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Inaugural list of top-performing independents levels the playing field BERNIE HEINZE AAMGA LEADER READY TO RIDE IN HAWAII





Brian Anderson

In the course of reviewing many dozens of nominations for this month’s cover story profiling elite independent agencies, several common themes emerged that provided some keen insight on what kinds of traits are shared by top-performing agencies. Whether they have fewer than five producers or more than 50, these agencies are focused on providing exceptional customer service, providing their employees with the tools they need to be successful, and improving their communities through volunteer work and fundraising activities. When it comes to exceptional customer service, elite agencies invariably feature producers who are experts in their markets and strong advocates for their clients. They are backed up by well-trained, responsive customer service staff who are leveraging technology to be increasingly available to clients. Several elite agencies mentioned that they were already at or working toward being available for their clients on a 24/7 basis. These agencies also strive to provide year-round risk management assistance “to maximize each client’s protection, efficiency and budget,” as one of the companies succinctly put it. In providing the tools employees need to succeed, today’s progressive agencies have taken on initiatives such as offering mentoring programs and continuing education classes, providing ownership stakes, and covering the costs of earning industry designations. They also seem to be focused on setting clearly defined goals and providing strong incentives for reaching those goals. Several companies talked about what they did to attract and retain good people, and create a workplace environment in which employees could build fulfilling careers. Finally, just about every company nominated made mention of their involvement in charitable causes and community activities— and not just token involvement but real, sweat-equity involvement. Not only do they donate to and fund-raise for causes important to them— they also frequently donate their time and effort to make these endeavors successful, often during work hours with the blessing of the agency. I hope you’ll spend a few minutes reading through the profiles of the agencies included in our Elite Agencies coverage (see page 18). I think you’ll find many common denominators that demonstrate what it takes to become truly elite.








COPY & FEATURES MANAGING EDITOR Brian Anderson JOURNALIST Caitlin Bronson CONTRIBUTORS Doren Aldana, Patricia LeBon, Muhammad Yasin PRODUCTION EDITORS Roslyn Meredith, Moira Daniels



CORPORATE CHIEF EXECUTIVE OFFICER Mike Shipley CHIEF OPERATING OFFICER George Walmsley MANAGING DIRECTOR Justin Kennedy CHIEF INFORMATION OFFICER Colin Chan HUMAN RESOURCES MANAGER Julia Bookallil Editorial inquiries Brian Anderson Advertising inquiries James Donnellan Molly Hummel Subscriptions Key Media 7807 E Peakview Ave Suite 115 Centennial CO 80111 United States of America tel: +1 720 452 2600 Offices in Sydney, Auckland, Manila, Toronto Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as IB magazine can accept no responsibility for loss


Contact the editor: MAY/JUNE 2014 | 1  

When asked about The Hanover… In a recent survey of 350 partner agents and brokers, we were pleased with the words our agents used to describe us — and that our value proposition is making a difference. The Hanover is unwavering in our commitment to being the best carrier partner for the best agents and brokers in the country. We’re a different kind of insurance company. We listen. We solve. We execute.


VALUE together. © 2014 The Hanover Insurance Group, Inc.



INDUSTRY ICON Bernd G. Heinze, Esq.: AAMGA on the right path Bernie Heinze has led the AAMGA well down the road to being a dominant force in the specialty property-casualty insurance industry, and has the association primed to lean into the curves ahead

06 FEATURE 6 | MGAs respond After hearing what their agent partners had to say in the previous issue of Insurance Business America, managing general agents took the time to shed some light on the dynamics and challenges of the agent/MGA relationship

PRODUCER PROFILE 40 | Brian Hudler: Lone (Energy) Star A thirst for knowledge and a great mentor have kept the Alliant producer’s star on the rise as one of the most innovative minds working the oil and gas sector


COVER STORY Elite Agencies Insurance Business America’s inaugural list puts the spotlight on top-performing independents of all sizes

CHECK IT OUT ONLINE: InFocus: Environmental InFocus: Cyber liability InFocus: Hospitality Special reports: IBA Hot 100 Latest jobs 

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34 | Raising the stakes: Medical malpractice in the age of ObamaCare Millions of newly insured patients are expected to flood doctors’ offices as healthcare reform takes effect, and the resulting environment presents both challenges and opportunities in the medical professional liability space

1 | Editor’s letter 3 common traits of elite agencies


55 | Favorite things Alan Jay Kaufman, chairman, president and CEO, Kaufman Financial Group 56 | The last word Patricia LeBon: 5 myths about affluent clients

52 | Plan to succeed A good plan can act like a compass, not only helping you stay the course but also getting you where you want to go


FEATURE Making inroads in trucking insurance Agents can gain an edge in the trucking and commercial auto market by going the extra mile to become an expert, and using that expertise to help clients down the road to better coverage


8 ways to mediocre marketing “Mediocre”—that’s not FEATURE exactly what brokers like to hear, but if you’re doing these “don’ts,” writes coach Doren Aldana, you may be writing that all over your 2014



How to develop a simple social media plan You might be daunted by the prospect of getting social media right for your brokerage. Muhammad Yasin presents a simple guide to get you on your way

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After hearing what their agent partners had to say in the previous issue of Insurance Business America, managing general agents took the time to shed some light on the dynamics and challenges of the agent/MGA relationship When an Insurance Business America survey of independent agents identified automation, underwriting and claims responsiveness as the top areas in which managing general agents could improve, MGAs themselves were hardly surprised. After all, it’s what they hear from their own agent partners on a regular basis. Familiarity does not make agents’ concerns unimportant, however. Many MGAs were eager to share the details of their work behind the scenes in expanding their technological capabilities, value-added services and underwriting expertise to better serve independent agents. In soliciting MGA reaction to the original IBA survey, we learned that the MGA/agent relationship is just as important to wholesalers as it is to producers. From their vantage point, however, the view is slightly different.

SOLICITING AGENT FEEDBACK MGAs are deeply invested in the independent agent. Despite some industry movement toward direct distribution, most MGAs view agents as their primary and most important asset. Therefore, 6 | MAY/JUNE 2014


MGAs SPEAK OUT ON AGENT SURVEY MGA professionals speak about their initial impressions of what agents had to say in the last issue of Insurance Business America: • “We know who our customer is, and that’s very important to us. We fully recognize that the most important part of how we get business is through independent agents and brokers. As such, we take the feedback we receive from our agent partners very seriously and make it clear that during times we’re not reaching out directly, they are more than welcome to provide us with unsolicited feedback” — Dan Mogelnicki, president of underwriting at NIF Group

communicating with agents and soliciting feedback is paramount. However, it appears that while each MGA values agent opinion, approaches to hearing that opinion vary. MGAs share stories of annual surveys, agent comment cards sent with custom policies, and “televisits” done over the phone or using a webcam, in addition to the traditional in-office visit. The goal is to learn as much as possible about what the underwriting team is doing correctly and where they can improve. At the NIF Group in Manhasset, NY, Dan Mogelnicki takes a three-tiered approach to communicating with the agency’s 2,500 agent partners. President of underwriting at the wholesale brokerage, Mogelnicki directs NIF Group underwriters to seek agent feedback first, in person; second, over the telephone; and third, through e-mail. “We make it a very large part of who we are and what we do to visit our customers on-site on a very regular basis,” Mogelnicki says. “We spend 20% of our time seeing agents, whether that’s once or five times a year.” Typically, MGAs say they seek feedback on agent workload, product needs and communication between the brokerage and its partners. They also share news of developments at their own offices or new products that might serve an agent’s existing clientele. When a concern reaches critical mass, or when an agent has a particularly unique issue or idea, MGAs often meet internally to develop solutions, though some do so with more regularity than others. One thing all MGAs spoke to, however, was the translation of agent feedback into real change. In one instance, an agent suggestion led NIF Group—which specializes partly in writing nonprofit business—to launch and develop its current adoption and foster care program. “We spent about a year putting it together, and

• “I found the article to be pretty on par with what we’ve been hearing from our customers, especially with underwriting responsiveness being the most important aspect of selecting an MGA” — Cathy Baldwin, director of marketing and communication at J.M. Wilson • “Agents are telling us that we, and they, have to go back to business fundamentals and the business of doing business. We would not be so bold as to think that we know all the needs an agent might have, but we can provide the tools and resources to seek solutions to the questions being asked” — Bernd G. Heinze, Esq., executive director of AAMGA • “The topics brought up in the article are the same topics that generate the most feedback from our agents. The range of carriers we represent, claims responsiveness, and underwriting responsiveness is always at the top of the list when we solicit feedback from agencies. Nothing really surprised me” — Brent Wright, assistant vice president of MGA binding authority at Towerstone • “Insurance is a very entrepreneurial business and there’s so many different types of both agents and MGAs, sometimes things don’t mesh perfectly—it wasn’t a surprise to hear that. However, we’re always problem solving and always trying to work together to find solutions” — Matt Letson, incoming president of AAMGA • “I was pleased to see that automation was ranked near the bottom in terms of agent priorities when selecting an MGA. Automation is key, but in my view, that shouldn’t be the reason you choose a particular MGA. Automation should be supportive of the business, not the other way around” — Scott Montney, chairman of the AAMGA Automation Committee

“We spent about a year putting it together ... now we have a good program that allows us to write new business, and it all started with one phone call from one broker in Texas” Dan Mogelnicki, NIF Group MAY/JUNE 2014 | 7  


now we have a good program that allows us to write new business,” Mogelnicki says, “and it all started with one phone call from one broker in Texas.” Geographically far-flung clients and a changing agent demographic may, however, see a decrease in on-site visits from MGAs, says Brent Wright, assistant vice president of MGA binding authority at Dallas-based Towerstone.

“When I see submissions where agents don’t take the time to fill everything out, they go to the bottom of the pile” Brent Wright, Towerstone “Our industry, unlike any others, is such a relationship-driven business, but the younger generation of insurance agents will want to do things over the web in the future,” Wright says. “I think as you see agencies hiring younger producers, you’re going to get a different concept of the way things should be done: less face-to-face, and even less over-the-phone conversations.”

IMPROVING UNDERWRITING TURNAROUND TIMES Whatever their method of gathering agent opinion, MGAs face the same basic feedback. At the top of most agents’ wish lists is faster underwriting turnaround times. Underwriting responsiveness and turnaround times ranked highest on the list of agent priorities, according the IBA survey. However, despite that universal consensus, agents seem somewhat dissatisfied with MGAs’ performance. 8 | MAY/JUNE 2014

Underwriting performance ranked as the fourth worst-performing area, behind marketing support, automation and claims responsiveness. Cathy Baldwin, director of marketing and communication at J.M. Wilson in Portage, Mich., says she understands the need for prompt responses from MGAs. However, the demands of the underwriting process may necessitate more careful thought than agents realize. “Sometimes, I think agents might not be aware of the decisions that go into the markets we use. It’s not just plugging in numbers and rating it up,” Baldwin says. “The fact that we are looking at so many diverse markets—especially on the E&S side—means the underwriter has a lot of choices.” Underwriters at J.M. Wilson do try to send an initial response to a quote request within 24 hours, whether it is the quote itself or an explanation of why the request is taking longer to process, Baldwin adds. That quick response has now become the focus of many MGAs, particularly those who want to attract top-performing agents. “I started on the retail side of the business, and I know the importance of getting something back quickly. I may not have the cheapest option out there, but if I can get it to the agent within 24 hours, I have the best option to sell,” Wright says. “A lot of our agents come to us because they know we’ll respond to them one way or the other.” In order to ensure a speedy turnaround time, both Wright and Baldwin urge agents to complete applications fully and communicate their needs well in advance. “The more information they can possibly give us to obtain what they need is helpful—especially up front,” Baldwin says. “We would just as soon have them pick up the phone to talk to us about the account—when they need the quote, the price range required and what carriers they’ve already approached—so we don’t end up spinning our wheels.”


MGAs WORKING ON IMPROVING WORKFLOW ISSUES Progress in the MGA sector comes through more than just agent feedback. Self-reflection and nationwide consideration led the Retail Agent-GA Subgroup of the E&S Joint Working Group to identify the following areas as workflow improvements for immediate attention in an October 2012 report:

Common areas where agents seem to trip up include leaving umbrella applications blank, not sharing information on underlying workers’ compensation or auto requirements, and not filling out a description of operations on the Acord 125 application. “When I see submissions where agents don’t take the time to fill everything out, they go to the bottom of the pile,” says Wright.

CLARIFYING THE CLAIMS PROCESS Claims responsiveness was another area agents graded high in importance but low on performance. And while the issue may seem to require technological solutions, Scott Montney, chairman of the American Association of Managing General Agents (AAMGA) Automation Committee, says that’s just not the case. “One thing I did find disappointing was the lack of claims information on the part of GAs. That inability to offer transparency is the perception of our industry, and I don’t think that’s right,” Montney says. “There’s no excuse for not having that information, and I don’t see a technological reason for it.” Indeed, very few MGAs allow agents to track client claims, instead functioning as the “middle man” to ensure claims are being handled and that the carrier’s adjusters are on the case. However, there may be more to the story than a mere lack of innovation from MGAs, says AAMGA executive director Bernd G. Heinze, Esq. In fact, MGAs themselves are “not very happy” with the current state of claims handling, either, but legal considerations may be preventing progress. “So often, we see instances in litigation where information is shared between the policyholder and attorney, and—if it’s given to the agent— becomes discoverable,” says Heinze. “I am interested in putting together discussion panels between the PIA and the AAMGA to find out what

• Expand and enhance the use of e-mail for GA/retail agent communication with TLS secure e-mail • GAs accept ACORD applications, preferably electronically • GAs provide automated ‘pop-up’ screens on their website for the retail agent to provide additional needed information when the agent has uploaded the ACORD application information and the submission is completed on the website • Improve underwriting communication • GA posts on its website the current status of outstanding quotes, submissions, endorsements and renewals • GAs and retail agents are kept in the loop when claims are made, and given access to claims on the carrier’s portal • Activate real-time logon transaction with the retail agent’s management system • GAs implement real-time quoting • GAs and E&S carriers accept credit card payment • GAs accept e-signed documents from their retail agent

data agents would like to see on a claim, and the level of detail that could be disclosed without stepping over the bounds of confidentiality. The more conversations we can have about this, the better we are able to look at the existing paradigm and improve it.”

