos & Aquariums

E-Commerce Websites Apply, quote, bind, and receive proof of coverage immediately!

SportsInsurance-kk.com 800.426.2889 info@sportsinsurance-kk.com

ActivityClubs-KK.com 866.648.6406 info@activityclubs-kk.com

CampInsurance-kk.com 800.426.2889 info@campinsurance-kk.com

DanceInsurance-kk.com 800.648.6406 info@danceinsurance-kk.com

• Amateur Sports Teams, Leagues & Associations • Amateur Sports Tournaments & Events • Sport Instructors

• Youth (19 & under) Sport Camp and Clinics • Youth (19 & under) Non-Sport Day Camps

EventInsurance-kk.com 800.328.2317 info@eventinsurance-kk.com

• Short Term Special Events • Concessionaires, Vendors, and Exhibitors • Entertainers & Performers

• Groups conducting youth or adult non-sport activities including art, bird watching, book clubs, collectors, computers, cooking, crafts, game or card clubs, gardening, genealogy, etc.

• Dance Studios • Dance Schools • Dance Instructors

FitnessInsurance-kk.com 800.506.4856 info@fitnessinsurance-kk.com • Small Fitness Facilities • Fitness Instructors

MartialartsInsurance-kk.com 800.648.6406 info@martialartsinsurance-kk.com • Martial Arts Schools • Martial Art Instructors • Self-Defense Instructors

NATIONAL | Business Moves ONI Risk Partners, Green Owens Insurance

Morse Insurance Agency Inc., Quaglia Insurance

Morse Insurance Agency Inc. has acquired Quaglia Insurance in Attleboro, Mass.

As part of the transition, Quaglia’s Attleboro office will be closing. However, Stacy Quaglia, daughter of Quaglia Insurance Owner Larry Quaglia, will join the Morse team as an account manager and move to the Morse Insurance Norton office.

G.F.H. Insurance Agency, Peyton, Cheely and Woodle Insurance

G.F.H. Insurance Agency Inc., a Richmond, Va.headquartered insurance broker, has acquired Peyton, Cheely and Woodle Insurance of Richmond, Va. Terms of the acquisition were not disclosed.

Peyton, Cheely and Woodle has a long history in Virginia, servicing clients for more than 72 years.

G.F.H. Insurance serves the Virginia and North Carolina markets for personal and commercial property and casualty insurance. The agency

will operate under the G.F.H. Insurance Agency Inc. name from its Richmond office following the transaction.

Widerman & Company, Smith Brothers

Widerman & Company Insurance of Haddonfield, N.J., has merged its business with Smith Brothers Insurance of Glastonbury, Conn.

Widerman has 20 employees. Smith Brothers has more than 150 employees and offices in Connecticut and Massachusetts. Following the merger, Widerman & Company will continue to operate at its current location in New Jersey and under the name Widerman & Company as an affiliate of Smith Brothers Insurance.

Bob Widerman will stay fully engaged in client service, business development and expansion through the merger.

Shawn Knechtel will be responsible for the executive leadership and strategic direction as head of the New Jersey region.

Widerman & Company’s service team will remain in its present location in New Jersey.

24 | INSURANCE JOURNAL | NATIONAL AUGUST 21, 2017

ONI Risk Partners, headquartered in Indianapolis, Ind., is acquiring Franklin, Ind.-based Green Owens Insurance.

In business since 1979, the Green Owens team joins ONI’s 300-plus insurance professionals serving business and individual clients throughout Indiana, Illinois and Kentucky.

In partnering with ONI, Green Owens also joins the national platform of Prime Risk Partners (PRP). PRP is building a national platform founded with regional agencies like ONI and Green Owens that seek expansion through local management and market knowledge with the national organization.

Brown & Brown, Clairmont Financial Group

Brown & Brown of Minnesota Inc., a subsidiary of Brown & Brown Inc., has acquired the assets of Clairmont Financial in Minnesota.

Clairmont Financial will transition into Brown & Brown’s profit center in Minneapolis, which operates under the direction of Barrett Brown, regional president of Brown & Brown Inc. Clairmont Financial is an employee benefits brokerage.

The agency has net revenues of approximately $1 million.

Threlkeld & Co., Employee Benefits Consulting

Threlkeld & Co. Insurance, an East Texas firm with 30-plus years in the benefits market, has formed a partnership with Employee Benefits Consulting LLC, a Tyler, Texas, firm with Houston and Dallas connec-

tions, owned and operated by Rachel Means. The result is a new entity: Threlkeld Benefits Partners LLC. This combination now serves as the largest book of business in the East Texas market, bringing national brokerage and carrier experience with a local name and feel.

Threlkeld & Co. is owned by Todd Threlkeld.

Hub, Coordinated Resources Group

Hub International Ltd. has acquired the assets of Portland, Ore.-based Coordinated Resources Group LLC. Terms of the deal were not disclosed.

Ruppert Reinstadler and Carol Dobbs, managing partners of CRG, will join Hub Northwest and report to Tim Kennedy, executive vice president of employee benefits at Hub Northwest.

CRG specializes in employee benefits.

U.S. Risk, Strategic Insurance Underwriters

U.S. Risk Insurance Group LLC, a property and casualty wholesaler, has acquired Strategic Insurance Underwriters, a specialist trucking MGA and broker headquartered in Sarasota, Fla. Strategic Insurance Underwriters has a 34-year history of offering insurance products to the trucking and transportation industries.

Gerry den Boggende and Neal Daunt, current executives at Strategic, will continue to manage and direct the operations of Strategic as part of their new leadership roles within U.S. Risk.

INSURANCEJOURNAL.COM

NATIONAL | MyNewMarkets include: general liability; auto liability (non-owned & hired); liquor liability; crime; employee benefits; property – max TIV of $15 million.

Available limits: As needed Carrier: Unable to disclose, non-admitted States: All states Contact: Suzanne Young at 800-545-1538 or e-mail: syoung@mcgowancompanies. com

Foundations Excess / Umbrella Professional Liability for Behavioral Healthcare, Addiction & Social Services Org’s Market Detail: Excess/umbrel-

la coverage from Negley Associates (www.jjnegley.com) follows form over professional and general liability, directors & officers/employment practices liability, auto liability and employers liability. Coverage is available over other carrier policies. Coverage limits apply separately to each cover included on the policy.

Available limits: As needed Carrier: Unable to disclose, admitted States: All states Contact: Bernice Holloway at 800-845-1209 or e-mail: bholloway@jjnegley.com

AmigoMexInsurance Market Detail: American

Border Insurance Services Inc.’s (www.abis-group.com) AmigoMex offers full coverage and liability coverage for U.S.registered vehicles driving into Mexico. Policies are underwritten by AIG and MAPFRE, and include legal defense as well as roadside assistance.

Available limits: Minimum

$5,000, Maximum limit $55,000 Carrier: AIG Seguros Mexico, admitted and non-admitted available States: Ariz., Calif., Colo., Ga., Ill, N.M., Nev., and Texas Contact: Customer service at 800-554-2247

REO-Foreclosure and Lender Placed Property Insurance

Market Detail: All Risks (quote.

allrisks.com/nsp-my-new-markets/) provides lender placed hazard and flood, builder’s risk, REO hazard and general liability, mortgage impairment and mortgage lenders E&O for institutions servicing and investing in occupied or vacant residential dwellings, manufactured homes, commercial property and vacant land. Product features include: simple, secure website administration; A.M. Best A, XII Rated carrier; admitted and non-admitted products available; flexible customized programs; monthly itemized billing; premium earned on a daily prorated basis; retro rating plans Available limits: As needed Carrier: Unable to disclose, admitted and non-admitted

26 | INSURANCE JOURNAL | NATIONAL AUGUST 21, 2017

available States: All states except Hawaii Contact: Customer service at 410-505-4836

Mid-Market Package Market Detail: Next Wave

Insurance Services LLC’s (www.nextwaveins.com) general Mid-Market Program allows agents access to admitted insurers with complementary risk appetites and competitive pricing for any size account. Package or monoline options are available with low minimum premiums.

