Main Street Industry News - September 2017

INSIDE Special Report: The State of Insurance » 7 The High Cost of Driving » 17 Insurers & Data — Now What? » 20 Surprise! ObamaCare’s Death Greatly Exaggerated » 31

Cover Image: Shelby L. Bell, Wildflowers

September 2017 | Published Monthly

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Did you know that PIA’s company council, The PIA Partnership, has conducted nationwide research about the insurance buying preferences of small business owners?

The research is encouraging because it found that small business owners strongly prefer independent insurance agents as they make choices in today’s online world.

However, the results also serve as a wake-up call that agents must take steps to continue to demonstrate their value and also be more engaged online.

PIA and the companies belonging to The PIA Partnership have created a public website that helps agents understand PIA’s findings.

PIA members also have access to a private website containing a series of strategies and tools to help them stay ahead of online competition in commercial lines.

To access the newest PIA Partnership project, Small Business Insurance & The Internet — The Voice of the Commercial Lines Customer, visit us at www.pianet.com/voiceoftheclcustomer.

If you are not a PIA member and want to access all of the tools available through this program, contact us for a membership application or visit us online at www.pianet.com/joinpia.

National Association of Professional Insurance Agents 400 N. Washington St., Alexandria, VA 22314-2353 www.pianet.com | membership@pianet.org | (703) 836-9340

Special Report: The State of Insurance | 7 José Manuel Dias da Fonseca is the CEO of Brokerslink. He recently wrote an article for PropertyCasualty360.com about the relevance of insurance brokers as we move forward.

Eclipse Fever — Some Conclusions | 10 The skies — as we all know — grew dark for twoplus minutes on a narrow band across the U.S. The total eclipse of the sun started in Oregon and moved at a southern angle across the country to South Carolina. It was spectacular for those watching. Government officials — however — didn’t think it was all that spectacular.

Insurers & Data — Now What? | 20 Data is being gathered just about everywhere. Use your computer, your phone, your tablet, start your car — heck — even open the refrigerator or turn on the microwave and someone, somewhere is gathering information about that use.

Another look at Jobs | 20 Weekly Industry News often looks at jobs and how we view jobs Last week we saw how the workplace — in the eyes of many employees — hostile, stressful and grim. This week we learn that people start really hating their jobs at about the age 35.

Hurricane Harvey — The Biggest Disaster Since Katrina | 11 It’s a certainty that Hurricane Harvey will be as big a financial disaster as Hurricane Katrina. Or maybe even bigger.

Emergency Planning — Maybe it’s Time to have THE Talk | 22 Hurricane Irma has devastated Florida and caused untold billions — some say as much as $200 billion — in damages.

Congress in September — All Eyes on Flood Reform | 15 Congress has ideas on how to reform the National Flood Insurance Program (NFIP).

Surprise! ObamaCare’s Death Greatly Exaggerated | 31 It was Mark Twain who once quipped: “The reports of my death are greatly exaggerated.”

The same — say many involved in healthcare — can be said for the Affordable Care Act.

The High Cost of Driving | 17 On average — in 2017 — it costs you $8,469 a year to drive a vehicle in the United States.

That’s how AAA’s Your Driving Costs survey sees things. That averages out to $706 a month.

Driverless Vehicles — Never Thought of This One | 18 Here’s something those working on driverless vehicles didn’t think about: graffiti on road signs.

Researchers at Washington State University say road signs that have been tampered with can totally confuse a driverless vehicle.

PIA NE IA EVENTS Upcoming Events Calendar 2017 | 28

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The GAO & Feinstein Target Crop Insurance | 19 The General Accounting Office (GAO) says the U.S. Department of Insurance could save millions of dollars by cutting the profits of private crop insurers.

September 2017 | Main Street Industry News | www.pianeia.com | 4

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TOP STORIES

SPECIAL REPORT The State of Insurance José Manuel Dias da Fonseca is the CEO of Brokerslink. He recently wrote an article for PropertyCasualty360.com about the relevance of insurance brokers as we move forward.

Some of this advice can also apply to agents and agencies.

Dias da Fonseca says new technologies are “reinventing the insurance industry’s distribution chain, its business models, and arguably even society as a whole. Many believe that the current shift towards a globally connected network of businesses will result in widespread disintermediation.”

At this point a definition is in order.

Disintermediation is defined as “reduction in the use of intermediaries between producers and consumers, for example by investing directly in the securities market rather than through a bank.”

Oh. In his article Dias da Fonseca said, “New technologies are altering business processes, and ‘disruptors’ are constantly emerging; but instead of feeling threatened, we must see these developments as an opportunity to evolve. By changing the way we see ourselves, and modifying our approach to the business, the good brokers will survive and prosper.”

There is a huge “but” that goes with his statement. Dias da Fonseca said failure to

acknowledge the challenges of the digital era — which has now arrived — will be a fatal mistake for some.

“Equally, failure to recognize and act upon the opportunities it presents would be disastrous.

We must adapt to become much more efficient and more accessible to our clients. But if we don’t identify the areas where we have to improve and advance, don’t make the right investments and learn how to become much more useful to our customers, we risk redundancy,” he wrote.

This is not a new threat. We’ve seen it coming for years. His suggestion to overcome the coming cataclysm is to innovate. And do so daily. Plus, we must recognize that some of the key roles once filled by human beings can now be automated.