AUTOMATION IS AN ONGOING BATTLE Perhaps the thorniest issue in the MGA/agent relationship is the struggle of MGAs to offer timely automation capabilities. While many MGAs acknowledge the growing importance of automation, the actual adoption of new technology is hindered by steep costs and a sizeable helping of institutional red tape. Most notable among automation issues is the inability of MGA systems to interface with agency management systems. Although MGA/agency interfacing is technically possible, it has been “out of reach” for so long that many GAs have given up on the possibility, says Montney, who also works

3 MOST IMPORTANT MGA TRAITS ACCORDING TO AGENTS 1 Underwriting responsiveness/ turnaround times 2 Claim responsiveness/ turnaround times 3 MGA reputation

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“We would just as soon have them pick up the phone to talk to us about the account— when they need the quote, the price range required and what carriers they’ve already approached—so we don’t end up spinning our wheels” Cathy Baldwin, J.M. Wilson as IT director for Spokane, Wash.-based Cochrane & Company. To really implement the capability, third-party technology vendors would have to pick up the torch and run with it—something many have failed to do. MGA IT staff, with their finite resources and small staff size, are also limited in building this capability. Even adapting existing industry automation to the wholesale market presents difficulties. At NIF Group, Mogelnicki is overseeing the building of direct billing capabilities to assist agents. However, the process has not been easy. “We learned that because we deal with so many different carriers, blending those systems together is going to be a long-term process—at least 12 months, if not longer,” says Mogelnicki. “It’s also taking the better part of a million dollars to make it happen, but we are working toward that goal.” Comparative raters are also seeing a higher adoption rate among MGAs, though that technology is expensive and highly dependent on carrier whim. “We represent seven or eight carriers and some are just not comfortable giving agents the authority to quote on their behalf,” says Wright. “They’re 10 | MAY/JUNE 2014

signing a contract with Towerstone, not every agent Towerstone represents. Carriers feel that if they allow agents to access rates through a comparative rater, the agents are essentially becoming the underwriters.” Another reason agents don’t always see their automation wishes fulfilled is the cost to MGAs. As Mogelnicki notes, technology like direct billing or comparative raters is expensive and ROI doesn’t always manifest itself immediately. “From an MGA standpoint, our margins are so thin—we pay 12.5% commissions to our agents— direct billing or comparative raters are sometimes not an option,” Wright says. “You have to be able to really get your money back in a few years on some of these things. That’s been the hold-up.” The same profit concerns also prevent thirdparty insurance technology vendors from creating solutions for the MGA market. As more MGAs specialize, the ROI foreseen on a specialized piece of technology, like download capabilities or a simple direct billing system, is low. Such vendor delays mean agents don’t get a chance to see how hard MGAs are working to bring about some of these technological advancements. “It probably looks like we’re not doing anything, but we’ve been working pretty hard to make these changes happen,” says Montney. “All of these concepts are available, but no one is using them. It’s the equivalent of having a pen sitting on your desk, but still choosing to use a quill.”

INVESTING IN AGENT PARTNERS Despite being somewhat stymied on the technological front, MGAs reaffirmed their commitment to their agent partners. At J.M. Wilson, employees are exploring ways to make specific policy information available to agents. Continuing education classes are also being offered in Michigan and Wisconsin, and underwriters are teaching classes on cyber


liability, social media and other trending topics to audiences of 500 agents. Towerstone is looking at expanding its comparative rating system from running three carrier quotes to seven or eight. The entire website was also redesigned at the end of 2013 to feature online policy applications and more substantive product descriptions. The group also offers monthly classes for agents wanting to grow their book of business in the oil and gas sector. NIF Group is heavily invested in both educational services and marketing support. Underwriters compile lists of client prospects for their agents and travel to make presentations to insureds or co-brand various pieces of literature in a unique product grouping. Heinze says he has also seen a tremendous uptake among AAMGA members in their own continuing education. “We’re seeing an exponential increase in the number of MGAs that are continuing their education both in terms of underwriting expertise and business acumen,” Heinze says. “I see MGAs looking to not be complacent and sit on their laurels, but rather grasp a hold of anything that gives them an edge. “And that’s not just because agents want it, but for their own preservation.”

WHAT MGAs WANT FROM YOU MGAs recognize and accept the tall order they’re receiving from their agent partners. At the same time, they hope agents will assist them in providing the kind of customer service so many producers are seeking. Nearly all of that comes down to communication. “Give us a target we need to shoot for,” says Mogelnicki. “Tell us about coverage deficiency, premium requirements or a line of business you don’t yet have a solution for. If we don’t have a target, we will never hit it.”

“Tell us about coverage deficiency, premium requirements or a line of business you don’t yet have a solution for. If we don’t have a target, we will never hit it” Dan Mogelnicki, NIF Group

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RIDE Bernie Heinze has led the AAMGA well down the road to being a dominant force in the specialty property-casualty insurance industry, and has the association primed to lean into the curves ahead



12 | MAY/JUNE 2014

The image of Bernd G. “Bernie” Heinze, Esq., wearing a tuxedo while sitting on his 2010 Harley-Davidson Electra-Glide Ultra Classic might remind you a little of those Dos Equis beer commercials featuring “The Most Interesting Man in the World.” In insurance circles, you might be hard pressed to find a more interesting, well-connected character than Heinze, now in his 13th year as the executive director of the American Association of Managing General Agents (AAMGA). He is licensed to practice law before the US and Pennsylvania Supreme Courts and is certified by all state insurance departments to present continuing education courses pertaining to insurance and legal matters. He regularly speaks to industry audiences and testifies in insurance



Attends Canisius College in Buffalo, NY, earning a BA in International Relations and Economics

Serves as a legislative assistant to Hon. Jack Kemp, a high-profile former member of the US House of Representatives (R-NY)


Anchorman and Capitol Hill correspondent for WAVA NewsRadio in Arlington, Va., the nation’s first all-news radio station


Executive assistant, Erie County (NY) executive Edward J. Rutkowski

1980–1983 Earns a JD, Law, from Temple University in Philadelphia



Equity partner at Wilson, Elser, Moskowitz, Edelman & Dicker, where he is a litigation and insurance coverage trial attorney on property and casualty cases and claims across the US


Vice president and chief national litigation counsel, Reliance Insurance Company


President and CEO, Heinze Group, LLC, and Accolade Management Services, LLC,

providing consulting services on property and casualty insurance, claim and litigation management matters, expert witness in state and federal courts, congressional and state government testimony, commercial arbitrations, mediation and presentations to the public and private sectors


Executive director, American Association of Managing General Agents

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“In the increasingly mobile society in which we live, NARAB would allow agents and brokers to more efficiently operate on a multistate basis”

cases as an expert witness. Oh, and he’s also a member of the fire department of Montgomery Township in Pennsylvania, and was mentored by the Honorable Jack Kemp while serving as a legislative aide to the former high-profile congressman from New York. “I have been extremely fortunate in my life’s journey so far, with incredible opportunities and memorable achievements, both personally and professionally,” Heinze says. “It has given my wife, daughters and me a unique way of hearing other people’s stories and, in that process, to develop lasting friendships.” These days Heinze is firmly entrenched as the face of the AAMGA, which represents more than 500 corporate members and is respected as the leader and voice of the wholesale and excess and surplus lines insurance industry. During his tenure, the 88-year-old organization has become much more proactive in legislative and regulatory issues, and has developed into a leading advocate for the specialty property-casualty insurance industry. In advance of May’s AAMGA annual meeting in Hawaii, Insurance Business America checked in with Heinze to learn more not only about current issues on the association’s plate but also about the person who has become one of the most influential figures in the industry.

INTERIM TITLE GOES AWAY FAST His deep involvement with AAMGA began in earnest when his good friend, and the association’s president at the time, Len LoVullo, reached out to him to step in as interim executive director and keep the organization on track for its 75th anniversary celebration festivities in 2001. A well-known Philadelphia lawyer at the time, Heinze had little association management experience, but had great business skills to go with his legal and insurance background. He was also familiar with the membership from teaching courses on behalf of the association, and had a passion for the AAMGA and its purpose. 14 | MAY/JUNE 2014

Heinze and AAMGA past president Tom Rogan formed Accolade Management Services Inc, and submitted a bid that earned Accolade a three-year contract to manage the association, with Heinze serving as executive director. Heinze assumed full control of Accolade following Rogan’s retirement, and Accolade is still retained today to manage the Philadelphia-based association, the AAMGA University and Foundation.

ACCOMPLISHED ADVOCATE Heinze has championed the association’s advocacy efforts on a variety of fronts over the years, including proposing a key addition to the National Association of Insurance Commissioners’ (NAIC’s) Model Act clarifying that compensation disclosure agreements would not be applicable to wholesale intermediaries; favoring state regulation over comprehensive federal regulation; resisting attempts to repeal the McCarron-Ferguson Act preserving the anti-trust exemption for the insurance industry; and backing the Nonadmitted and Reinsurance Reform Act within the DoddFrank Act, which simplified the complex and conflicting web of taxing, licensing and eligibility rules for surplus lines insurance. Currently, the AAMGA is actively engaged in the various iterations of the National Association of Registered Agents and Brokers Act (NARAB) and its successive bills. The association has responded to inquiries from Congress, various federal agencies and the NAIC, submitting testimony in support of the legislation. Heinze says the legislation would create a streamlined agent and broker licensing system that would strengthen the competitive insurance market while maintaining important consumer protections. “In the increasingly mobile society in which we live, NARAB would allow agents and brokers to more efficiently operate on a multistate basis,” Heinze says. “Our membership, as well as other agents and brokers, will benefit from NARAB’s passage



by bringing agent and broker licensing into the modern age, eliminating inefficiencies and overhead costs unrelated to risk securitization.” Internally, the AAMGA’s board has been hard at work for the past couple of years on a new strategic plan intended to strengthen the value proposition and ensure the organization and its members remain relevant and ahead of the curve. Heinze says the ongoing effort has revealed the need for a consistent message representative of all members of the wholesale insurance industry. This has led to changes in the membership criteria. “Members presently account for over $22.6bn of annual written premium,” Heinze says. “We expect this to increase substantially as more wholesale facilities join the association.” Heinze says the strategic intent of the association is to remain focused on challenges, opportunities and the integral importance of wholesale insurance professionals. “That will ensure the relevancy, sustainability, growth and leadership of the AAMGA, and provide the greatest value to each of our members,” Heinze says. “The impact of the effort will be to continue to provide greater confidence in the market, raise the standards and competencies of the industry, leverage the strength of the consolidated membership, and further enhance its reliability and credibility.” Earlier this year, AAMGA’s senior leadership met with the big three from the Lloyd’s of London syndicate to discuss the urgent need for coordinating a global standard for regulating the surplus lines industry. Lloyd’s is an integral market for AAMGA members to place specialty risks, and more than 185 Lloyd’s coverholders are members of the AAMGA. “We have already begun to see the benefits of those meetings emerge,” Heinze says, noting that the Lloyd’s Market Association and the Managing General Agents Association have both submitted applications to join the AAMGA. “This will promote an even closer relationship and ability to leverage

In addition to networking, meeting and learning during this year’s 88th Annual Meeting of the American Association of Managing General Agents (AAMGA) in Hawaii on May 18-21, representatives from all corners of the wholesale insurance market will be working together to adapt to meet the changing needs of AAMGA members. The meeting, at the beautiful Hilton Waikoloa on the big island, brings managing general agents, underwriters and vendors together to chart the course of the AAMGA’s collaborative efforts. Executive director Bernd Heinze recently shared his thoughts with Insurance Business America as to what he hopes to accomplish during the annual meeting. “There are several main takeaways that attendees will be able to validate at the annual meeting,” Heinze said. “The first is that the wholesale insurance market and AAMGA members are open for business. The association’s member underwriting facilities comprising the wholesale managing general agents, managing general underwriters, program administrators/managers, brokers, aggregators, insurance and reinsurance companies, business services and state stamping and surplus lines offices are collectively strengthening and further enhancing the binding authority segment of the insurance industry. All members and all wholesale insurance markets will have access to one another at the conference, along with the important vendors and solution providers who will be exhibiting their products and services. “Secondly, the marketplace has seen an increased level of confidence in the past year, driven by a relentless emphasis on further improving underwriting discipline and expense management. Similarly, we have seen challenges and opportunities arise. The robust risk-adjusted and surplus capitalization has enhanced competition while maintaining the level of access, service and responsiveness our customers expect. Through our educational and advocacy initiatives, we are ensuring the voices of our members are being heard, that our seats at the table are occupied, and our engagement with domestic, international and state regulators, legislators and markets are meaningful, regular and effective. “Third, our ongoing commitment to young professionals entering the industry, and students enrolled in the RMI programs across the country, has never been more aggressive. We are actively participating in numerous programs in colleges and universities, Gamma Iota Sigma conferences and educational opportunities, and with our own Under Forty Organization to ensure the next generation of wholesale insurance professionals is well prepared and engaged. A number of the students will be at the annual meeting and able to network with our members one-on-one.”

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“Helping our members and their respective customers to improve their operations through automation and technology is a key priority of the AAMGA” the combined interests of the marketplace on matters of mutual importance. It will also enable their leadership to attend all AAMGA meetings.” At a time when market opportunity can often be elusive or difficult to exploit, Heinze says, having all the influential players of the industry under the same umbrella simply makes good sense. “It enables us to address any problems as they arise and solve them and, by the same token, to collaborate on the best ways in which to provide greater opportunities to the entire membership.” AAMGA president Frank Mastowski says the meetings in London “will help every Lloyd’s AAMGA coverholder save money and reduce the reporting requirements when placing business with Lloyds.”