Coverages offered include: General liability; commercial auto; workers’ compensation; property; inland marine; ocean cargo; boiler & machinery; umbrella; excess liability; and environmental liability.

Available limits: As needed Carrier: PMA Ins Co, Chubb, CNA, Chartis, Markel States: All states Contact: Cameron Ward at 619232-3900 or e-mail: cward@ nextwaveins.com

Franchised, LimitedService Hotels

Market Detail: The McGowan Companies (www.mcgowancompanies.com) products

Market Detail: Nonprofits

Insurance Alliance of California (NIAC) (www.insurancefornonprofits.org) provides a full range of coverages including: general liability (including coverage for special events, fundraisers, and volunteers); auto liability (owned and nonowned vehicles); social service professional liability; improper sexual conduct liability; directors & officers liability; umbrella; liquor and employee benefits liability. Property available through property partner.

Organizations must be 501(c)(3) to be insured by NIAC. Available limits: Maximum $5 million Carrier: Unable to disclose, admitted and nonadmitted States: Calif. Only Contact: Julie Bernhard at 831621-6037 or e-mail: jbernhard@ insurancefornonprofits.org

This section brought to you by Insurance Journal’s sister website: www.mynewmarkets.com

Need a Market?

Find it.

FAST INSURANCEJOURNAL.COM

Be More T H A N J U S T A N AG E N T

DAVID GONZALEZ Allstate Agency Owner Norwalk, CT

BE AN OWNER WITH EQUITY. Unlike other small business ventures, being an Allstate Agency Owner lets you earn equity in your business with the opportunity to pass it down or sell someday. So why settle for being just an agent?

Be an Allstate Agency Owner.

Get started today at allstateagencyowner.com Subject to all terms and conditions as outlined in the Allstate R3001 Exclusive Agency Agreement and Exclusive Agency program materials. Allstate agents are not franchisees; rather they are exclusive agent independent contractors and are not employed by Allstate. Allstate is an Equal Opportunity Company. Allstate Insurance Company, Northbrook, IL. In New Jersey, Allstate New Jersey Insurance Company, Bridgewater, NJ. Š 2017 Allstate Insurance Co.

NATIONAL | Special Report | Agency Management

1. Dare to Break the Mold. We

tend to hit a sweet spot of what works for us in agency management and stay there, focusing on the “sexier” sales side of the business. It’s fine to keep what works, but always look to evolve your management processes for a competitive edge.

— Mary Ann Cook, The Institutes 2. Ask About Cyber. Develop a cyber security questionnaire or checklist that not only helps underwriting but also helps customers identify gaps.

3. Diversify and Cross-Sell.

Many personal lines agents won’t write commercial lines and vice versa. You’re missing great opportunities for new business and increased retention. If you don’t diversify and cross-sell for your clients' benefit, your competition may just do it for you ... with your customers! — Juan Adame 4. Use Technology. Utilize better your comparative raters, agency management systems or marketing automation to

28 | INSURANCE JOURNAL | NATIONAL AUGUST 21, 2017

help your agency be more efficient with repeatable tasks.

Track your lead sources. Know exactly where your leads come from. It will help you know which of your marketing dollars are working for you and which you are wasting. — Laird

Rixford, ITC 5. Constructive Tension.

Adding “constructive tension” to the relationship can indicate the true interest of the prospect. Ask the prospect for something you’ll need later —

early on. Continue this with every interaction setting a mutually agreeable “due date” for each of the next steps. A prospect who agrees to a timeline and delivers accordingly is engaged. Avoid “x-date blues” of working hard on an account only to find the prospect won’t take your call on the inception date. — Steve Pearson, ISU

Insurance Agency Network 6. Talk Budget. State, verify and confirm the prospect’s budget; do not assume.

INSURANCEJOURNAL.COM

The bottom line: When you are building any strong brand, you need to ensure that you have employees who are thoroughly engaged (including on social media), connected and committed. If you aren’t doing this you are hindering your brand and ultimately your sales. —

Julia Silve, marketing coordinator, Kaplansky Insurance 11. Investigate First. Study your prospects’ industry before you meet with them. — Chris

“People buy emotionally but make decisions intellectually.”

Confirm that your prospect is making an intellectual decision or they will face buyer’s remorse. — The Nitsche Group,

Giddings, Texas 7. Speak the Language. Learn the language that leads to gaining a Broker of Record/ Agent of Record. You’ll make more money faster. — Randy

Schwantz, founder, The Wedge Group 8. Maybe. The worst thing

you can hear from a prospect isn’t “no.” It’s “maybe.” — Jim

Wochele, unit manager, sales performance, MarshBerry 9. What Do YOU Want? A true

sales process starts all the way back at building your personal vision for your career. What do you want to achieve? And why?

— Nick Kormos, vice president,

sales performance, MarshBerry 10. Engage Employees. The best companies are the ones that recognize that every employee and every department has a role and a voice.

INSURANCEJOURNAL.COM

Burand, Burand & Associates LLC 12. Yes or No. Do not use yes or no questions if you can help it. People like to tell their story if they know you care about them. — Michael Brennan, NFP

Property & Casualty 13. Listen and Adapt. Not

every prospect is the same.

Being able to communicate with people that want every detail about the product versus people that just want the cliff notes is vital in being a well-rounded salesperson. If you treat everyone the same and never adapt your presentation or conversation you will miss out on a ton of opportunities and turn a lot of prospects off. — Curt

Sieve, senior producer, General LiabilityShop.com 14. Everyone Is Special.

Business owners do not make it into their position unless they have done something special. Ask them what makes their company special and why people do business with them. It may not always be the obvious

answer like a good product or low price. Once you know why they think they are special you can design your service plan approach to work in conjunction with it. — Michael Brennan,

NFP Property & Casualty 15. Forms Matter. Read your

forms and do not assume that because you learned something studying ISO forms that the applicable forms read the same. This is where agencies earn their commissions. — Chris

Burand, Burand & Associates LLC 16. The 5 Ps. Before you close a sale, you need to ask the prospect what the “5 Ps” are in order to write their account — price, product, program, problems with and politics in their current insurance program. —

Catherine Oak, Oak & Associates 17. Sell the Benefit, Not the Comparison. Anyone

can sell a product based on

price, but a true advisor sells based on the benefit. It’s more important to provide the correct coverage for a client that will make them whole in the unfortunate event of a loss, than to just provide a lesser product based on a cheaper price. — Nicholas Campbell,

Insurance-On-Hudson Agency 18. Who’s Not at the Table?

Take a look at your client list.

Who’s not at the table but should be? Conversely, who’s at the table but shouldn’t be?

Do you have a vision that’s clear enough to guide these decisions? Consider a fit that works best for both you and your clients in the long term. — Mary

Ann Cook, The Institutes 19. TwoWay Street.

Agents and carriers have a vested interest in working together to ensure that expectations are understood. Ask what you can do to make your carrier/agency partnership successful, and by doing so and following through, you’ll be successful, too. — Richard

Coskren, Polestar Performance Programs 20. Experience Is Everything.

The number one opportunity for every agent is to focus on the experience the client receives. Commission secret shops each month, where professional shoppers anonymously test the experience.

View everything from the eyes of the client and it will be all the marketing you ever need to do. — Billy Wagner, multi

unit agency owner, Brightway Insurance continued on page 30

NATIONAL | Special Report | Agency Management continued from page 29 21. Keep It Simple. You may

think your job is to give a possible buyer multiple options for planning for long-term care, such as spread sheeting several insurance carriers or comparing standalone and linked products. However, the reality is consumers don’t want this.

They want a recommendation with just a few choices. Limit the options they can consider.

— Steve Cain, LTCI Partners LLC 22. New Biz. Improving your new business generation makes the rest of the financial numbers that you’re obsessing over far less impactful. — Nick

Kormos, vice president, sales performance, MarshBerry 23. Video Quotes. You can use free screen recording software to say a “quick hello” on camera, then review some of the key aspects of the coverages.

It’s a simple way to stand out from the crowd and create a deeper connection with your clients/prospects. — Mike Demko, My Insurance Videos 24. Goals and Deadlines. Give yourself and your team firm deadlines and stretch goals.