THE WAR ON KEYSTROKES “A key initiative of our industry is centered on the ever-increasing importance of and relentless appetite for data to be used for predictive analytics

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AAMGA president Frank Mastowski, CPCU, CIW, will be passing the gavel to incoming president Matthew Letson during May’s annual meeting in Hawaii. As the meeting approaches, Insurance Business America interviewed Mastowski and Letson to get their take on the key objectives and challenges facing the organization – and the benefits of serving on the board. Moving forward with the AAMGA’s strategic plan initiative worked on by prior boards of directors was a primary objective of his one-year term, says outgoing AAMGA president Frank Mastowski. Frank Mastowski “Ad hoc and steering committees were used to research and fact-find, so their reports formed the basis of the next steps needed to allow the AAMGA to become an organization for all binding and underwriting authority wholesalers,” Mastowski says. “With this first step being accomplished, the information will carry into the future to continue the journey of moving the association forward.” Mastowski says another important goal was to further enhance the benefits available for members. He credits the work of the standing committees, and points to successes, including the attendance at university classes being at record levels, the Automation Committee’s conference in Florida seeing a record turnout, the continued growth of the Under Forty Organization (UFO) to record levels, and a needed upgrade of the AAMGA website. Mastowski says the association’s biggest challenge will be adapting alongside an ever-changing wholesale insurance industry. “Things that are affecting the wholesale industry include mergers/acquisitions of both wholesalers and companies; the speed, cost and implementation of technology and the regulatory issues that come at added expense,” Mastowski says. “The AAMGA’s challenge is to recognize these changes and adapt and/or revise the committees as needed. The board and headquarters will need to help the membership with answers to the changing wholesale market. The AAMGA is then an added-value proposition.” Letson says that during his term as president there will be a focus on executing the strategic plan. “We will use the knowledge that we’ve gained to deliver a new networking meeting for our new membership Matthew Letson categories—not only will this be a smart meeting where business gets done, it will provide an opportunity for the AAMGA to showcase the benefits and services it provides,” Letson says. Other areas of focus will be maximizing the benefits of current members, keeping members abreast of key regulatory and legislative issues, and continuing to foster the future of the UFO and relationships with Georgia State (through the AAMGA chair on Risk & Insurance Management) as well as other schools with risk management programs. What could the organization do better? “I’d say more effectively communicating the value proposition of the AAMGA to all businesses involved in the wholesale underwriting and binding authority arena,” Letson says. “AAMGA provides a tremendous amount of services and represents an outstanding value for its membership.”


and other purposes,” Heinze says. The ongoing “war on keystrokes” is being waged to reduce redundant efforts and improve efficiencies. Educating and providing access to new automation and technology solutions for the entire wholesale insurance industry is imperative. Heinze says the importance of the nature and scope of technology being used by all involved in the insurance transaction is why AAMGA’s Automation Committee continues partnering with ACORD, the Big I’s Agents Council on Technology, and has a leadership role on the Excess & Surplus Lines Joint Working Group. “These efforts are focused on finding consistent, efficient, and implementable solutions for all those in the insurance transaction,” Heinze says. “Helping our members and their respective customers to improve their operations through automation and technology is a key priority of the AAMGA.”

BUILDING THE NEXT GENERATION The AAMGA’s Under Forty Organization is growing its membership record levels, and Heinze says the association views the efforts of the group as an indispensable component of AAMGA’s future. He says the AAMGA is also engaged in efforts with the Gamma lota Sigma student fraternity and RMI University programs throughout the country to help sponsor their programs, afford shadowing opportunities with association members to students, and encourage them to pursue a career in the industry. “We are equipping our young members with access to industry thought leaders, leadership certificated programs and educational initiatives through which they can structure a learning development plan to ensure the continuity of the marketplace,” Heinze says.

ROAD WARRIOR In addition to riding his Harley-Davidson Electra-Glide Ultra Classic through the Amish country and along the Delaware River in the Philadelphia area, here are some of Bernie Heinze’s favorite destinations: • For business: Washington, DC, and Scottsdale, Ariz. • For vacation: Wolfeboro, NH, on Lake Winnipesaukee • Haven’t been, but want to go to: the beaches of Normandy

“When my wife Martha and I travel, we will often stay for the weekend and rent a motorcycle to head out into the surrounding areas, especially in Arizona. I have had some incredible rides along the way and enjoy the fresh air and wide open spaces. It’s a lot like this business actually; in times of great challenges, you need to lean into the curves” – Bernie Heinze

ENGAGING MEMBERS The AAMGA has seven standing committees comprised of 122 volunteer members. Heinze calls these committees the real incubators of new ideas and solutions to ever-changing market conditions. Committee members network monthly with their peers on issues and opportunities they are able to see first-hand, and become personally involved in the development of solutions. This includes the new Emerging Risks Committee that is being launched to allow members to share new ideas and address new risks as they arise. “There are certain realities in the insurance business and the world’s current economic situation; and while there are some factors that are intransigent, there are others that we can confidently mold and shape if we are far enough ahead of the trends,” Heinze says. “The old adage is true that one can either take risks and lead, or sit back and follow. We are committed to the former.

MAY/JUNE 2014 | 17  


Insurance Business America profiles top-performing independent commercial agencies, providing unique insight and identifying common denominators that power today’s most innovative, efficient and successful operations Welcome to our inaugural look at America’s Elite Independent Agencies. Big and small, from agencies with hundreds of producers and many locations to agencies with one office and just three producers, spanning 22 states with an average time in business of more than 60 years, this list provides a wide-ranging look at agencies that are leading the way in terms of best practices, revenue per producer, employee satisfaction and community service. These agencies, which either nominated themselves or were first nominated by outside partners and then completed the nomination, have graciously shared their unique stories as to what exactly it is that makes them “elite” agencies. While the profiles have been edited down for publication, just about every one of the agencies 18 | MAY/JUNE 2014

profiled in the following pages made significant mention of the ways they go the extra mile to better serve clients, take care of and provide incentives for their employees, and make their communities a better place through extensive charitable and volunteer activities. These agencies are doing it right, and we hope that, by sharing insights on how they have become so successful, this will help more agencies strive to go above and beyond to achieve elite status. In these listings we weren’t looking for sheer size so much as efficiency and innovation within an organization, which was reflected in the criteria we used for the nomination process. Think your agency should be featured? Make sure you nominate your agency to be included in next year’s Elite Agencies coverage.

ELITE AGENCIES: BY THE NUMBERS Newest: ABD Insurance and Financial Services, founded 2011 Average age of agencies listed: 62 years Average number of producers: 51 States represented: 22 Oldest: Hickok & Boardman, Inc., Insurance, founded in 1821


IMA FINANCIAL GROUP Home office: Denver and Wichita, Kan. Years in business: 40 Producers: 65 Website:

What makes them elite This company wins employee health and workplace awards regularly. Its Denver office features a private Starbucks with complimentary gifts for employees and guests. IMA consistently gives 2.5% or more of its profit to the IMA Foundation, which last year gave grants to 51 nonprofit organizations. IMA included a community room in its new Denver headquarters. This space is available at no charge to nonprofit organizations to host meetings. IMA hosts an annual corporate-wide day of service (‘‘I MAke a Difference Day’’) when associates and their families and friends come together to volunteer at nonprofits in its four markets.

From left: Ken Sihle, Jerry Sihle and Traci Sihle of Sihle Insurance Group

SIHLE INSURANCE GROUP Home office: Altamonte Springs, Fla. Years in business: 40 Producers: 69 Website:

What makes them elite Sihle Insurance Group was founded by Jerry Sihle 40 years ago in 1974. Since that time it has grown to become one of the largest privately held agencies in Florida, with 150 employees and 10% growth in the past year. The company has a heavy focus on condo associations, hospitality, construction and fuel with a culture that centers on building relationships with customers.



Home office: San Carlos, Calif. Years in business: 104 Producers: 500+ Website:

Home office: Penn Yan, N.Y. Years in business: 172 Producers: 8 Website:

What makes them elite

What makes them elite

With more than 70,000 policyholders and written premiums of more than $175m, Professional Insurance Associates is one of the largest insurance agencies in the country. PIA has more than 500 affiliated agents in California and Nevada, working out of more than 250 offices.

Stork Insurance has managed to gain a unique position as a trusted adviser to over 90 winery, brewery and distillery customers. Their enviable reach into this market is accompanied by a wide range of other commercial coverages that make them such an important agency in the area.

ASSURANCE Home office: Schaumberg, Ill. Years in business: 53 Producers: 51 Website:

What makes them elite Assurance, an independent insurance brokerage serving 5,800 clients, with offices near Chicago and St Louis, has grown at a rate that averages out at 14% per year over the past 10 years as a result of its focus

on organic growth. Assurance has earned more than 60 culture and service awards in the past five years, and was named a 2013 “101 Best and Brightest Company to Work For” by the National Association for Business Resources for the eighth consecutive year. Assurance was also ranked in 2013 as the sixth best workplace in the US within its category by the Great Places to Work Institute. In 2013, Assurance employees walked or ran a combined total of 852 miles and completed its 2013 goal with 93% employee participation.

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ASSOCIATED COMMUNITY BROKERS INC (ACBI) Home office: Fairfield, Ct. Years in business: 10 Producers: 5 Website:

What makes them elite In 10 years ACBI has grown from a one-person agency with zero revenue to an agency with 12 employees generating nearly $4m in annual revenue distributed among commercial, personal and group benefit lines of business. Commercial growth in 2013 was 22%, and ACBI has grown by double digits each year since its inception. It is automated via the Applied System and is about to move to the Cloud in order to provide producers and clients with 24/7 capabilities. ACBI specializes in large national commercial real estate portfolios and in executive management protection for banks and financial institutions throughout the country. It grew from a dissatisfaction with the results of mergers and consolidation in the industry—its founders wanted to create a firm that was professional, knowledgeable, knew its clients by their first names, and contributed to and participated in the community.

BOLTON & COMPANY Home office: Pasadena, Calif. Years in business: 83 Producers: 28 Website:

What makes them elite The company focuses on employee benefits, workers’ comp and the property/ casualty business. Revenues have grown by 14% in the past year, in specific niches. It has an endorsed program for alarm installers, and a workers’ comp and accident and health policy for the majority of jockeys across the US. Bolton & Company has been honored as a “Best Place to Work in LA” by the LA Business Journal, and is an Independent Insurance Agents & Brokers of America “Best Practices” agency. It took all of its 120 employees and guests to Hawaii for hitting a profit margin goal.

HNI Home office: Milwaukee Years in business: 51 Producers: 18 Website:

What makes them elite The company has added most of its four offices in the past two years, and has had 63% growth in that time. almost 100 employees and has already won a number of workplace awards. While many agencies are struggling with perpetuation strategies, with less and less young talent coming into the industry, HNI is building a producer onboarding program and offers business advisory programs to clients. 20 | MAY/JUNE 2014

President & CEO Alexander Green

AHT INSURANCE Home office: Leesburg, Va. Years in business: 93 Producers: 31 Website:

What makes them elite AHT is employee-owned and one of the largest independent insurance brokerages in the nation. Founded in 1921, AHT Insurance is an insurance brokerage and a risk management consulting, employee benefits, surety bond and retirement planning services organization dedicated to providing innovative solutions globally for business and individuals. It maintains a number of nationally recognized practice groups. AHT is a partner of the RiskProNet and TechAssure global broker networks.

BISNETT INSURANCE Home office: Lake Oswego, Ore. Years in business: 32 Producers: 30 Website:

What makes them elite Bisnett Insurance is an independent insurance broker serving the Pacific Northwest and Western regions. It has achieved smart growth through acquisition since it was formed by Roger and Linda Bisnett in 1982. Bisnett now operates in eight locations with more than 35 employees serving a diverse range of clients. Many offices are located literally right on Main Street in the communities they serve.




Home office: Plant City, Fla. Years in business: 15 Producers: 3 Website:

Home office: New Castle, Ind. Years in business: 112 Producers: 7 Website:

What makes them elite

What makes them elite

WorkComp has a unique story in the fact that 80% of its business is domiciled in Florida. Florida rates dropped 64% from 2003 to 2010. It stayed a compSteve Soloman only shop, laid off no one and did not decrease services. Revenues have increased 30% in the past year, primarily due to organic growth from current clients. All its employees are provided with autos, cell phones, ultra books and USB modem air cards. All take calls 24/7. Each employee has a specific set of skills and works on their craft to stay best in class. Agency sole founder and principal Steve Soloman is a former US Navy Seal. He assists business leaders in implementing a unique process to reduce the number, cost and duration of employee injuries.

A small-town agency with a long history, PCE Insurance has worked hard to build a broad range of commercial clients in Indiana. In addition to tailored business insurance packages, PCE clients have the option of receiving digitized monthly statements and policy requests as well as a free business savings analysis from their broker. PCE has also invested heavily in automation capabilities, offering a specialized customer app for both Apple and Android phones. The app provides access to roadside assistance, claims submission at the scene of an accident and digitized proof of insurance.

MAY/JUNE 2014 | 21  




Home office: Kansas City Years in business: 48 Producers: 300 Website:

Home office: Fairlawn, Ohio Years in business: 39 Producers: 5 Website:

What makes them elite

What makes them elite Over time the agency has developed niche areas of expertise. Jones & Wenner is a thorough specialist in insurance for trucking, hauling and other kinds of transportation. The company also has well-developed niches in working with contractors, embroiderers and arborists. It serves only those commercial clients whose businesses and industries it knows in-depth, a practice founded on the company’s belief that you can’t be everything to everyone. Jones & Wenner is a paperless operation, and phones are always answered personally instead of via an automated system.

Lockton is one of the largest insurance brokers in the world, with more than 4,950 professionals in 64 locations and 17 countries serving 35,000 clients around the world with risk management, insurance and employee benefits consulting services. The family-owned company had an 11% organic growth rate in fiscal 2013 with revenues topping $1bn, and boasts a 96% client retention rate. It has a very flat organizational hierarchy that allows its most talented people to deal directly

PLASTRIDGE AGENCY Home office: Delray Beach, Fla. Years in business: 95 Producers: 17 Website:

What makes them elite This agency has grown to five locations with over 95 employees. Most of the growth has occurred in Broward, Palm Beach and Martin Counties, but Plastridge is also licensed in 16 other states and can provide insurance coverage anywhere in the world. The Plastridge Insurance Agency had the phone number ‘‘1” until the late 1940s, and trumpet on their website that “we are still the first number you should call for all of your insurance needs.”

TEAGUE INSURANCE Home office: San Diego Years in business: 60 Producers: 14 Website:


What makes them elite

Home office: Gurnee, Ill. Years in business: 85 Producers: 4 Website:

Teague Insurance is a full-service agency with 43 employees that has provided both personal and commercial insurance to the San Diego community for the past 60 years. The agency has grown 10% in the past year, and is 85% commercial and 15% personal; 45% of the commercial side comes from the workers’ comp market. Teague was also named an Independent Insurance Agents & Brokers “Best Practices” Agency last year. The agency has three owners who served as president of the local chapter of IBA San Diego. One owner is president elect for the state IIABCal. In addition to caring for customers, it is active in the community through local charities and service organizations such as Boys & Girls Club and the Interfaith Shelter Network of SD.

What makes them elite West’s Insurance Agency’s niche specialty area is franchise businesses, which has helped it grow rapidly in the past five years. West’s was honored as a 2013 BrightStar Preferred Partner of the Year as voted by BrightStar home care and medical staffing franchisees.

22 | MAY/JUNE 2014



PEEL & HOLLAND Home office: Benton, Ky. Years in business: 90 Producers: 12 Website:

What makes them elite Peel & Holland is an independent insurance, risk consulting and employee benefits firm. With 46 team members and four offices in Western Kentucky, Peel & Holland’s risk advisers establish themselves as trusted advisers. Through its trademarked SolutionPRO process, it helps clients control costs, avoid pitfalls, maximize investments and grow the value of their companies. Peel & Holland has aligned itself with some of the top national networks, including Keystone Insurers Group, Benefit Advisors Network and Sitkins International, and has steadily grown in geographic footprint, client count, client penetration, revenue and retention.

ABD INSURANCE AND FINANCIAL SERVICES Home office: San Mateo, Calif. Years in business: 2 Producers: 34 Website:



What makes them elite With more than 150 employees serving 3,500 clients across industries as varied as life sciences, entertainment and real estate, ABD is a force to be reckoned with. One of the company’s core tenets is to make risk approachable, cutting out jargon and reducing paperwork to help customers understand how to manage risk. That philosophy is paying off; ABD has been recognized as among the top brokers for employee benefits and property and casualty, one of the fastestgrowing companies in the San Francisco Bay area, as well as one of the area’s top places to work.

Medical Directors • Day Spas Medical Spas • Laser Centers Wellness Centers • Weight Loss Permanent Makeup • Tattoo & Body Piercing • Smoke Shops Medical Marijuana Infusion Products Claims Made Products Liability & MORE!


MAY/JUNE 2014 | 23  



HIGGINBOTHAM Home office: Fort Worth, Tx. Years in business: 66 Producers: 92 Website:

What makes them elite Higginbotham has operated in Fort Worth, Tx., since 1948 and has grown to more than 600 employees and 22 offices across the state. As Higginbotham grows into new Texas markets, so too does its capacity to serve the community

24 | MAY/JUNE 2014

through added financial resources, a larger workforce and a longer geographic reach. In partnership with the Community Foundation of North Texas, the firm created the Higginbotham Community Fund in 2010 to provide monetary support to nonprofits operating in its markets throughout Texas. Grants from the donor-advised fund are distributed to nonprofits selected by an advisory committee comprised of Higginbotham employees. Since inception, the fund has amassed $400,183 in employee contributions and pledges, $232,239 of which has been granted to more than 100 nonprofits in Texas.



Home office: Bellevue, Wash. Years in business: 77 Producers: 28 Website:

Home office: Dallas Years in business: 17 Producers: 60 Website:

What makes them elite

What makes them elite

This fourth-generation insurance brokerage has grown into one of the 100 largest in the US, helping a wide variety of commercial clients secure everything from employee benefits to workers’ compensation. Parker, Smith & Feek sets itself apart by offering detailed and tailored insurance and risk management training, including “client specific” education courses. Parker, Smith & Feek also hosts regular webinars and seminars, in addition to maintaining a regular blog detailing movements within the insurance industry. Agency staff members have spoken at conferences held by local law firms, chambers of commerce and the CPCU Society.

MHBT is one of the largest independent insurance firms in Texas, serving clients from offices in Dallas, Austin and Fort Worth. The company sets itself apart through its ValuPlus services, which support clients beyond the call of simply sourcing risk. ValuPlus services include a customized return-towork program, an employee wellness program and access to MHBT’s team of financial analysts. MHBT was recognized as one of Fortune’s “Best Companies to Work For,” as well as a “Best Practices Agency” by the Independent Insurance Agents & Brokers of America. The company has also received the Alfred P. Sloan Award for Business Excellence in Workplace Flexibility for its commitment to maintaining both employee satisfaction and organizational effectiveness.


SHEPHERD INSURANCE Home office: Carmel, Ind. Years in business: 37 Producers: 47 Website:

What makes them elite David Shepherd started Shepherd Insurance in 1977 in his hometown of Carmel, Ind. Over the years, the agency has become a national presence, with nearly 150 employees and six offices across the state of Indiana. Still headquartered in Carmel, Shepherd’s operations have expanded to Columbus, Evansville, Greenfield, Noblesville, and Seymour. At the end of 2013 the agency managed nearly $250m in premiums. Shepherd handles the insurance needs of more than 15,000 companies and individuals across the US.

BB&T Home office: Raleigh, NC Years in business: 92 Website:

What makes them elite With more than 150 employees serving 3,500 clients across industries

as varied as life sciences, entertainment and real estate, ABD is a force to be reckoned with. One of the company’s core tenets is to make risk approachable, cutting out jargon and reducing paperwork to help customers understand how to manage risk.

HERBERT H. LANDY INSURANCE AGENCY Home office: Needham, Mass. Years in business: 65 Producers: not provided Website:

What makes them elite The Herbert H. Landy Insurance Agency was founded in 1949, and in 1962 focused exclusively on professional liability insurance and became the first insurance provider in the nation to develop a professional liability program for accountants. Since then, the agency has become a dominant and respected program manager for accountants professional liability insurance, real estate agents and brokers, and real estate appraisers errors and omission insurance, as well as offering professional insurance to other types of real estate businesses, attorneys, and other professionals.



Home office: Aberdeen, SD Years in business: 20 Producers: 4 Website:

Home office: Glen Allen, Va. Years in business: 15 Producers: 56 Website:

What makes them elite

What makes them elite

Insurance Plus is an independent agency employing approximately 25 people in North Dakota and South Dakota that has experienced 15% growth in its commercial lines business in the past year. The company writes several contractors, including specialty contractors in the oil and gas fields. It is owned and operated by Eldon Swingler, who has set a phenomenal example to all of his employees to donate their time back to the community. Several employees serve on numerous nonprofit boards.

Bankers Insurance is currently the sixth largest insurance agency based in Virginia, and the 86th largest insurance broker in the US. It has 19 branches. Each branch is encouraged to get involved in the community and participate regularly in everything from collecting greeting cards for St Jude’s Recycled Card program, to sponsoring local art events.

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KMRD PARTNERS Home office: West Chester, Pa. Years in business: 9 Producers: 5 Website:

What makes them elite

The owners of The Crichton Group

THE CRICHTON GROUP Home office: Nashville, Tenn. Years in business: 35 Producers: 16 Website:

What makes them elite In the last five years, this agency has seen historic growth. Current growth is 18% over the prior year. The Crichton Group’s risk management and group benefits departments are very profitable. The Crichton Group has received the Independent Insurance Agents & Brokers of America “Best Practices Agency” designation 12 years in a row. It has also launched Middle Tennessee’s first private insurance exchange—a huge accomplishment. As a company, it volunteers with and has employees who are board members of many charities, including Fannie Battle Day Home for Children and Cumberland Heights Alcohol and Drug Treatment Center. Employees can volunteer during work hours without having to take time off.

ROBERTSON RYAN & ASSOCIATES, INC Home office: Milwaukee, Wis. Years in business: 54 Producers: 80 Website:

What makes them elite Robertson Ryan & Associates counsels more than 25,000 clients, in all states and worldwide. A.D. Robertson and Jack T. Ryan founded

26 | MAY/JUNE 2014

KMRD has expanded to include three offices in Pennsylvania, and its client base has grown 20% over the past year. Revenues increased by 32% last year and the business has grown considerably since 2005. Through the use of effective collaboration, technology and highly structured plans, the firm provides clients with heightened protection at reduced cost. Instead of just providing quotations, KMRD identifies the optimal risk management solution.

REMCO AGENCY Home office: Hempstead, NY Years in business: 15 Producers: 12 Website:

What makes them elite Remco Agency has grown into a full-service agency with a staff of 10 insurance specialists serving over 5,000 individuals and families and over 1,200 businesses in Brooklyn, Queens Nassau and Suffolk, NY. All of its producers and customer service reps have their cell phone on their business cards for 24/7 availability. It contributes to all of the insurance organizations as well as donating money to worthy causes. The team has systems in place to doublecheck policy coverages, and offers a comprehensive review service to prospective clients.

Robertson Ryan & Associates in 1960, departing radically from the insurance industry norm. In their model, each agent personally owns his or her book of business. The agency, the largest independent agency in Wisconsin, has no sales managers tracking, directing or motivating them to earn more for the company. As owners, agents are rewarded primarily for building strong relationships—for working hard to keep the business they have.


MACKOUL & ASSOCIATES Home office: Island Park, N.Y. Years in business: 27 Producers: 3 Website:

What makes them elite Over the past 27 years, Mackoul has grown consistently to become a $35m agency. It started as a small

personal lines agency and is now 95% commercial lines. It developed a niche market in coops and condos in New York and New Jersey, and currently insures over 830 of them in the metropolitan area. Mackoul & Associates finds the best in its employees and helps them to shine. It has its goals set for growth and retention by the beginning of every year—this year staff are going to the Bahamas as the 2013 goals were met.

STARKWEATHER & SHEPLEY Home office: East Providence, RI Years in business: 135 Producers: 35 Website:

What makes them elite One of the nation’s top 100 agencies, Starkweather & Shepley was founded in 1879 in Providence, RI, insuring cargo calling on ports around the world. In 1935, the agency created an ownership trust, where every employee shares in the firm’s success and sees a direct link between its growth and their benefit. It also cemented what has become a

The Board at Starkweather & Shepley

mantra for the agency: “Starkweather & Shepley’s primary objective is to focus on our two greatest assets: Our employees and our clientele.” It has three office locations—one in Boston and two in Rhode Island.



Home office: Tempe, Ariz. Years in business: 102 Producers: 56 Website:

Home office: Burlington, Vt. Years in business: 193 Website:

What makes them elite

Hickok & Boardman is the longest-standing agency among IBA’s elite agencies, tracing its origins all the way back to 1821. Still thriving today, it has an emphasis on value-added services in risk management, safety and technology, with custom portals for larger clients to manage their insurance. It also puts an emphasis on giving back to the community, with a focus on United Way campaigns, encouraging employees at all offices to take time from their day to participate. Policies from 1892 hang on the agency’s wall, from when it insured cargo from the steamship Oliaro, and the library collection of the Vergennes City library in 1887.

A main staple in both the insurance industry and its own stomping grounds of Tempe, Ariz., Lovitt & Touche Inc. has brought in more than $300m in total premiums through its property/casualty and employee benefits business. Recognized by CareerBuilder as one of the best places to work in Arizona, Lovitt & Touche recently decided to give back to the community by supporting a wide variety of local nonprofit organizations. The agency’s CARES program identifies one nonprofit to support through walks, fundraisers and food and clothing drives each month.

What makes them elite

MAY/JUNE 2014 | 27  




Agents can gain an edge in the trucking and commercial auto market by going the extra mile to become an expert, and using that expertise to help clients down the road to better coverage 28 | MAY/JUNE 2014

The financial health of the trucking industry, safety issues, driver shortages, new regulations and a pending explosion in the use of technology are among the chief factors influencing the trucking and commercial auto transportation insurance sector. The net result? Premiums are on the rise. “Premiums will definitely increase again this year in the trucking sector due to the rising incidences of large losses,” says David Firstenberg, president and CEO of Canal Insurance Company in Greenville, SC. “There are a number of environmental factors driving this trend, including distracted drivers, the shrinking pool of qualified drivers, and public access to safety information. These factors have had an impact on the overall commercial auto loss experiences and therefore insurance rates.” Chad L. Trainor, vice president and manager at Arlington/Roe & Co. in Indianapolis, says he expects rate increases from 1% to 10% this year. “However, with some carriers making radical underwriting adjustments to their book of business due to lack of profitability, increases greater than 15% are not out of the question,” Trainor says. Yes, profitability has been an issue for insurers in the sector, and it is having a trickle-down effect. Sandi Fritz, CIC, vice president, branch offices at Portage, Mich.-based MGA and surplus lines broker J.M. Wilson, says that for the first time in years, the trucking market did not turn a profit last year. This has caused everybody in the market to look at their books of business and focus on underwriting and pricing properly. “We’re seeing pricing increases,” Fritz says, adding that they are generally in the 5% to 10% range, especially for clients that have had some losses. And losses resulting from accidents are a constant hazard in the trucking industry. Firstenberg says driver distraction and inattention continue to be a leading cause of accidents. “Fortunately, laws are being enacted in many jurisdictions banning the use of hand-held devices without a Bluetooth connection. However, for this and other reasons, our highways are less safe than they used to be.” Inattention by other drivers is also a big part of the problem. Diana Pantle, program manager at Freberg Environmental Insurance in Denver, says people in cars routinely – knowingly or not – make dangerous maneuvers when they are near or


TELEMATICS FLOODGATES POISED TO OPEN? Fleet telematics systems – which use electronics and GPS devices to track the location and other characteristics (distance driven, speed, brake usage, time of day, etc.) of vehicles in a fleet – appear to be poised for rapid growth. The information can be very useful in monitoring safe and efficient driving habits and reconstructing accident details. While widespread development of fleet telematics systems has been stymied by a series of patents held by Progressive Insurance (Progressive’s voluntary “Snapshot” telematics device that can reduce auto insurance rates for good drivers has collected over 10 billion miles of driving data since 2008), those patents are under challenge. The US Patent Trial and Appeal Board recently canceled several patents related to telematics held by Progressive, which could open the door to mass-market adoption of fleet telematics. Jeff Stampura, founder and CEO of Advanced Insurance Products & Services, says he is confident that commercial usage-based insurance will be widely adopted. “The insurance industry is always trying to find new ways to differentiate itself and provide more value, and one way is to

underwrite risk more accurately,” says Stampura. “In the past, we didn’t have good predictive factors or good data, especially on the commercial side, to do underwriting – or more sophisticated underwriting – and pricing,” Stampura says. “And now, with telematics, that has all changed.” While the presence of a telematics device alone may not impact a client’s rates, using the device to effectively monitor and coach drivers can lead to a discounted rate. DATA POINTS THAT CAN BE COLLECTED BY IN-VEHICLE TELEMATICS DEVICES • Engine RPM • Engine idle time • Fuel consumption • Hard braking • Miles driven • Trip start/stop times • Trip start/stop locations • Rapid acceleration • Seatbelt use • Route taken • Time of crash • Velocity

passing large trucks, often cutting in front of them or following too closely and therefore being in the trucker’s blind spot. “We have a lot of losses where [the trucker] can’t see the vehicle,” Pantle says. Statistics show that in fatal accidents involving trucks, the fatalities are more likely to be people in other vehicles rather than the truck drivers. In 2012, 73% of fatalities in truck crashes were occupants of other vehicles. Despite the challenges facing the market, there is good news for producers. “Retail agents are being presented with a lot of opportunity at this time,” Trainor says. “Risks that have little to no loss experience and have a great safety program are being pursued heavily by transportation carriers.” Risks that are struggling from a safety and loss experience perspective need help from agents, as they are quickly looking for alternatives for insuring their operation due to dramatic pricing shifts, Trainor adds. “These risks are being offered renewal 30 | MAY/JUNE 2014

terms at a much higher rate or being non-renewed due to uncontrolled loss exposure. There are insurance carriers that will look at these risks, but the coverage will not be cheap.”