25. Put Yourself in Your Customers’ Shoes. Consumer buying behavior is a constant change so we must keep up with our buyers’ interest, needs, but most importantly how to properly sell to them.

We all know that no one likes to be “sold” so keep the focus on their personality and their tone of speaking. This is key.

— Zandra Harvey, Cut-Rate

Insurance Agency 26. Give a Workshop.

Commercial and personal lines producers or agency principals can put on workshops for local businesses to discuss how to promote business locally by leveraging social media, Yelp,

email marketing and other tools. Local chambers and realty groups are always looking for quality content in their meetings. This will help with new business and build referral relationships. — Stuart Ganis,

Ganis Consulting Inc. 27. Save the Money. Thinking

of joining a chamber of commerce or other trade organization? Unless you send a representative regularly, save your money. You simply will not receive referrals unless people get to know you and trust you.

It’s a big commitment and an added expense, so determine if you can dedicate personnel to attend regularly. Don’t expect overnight results. It can take at least a year before you begin to receive meaningful referrals. — Nancy

Germond, insurance writer 28. Get Bored. When you give your mind nothing to do is when the greatest of ideas can emerge. — Alicia Frye, NFP

29. Spur Office Sales Competition. Whoever sells the least over a month puts money into a vacation kitty. At the end of the year, the one with the most sales gets the kitty.

just to name a few. — Becky

Schroeder, ITC 31. Understand the Client.

Take the time to really get to know your client and their needs. Understanding the complexities of what stage of life that they are in will help determine how you can best serve them. — Sandy Latta, Aartrijk

32. Overcoming Incumbent Loyalty. Ask prospects one

question before you go: “Do you know why people who have a long relationship with their agent still want to talk to me?” We have seen that a long and loyal relationship can lead to: 1) Agent apathy — Agents no longer worry about losing their clients business. 2) “Slow drip premium increases” — each year they are too small to notice but given time-add up 3) “Lack of marketing” — who benefits from a lack of competition?

The prospect’s current provider does. — Todd Heller, The Nitsche

Group 33. Outside the Zone. Move

outside your insurance com-

fort zone to get new ideas.

Read an article from a different industry. Attend a conference or webinar on an unusual topic outside insurance that will expand your knowledge.

34. 30-Second Commercials.

Incorporate any of the following phrases: concerned about, frustrated with, worried about, upset about, tired of.

Remember the message is for their reasons and not yours.

— The Nitsche Group, Giddings, Texas 35. TV and Radio. Host your

own local radio or cable TV show featuring events and people in your community. Many local cable and radio operators are looking for content.

36. Blog. Being too busy is not an excuse. Blogging is the most important thing you can do for your insurance agency website.

Updating your website doesn’t have to take a whole day.

Working on making changes an hour a week or a few hours a month. Those small changes can have a big impact. — Laird

Rixford, ITC 37. Head Trash or Limiting Beliefs. These can stop you

before you even start. You can only rise as high as you believe. Limiting beliefs around money will directly affect your

30. Use Email Marketing.

Everyone has an email address, and many consumers prefer to hear from you via email. Compared to direct mail, it’s cheaper and more effective. Plus, there’s so much you can do with a good email platform and solid strategy such as renewal reminders, cross selling and claims information following a big storm,

30 | INSURANCE JOURNAL | NATIONAL AUGUST 21, 2017

INSURANCEJOURNAL.COM

income. How much is a lot of money to you? If your answer is $10,000 you will struggle working with prospects where their premiums are more than that. Remember: Those are your beliefs not the prospects.

Do not transfer it to them. —

The Nitsche Group, Giddings, Texas 38. Niche It. Niche programs

are key to an agent’s ability to thrive in the current marketplace. So many agents try the “shotgun approach” of writing anything and everything they can get their hands on. At the end of the day, that creates a messy, difficult to manage book of business. By focusing on one or two key markets, the agent can begin to develop streamlined processes that will allow them to write a higher volume of accounts with ease.

— Jeff Schmidt, Eaton-Provident Group LLC 39. Bust the Incumbent.

Insurance buyers do not need two agents … get good at building relationships … get better at busting the incumbent relationship — Randy

the experience. Success starts with employees, they are your brand ambassadors. — Julia

Silve, marketing coordinator, Kaplansky Insurance 42. Organic Growth Is King. Organic growth only happens with proactive sales activities. How proactive is your agency? — Chris

Burand, Burand & Associates LLC 43. Notify. To avoid

client doubts creeping in after handing over an account to your account manager, arrange with the account manager to notify you when certain issues arise so you can contact the client. — John

in their field. — Nancy Fields,

marketing associate, Workers Compensation Shop.com 45. Email Customers. Send

customers and prospects regular emails that include: seasonally relevant stories, tips on reducing risks, links to informational videos. — Patrick

Graham of GrahamComm, a marketing and sales strategy consultant and business writer 44. Listen and Learn.

Listen emphatically to the commercial client in the initial contact. Follow up

Wraight, director, Insurance Journal’s Academy of Insurance.

46. Don’t Fear the Word: FREE! The idea behind this is

basic yet often overlooked.

Give of your time, talent or treasury. Provide free engagements, engage in public speaking, host a charity-a-thon at your location, implement car washes, donate pens or pencils to local organizations (branded of course), and more.

— Oyauma Garrison, senior vice

Schwantz, founder, The Wedge Group 40. Expertise.

Nearly all million-dollar producers have three to five well-defined niches. What industries are you an expert in?

— Jim Wochele, unit man-

ager, sales performance, MarshBerry 41. Empowerment Marketing. Empower

your employees with empowerment marketing. The quality of customer experience is a function of the quality of the employees delivering INSURANCEJOURNAL.COM

with specifically focused questions directed at learning exactly what all of your client’s operations include and exclude.

Remember the client may not know what information is useful and relevant, or that they may need a certain type of coverage for an emerging issue

president, The Jacobson Group 47. Ask and You Shall Receive … Referrals. It’s not always obvious to customers that they should recommend you.

Making that clear will establish a path to new business.

— Richard Coskren, Polestar

Performance Programs 48. Don’t Set It and Forget It. Understanding how to use continued on page 32

AUGUST 21, 2017 INSURANCE JOURNAL | NATIONAL | 31

NATIONAL | Special Report | Agency Management continued from page 31 useful every day in sales is taking the time to educate your prospect on what is going on with their policy. Giving a quick Work Comp 101 goes a long way. Even if I don’t get a sale that day I have had calls a month or a year later from referrals that I have helped or walked through exactly what is going on with their policy. — Melinda

Langworthy, senior producer, Insurance Shop LLC 52. Google It. If you quote

various social media platforms today for sustained engagement with clients and prospects is just as important as attending monthly chamber of commerce meetings. — Mary

Ann Cook, The Institutes 49. Contests. Periodically hold a contest related to insurance.

This can be on trivia, create a caption for an image, or share best practices. Send this out to existing clients, as well as advertising on social media for new prospects. — Bill Schoeffler,

Chrysalis Financial LLC 50. Shut Up and Sell. Nearly 99 percent of the talking you should do as a sales person should be asking questions. Then shut up and let the prospect/client tell their story. Don’t lead them or try to answer for them. Even if it takes them a while to formulate an answer be patient.

— Michael Brennan, NFP Property & Casualty 51. Educate Your Prospects.

What I find

a prospect and you kill their current rate, this is a great time to search for businesses that are in the same industry in that area. So, pull up Google and start dialing. When you get someone on the phone, lead with: “I’m calling today because I have a carrier that’s very aggressive in your market and wanted to see if you’d like a quote.” — April Melvin, senior

producer, Workers Compensation Shop.com 53. Errors and Omissions.

E&O happens, but it does not have to happen to you. Don’t be afraid of hiring an E&O auditor to help you improve sales and simultaneously decrease your E&O exposures. — Chris

Burand, Burand & Associates LLC

54. No Secret Weapons. There

is no secret weapon for hunting larger accounts. Research, persistence, and a clearly articulated value proposition is all you need ... But make it different!