KNOWLEDGE LEADS TO SALES Perhaps the best way for agents to make inroads in trucking insurance is by making a concerted effort to become experts. In such a highly specialized market, the experts we talked to for this article all stressed the importance of being well prepared if they really want to make an impact. “Before diving in head first, educate yourself on current trends within the transportation business segment and transportation insurance segment. This is critical to being successful,” Trainor says. “An agent that demonstrates knowledge of the trucking industry and can help a motor carrier manage their risks has the best opportunity of getting their foot in the door and winning over an account,” Firstenberg says. He says agents should learn as much as they can from sources such as the Federal Motor Carrier Safety Administration (FMCSA) website so they can help insureds and prospects proactively respond to risk and safety issues to position themselves as better candidates. This not only helps motor carriers gain better insurance options but positively impacts their financial statements. In addition, the FMCSA has a database of all authorized truckers that it updates monthly. The database contains names, addresses, phone numbers, and safety statistics. “Agents can mine this data and learn the areas where they can provide value-added services for performance and safety assessments to the account for marketing purposes,” Firstenberg says. Agents should also consider tapping resources at wholesalers and carriers that specialize in transportation as an expert resource. J.M. Wilson has partnered with the Central Analysis Bureau to offer online classes to educate agents, and Fritz says agents should not hesitate to run something by them as they are working on an account. “I’ve been in agents’ offices and gone through forms with them,” Fritz says. “Anything they need, we’re there to be a resource for them.” Another way agents can assist their insureds is by helping them stay on top of their Safety Management System (SMS) numbers through the FMCSA. Underwriters have more information at

“Before diving in head first, educate yourself on current trends within the transportation business segment and transportation insurance segment. This is critical to being successful” Chad Trainor their disposal through the SMS to identify bad drivers and poorly run motor carriers. Firstenberg says underwriters are using this public information to help select and price risks. “Motor carriers who do not monitor their SMS numbers for accuracy or aren’t taking appropriate action to improve their scores may see their insurance premiums increase thousands of dollars per truck,” Firstenberg says. “As carriers look to clean up their underwriting books, safety procedures and execution of those procedures have become critical to identifying the good risks from the bad ones,” Trainor adds. An agent can teach their clients how to use the SMS to identify red flags and utilize tools such as the pre-employment screening program to improve their scores and positively impact their insurance rates and their overall financial health. “The more educated a producer is about the risk environment, the more help they can provide to clients,” Pantle says. “There are specific classes they can take so they know about things like filing, inspections, keeping track of the drivers’ logs and maintaining the vehicles.” The more an agent knows about the specific use of a commercial vehicle, the better position they are in to provide ideal coverage.

DRIVER SHORTAGE The shrinking pool of qualified drivers, caused by the aging truck driver population, is a major challenge facing the trucking industry. “This,


New rules for truck drivers have reduced the hours they can drive, and require more breaks, in effect lowering the hourly pay rate for long-haul drivers paid by the mile. The average annual salary of $38,000 for truck drivers is another hurdle to attracting and retaining talented drivers.


“An agent that demonstrates knowledge of the trucking industry and can help a motor carrier manage their risks has the best opportunity of getting their foot in the door and winning over an account” David Firstenberg unfortunately, can lead to inexperienced people behind the wheel of very large vehicles, another factor that leads to accidents or claims,” says Canal’s David Firstenberg. The lack of drivers is causing an increase in turnover as motor carriers compete for the best drivers, Firstenberg says. The American Trucking Association estimates that the current driver shortage is between 20,000 and 25,000 drivers and it is expected to get worse. The average age of a commercial driver in the US is 55, according to the US Bureau of Labor Statistics, and it is expected that more than 300,000 new drivers will be needed by the end of the decade. As a result, there is a capacity shortage for motor carriers, especially for larger fleets where turnover is higher.

32 | MAY/JUNE 2014

“Compliance, Safety, Accountability” (CSA) is an FMCSA initiative, rolled out in 2010, to improve large truck and bus safety and ultimately reduce crashes, injuries and fatalities related to commercial motor vehicles. It introduces a new enforcement and compliance model that allows FMCSA and its state partners to contact a larger number of carriers earlier in order to address safety problems before crashes occur. Fritz says CSA scores are having a big impact on the trucking industry, and in turn on trucking insurance. “It’s driving everything right now,” she says. J.M. Wilson is working to help its trucking clients become savvy with CSA scores – how to read them, how they can help them hire better drivers, and how to limit violations so they aren’t negatively impacted by employing drivers with poor CSA scores. “These trucking companies aren’t accustomed to this but they are waking up,” Fritz says. “CSA scores are really impacting them.” But this issue for trucking companies is also an opportunity for agents. “I always encourage agents to educate themselves on CSA scores so they can help their insureds become safer and run better operations,” Fritz says. “That’s a real value-add they can bring.”

HAZARDOUS MATERIALS While a gasoline tanker is an obvious example of a truck carrying hazardous materials, there are a variety of less conspicuous commodities transported by truck that are considered hazardous and require additional pollution coverage. Pantle notes that any company working in the oilfields (including fracking) needs coverage. Firstenberg concurs that fracking activity has boosted business, particularly in North Dakota and Texas. “Requests to quote motor carriers hauling pipe, pump motors and the like, as well as sand, rock and gravel, has risen these past few months,” Firstenberg says.

Medical waste haulers, liquid asphalt haulers, chemical haulers, and utility companies (due to working with hazardous materials inside transformers) are all examples Pantle mentions of industries that need hazardous materials coverage. Suppose a trucker with a load of crude oil gets into an accident, the tanker falls on its side and spills the crude. “If you don’t have specific pollution coverage, the clean-up from that spill will not be covered,” says Pantle. This is different than if the gas was spilled while it was being unloaded, as that is covered under the loading and unloading coverage.

OPPORTUNITY: SHORT-HAUL Firstenberg says an increasing trend of competition from intermodal rail carriers is taking business away from long-haul truckers, but that is providing more opportunity for short-haul carriers as they are needed to move the containers from the rails to its destination. “It is much cheaper to haul heavy commodities long distances by rail than it is by truck. Conversely, business has increased for the short-haul ‘drayage’ trucking companies that transport intermodal containers from seaports to rail terminals and rail terminals to warehouses,” Firstenberg says.

TOUGH MARKET FOR NEW VENTURES New-venture operations – typically less than two years in business – are struggling to find coverage in today’s environment. “And when they do, it’s priced heavily,” says Trainor. “This, coupled with continually high gas prices, makes it tough for a newventure operation to be profitable and sustainable; both of which are key underwriting measures.” Fritz concurs. “We’re having a heck of a time with new business ventures,” she says. “Where do we get them covered right now?”

REGULATION AND TECHNOLOGY Additional trends are evolving government regulations and new technologies affecting the trucking sector. Two prime examples are the recent change in the Hours of Service and the newly proposed requirement for onboard recorders/electronic logs. Both are positive regulations intended to reduce driver fatigue and accidents, but it can be a challenge for drivers to change behavior. (See “Telematics floodgates poised to open?”, p30)



large trucks were involved in traffic crashes during 2012, compared to 287,000 in 2011


people were injured in crashes involving large trucks in 2012, an increase of 18% from the previous year; 3,921 people were killed (3,757 in 2011)

1 in 8

traffic fatalities involves a trucking collision Source: US Department of Transportation





Millions of newly insured patients are expected to flood doctors’ offices as healthcare reform takes effect, and the resulting environment presents both challenges and opportunities in the medical professional liability space

34 | MAY/JUNE 2014


Medical malpractice in the United States remains a dense and divisive issue, made no less so by potential complications from the Affordable Care Act. As millions of Americans head to doctors’ offices for the first time, medical practitioners face a host of unknowns that could later come back to bite. Admittedly, health reform does herald some bright spots on the horizon. The expected increase in preventative care could mean better outcomes, happier patients and fewer medical malpractice suits. However, many industry analysts suspect some provisions in the law actually read like a double-edged sword to professionals in the healthcare industry. Insurance agents and brokers operating in the medical malpractice space already face a host of difficult dynamics: a softening market, a shrinking client base and greater competition from alternative distribution channels. The implications of health reform, however, give rise to new considerations that must be dealt with if independents hope to remain successful in a challenging market.

SEVEN MILLION NEW PATIENTS As of April 2014, an estimated 7.5 million Americans are holding newly minted insurance cards purchased through the state and federal exchange sites—many of them for the first time. Sam Friedman, insurance research leader at the Deloitte Center for Financial Services, believes it’s only natural that with that increase in policyholders will come a flood of new medical visits. “Whether willingly or otherwise, people are paying for health insurance. It’s only logical for them to decide they might as well use it,” Friedman says. “And of course, many of the newly insured may have chronic conditions or troubling family history, all of which leads to an upsurge in patient volume both for general practitioners and specialists.” The likelihood of an increase in especially ill policyholders is also worrying to Daniel Mogelnicki, executive vice president of New York wholesale brokerage NIF Group. According to Mogelnicki, newly insured patients bring with

them a high set of standards for medical service providers, which the overwhelmed workforce may struggle to meet. “In the past, uninsured people would get very sick and then go the emergency room for treatment. Their expectations might not be all that high,” he says. “Now they have insurance, they’re sick anyway, and there might not be the positive outcomes they’re expecting.” Unfortunately, these new and demanding patients are meeting a physician workforce even less equipped to accommodate them than it was 20 years ago. According to the American Academy of Family Physicians (AAFP), the number of medical school students entering primary care has decreased by nearly 52% since 1997. By 2020, the AAFP predicts a shortage of about 40,000 physicians. It’s easy to draw the logical conclusion: with an increased patient load and fewer resources, general practice physicians will be forced to implement shorter visits and longer wait times, increasing the potential for mistakes and patient litigiousness. “When you combine all that together, you’re

MAY/JUNE 2014 | 35  


DID YOU KNOW…? • The most common plaintiffs in a medical malpractice suit are OBGYNs (19% of cases), general surgeons (17%) and primary care physicians (16%), according to a New England Journal of Medicine study. • The most common reasons for medical malpractice claims include surgery error (34% of claims in an inpatient setting) and errors in diagnosis (46% of claims in an outpatient setting), according to the American Medical Association. • The average compensation for medical malpractice that occurred in the inpatient setting was around $363,000 from 2005 to 2009. The average award for medical malpractice in the outpatient setting was about $290,000, according to the American Medical Association. • The total direct costs to healthcare providers arising from medical malpractice liability, not covered by insurance, totalled $35bn in 2009, according to a Congressional Budget Office report.

practice’s susceptibility to a medical malpractice suit. “There are all sorts of landmines to this approach in accommodating patient load,” Friedman says. “Once you start dealing with less-skilled individuals, error rates might go up. Insurers will likely be watching a doctor’s utilization rates of PAs or nurse practitioners carefully.” In that eventuality, physicians must be prepared to demonstrate that their mid-tier staff are capable of adequately treating patient needs. This may include documenting time spent with patients as well as performing regular spot checks to ensure all patient requirements are being appropriately addressed.

TELEMEDICINE EXPANDS ITS REACH likely to enter into a situation when more medical malpractice suits are brought against physicians and those providing medical care,” Mogelnicki says.

INCREASING RELIANCE ON MID-TIER STAFF One way in which many physician groups are planning to handle the influx of new patients is by increasing their reliance on mid-tier medical staff,

including physician assistants, nurse practitioners and even registered nurses. With lower pay grades and a greater selection of candidates to choose from—the number of PAs in the US more than doubled in the past decade—the approach just seems to make sense. “From a dollars and cents standpoint, it’s a lot cheaper to hire a PA,” says Scott Palde, a specialized medical malpractice insurance broker with Cornerstone Professional Liability Consultants. “We now have a lot of family practice doctors using three or four PAs just to try to make more money and treat more patients.” The cost is lower from an insurance perspective as well. It can cost as little as $2,000 to add a PA to a medical malpractice policy, Palde says. However, there is ample cause to believe that reliance on lower-level staff may increase a 36 | MAY/JUNE 2014

Physicians are also likely to find an effective workload management technique in the continued expansion of telemedicine services. At least 300 US hospitals and roughly two-thirds of radiology practices already use some form of telemedicine, according to a 2008 study in the New England Journal of Medicine, and that number is only expected to grow. Boasting the ability to consult patients remotely through the use of video technology, telemedicine decreases the need for on-site physician visits and cuts down on both financial and opportunity costs. In fact, an Intel survey of healthcare executives suggests that a full 89% of industry players expect to use telemedicine services within the next decade to streamline workflow. Yet the use of telemedicine has liability demons of its own. “For routine assessment, many doctors could visit patients quite effectively using their smartphone, tablet or computer. However, in some cases it may be better to see someone faceto-face,” Friedman says. “There are certain things you might spot if you have a patient right in the room with you as opposed to looking at someone over your smartphone screen.” Additionally, many medical malpractice insurers are uncertain of how to approach the geographic challenges posed by telemedicine.