— Nick Kormos, vice president –

Sales Performance, MarshBerry 55. Practice in Off-Time.

Everyone needs to develop their skills but if you do it in prime selling time, it will cost you money. Practice early, practice late. — Randy

Schwantz, founder, The Wedge Group 56. New Technology Purchases. When deciding to

buy technology, be sure to have a plan and process. Understand your need and whether technology is the answer, research, test drive, seek outside opin-

ions, don’t forget training, and ask for more than vendor is offering.

57. Welcome Committee. If your community does not have a service that welcomes newcomers to the neighborhood, then start one.

58. Automate Marketing. If you often forget to follow-up on a lead or you send the same email to prospects every day, try marketing automation. It will automate those tasks for you giving you time for other priorities. — Becky Schroeder, ITC

59. Social Media Best Practices. Deliver social media best practices training to realtors, mortgage brokers and other potential referral sources in your local community.

Workshops for small business

owners at your agency will go a long way to branding your agency locally and increase quality referrals. — Stuart

Ganis, Ganis Insurance 60. You Do You. Reacting to

what your competitor has done will put you two steps behind.

Know your voice, be the leader — the one others try to mimic — and you’ll stay ahead. — Alicia

Frye, NFP 61. Create a Holiday Video.

Share the video with your clients. You can “bulk send” this via email to your entire book, and also post it on social media. These types of touches are good way to stay top of mind and can help with retention/referrals. Consider Fourth of July and Thanksgiving videos; these holidays are “less crowded” than Christmas and New Year's. — Mike Demko, My

Insurance Videos 62. Use Stories, not Statistics.

Statistics are important for discovering trends and insights, but they are awful when used for discussing long-term care planning. Statistics destroy empathy and emotion. People are way too optimistic about their future and think they will be on the winning side of a statistic. Focus on stories and experience when talking about planning for LTC. — Steve Cain,

LTCI Partners LLC 63. Get in Print. Don’t aban-

don print advertising — target it to make it work for you.

64. Data Analytics. Customer

data is king — collect, analyze and protect what you have. Get help if you need it. Use it to properly to understand, educate and serve your customers.

Hire a data analyst.

65. Divide and Conquer.

Segment your customer and prospect audiences for personalized and targeted communications.

66. Give Time. Give your greatest asset, time, to listen to the customer’s needs. — Patrick

Wraight, director, Insurance Journal’s Academy of Insurance.

67. Annual Reviews. Make sure to conduct annual insurance program reviews with clients. — John Graham of

GrahamComm, a marketing and sales strategy consultant and business writer

68. Innovation Will Change How You Sell. Drones are

increasingly being used to evaluate structures, reducing the need for onsite visits. Remote monitoring is helping to reduce claim frequency and severity.

Technology-driven innovations will change how we sell, how we establish pricing structures, how we manage risk and, ultimately, who professionals market to for business. — Oyauma

Garrison, senior vice president, The Jacobson Group 69. Find a Mentor or a Mentee.

Either way, encourage mentorship. Creativity, innovation, continuity and results derive from it. — Mary Ann Cook, The

Institutes 70. Nurture Your Niche. While

the value of focusing on a niche is a recognized and effective

sales technique, select a niche or niches that “PAS” this test: Do you have the passion for it, are enough insurer markets available, and does your leadership support it? — Richard Coskren, Polestar Performance Programs

71. Appreciate Customers.

Hold an annual customer appreciation day that ties in with a charity fundraiser.

Choose one client to highlight at the event and make a donation in their name to a local charity. Include a way for the other attendees to make donations to the same charity. — Bill

Schoeffler, Chrysalis Financial LLC 72. Treat People with Respect. Treat people the way you would want to be treated.

I believe that successful sales

continued on page 34

NATIONAL | Special Report | Agency Management continued from page 33

people naturally have this characteristic. Personally, I recognize it or the lack of it when I am interacting with people daily. Treating people with respect creates a great first impression and automatically builds a sense of comfort between the agent and the insured. — Justin

Bartmess, senior producer, General Liability Shop.com 73. Help Your Prospects.

If you have a great solution immediately available or access to a great solution for a prospect, provide it to the prospect promptly. If you’re not able to help a prospect directly, take the time to point the prospect in one or several directions which are most likely to meet his or her needs.

— AJ Schrage,

senior producer, Insurance Shop LLC 74. Assume You’re Quoting All Lines. People

answer yes or no questions automatically with a no, so stop asking those questions.

Instead, ask probing questions about their other policies.

What’s their effective date, what limits do they currently have, what are their gross sales, etc. Chances are they’ll just answer, but I’d make them tell me they didn’t want me to quote their other insurance lines. So, assume the quote.

— April Melvin, senior producer,

Workers Compensation Shop.com 75. Get Professional. Clients need professional advice more than they need you to sell them insurance. What are you doing to improve your knowledge and skills to fill your

clients’ needs? — Chris Burand,

Burand & Associates LLC 76. Special Treatment. Treat

your team as more than just sales people. Show them that you care and take the time to truly acknowledge their accomplishments and milestones (big or small). Then, take it to a next level: acknowledge their accomplishments on your social media channels, share testimonials with the staff, provide notes or small gift cards, maybe even rethink perks and benefits associated with your company. It may take time to get it just right but you will see a huge improvement.

— Julia Silve, mar-

keting coordinator, Kaplansky Insurance 77. Future Hires.

Hire people for the future, not the present. — Curt

Vondrasek, vice president, MarshBerry 78. Office Décor. A new hire

candidate will decide if they want to work for you within seven seconds of entering your office. Does your office space say Google or funeral home? —

Nick Kormos, vice president, sales performance, MarshBerry 79. Ideal Recipe. The process is more important than the voicemail. There’s not a silver

bullet for a perfect voicemail, but there is an ideal recipe of mixing in eight-to-10 attempts on the same prospect to get the conversation started. — Jim

Wochele, unit manager, sales performance, MarshBerry 80. Master Story Telling Skills. Story telling engages

customers, makes you more interesting and gets your points across. — Randy Schwantz,

founder, The Wedge Group 81. Websites. Invest in a great website, and make sure it’s mobile friendly. These days your website says a lot about you to consumers who are researching online. Make sure it has the right message. —

Laird Rixford, ITC 82. Listen to Others. Don’t

shut out or shut down ideas from someone that’s “not in marketing”.

We’re all in marketing. Some of us just have a different job title.

— Alicia Frye, NFP 83. Focus on Now Benefits, Not the Future. It’s incredi-

bly hard for people to imagine aging and needing help.

Only something like an aging suit can really give people a glimpse of how needing care will affect them and their families. Instead, focus on the “now” benefits of LTC insurance. The now benefits for LTC insurance are harder to quantify, but they can include peace of mind, good health underwriting and locking into a lower premium before a birthday. — Steve

Cain, LTCI Partners LLC 84. Department Checklists. Create

a quality (as opposed to workflow) checklist for each department and project that captures the standards your organization strives to uphold.

85. Pets. What

percentage of your customers own dogs or cats?

They might welcome advice on training, local regulations, dog parks, not to mention dog bites and liability — or pet insurance, whether you sell it or not.

86. Refer Others. Recommend the services of another trusted professional or vendor to your clients. Chances are the favor

will be returned.

and strategy for Millennials should be thrown out when marketing to this group. Gen Zers aren’t even on the same playing field. — Julia Silve, mar-

87. Google Posts. Check out

Google’s new feature for local businesses: Google Posts. It appears right in the results page so you can highlight your latest blog post, an upcoming event or claim information during emergencies. — Becky

keting coordinator, Kaplansky Insurance 97. Don't Overlook Introverts.

Schroeder, ITC 88. Risk Management Meetings. Create a local risk

manager society. Most smalland medium-sized businesses do not have their own risk managers but they need risk management advice. Create a local organization that meets quarterly to hear experts and discuss risk management topics with no insurance sales pressure. Meetings can be in-person and/or over telecommunications.

89. Problem Solve. Solve a problem, don’t sell a product. — Patrick Wraight, director,

Insurance Journal’s Academy of Insurance.