The lighter the color, the bigger the problem 63 to 77: Idaho, Nevada, Utah, Arizona, Oklahoma, Texas, Arkansas, Mississippi, Alabama, Georgia 78 to 85: Wyoming, Nebraska, Kansas, Iowa, Missouri, Indiana, Kentucky, North Carolina, South Carolina, Louisiana 86 to 95: California, Montana, Colorado, New Mexico, North Dakota, South Dakota, Illinois, Tennessee, Ohio, Virginia, Florida 96 to 103: Washington, Oregon, Alaska, Wisconsin, Michigan, West Virginia, Delaware, New Jersey, Pennsylvania 104 to 249: Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, New York, Maryland, Minnesota, Hawaii Source: Association of American Medical Colleges

“One of the big things we’re seeing is that carriers don’t know how to treat telemedicine,” Palde says. “Will the lawsuit come in where the patient was, or where the physician is based? In my experience, every carrier has done it differently. “As a broker, you want to make sure a carrier practices in all 50 states. That way, it’s not a big issue because the carrier will be able to handle it no matter where the case is brought.”

ELECTRONIC HEALTH RECORD REQUIREMENTS Telemedicine is not the only growing technology to pose significant liability questions. A provision in the 20,000-page Affordable Care Act strongly incentivizes the use of electronic medical records (EMRs), promising up to $44,000 to complying professionals. While the Centers for Disease Control and Prevention estimates that approximately half of office-based physicians already use EMRs, many physicians are so entrenched in their traditional

“Once you start dealing with less-skilled individuals, error rates might go up. Insurers will likely be watching a doctor’s utilization rates of PAs or nurse practitioners carefully” Sam Friedman

MAY/JUNE 2014 | 37  


MORE TYPES OF CARE, MORE OPPORTUNITIES Despite trends like physician integration and the decrease of general practitioners in the US, healthcare remains a growing industry. In fact, the Bureau of Labor Statistics estimates the industry will yield 2.3 million new jobs between 2008 and 2018. As such, insurance agents and brokers shouldn’t restrict their medical malpractice marketing to traditional care centers. A growing array of new business classes operating under the healthcare umbrella provide ample opportunity for enterprising independents, says Brad Rosgen, healthcare practice leader at Burns & Wilcox. “A lot of agents that specialized in small-practice doctors will need to find different ways of keeping their doors open,” Rosgen says. “That means expanding to things they may not have worked on in the past, including home healthcare or outpatient services.” Home healthcare is indeed a rising enterprise—one that is expected to grow 40% over the next decade as baby boomers age and prefer services within the comfort of their own home. However, agents should be sensitive to some of the challenges within this industry. Rosgen notes that due to loose underwriting guidelines, some carriers have withdrawn from the market, feeling rates were too low to support potential loss. Advising clients on this type of account means shopping around and providing the kind of value-added services that other accounts may not require. Hospice is another potential growth market. Particularly inviting to agents looking to get their feet wet in the medical malpractice market, hospice offers low risks and less underwriting complication. “It’s not something a lot of people think to go after,” Rosgen says. “It’s a fantastic business to write from a risk standpoint and carriers typically provide rates that are aggressive, but fair.” Other growing enterprises of note include telemedicine, anesthesiology, nursing homes and assisted living. Investing in any one of these will pay off for medical malpractice brokers as the healthcare industry continues to grow and specialize. “[Medical professional liability] is definitely an area of growth. Competitive as it is, it is still a high-growth industry and will continue to be as the population grows,” Rosgen says. “If you’re not already, it’s definitely an area to get into if you want to keep pace with the general rate of the economy and have something new or fun to talk about every time you visit a client.”

“One of the big things we’re seeing is that carriers don’t know how to treat telemedicine” Scott Palde paper filing systems that the new provisions are daunting. “A lot of my [physician] clients are still in denial that EMR requirements are going to take effect. I actually have a group of two doctors who keep their records in a bathtub on the second floor,” says Palde. “It’s absolutely crazy.” Even for those more open to using EMRs, significant challenges remain. Friedman notes that the ease of accessibility to patient health records not only incentivizes hackers but acts as a godsend 38 | MAY/JUNE 2014

to attorneys bringing a medical malpractice suit against a physician. “Physicians may make mistakes just as easily on paper, but it’s easier to search and find mistakes on things like level or type of medication digitally,” Friedman says. “That’s a veritable treasure trove of discovery for plaintiff attorneys.” And of course, the transmission of the data itself poses problems. The risk of misreading patient records or keying in data incorrectly is almost inevitable, and given resources that are already limited, surveillance beyond general spot-checking is difficult to justify. Upgrading patient records to EMRs may have its advantages, however, provided clients undertake the upgrade sooner rather than later. “A lot of carriers will offer something like a 3% discount for keeping digital records,” Palde notes. “I think that may be removed eventually, though, as everyone will be using EMRs at some point.”

PRESENTING A DIFFERENTIATED VIEW OF RISK The depth of risk intrinsic to many facets of healthcare reform may leave insurance agents feeling just as beleaguered as their clients. However, there are several ways agents can help clients meet the requirements of the Affordable Care Act and establish themselves as a long-term, professional partner at the same time. Presenting a differentiated view of client risk to medical malpractice carriers is one way to start. Capping new patient enrollment at a certain percentage, hiring medical students to digitize medical records, or restricting the use of telemedicine to complaints like fever or acute pain are all ways medical professionals can demonstrate they are on top of emerging risks, Friedman says. And the agent who recommends these practices will stand out as offering the kind of specialized, value-added services clients crave. “When it’s time to renew medical liability policies, make it a point to sit down and ask how ObamaCare has affected the client in terms of patient load and digital record transition,” Friedman says. “If you can offer that kind of feedback, it gives you a huge competitive advantage over someone moving clients from carrier to carrier in order to save a few dollars here and there.”


Mogelnicki also urges agents not to discount the services provided by carriers. “Make sure you properly coordinate any available risk management tools that insurance companies provide because they can really insulate an insured against liability charges,” he says. “Many offer training in hiring practices, training practices and documentation issues that allow physicians’ operations to provide a higher degree of efficiency and care.”

AN UNCERTAIN FUTURE It seems no insurance industry analyst, however experienced, has a clear picture of what the posthealth reform environment will look like in terms of medical malpractice. Mogelnicki predicts an increase in lawsuit frequency within the next five years, followed by necessary rate hikes, before the potentially positive effects begin to influence the market. Friedman and Palde see merit in arguments favoring both an increase and decrease in medical malpractice claims. One thing, however, is certain—there will be measurable impact. “Some impact will be positive, some impact will be negative, some impact will be immediate, and some impact will be long-term,” Mogelnicki says. “In the meantime, we just have to weather the storm.”


Percentage of office-based physicians with EMR systems, 2006-13






2008 2009

21.8 27.9








Source: CDC

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A thirst for knowledge and a great mentor have kept producer Brian Hudler’s star on the rise as one of the most innovative minds working the oil and gas sector Brian Hudler essentially started out from scratch in the insurance business seven years ago. Since then, the career-changer with an accounting background has developed into one of the leading insurance experts in the energy sector. His story provides a model for how an industry desperately in need of young talent can recruit good people and nurture them into becoming top producers with a mix of mentoring, education and good old-fashioned hard work. It also provides a lesson about what it takes to become a topproducing commercial lines agent. Today, Hudler is first vice president of the energy and marine group at Alliant Insurance Services, working out of the Fort Worth, Tx., office for one of the largest insurance brokerage firms in the US. With 40 | MAY/JUNE 2014

a focus on risk management for the energy industry, specifically the upstream and midstream sectors, Hudler helps his clients by using his deep knowledge of oil and gas operations, contractual issues and insurance products to design and implement innovative insurance programs that cover all facets of their business, including operations, transactions, acquisitions, divestitures and other risk events. His success led to recognition recently as one of Oil and Gas Investor’s “20 Under 40,” reserved for up-andcoming innovators in the energy industry. He has built a sterling reputation in the industry, and attributes his success to his ability to build longterm client relationships. “We pride ourselves on keeping customers for a long time. It has been a pleasure to create a growing


“Brian came to us with no insurance experience, a small sales background, and a strong willingness to learn”

MAY/JUNE 2014 | 41  


BRIAN HUDLER ON… • Generating referrals: “I ask for them. I’m very fortunate in being energy-specific—it’s really a very tight community. It’s really not very hard to generate referrals if you do a nice job on the service end. Sometimes they come without even asking—they just say, ‘I’d really like you to call this person,’ because they think you can help.” • Cold calling: “About twice a month I will pick up the phone and cold call. I still do it just to keep in practice. There’s a bit of a rush associated with cold calling.” • Knowing your business: “My success in oil and gas has come from immersing myself and being very competent in the industry. It’s always changing, so you have to keep up to date. I found my success in just knowing oil and gas inside and out, and striving to be the most technically competent person in our business.”

list of people who I trust and are willing to refer me to others,” Hudler says.

FROM NEWBIE TO EXPERT While plenty of Texans figure they may grow up to work in the oil and gas industry, nobody thinks they are going to grow up to be an insurance salesman. Hudler was no different. While a business major at Texas A&M University, he entertained thoughts of becoming an attorney. He had friends who were studying on insurance programs, and remembers thinking “insurance sounds like the most boring major ever.” It would be a while before insurance would enter the picture. While the Aggie grad had interned with an oil company out of Dallas, Hudler began his career more on the end-user side of the energy industry. He moved to Detroit to work in operations at the Ford Motor Company, where he remained for a couple of years before jumping at the opportunity to move back to Texas while still working for Ford on a consulting basis. Toward the end of 2006, Hudler’s good friend (and now a peer at Alliant) Adam Hall introduced him to John Ludwig, the man who would become his mentor and guide his course into the insurance end of the oil and gas industry. At the time, Ludwig was CEO of EnRisk Services Inc, a Fort Worth-based firm that 42 | MAY/JUNE 2014

specialized in insurance and risk management for the energy industry. “It just fit,” Hudler says of his instant rapport with Ludwig. Hudler, Ludwig says, was one of four “test cases” for EnRisk at the time, as the company looked to grow its producer ranks by bringing in great talent from outside the industry. So despite having experience mainly in operations and accounting, in 2007 Hudler made the jump to commercial insurance sales. “Brian came to us with no insurance experience, a small sales background, and a strong willingness to learn,” Ludwig says. “Brian and I worked closely together in developing his goals, structure, and tactics for growing his book of business.” Hudler was mentored in every step of his development, including in-depth training on the insurance industry, legal and contractual issues, and the oil and gas business. “Brian has emerged from this process as both a successful producer and an oil and gas industry expert,” Ludwig says. “Brian is a testament to the fact that hard work pays off.” The lesson here? A good mentor can go a long way toward helping a producer who’s eager to learn become successful. “John took a great amount of time to mentor me in how to do this right, and be long-lasting in the business,” Hudler says. “A lot of young people get discouraged if they don’t succeed right away.” Hudler says weekly meetings and frequent conversations with Ludwig were a big help, and accompanying Ludwig to client meetings in his early days was especially useful. “He wanted to show me how this business was conducted,” Hudler says. “He took me to meetings I had no business being in.” Despite early discussions about seeding his book, Ludwig remembers that Hudler wanted to do it from scratch, building his book from the ground up. “Brian was driven and motivated to be successful in all facets of his growth. I believe he achieved this level of success because he expects great things and works tenaciously until they become a reality,” Ludwig says.

GROWTH OPPORTUNITY Since joining EnRisk in 2004, Ludwig has built a team —including Hudler—that has more than quadrupled



revenue, while expanding the firm with offices in Houston and Denver. That success led to a new opportunity to expand from a regional player to a national one, as EnRisk was acquired in October 2013 by Alliant, instantly creating one of the nation’s most experienced and trusted teams in the energy and marine industries. Ludwig became executive vice president and managing director of Alliant’s energy and marine group while Hudler, who Ludwig says also played a key role in the merger, was named first vice president of the group. Going from a middle-market regional firm to a prominent national firm, Hudler says he quickly noticed a distinct advantage in terms of opening doors to more new business. While EnRisk and Alliant enjoyed similar reputations, Alliant works on a decidedly larger scale. Having a sharp focus on the energy market—and the deep knowledge that results from that focus—has also paid dividends. “We’re extraordinarily involved in the oil and gas community,” Hudler says. “I think a lot of people in our office would say we know oil and gas first and insurance second.” It is a very transaction-oriented business, as there are always companies buying and selling various oil and gas assets. Hudler recalls how one large client was buying a set of more than 2,500 wells from another major corporation. The client engaged them to look at the purchase and sale agreement, where the seller was requesting that a big bond be put in place along with unique retroactive pollution coverage. Based on conversations with the client, they felt they could negotiate out of one of the two stipulations, and Hudler and his team were able to determine which one made more sense economically. “We ran through them and got them to drop the bonding requirement in favor of pollution coverage,” Hudler says, noting that this ended up presenting huge savings for the client. “We are recognized because of our work on the transaction side. We’re just able to do some unique and special things,” Hudler says.