90. Keep Updated. Provide

the client with periodic reports on insurance issues. — John

Graham of GrahamComm, a marketing and sales strategy consultant and business writer 91. Breaking Sales. No one

wants to be sold to; they want to buy. Are you creating a buying environment or a pushy sales environment? Create the right environment that encourages clients to do business with you and not your competitor. Price is not always the final factor. — Oyauma

Garrison, senior vice president, The Jacobson Group 92. Honesty Equals Profitability. It’s hard to

know exactly how your clients feel. For that reason, it makes sense to ask them — through a third-party source if possible INSURANCEJOURNAL.COM

— to describe their experience in working with you. Their answers will give you a framework on which to build success and preempt burgeoning problems. — Richard Coskren,

Polestar Performance Programs 93. Take Suggestions. Tap into your customers’ and employees’ creativity and connections — ask them for marketing ideas, stories and photos to share, community events to highlight, etc.

94. Ask the Right Person for Help. When you reach a

gatekeeper say, “Hello, I was

wondering if you could help me?” People are trained to help people. If you ask for help when you’re trying to reach a decision maker, you’ll have better success. Think about it: When someone asks you for help, aren’t you more likely to try and meet that need? — April

Melvin, senior producer, Workers Compensation Shop.com 95. Stop the Stock. This is

probably one of my biggest problems with this industry.

It’s 2017 … stop with the stock images. That family skipping along the beach or driving in that new convertible car? Chances are, your clients and prospects cannot relate.

Still, it seems, stock photos are everywhere. Stock photos are so recognizable, they’re overused and aren’t communicating your brand in any way. — Julia Silve,

marketing coordinator, Kaplansky Insurance 96. Prepare for Gen Z. If you are trying to increase sales volume and remain relevant, chances are, you probably already have separate marketing strategy for Millennials but have you even started to think about Gen Z? Your playbook

Introverts make up roughly one-third to one-half of the average company’s leadership and staff yet their contributions often go unnoticed.

Some experts say that’s just not good business. The assumption that extroverts make the best salespeople is incorrect. The power in introverts is demonstrated by some highly successful introverted leaders today, including Warren Buffett, Elon Musk, Bill Gates and Mark Zuckerberg to name just a few.

98. Schedule Prospecting.

Treat prospecting time like an appointment on your calendar.

— Curt Vondrasek, vice president,

MarshBerry 99. Save More Now. You need

22 times your annual living expense in your retirement account when you decide to hang it up. If you live on $100,000 that means you need $2,200,000 in your retirement account. Make more now and save more now. That’s the secret to financial success. —

Randy Schwantz, founder, The Wedge Group 100. Trust Your Instincts.

Don’t ignore a gut feeling in favor of playing it safe. — Alicia

Frye, NFP 101. Safety Tours. Arrange for

a risk management/safety tour of an iconic building, stadium or event for customers and prospects.

Share this article

with a colleague.

IJMAG.COM/821TOP

AUGUST 21, 2017 INSURANCE JOURNAL | NATIONAL | 35

NATIONAL | M&A Review

M&A Activity Outpacing Prior Years

By Sarah Lucas

M

erger and acquisition (M&A) activity continued strong through the second quarter of 2017. The year to date announced deal count is 239 through June 30 (compaared to 222 for the same period last year). The number of buyers closing on deals appears to have decreased so far in 2017, but the total number of announced deals

increased 8 percent over last year. A more concentrated group of buyers did a larger pro rata share of the deals.

Private equity-backed brokers continued to lead the number of acquisitions, with roughly half of the transactions.

Privately held, independent firms closed almost 30 percent of the deals, and publicly traded brokers closed approximately 10 percent of the transactions. The other 10 percent included bank or bank-owned firms, credit unions, insurance companies, and other various buyers.

The 10 most active buyers in the first two quarters of 2017 closed on nearly half of the transactions. The top five buyers closed 36 percent of all deals in the first and second quarter. These top five are:

Acrisure, LLC, BroadStreet Partners Inc., Arthur J. Gallagher & Co. (AJG), Hub International Limited, and NFP Corp.

Acrisure, a private equity-backed firm that completed a management-led buyout in late 2016, was the most active acquirer with 12 transactions in the second quarter (24 for yearto-date, 2017). Half of the deals Acrisure announced in the second quarter were employee benefit (EB) and consulting firms. The other half were property/casualty (P/C) firms or multi-line (firms that write P/C and EB). The deals were fairly evenly spread across the country, with six in the western U.S. and the other six in the central and eastern U.S. Hub, a private equity-backed firm, announced nine transactions in the second quarter (16 as of June 30, 2017).

AJG, which is publicly traded, and BroadStreet Partners, which is majority owned by Ontario Teachers’ Pension Plan,

Announced Deals (U.S. Transactions)

Note: All transactions in this presentation are announced deals involving public companies, private equity backed brokers, private companies, banks, insurtech companies as well as others including private equity groups, underwriters, specialty lenders, etc. All targets are U.S. only. This data displays a snapshot at a particular point in time and has not been updated to reflect subsequent changes in prior years, if any. 2017 Q1 has been updated to reflect current deal count. MarshBerry estimates that only 15-30 percent of all transactions are actually made public. Past performance is not necessarily indicative of future results.

36 | INSURANCE JOURNAL | NATIONAL AUGUST 21, 2017

tied for the third most active acquirer in the second quarter with eight announced deals each.

BroadStreet has announced 19 deals so far in 2017.

The fifth most active firm was NFP, also private equity-backed. NFP closed five deals in the second quarter and nine for the year-to-date.

Overall, 49 percent of the total second quarter deals were P/C firms, 20 percent were EB firms, and 31 percent were multi-line firms.

The geographic concentration of transactions generally followed the population.

The three states with the largest number of deals were California, New York, and Texas, comprising roughly onethird of the transactions closed in the first half of 2017.

With the number of active buyers and sellers, and the current economic and industry conditions, we believe that the M&A market for insurance distribution firms shows no signs of a slowdown. If the deal pace continues at the current rate, 2017 will likely be another record year for insurance broker transactions.

Securities offered through MarshBerry Capital Inc., Member FINRA and SIPC, and an affiliate of Marsh, Berry & Co. Inc. 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 (440-354-3230). Except where otherwise indicated, the information provided is based on matters as they exist as of the date of preparation. Past performance is not necessarily indicative of future results.

Lucas is vice president, Marsh, Berry & Co. Inc. INSURANCEJOURNAL.COM

Merger Announced and Acquisition Activity Date Buyer Announced Date

04/01/17 04/01/17 04/01/17 04/01/17 04/01/17 04/01/17 04/01/17 04/01/17 04/01/17 04/01/17 04/01/17 04/01/17 04/03/17 04/03/17 04/03/17 04/04/17 04/05/17 04/06/17 04/07/17 04/10/17 04/13/17 04/15/17 04/18/17 04/18/17 04/19/17 04/19/17 04/19/17 04/19/17 04/19/17 04/26/17 04/26/17 04/30/17 04/30/17 04/30/17 04/30/17 04/30/17 05/01/17 05/01/17 05/01/17 05/01/17 05/01/17 05/01/17 05/01/17 05/01/17 05/01/17 05/02/17 05/02/17 05/02/17 05/03/17 05/03/17 05/03/17 05/04/17 05/05/17 05/08/17 05/09/17 05/11/17 05/11/17 05/12/17 05/15/17 05/15/17 05/15/17 05/24/17 05/24/17 05/26/17 05/26/17 05/26/17 05/30/17 05/30/17 05/30/17 05/30/17 05/30/17 05/31/17 05/31/17 05/31/17 05/31/17 05/31/17 06/01/17 06/01/17 06/01/17 06/01/17 06/01/17 06/01/17 06/01/17 06/01/17 06/01/17 06/01/17 06/01/17 06/01/17 06/01/17 06/01/17 06/01/17 06/01/17 06/02/17 06/02/17 06/05/17 06/06/17 06/06/17 06/07/17 06/07/17 06/07/17 06/08/17 06/08/17 06/08/17 06/09/17 06/12/17 06/13/17 06/13/17 06/14/17 06/19/17 06/19/17 06/20/17 06/20/17 06/20/17 06/20/17 06/20/17 06/21/17 06/21/17 06/21/17 06/21/17 06/21/17 06/22/17 06/26/17 06/28/17 06/29/17

Buyer

Heffernan Insurance Brokers Hilb Group LLC World Insurance Associates LLC Linnett Group BenefitMall BroadStreet Partners Inc. BroadStreet Partners Inc. BroadStreet Partners Inc. McGowan Companies Hilb Group LLC NFP Corp.

Prime Risk Partners Inc. Sirius International Insurance Group Ltd. Hub International Limited Maximum Independent Brokerage Inc. Truitt Insurance & Bonding Inc. KKR & Co. L.P. USI Inc. NFP Corp.

RSC Insurance Brokerage Inc. First Defiance Financial Corp.

Nancy Z. Bender Insurance Agency Inc. Platforms Partners LLC RSC Insurance Brokerage Inc. Hausmann-Johnson Insurance Inc. M&M Insurance Associates Inc. AmWINS Group Inc. Seeman Holtz Property and Casualty Inc. Bryn Mawr Bank Corp.

Arthur J. Gallagher & Co. Workers' Credit Union Acrisure LLC Acrisure LLC Acrisure LLC Higginbotham & Associates Inc. World Insurance Associates LLC Alera Group Inc. AmWINS Group Hub International Limited Marsh & McLennan Companies Inc. NFP Corp.

NFP Corp.

NFP Corp.

BroadStreet Partners Inc. BroadStreet Partners Inc. Cross Insurance Hub International Limited Alliant Insurance Services Arthur J. Gallagher & Co. Hub International Limited Insurance Services United Inc. Acentria Insurance Kaplansky Insurance Agency Inc. New Mountain Capital LLC AssuredPartners Inc. Arthur J. Gallagher & Co. Higginbotham & Associates Inc. Acrisure LLC DOXA Insurance Holdings LLC Lacher & Associates Insurance Agency Inc. G2 Insurance Services LLC AIMC LLC RSC Insurance Brokerage Inc. Allison Commercial Insurance Agency Inc. Management Group Sirius International Insurance Group Ltd. Arthur J. Gallagher & Co. Arthur J. Gallagher & Co. AVID Risk Solutions Inc. Family Insurance Center USI Holdings Corporation AssuredPartners Inc. Acrisure LLC Acrisure LLC Acrisure LLC Hub International Limited Acrisure LLC Acrisure LLC Acrisure LLC Acrisure LLC Acrisure LLC Alera Group Inc. Alera Group Inc. BroadStreet Partners Inc. Andrew Agency Inc. CBIZ Inc. John L. Wortham & Son L.P. Ontario Teachers' Pension Plan Board Ontario Teachers' Pension Plan Board Ontario Teachers' Pension Plan Board AssuredPartners Inc. Hub International Limited Element Group LLC Specialty Program Group LLC Cross Insurance Arthur J. Gallagher & Co. Arthur J. Gallagher & Co. Leavitt Group Hub International Limited Specialty Program Group LLC Farmers Bankshares Inc. Hub International Limited Arthur J. Gallagher & Co. Seeman Holtz Property and Casualty Inc. J.M. Wilson Corporation Acrisure LLC Acrisure LLC Southerland Insurance Agency Brown & Brown Inc. Dean Insurance Agency Inc. Brown & Brown Inc. DTRT Insurance Group Kaplansky Insurance Agency Inc. Seeman Holtz Property and Casualty Inc. B.P. Marsh North America Ltd. Confie Seguros Insurance Services Confie Seguros Insurance Services Confie Seguros Insurance Services Confie Seguros Insurance Services Confie Seguros Insurance Services Bridger OceanPoint Financial Partners Kraus-Anderson Insurance Higginbotham & Associates Inc.

April 1, 2017 to June 30, 2017 Seller Seller

National Truck Services Group Group benefits Division Mark Lauria Associates Inc. Skylands Insurance Group Strategic Business Services Agecy LLC Certain Insurance Assets Certain Insurance Assets Certain Insurance Assets North American Professional Liability Insurance Agency Keough Kirby Associates Inc. McCullough Insurance Agency Inc. Gundermann & Gundermann Inc. ArmadaCorp Capital LLC Heritage Corporate Benefits LLC Starpoint General Agency Inc. Beacon Insurance Group Inc. SES Insurance Brokerage Services Inc. Cameron M. Harris & Co. LLC Kempkey Insurance Services Inc. Mosse & Mosse Insurance Associates LLC Corporate One Benefits Agency Inc. H.R. Hatch Insurance Agency Inc. Beneplace LLC Friedman & Friedman Agency Inc. Benefit Services Group Inc. Richey Healthy Benefits LLC Partners Specialty Group LLC A&J Insurance Agency Inc. Hirshorn Boothby Commercial Insurance Brokers Braley Wellington Insurance Group Undisclosed Insurance Agency (CA) Undisclosed Insurance Agency (CA) Undisclosed Insurance Agency (MI) Painter & Johnson Financial LP Wm. G. Palermo Inc. Striewig Bonding Agency Inc. Networked Insurance Agents LLC City Insurance Services/Silver City Insurance/J&C Financial Insurance Partners of Texas Bigbie, Hensley & Janway Insurance Agency Inc. International Insurance Group Inc. Brennan & Associates Risk Management & Insurance Services Certain Insurance Assets Certain Insurance Assets A. E. Barnes Insurance Agency Inc. Rossmann-Hurt-Hoffman Inc. Summit Insurance Resource Group Texas Insurance Managers Inc. Scarborough Company Insurance Inc. Lewis Casualty L&S Insurance and Financial Services Inc. Brooklawn Insurance Agency Inc. OneDigital Health and Benefits Preferred Guardian Insurance Strong Financial Resources Portion of Hilb Group of Texas LLC's operations Britton-Gallagher & Associates Inc. Promont Advisors D.P. Moyer Insurance Inc. MacGillis & Company Integrity Marketing Group LLC Brightstone Insurance Services LLC Assets of Health Benefit Advisors IMG-Stop Loss International Medical Group Inc. Williams-Manny Inc. Zuber Insurance Agency Inc. ISC Inc. ISC Inc. Hartman Employee Benefits Inc. Craft Insurance Center Inc. Undisclosed Insurance Agency (CA) Undisclosed Insurance Agency (CA) Undisclosed Insurance Agency (NJ) Workers Compensation Business Undisclosed Insurance Agency (CA) Undisclosed Insurance Agency (CT) Undisclosed Insurance Agency (MI) FreedomCare Benefits LLC Self Insured Solutions LLC AIC Denver LLC Group Benefits LLC David Paulson Agency Inc. Wood Insurance Agency Inc. Slaton Insurance Lucien Wright Insurance Services Inc. Certain Insurance Assets Certain Insurance Assets Certain Insurance Assets Alkali LLC Ponce de Leon Insurance Group Inc. Rhodes Insurance Agency Inc. Hanson & Paul Inc. Appleby & Wyman Insurance Agency Inc. Armstrong/Robitaille/Riegle Inc. Ann Arbor Business Advisors LLC Heavin & Associates Insurance Agency Inc. and Arvak Insurance Group Brady Insurance Planning Workers Compensation Underwriting Unit of MarketScout Manry Rawls LLC Henry M. Murray Agency Inc. Northern Star Insurance Services Vincent, Urban, Walker & Associates Inc. Klinger Associates Self Insured Solutions FreedomCare Tiger Insurance Agency Spann Insurance Inc. Sumnar-Scholl Insurance Agency Inc. TriCoast Insurance Services Insurance Authority Inc. George Gath Insurance Agency Inc. Direct Choice Insurance Services Inc. XPT Group EZ Insurance Services LLC Louis P. Ferrari Agency Inc. Rodney D. Young Insurance Agency Inc. Tremont Spirit Insurance Inc. Valletta Insurance Agency LLC SCJ Insurance Services Christopher & Regan Insurance Inc. Dennis J. Linder & Associates Jeannette Blanton Insurance Agency

Sources: S&P Global Market Intelligence, Insurance Journal, other publicly available sources and MarshBerry proprietary databases.