EARNING NEW BUSINESS Hudler spends time getting to know potential clients and courts them by sharing information. That can

Top producers typically become top producers by working hard, long hours to build their book of business. That can make it a challenge to maintain a healthy work-life balance. “Balance is a hard thing to achieve in this business,” Brian Hudler says, noting that anyone truly driven to succeed by nature spends a lot of time working to achieve that success. But he still has his priorities in order: “Family is first and foremost,” Hudler says. He has a wife, two sons and a daughter, and Hudler never loses sight of the importance of spending quality time with them. He coaches his sons in baseball, meaning he’ll usually be at work by 6:30am so he can be done in time to keep his coaching commitments. His family is also very involved in their church, where he teaches Sunday School. The importance of family in Hudler’s success as a producer has not been lost on his boss, John Ludwig, either. “We believe that a great producer is a combination of hard work, talent, and a winning team at home. The Hudler family’s support made it possible for Brian to put forth a great deal of time and effort working with prospects, clients, and at company events,” says Ludwig. “We lovingly refer to them as ‘Team Hudler’ and they are a key to Brian’s success.”

lead to an opportunity to conduct a lengthy review of their coverage, which is designed to be consultative as opposed to transactional. This is where he really shines. “That’s generally how I win clients,” Hudler says. “Because we are so specific in the types of clients we work with, we are able to demonstrate our technical prowess.” While the majority of his new business comes from referrals, Hudler still likes to pick up the phone and cold call every so often, usually companies he is familiar with but where he just doesn’t know anyone… yet. Another way he finds new business opportunities is by being a member of a variety of oil and gas industry organizations in his area. And surprise—there is no shortage of such organizations in the Fort Worth area—Hudler is a member of seven. While one reason for joining these organizations is to stay informed and involved in causes important to his clients, the opportunity to network with pools full of good prospects is a pretty good side benefit. “The prospecting piece of it is huge,” Hudler says. “I’ve met a lot of future clients through all those industry associations and their events.” MAY/JUNE 2014 | 43  




You might be daunted by the prospect of getting social media right for your brokerage. Muhammad Yasin presents a simple guide to get you on your way

44 | MAY/JUNE 2014

Feeling overwhelmed by the world of social media is easy, especially if you have yet to take part in it. Many businesses use it, have amassed hundreds of thousands of followers, built brand loyalists, and even generated sales leads. Yet without any prior experience with social media, it might get frustrating as you ask yourself the many questions necessary to start up your social media plan: Where do I start? Which social media platforms are right for me? What is the right balance? Social media is a cog in your marketing plan and should align with your other marketing goals, your branding, and with the way you engage your customers offline. You must have goals you want to reach before you actually begin the process.




Reserve your accounts An obvious but important first step, register the name of your business and the names of your products. Consistency is important through social media as a whole, but here particularly. If you use an anagram or a shortened spelling of your business on one account, you should use it on others as well. Use a handle that will allow people to find you when they go searching. When you start registering accounts, sign up for every social media site you know of. Start with well-known sites like Facebook or Twitter, but do not neglect the sites such as YouTube, Pinterest, LinkedIn, and others. You likely will not produce content for all of these accounts, but it is a good idea to secure your company/brand names to ensure that others do not register, and use, them for negative purposes.

Find your following Different people prefer to interact using different types of social media. If you know that your customers focus on specific sites, go to those first. Spending your time and content on Pinterest while all of your customers are on Twitter means you will lose valuable time in front of your audience. Search for the platforms with the most interaction, and go to that audience. Never completely neglect the smaller audience from the other sites, but spend your time where you stand to gain the best ROI.

Monitor conversations Imagine yourself at a party. How likely are you to jump into a conversation between two people without knowing what the conversation is about? Hopefully, not very likely. The same should be true for social media conversations. Know what is being discussed through social media before jumping into conversations. Monitor what others are talking about. Use the search functions of the social networks to find out what people are saying about your industry keywords and your business and products. Create benchmarks Your marketing plan brings in customers, attracts people to work for you, and says a lot about your business. Social media is part of your marketing and public relations. Any goals that are set as part of a social media plan should be relevant to your marketing and PR, as well as your customer service and sales initiatives. Once you begin interacting, check your performance against the benchmarks you have created. Using analytics tools, measure the engagement of your content, your brand consistency, and return on investment (ROI). You can adjust your plan as necessary.

Valuable content Content is one of the most important parts of social media. While a large part of social media is interaction, another large part is learning. People take to social media and follow different people because of their expert status. As a business, you are the expert, and the content you share should reflect that. Blog your expert ideas and share them via social media. Remember, though, that sharing information via social media is not for the purpose of making sales. Instead, you are sharing information to establish a relationship with your followers. If your followers value your insight and expert opinion, they will come back to see you as a customer.

Muhammad Yasin is a public speaker, e-book author, and director of Marketing for HCC Medical Insurance Services. In his role, Yasin is responsible for the brand building and lead generation strategy of several dozen social media accounts with over a quarter of a million followers

Response Again, social media is about building relationships, and your main goal when using social media should be growing those relationships. People reach out via social media because they want a response, so you should provide them some kind of response in return. Any reply from you will strengthen the tie between you and the customer. Once you have loyal custom-

“Your social media plan should align with your other marketing goals, your branding, and with the way you engage your customers offline” MAY/JUNE 2014 | 45  





Register your business name and any brands that you own. There is no need to produce content right away, but do not let a competitor snap up your accounts. Start with the well-known ones (Facebook, Twitter and YouTube) and expand from there.



It is to your advantage to monitor what others are saying about your brand and industry. Search your company names, brand names, and industry keywords using search functions. This is what you will need to talk about.



Planning is vital. Social media should be integrated into your marketing efforts. Make a plan that supports the existing marketing goals and set benchmarks. Your actions in

ers and brand evangelists, reward them through promotions. Mention and thank anyone who blogs about you. Keep track of your followers and note who is and who is not a customer. Remember that every person who interacts with you is a potential customer. Generating leads Just like you use marketing to generate leads and help the sales team, social media should be used to drive revenue as well. Unless you are bringing in, or at least learning about, potential customers, then the time you spend on social media is wasted. However, when you generate leads, different tactics are required for different social media platforms. Facebook With over 1 billion users, Facebook is a powerhouse in social media platforms. Share your expertise on Facebook by linking to blog posts, articles, or other relevant information that your followers would find interesting and pertinent. Customers can ‘Like’ you and your business, and then your posts will appear in their feeds. Be careful about the amount you share, though: share too much, and you will bog down newsfeeds, which may lead to you getting “Unliked.” If your customers like your content, they can share it and make it appear on their own pages, and link back to yours, expanding your network into theirs. Facebook is a great medium for contests and other promotions, and that is a great way to reward your following. 46 | MAY/JUNE 2014

social media should support those goals, and the goals of the marketing plan overall.





Creating and sharing relevant and interesting content is very important, but it is also very important to interact with your followers. Social media is about building a community on a personal level and building relationships. Building relationships can help your business’ bottom line. As with any part of marketing, measuring your performance is vital to becoming more efficient and better overall. Set checkpoints to measure growth. Divide tools into four categories: Content, Diagnostic, Monitoring and ROI. Each will help you improve and adapt your social media plan overall.

Twitter Yes, the 140-character limit on each Twitter post is not a lot to work with, but used correctly it can capture the attention of your reader for just long enough to drive them to content or even to your website. Describe yourself well in your bio to give a better idea of who you are. Your Twitter icon should be an up-to-date head shot of you or your branding, so followers can identify you or your business. Stay relevant to your industry when you tweet. You should share a variety of content, but also engage in conversations. Make your tweets public, and use keywords and hashtags that will allow customers to find you. Twitter should be a natural conversation. Pinterest Many people think that Pinterest is full of recipes and home decorating ideas, but there is so much more to it than that. If you leave out Pinterest, you are missing out on a world of potential followers. Create boards that are relevant to the many aspects of your industry, and find great content you can pin to them. With Pinterest, you can gather some of the most creative pieces of content in the world all in the one place. As you generate leads, ensure that you continue to engage your current customers. Focusing on leads is certainly important, but your established relationships will pay dividends if you keep them solid. Social media boils down to building relationships, and if you give it the right attention, your business will soon see great results.















DEADLINE JUNE 6, 2014 Do you know women who are making their mark in the insurance industry? Email Editor Brian Anderson at and tell us why they should be nominated for our Elite Women in Insurance award.




‘Mediocre’ - that’s not exactly what brokers like to hear, but if you’re doing these ‘don’ts,’ writes coach Doren Aldana, you may be writing that all over your 2014

48 | MAY/JUNE 2014

Little things make a big difference. That’s true in marriage, parenting, and in marketing yourself as an insurance professional. In the little time we have together, I want to remind you of – or, indeed, surprise you with – eight deadly marketing sins that insurance professionals commit and that threaten business growth in any market, especially today’s challenging one.

his famous “Time Management Matrix.” Dr. Covey emphasizes that too many business owners spend their time doing “urgent but not important” activities when they should be spending their time on “non-urgent but important” activities. Non-urgent but important activities such as planning and marketing generate continued and sustainable long-term growth.



I was working with a consulting client recently who was in a sales slump. I decided to perform a very simple diagnostic. I simply asked him to email me a detailed list with all of his activities for the next three days, and then give me a call back. After reviewing his activities it was clear that he was in the “putting out fires” business because that’s where most of his time was spent. Rather than working “on” his business he was working “in” his business. This industry professional (and you) should be spending as much time as possible working “on” your business doing things like planning and developing “marketing assets” that work while you’re not working. These are what I call “High Leverage Activities” because they allow you to leverage your time so you can reap a higher long-term payoff. In his popular book, 7 Habits for Highly Effective People, Stephen Covey hammers this point home using

Last year, I was speaking at a national conference and had about 100 professionals in the room. I asked the crowd to hold up their hands if they had a current marketing plan that they use and refer to on a consistent basis. Only three hands went up! Studies have shown that small businesses that create and consistently use marketing plans experience an average of 30 per cent higher sales than their competitors. How would you like to increase your sales by 30 per cent or more? Proactive marketing is the key! Here are a few tips to help you create your marketing plan.

Tip # 1 Create a plan for mining the gold from your existing database of prospects, clients and referral partners. If done right, this will allow you to maximize your


“This insurance professional (and you) should be spending as much time as possible working ‘on’ your business doing things like planning and developing ‘marketing assets’“ Unfortunately, most insurance professionals never take the time to “systematize” their business, which results in waste, chaos, and ultimately, lost sales. Sin # 1 is partly to blame for not getting around to creating and implementing systems.

SIN # 4 – NOT MARKETING TO YOUR CLIENT DATABASE repeat and referral business. Think of ways to add value and cultivate the relationship with little meaningful touches over time.

Tip # 4

Many insurance professionals believe that once you “close the deal” and the happy client walks out the door, then the deed is done and you need to quickly move on to the next prospect. While that’s true, your next prospect (in the form of repeat or referral business) might have just walked out the door. Many insurance professionals tend to think, “That deal is closed – they’re not going to buy another insurance policy any time soon so why waste my time on them? Let’s find a new prospect.” Top producers, on the other hand, implement effective database marketing systems and, as a result, often get 60 per cent to 70 per cent of their business from their past clients through referrals and repeat business. That’s working smart, not hard. In your marketing plan you should be including customer appreciation events, monthly or quarterly newsletters, annual policy reviews, birthday campaigns, renewal campaigns, weekly email tips and relevant greeting cards – all of which are designed to stimulate repeat and referral business.

Block schedule at least 30 minutes every day to implement your marketing plan in each of the above three areas. Plan your work and then work your plan!


Tip # 2 Create a plan to attract more referral partners and motivate them to send you more referrals more often. The key to success is to develop a compelling, unique value proposition that positions you as an irreplaceable, indispensable asset on their team.

Tip # 3 Create a plan for generating qualified insurance leads independent of your clients or referral partners. I call this “Consumer-Direct Marketing.” For example, you could launch your own Employee Insurance Benefits Program designed to get companies to endorse you to hundreds, even thousands, of their employees.

SIN # 3 - FAILING TO IMPLEMENT SYSTEMS A system is a business process that generates predictable, consistent, and reliable results day after day. If you want to see a good example of a system, simply visit a fast food franchise like McDonald’s or Wendy’s. Notice how they do the same things, the same way, every single time.

John Wanamaker’s famous 1886 quote sums it up very well: “I know that 50 per cent of my advertising is wasted... I just don’t know which half!” There’s nothing worse than spending money on a marketing campaign and not knowing whether it worked. It’s even worse when you continue to spend money on a marketing campaign that you think is working, but really isn’t. Most insurance pros use the MAY/JUNE 2014 | 49  


S.W.A.G. method for tracking their marketing – Scientific Wild Ass Guess! The only way to invest in your marketing efforts with confidence is to test a campaign, track it, and measure your results. That’s why I recommend always offering something of high-perceived value and low risk to motivate prospects to respond. For example, you could offer a special report, seminar, or audio CD to get people to respond immediately via the phone or your website so that you can track your response. This strategy also allows you to capture your prospects’ contact information so that you can continue to follow up with them. Remember, the fortune is in the follow-up!

SIN # 6 - NOT FOLLOWING UP WITH YOUR PROSPECTS Studies have shown that 81 per cent of all sales happen on or after the fifth contact. If you’re an insurance

professional and you’re only doing one or two follow-ups, imagine all the business you’re losing. Not following up with your prospects and customers is the same as filling up your bathtub without first putting the stopper in the drain! Here are four keys to developing a successful follow-up system: 1. Create a lead capture system that is accurate and reliable. 2. Develop compelling follow-up marketing campaigns that will drive traffic to your website or generate phone calls (i.e. weekly email tips, monthly client newsletter, etc.) 3. Systematize the process so that it happens day in and day out, the same way every time. 4. Automate the system as much as possible using Client Relationship Management (CRM) software and/or an outside mailing house to do your mailings.

“The only way to invest in your marketing efforts with confidence is to test a campaign, track it, and measure your results” 50 | MAY/JUNE 2014


IS HERE TO HELP! SHEET: CYBER LIABILITY INSURANCE Now that you’ve read about IsFACT your company at risk? how to avoid marketing missteps, here’s some information that will really help you get your marketing on target. Insurance Business America recently introduced InFocus, an ongoing series of week-long content centered on a specific market niche, designed to introduce growth strategies and opportunities for agents and brokers. InFocus includes market overviews, case studies, compelling infographics, key trends and opinion pieces by experts in the field that provide producers with actionable ideas to approach potential clients for coverages such as Workers’ Comp, Cyber Liability, Hospitality, and many more. And here’s the kicker – a free, downloadable Factsheet, which agents can email to any and all prospective clients that provides a compelling outline of exactly why they need this coverage. Now that follow-up call is going to be so much easier! You can find all of the InFocus content on the home page at – just click on InFocus near the top right corner. Target, LinkedIn, eHarmony, Yahoo!—all companies that suffered huge losses following cyber attacks. Cyber experts agree that it’s now no longer a question of “if” a business suffers a data breach, but “when.” And because policy language increasingly excludes cyber loss from commercial general liability (CGL) coverage, your business faces a very real risk—one that could even be a death sentence.