Disclosure: All deal count metrics are inclusive of completed deals with U.S. targets only.

INSURANCEJOURNAL.COM

AUGUST 21, 2017 INSURANCE JOURNAL | NATIONAL | 37

Idea Exchange

Human Resources

Tailor Your Talent Brand to Fit Today’s Candidates

By David E. Coons

O

utdated, behind-the-times, old-fashioned and boring — all of these terms have been used to describe the insurance industry at one point in time. It’s clear that the industry has an image problem. But what about your organization? Does your company’s talent brand cut through the industry stereotypes to attract today’s talent?

At the industry level, partnerships like the Insurance Careers Movement have worked hard to combat long-held misconceptions. Acknowledging that insurance is tied second to last with the defense industry in terms of public image, these groups have begun to rebrand. Their efforts are beginning to make headway in promoting insurance as a great place to work — with historically stable employment, rewarding careers and opportunities for growth.

Now this rebranding needs to trickle down to the company level.

In order to compete in today’s challenging labor market, insurance organizations must focus their attention on building and promoting their own unique employer brands.

organization’s public image, the feelings employees and potential employees have about your company as well as your social presence. Having a positive talent brand can play a big role in giving insurance organizations a leg up on the competition in today’s labor market. In fact, employer branding is considered the second most essential, long-term recruitment trend within the business world — surpassed only by the rise of social and professional networks.

Forward-thinking leaders understand the correlation between a strong talent brand and the successful recruitment and engagement of top talent. Eighty-three percent of global recruiting leaders report branding as a critical driver of their ability to attract and hire top talent, while 69 percent rate it as a top priority. Organizations with a focus on talent branding tend to grow 20 percent faster than their counterparts and report 28 percent lower turnover rates.

In addition, a strong talent persona helps to enhance an organization’s reputation and name recognition. It is clear that

branding is an integral foundation for competing in today’s increasingly challenging labor market.

Your Website as Your Brand

A successful talent brand requires outreach across a variety of channels.

However, when looking at the most effective vehicles for outreach, the company website tops the list at 78 percent. Your organization’s website is often potential employees’ first point of contact with the company. As such, it is critical that your website positively promotes your firm.

Update your website with a focus on your About Us and Career sections. Make sure to continually update these pages with fresh content including company accomplishments and employer branded pieces. Incorporate photos throughout your website to increase engagement.

You may even want to consider using photos of your current employees instead of the standard stock photography.

Insurance organizations should be

The ‘Why’ of Talent Branding

Considered “the people’s voice,” a talent brand encompasses your 38 | INSURANCE JOURNAL | NATIONAL AUGUST 21, 2017

INSURANCEJOURNAL.COM

looking to their current employees to serve as ambassadors and advocates for their organizations. Make sure to spotlight the positive experiences of current employees through employee testimonials. Whenever possible, include interactive content such as videos to “show, don’t tell” the story of your employees.

Finally, make sure your career page is optimized for mobile. With most job candidates utilizing mobile devices to search for their next opportunity, being able to view your page on their tablet or phone is a definite plus.

Social Media for Brand Outreach

Don’t overlook the power of social media. Thirty-eight percent of recruiters view social media as the most effective channel for talent branding. With its rapid rise, social media provides a quick, easy and cost-effective way to build and promote your company brand.

In today’s competitive labor market, having a strong, positive company image can be the key to recruiting and engaging top talent.

Insurance organizations need to build and leverage a positive and robust social media presence that will help to engage candidates. Update your company’s profile, publish posts regularly and make an effort to engage and interact with your followers. Strike up conversations, respond to discussions and take part in dialogues.

Take it a step further and prompt your employees to get involved with your social media pages. Encourage them to add photos, post videos and share messages that showcase their involvement with your organization. Promote company activities and share awards and successes. If it bolsters your organization’s image or high-

lights a key part of your culture, share it.

Social media is quickly becoming a vital component in building a successful public persona. Your organization’s active participation across social networks will go a long way in building your online presence and reputation.

Talent branding matters. In today’s competitive labor market, having a strong, positive company image can be the key to recruiting and engaging top talent.

Developing a multi-faceted, employee-focused brand will go a long way in promoting your company as an employer of choice. Only those organizations that take the time to cultivate a positive talent brand will be able to ensure future success.

Share this article with a colleague.

IJMAG.COM/821CO Coons is senior vice president of The Jacobson Group, a provider of talent to the insurance industry. Phone: 800-466-1578. Email: dcoons@ jacobsononline.com.

Complimentary Webinar

Out of Control Commercial Use Epidemic is Hurting Your Combined Ratio

Presenter: Alex Young VP, Risk Solutions

Reserve Your Space Now at www.ijmag.com/drn DRNWK003.indd 1

INSURANCEJOURNAL.COM

8/11/17 1:11 PM

AUGUST 21, 2017 INSURANCE JOURNAL | NATIONAL | 39

Idea Exchange

Minding Your Business

The Tale of Two Values up to the 1980s, most agency transactions were local and consisted of a peer buying a peer. The firms were not all that big, so the buyer just absorbed the seller’s business within its operation, so the expense structure was the same. The traditional rule of thumb was that value was based on one to two times commission revenue. As the insurance industry grew and became more complicated and specialized, the multiple of revenue approach became less relevant.

Profits & Cash Flow

By Bill Schoeffler and

For the past 30 years, agencies have become much larger and more sophisticated. The book of business can vary significantly as agencies focus on niches. The related expense structure, especially on salaries and commissions, also has a wide spectrum. This means that the multiple of revenue method for determining value became less accurate.

The best way to value any business is based on the profitability of the business.

This takes the actual expenses of the business into consideration. Therefore, two

firms with the same revenue, but different profit margins are not valued the same, like they would be if only revenue was considered.

In general, the insurance industry is a very profitable industry and can typically generate between 15 percent to 30 percent profit margins, which is more profitable than most industries. For example, retail, trucking and manufacturing firms have single digit profit margins on average. This is why some investors have shown interest in buying insurance firms for the past 30 plus years.

Publicly Traded Brokers

Publicly traded insurance brokers have also been active in acquisitions for the past 30 years. One of the main driving factors has been that stockholders want to see regular growth. Organic growth is often not significant, so growth through acquisitions is the easiest way to post noticeable numbers on a consistent basis.

Typically, these firms have been trading on the stock exchange with PE ratios (price/

Catherine Oak

I

t was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness…”

This opening line in Charles Dickens novel “A Tale of Two Cities” summarizes the contradictions and differences between London and Paris during the turmoil of the French Revolution.

For the past several years and going forward into the near future, there has been a bifurcation of agency value. This is creating a dilemma for independent agency owners who want to remain privately held and agencies that want to grow through acquisition.

Agency value for many years was looked at as a function of a multiple of revenue.

This is an easy concept to understand and has some logic to it. Back in the 1950s and 40 | INSURANCE JOURNAL | NATIONAL AUGUST 21, 2017

INSURANCEJOURNAL.COM

earnings) of 15-25. Therefore, it is easy for them to justify buying an agency at seven to 10 times EBITA (Earnings Before Interest, Taxes and Amortization). The deals can be cash or stock or a combination. Receiving stock is often a good option for sellers since these publicly traded firms tend to increase in value.

Banks and S&Ls

Starting in the late 1990s, banks and savings and loans (S&Ls) started getting into the acquisitions of insurance agencies as the repeal of the Glass-Steagall Act (1933) seemed likely (it was officially repealed in 1999). They believed selling insurance was a good way to improve profits while cross selling existing clients. Their enthusiasm created a buying frenzy during the early 2000s, which forced them to pay top dollar values to sellers. Multiples of EBITDA in the range of seven to 10 were common as the banks tried to lure agency owners to sell.

In the long run, banks soured on buying agencies for a variety of reasons, which included a lack of cross-selling and failure to integrate insurance into their product portfolio, as well as lower profits due to the soft market in the early 2000s. In addition, banks were not used to underwriting criteria and insurance producers making more money than bank presidents.