2 million cyber attacks on businesses occur every week

Liability for security or privacy breaches, including loss of confidential information via unauthorized access to computer systems

72% of all data breaches occur in small- to medium-size businesses

Costs associated with a privacy breach, including consumer notification and costs of providing credit-monitoring services to affected customers

100,000 customer records are affected in an average cyber attack

$300,000: average total cost of a data breach

Costs associated with restoring, updating or replacing business assets stored electronically

Sources: IBM, The Ponemon Institute, Verizon Communications

Business interruption and extra expense related to a security or privacy breach


Liability associated with libel, slander, copyright infringement or reputational damage

• Social media One in 10 social network users have fallen victim to a scam or fake link on their social network platforms. Facebook alone accounts for more than 600,000 compromised users daily.

• Mobile payment platforms Nearly 3 in 5 compromised credit-card transactions took place using a mobile payment platform.

Expenses related to cyber extortion or cyber terrorism

Source: NAIC

• Ex-employees 59% of former employees admit to stealing company data when leaving. Source: LexisNexis


These business sectors experienced the highest incidence of cybercrime in 2011 • Manufacturing: 26.5%


• Finance and insurance: 20.9%


• Information and communication: 18.7%


• Health and social service: 7.3%


• Retail and wholesale: 6.6%


Source: IBM Security Services Cyber Security Intelligence Index, 2013






10,000 5,000 0

5,503 2006

16,843 2008


Source: GAO analysis of US-CERT data for fiscal years 2008-2012

SIN # 7 - ‘SPRAYING AND PRAYING’ Believe it or not, not everyone is a good prospect for your insurance services. If that’s the case, why would you spend your precious marketing dollars trying to reach them? It doesn’t make sense. If everyone is your prospect, no one will be your customer. If you want to maximize your marketing magnetism, you’ve got to shift from being a vague generality to being a meaningful specific. Unfortunately, too many insurance professionals blast their general marketing message using general marketing media such as radio, bus stop ads, newspaper ads, mass mail-outs, etc. I call this “spraying and praying.” This approach is based on the premise that if you just throw enough yogurt at the fan, something’s bound to stick. The problem is, unless you’re a big dumb company with a multi-million dollar ad budget and no requirement for a positive ROI, you can’t afford to waste a single penny on useless ads. Instead of spraying and praying, narrow your focus onto a specific niche market that actually has a need for insurance and then market to people just like them. If your ideal prospect is an apartment renter paying $1,500+ per month, then find a policy that suits their lifestyle and resources. Your response rate will go up and your cost of acquisition per client will go down when you begin to target your market. Go narrow, deep and rich in your niche!

SIN # 8 - NOT DIFFERENTIATING YOURSELF Did you know that your prospect receives, on the average, over 3,000 marketing impressions a day! With all that clutter you have to compete with, how do you make your insurance business stand out? How do you differentiate your business in a way that separates you from the competition? Obviously, it’s not going to happen by following the herd


NAS Insurance is a unique specialty market with distinct capabilities in product development, underwriting, marketing, risk management and claims handling. Ask your agent for details.

and touting the usual “best rates,” “best service” and “unbiased advice.” It’s like marketing incest out there — everyone else is doing the same thing with ever decreasing results! You need to differentiate your business in a way that makes you stand out from the clutter and get noticed. A simple way to do that is to keep a close eye on the marketing that really captures your attention and make a note of it. Then borrow and modify those strategies and ideas to create your own unique and compelling message. When in doubt, notice what everyone else is doing, and do the opposite.

CONCLUSION Let’s face it, most insurance pros are committing one or more of the above marketing sins. If you fall into that category, there is hope — you can repent and improve. My challenge to you is to take just one or two sins that are costing you the most in terms of profits and productivity, and focus on improving them first. Once you have them handled, move on to the next, and so on. Extraordinary business success is often the result of small incremental improvements over time.

MAY/JUNE 2014 | 51  


PLAN TO SUCCEED A good business plan can act like a compass, not only helping you stay the course but also getting you to where you want to be

For new insurance brokers setting up shop, a business plan is an essential tool in helping you realise your goals. “Without a business plan, you have a dream with no stepping stones,” says Michael Griffiths, small business coach and CEO of Michael Griffiths & Associates. “A business plan ensures you know where you’re going, what you want to achieve and the action steps required to get to your goals,” Griffiths says. “Business owners without a business plan usually find themselves not growing or taking the required steps to move the business forwards. Their heads are usually stuck in day-to-day routines rather than business growth strategies.” Even veteran business owners often fail to recognize the importance of creating a business plan, adds Michael Altenburger, Small Fish business coach. “In my experience, only very few SMEs have a formal written down business plan. Not many know exactly what a business plan is or what purpose it serves. Those who do know often feel overwhelmed by the daunting task of creating one. Lack of experience adds to the problem.” Altenburger adds that having a plan – especially in written form – helps to quickly determine that things are heading in the wrong direction (hence ‘not going to plan’) – not when it is already too late.

PUTTING IT TOGETHER Simply put, a business plan is a written description of your business and your business goals. It can be 52 | MAY/JUNE 2014

used to help you describe your business to potential investors, attract employees, or prospect for new business. The structure of your business plan will reflect who is using it. If you’re looking for finance, your business plan might be slightly more detailed than one that will be used internally for staff. So step one in creating a plan is to determine who the plan is for. Deciding whether the plan will be used internally or viewed by third parties will help you target your answers. According to Griffiths, it 5 REASONS TO UPDATE YOUR PLAN


If there has been a significant change in the market, for instance, with floods impacting pricing and industry reputation, you might want to revisit your plan and figure out how this affects you


All industries undergo changes due to new regulations. You need to ensure your business plan is in line with the regulatory demands of the current market


Perhaps you are in the process of adding new brokers, or maybe the business has lost a partner – the business plan should be revised and each person should be aware of the management structure




One way to grow your business revenue is to look at how you can incorporate diversification into your strategy. Your chances of embracing new opportunities will increase if you visualise how it will fit into your business

There are no hard and fast rules on how often you should update your plan, but a new financial period – annually, quarterly, monthly – can be a good time to update if your goals are being met and your plan is realistic

MAY/JUNE 2014 | 53  



“Remember, a goal is no good unless it has action steps to get you there” Michael Griffiths doesn’t need to be pages and pages long. There are many variations of business plans, but a basic business plan typically includes: Description of the business: This is your management plan. It typically covers information regarding the structure and premises, staff, your relevant experience and services. Market analysis and strategy: This section includes an analysis of your industry, your target market, and your competition. It should also outline your key marketing tactics to reach your target audience. Future planning: You might want to include your business’ vision statement, your plans for the future, your business goals (short and long term) and how you intend to reach them. Finances: This includes how you’ll finance the business, and outlines the operational costs and earnings, and projections. Executive summary: This can be short and sweet – just a one-page overview of your business. When it comes to outlining your goals, Griffiths suggests: “Start with 12-month goals and ask yourself, what outcome do you want in the next 12 months? Set three to five goals you want to achieve, then break it down to three months, six months and the next 30 days. For example, if you want 100 customers in 12 months then how many do you need in the first 30 days? What stepping stones or action tasks do you need to be doing to ensure that your goal comes true? Remember, a goal is no good unless it has action steps to get you there.”

AND AGAIN There are no hard and fast rules regarding how often you revisit your plan, although Griffiths suggests business owners check at least on a quarterly basis. “We revisit ours every month to ensure we focus on the next 30 days and what needs to be achieved.” According to Altenburger, a formal review of the plan should be conducted annually. “On these occasions the goals would be re-evaluated based on new information available.” 54 | MAY/JUNE 2014

Part of the value in putting together a business plan is to help you visualise and focus on your objectives. A plan that fails to clearly identify tangible and realistic goals misses the point. POORLY WRITTEN

Maybe this is not a huge deal if the plan is for your eyes only, but if it is to be viewed by third parties, you want to ensure that there are no mistakes in spelling, punctuation or grammar. STOPS SHORT OF BEING A GUIDE

It’s great to outline your goals, but to get real value from your business plan you need to clearly identify how you intend to reach them. INADEQUATE RESEARCH

Failing to properly identify and research your target market can lead you to make foolish marketing choices. Get some facts. Find out as much hard information about your target market as possible. Do they read the local newspaper, are they mums and dads of the local footy team, and/or are they tech savvy? GOING SOLO

You may be a one-man show, but there is no reason why you have to create your business plan in isolation. There are tons of resources available for small businesses. Get professional help. The right business coach can help you turn what may seem like a daunting task into an invaluable tool for your business. UNREALISTIC

If your goals are over-ambitious and rely on too many forces that are out of your control, then perhaps you need to scale back your expectations. Creating a 10-page plan with world domination as the end goal can only lead to disappointment. UNDERESTIMATING THE COMPETITION

Failing to recognise that there are other brokers operating in your space is foolish. You need to look at their business and figure out how you can offer a point of differentiation. PUTTING IT OFF

Don’t wait to write a plan until you absolutely have to. Too many businesses make business plans only when they have no choice in the matter. So get cracking!


Favorite things... Alan Jay Kaufman, chairman, president and CEO, Kaufman Financial Group Overseeing the group that includes Burns & Wilcox and other major insurance brokers, Alan Kaufman of Bloomfield Hills, Mich., is both a leader in the insurance industry and a legal professional. When he’s not growing the nation’s largest independent wholesale broker, Kaufman likes to relax with his family, friends and a good book

Place to be: “At home with my family and friends in Michigan—especially in the summer and fall. During the winter months, we try to bring our family and friends together and spend some time in Sarasota, Fla.” Favorite vacation spot: “Sarasota, Fla.” Favorite sport: “I grew up playing ice hockey, football, basketball and baseball, but now my spare time is usually spent playing golf and tennis. I also enjoy swimming and cycling. On football weekends in the fall, you can usually find me with family and friends in East Lansing, South Bend or Ann Arbor.”

Best thing about working in insurance: “Insurance powers the world. It enables commerce to flourish and provides protection in the face of global risk. We are right in the middle of it, with changing dynamics that bring new challenges each and every day. Our business is fundamentally relationshipdriven. The insurance industry offers an ideal platform to cultivate personal relationships and meet interesting people throughout the world. I enjoy continuing to build on the long-standing relationships we have with our broker and agent clients, in exploring new distribution opportunities for our insurance company partners, and in making significant investments in our talent to ensure the Kaufman Financial Group remains an unmatched global player.”

Book: “I enjoy reading books on business, history and successful entrepreneurs. I recently finished a great book by Vahan Janjigian called Even Buffett Isn’t Perfect, which examines Warren Buffett’s philosophy and the strategies that guide him.”

Favorite food: “Branzino—it is a really flavorful fish that is fantastic when eaten right off the bone.” Favorite hobby or interest: “Collecting modern and contemporary art.”

MAY/JUNE 2014 | 55  




about affluent clients

Patricia LeBon is a personal lines manager for Burns & Wilcox, the nation’s largest independent wholesale broker and underwriting manager. A wealth management adviser who has consulted with many of the Forbes 400, she is an expert in managing risk for multigenerational, multistate clientele. For more information visit

A volatile economy, coupled with technology advancements and the sustained success of e-commerce and social media, has caused a dramatic shift in the landscape of wealth in the US. Within this new landscape, affluent clients are no longer a niche group of people with a net worth of more than $50m. This shift has a tremendous impact for our business and forces us to ask: In the current climate, what makes a client ‘affluent’? I define today’s affluent client as someone whose net worth makes them a possible target for liability lawsuits, and it’s likely that many of your existing clients fall into this category. We often fail to identify affluent clients because we haven’t asked the right questions. Affluent clients require a careful review of their assets and lifestyle so that a personalized insurance program can be constructed to adequately protect their family and long-term financial well-being. Initiating this process means we need to throw out our preconceived notions of ‘who’ an affluent client is and instead take a complete risk management approach in evaluating the type of coverage those clients need.

MYTH: NET WORTH IS REFLECTED IN PHYSICAL ASSETS It may seem obvious, but don’t judge a book by its cover. While high net worth clients are easily recognizable by their homes, cars and accessories, today’s affluent client may only be identifiable by what you can’t see, such as a substantial investment portfolio. Asking the right questions is critical in gaining a clear picture of all assets, from properties and investments to jewelry, art and expensive toys.

MYTH: RISK EXPOSURE IS DETERMINED BY A CLIENT’S PROFESSION Clients don’t need to be a celebrity, professional athlete or CEO of a Fortune 500 company to become 56 | MAY/JUNE 2014

the victim of a superfluous liability lawsuit. A client’s lifestyle and public presence can also contribute to their risk profile. Remember to consider social circles, volunteer work, board memberships and the risks associated with these responsibilities when evaluating the coverage required.

MYTH: SPECIAL RISK ASSESSMENTS ARE ONLY REQUIRED FOR HIGH NET WORTH CLIENTS When working with an affluent client, agents must go beyond the act of quoting policies and become a true risk management adviser. In doing so, we can uncover risks, quantify their impact on the insured and ultimately provide solutions to protect the client.

MYTH: YOU ONLY NEED TO WORRY ABOUT THE CLIENT AND THEIR EXTENDED FAMILY Liability risks don’t end with family members. Many affluent clients consider their household staff an extension of their family—and you should too. Housekeepers, landscapers and nannies all have risks associated with their employment, which must be taken into account when building an insurance package.

MYTH: IT’S DIFFICULT TO MAINTAIN A LONG-TERM RELATIONSHIP WITH AN AFFLUENT CLIENT In my experience, agents who can provide comprehensive risk management services in addition to cost-effective policies become a highly valuable and important long-term resource. Offering to sign a confidentiality agreement can be a great first start in building trust with the client. As the relationship develops, the agent will gain an unparalleled understanding of the spectrum of risks the client faces. In addition, a trusted adviser benefits from an intimate knowledge and confidence that helps to lock out future competition.

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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 Š2014 Applied Underwriters, Inc. A Berkshire Hathaway company. Rated A+ (Superior) by A.M. Best. Insurance plans protected under U.S. Patent No. 7,908,157.

Insurance Business America issue 2.02  

The magazine for America’s insurance broking and advice community.

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