Private Equity

More recently, private equity firms have been buying up insurance agencies for their investors. This makes a lot of sense because the return on investment is typically 20 percent plus or minus, which is greater than most other available investments today. Private equity firms are paying typically eight to 10 times EBITA and sometimes even more. When the value is translated to a multiple of revenue this means two to three times revenue. Some of these private equity firms have the longterm goal of flipping the business to another private equity firm or going public.

Downside

Selling to a bank, publicly traded broker or a private equity held firm can have its INSURANCEJOURNAL.COM

financial reward. The downside is that often the seller is doing the same thing before the sale, except that they now report to a corporate management team far away. If the agency is left as a stand-alone and not folded into a larger organization, there might be very little support for the regular issues such as hiring people, generating new sales and planning the succession of the original owner. The agency can also lose its small business culture as it meets the demands of the new owner. This can upset clients and employees.

If commissions are cut to improve the bottom line, the producers will leave and sometimes with accounts. This can impact the seller because deals typically have an earn out component based on retention of business for part of the price. We have seen many deals that promised a high price result in a mediocre final price because producers left with their books of business.

Keep in mind that these firms do not buy just any old agency. They have specific criteria for their target seller, which will vary from time-to-time. These buyers are looking for the right agency, at the right location and at the right time to provide top dollar.

Internal and Local Buyers

Internal perpetuation and local buyers do not have deep pockets and need to buy an agency based on its cash flow to make it affordable. The typical deal is between six and seven times EBITA and translates to around 1.2 to 1.7 times revenue. Buyers often put less than 25 percent down and terms can stretch from three to seven years.

If all things remain static, a six times EBITDA can be interpreted to mean that it will take six years to breakeven on the transaction. This is one reason that internal and local buyers cannot afford to pay 10 times EBITDA since the breakeven point is too far away.

For sellers, the dilemma is: do they want to maximize their return on equity and sell to a private equity firm or would they like to sell to family, employees or a local competitor at a lower price?

This decision is easier for family run

businesses since blood is a strong factor in the thought process. Also, if the agency does not match up with the target acquisition criteria of a well-funded buyer, that eliminates that option. However, there is less motivation to sell to a friendly competitor at a lower price compared to what is potentially available out in the open market.

Summary

We have been experiencing this two-tier valuation of agencies for quite a while, and it will continue into the near future.

Depending on circumstances, these can be the best of times or the worst of times.

Oak is the founder of the international consulting firm, Oak & Associates, based in Northern California. Schoeffler is an associate of the firm. The firm specializes in financial and management consulting for independent insurance agencies, including valuations, mergers and acquisitions, clusters, sales and marketing planning as well as perpetuation planning.

Phone: 707-936-6565. E-mail: catoak@gmail.com.

Advertisers Index

Read, browse, contact, or do product searches on any of our full page advertisers at: www.insurancejournal.com/adshowcase/

AllState Insurance Company www.allstateagent.com 27 Aon Affinity www.aon.com 5 Applied Underwriters www.auw.com 2, 3, 44 Bank of Arizona www.bankofarizona.com W5 Coloarado State Bank and Trust www.csbt.com W5 CTC Transportation Insurance Services https://insurancetruck.com 16, 17 EZLynx www.ezlynx.com 14, 15 Great American Insurance Group www.gaig.com 18, 19 K&K Insurance Group www.kandkinsurance.com 22, 23 Louisiana Commerce & Trade Assoc. www.lctacomp.com S5 Monarch E&S Insurance Services www.monarchexcess.com W3 PersonalUmbrella.Com www.personalumbrella.com 43 Regions Bank www.regions.com 9 South & Western www.southandwestern.com 20, 21 Texas Mutual www.texasmutual.com SC3 The Hartford Insurance Group www.thehartford.com 6, 7 tKg Wholesale Brokerage www.tkgins.com 25 United Fire Group www.ufgsolutions.com E5

AUGUST 21, 2017 INSURANCE JOURNAL | NATIONAL | 41

Closing Quote High Net Worth Insurance Needs More Specialists nity for insurance brokers and agents.

Understanding a Lifestyle and Gaining Access

By Heather Posner

T

he high net worth (HNW) specialty insurance market is a lucrative and developing segment of the insurance industry. According to the U.S. Census Bureau, 25 percent of Americans hold 74 percent of the country’s wealth, and this number is rising. Amassing this wealth takes hard work, determination and time, and the demand for HNW specialists will grow as these individuals become more affluent.

Proof of increased prosperity is highlighted by the fact that an estimated one of every 10 homes in the U.S. is worth at least $1 million. Since 2008 alone, the quantity of million dollar homes in America has escalated by four million. As fortunes flourish, there is an opportunity for prosperous clients to enter the specialty market for the first time — paving the way for a massive opportu-

The affluent individual, in general, has many unique exposures that come with their lifestyle. Becoming an expert in this area requires knowledge of their way of life and experience in asking the right questions to ensure proper coverage.

Annual risk assessments are imperative and set the stage to find answers to questions about net worth, assets, collections and perhaps the purchase of a summer cottage. Brokers and agents may find more coverage is placed in standard markets than should be.

For brokers not working with specialty carriers every day, getting approval – or even access – can be difficult. HNW carriers want to work with

42 | INSURANCE JOURNAL | NATIONAL AUGUST 21, 2017

firms who have expertise to underwrite policies properly.

Brokers looking to properly insure HNW clients should partner with dedicated experts who understand the needs of wealthy clientele.

It Takes Time

High net worth coverage is not as simple as one phone conversation. It takes time and relationships to build networks.

Once a broker understands the insurance marketplace and what is available from a coverage, service and risk management perspective, learning the client’s risk tolerance is a subsequent hurdle. The broker or agent should work with a trusted specialty insurance underwriter to tailor coverage and pricing to meet clients' pre-requisites.

HNW exposures can be similar to commercial exposures, as both may need to insure multiple locations, in-home employees and non-profit work. The main takeaway is this cannot be a one-size-fits-all approach.

Networking

Developing relationships

with other professions that serve HNW individuals will provide a better understanding of exposures. Networking with lawyers, accountants and financial advisors can aide in the process. Make a point to ask these professionals what clients request of them. Not all professions can see a liability exposure. A lawyer may be aware of employees on staff and the need for workers’ compensation or disability coverage. A seasoned high net worth specialist can provide additional value, recommending employment practices liability insurance to cover legal costs related to sexual harassment, wrongful termination or discrimination cases – whether they are legitimate claims or not.

Having conversations with various professionals and offering valuable advice in high net worth insurance will build trust and showcase expertise, which can open the door for future client recommendations. Being introduced through a reliable source can lower the barrier to entry. High net worth clients spend years building amazing wealth and legacies that need to be protected. Due to the high amount of exposures, brokers need to be educated on all liabilities and dig deep to find the best coverage, working with trusted partners to guide them through the process. As the wealth in America and across the globe increases, so will the need for more high net worth specialists.

Posner is assistant vice president and director of high net worth insurance at Burns & Wilcox.

INSURANCEJOURNAL.COM

Life’s not neat.

GET A standalone PERSONAL UMBRELLA for stuff that can be a little messy.

FROM a LANDLORD to a LEAD FOOT, ANSWER 4 quick QUESTIONS ONLINE AND GET a $5 MM POLICY IN MINUTES FROM AN ADMITTED CARRIER RATED A+ XV BY A.M. BEST. plus, no volume requirement. umbrellas are for everyone.

Family-owned and operated. Proudly dog-friendly. available nationally. Underwriting criteria varies by state. Visit us online for guideLines.

California Insurance License 0D08438. A.M. Best rating effective JULY 2017. For the latest rating, visit ambest.com.

Expect big things in workers’ compensation. Expect to save a third of your clients 30% or more. Most classes approved, nationwide.

For information call (877) 234-4450 or visit auw.com/us. Follow us at bigdoghq.com. Š2017 Applied Underwriters, Inc., a Berkshire Hathaway company. Rated A+ (Superior) by A.M. Best.

Insurance plans protected U.S. Patent No. 7,908,157.