Where we can innovate is in areas like risk management and in giving our clients strategic advice and the ability to negotiate. These things cannot be replaced by codes or algorithms. At least so far.

“They instead depend on human social qualities and cannot be replaced by technology (at least, not yet). Brokers must alter their business models to emphasize these interpersonal and social qualities, their strategic advice, and their consultative offerings. To survive, brokers must adapt their role to act increasingly as holistic risk consultants, not just transactional market specialists. Such a shift will pave the way

September 2017 | Main Street Industry News | www.pianeia.com | 7

TOP STORIES to build and maintain trust between brokers and clients. Trust is essential to maintain and attract business, and is a something else that computers cannot guarantee.”

The article goes on to explain how to overcome the oncoming disintermediation and it is a fascinating look at the future. You can find the whole article by clicking here and we also post the link at the end of this article.

His conclusion leads into the next part of this article: the value of the independent insurance agent.

“Insurers have strong, established customer and market relationships. Their goal is to give clients what they now need and rightly want: a comprehensive, informed, twenty-first century risk consulting service, which delivers the best possible solutions every time. Do that, and our future is secure,” Dias da Fonseca said.

While we all worry about the change in technology and how it will impact the future of insurance for insurance agents in particular, a survey released by PIA National in August of 2015 says no matter what people still want insurance advice in person.

Insurance makes people whole and many of you are the people that make that happen.

Most of what we hear about insurance in media is negative. In fact, these days the only positive you hear about insurance is the selfserving commercials on television and they’re industry produced.

The study referenced here is from PIA National’s agency-company council the PIA Partnership and is titled Small Business Insurance & The Internet—The Voice of the Commercial Lines Customer. It may be an online world these days but businesses want — and more importantly

need — the advice and experience of a professional independent insurance agent.

This isn’t to say that the Internet is not important to them and the study comes with a warning. As Dias da Fonseca notes in his article, the Internet and its online lure is powerful. Independent agents must be proactive to continue to demonstrate the value of the independent agency system to business.

That said, here is how you are valuable to your clients: • Belief in the client or company • Having a person who understands their business • Quick service response • Personal attention • Providing confidence the client is making the right insurance decisions John Petrucci was the PIA Partnership chair at the time of the study. He said, “The Internet is here to stay. It is not the opponent of agents. But while it can be a source for competition, it can also provide an opportunity for agents when they use it to their own advantage. Responding is about evolution, not revolution. The changes taking place in the marketplace provide an excellent opportunity for independent agents to increase their dominance in the CL market, but the one thing that is not an option for independent agents is inaction.”

Here’s what else the study found: • In order to be competitive, independent agents must have a full, credible online presence.

September 2017 | Main Street Industry News | www.pianeia.com | 8

TOP STORIES • Small business owners most value agents with professional, industry-specific knowledge.

• Most small business owners who shop insurance online still lack confidence in themselves to make ideal insurance choices, and they want help.

• Agents need to sell their value. Without more frequent demonstration of value, alternatives like bypassing the agent by going online will encroach further.

To sum it up:

Small business owners will start the insurance process online. But they depend on you to check and confirm what they learn there. And they overwhelmingly prefer personal contact throughout the insurance purchase process.

Sources: PropertyCasualty360.com, PIA Western Alliance

September 2017 | Main Street Industry News | www.pianeia.com | 9

TOP STORIES

ECLIPSE FEVER SOME CONCLUSIONS

The skies — as we all know — grew dark for two-plus minutes on a narrow band across the U.S. The total eclipse of the sun started in Oregon and moved at a southern angle across the country to South Carolina. It was spectacular for those watching.

Government officials — however — didn’t think it was all that spectacular.

More ambulances were ordered active and emergency call centers added more staff for the days leading up to and after the event.

Many predicted snarled traffic and the human disasters that accompany a mass movement of people.

Challenger, Gray & Christmas did an estimate and found the 20 minutes to an hour or more taken out of the workday to see the eclipse cost U.S. businesses $694 million in output.

The firm said during the eclipse hours 87 million employees were working.

Millions of people traveled to a 70-mile band in the 14 states to see the eclipse. Medical centers beefed up and put extra beds into play.

The sky didn’t fall but it got fairly busy for the 12 million people living within the eclipse path and the one to seven or so million who traveled to that path. Gasoline shortages were evidenced in some places as were food shortages.

And it was very, very costly for employers.

Sources: The Washington Post, Insurance Journal

September 2017 | Main Street Industry News | www.pianeia.com | 10

TOP STORIES

Hurricane Harvey

The Biggest Disaster Since Katrina It’s a certainty that Hurricane Harvey will be as big a financial disaster as Hurricane Katrina. Or maybe even bigger. Ironically, it hit Houston, Texas and surrounding areas almost 12 years to the day that Katrina hit New Orleans.

Relief efforts are underway by the federal government, state governments and by private and public groups and individuals. Some celebrities have donated huge sums of money as have the afore mentioned groups.

It goes without saying that heroism and all that is good about humanity prevailed during the disaster and prevails today as Texans and those impacted in other states begin to put their lives back together.

The PIA Disaster Relief Fund — a project of the PIA Insurance Foundation — is soliciting charitable donations and providing relief grants to Main Street businesses that may be facing gaps in the insurance coverages or

September 2017 | Main Street Industry News | www.pianeia.com | 11

TOP STORIES other assistance available to them. Grants are available in areas of Texas covered by federal or state declarations of disaster related to the flooding events that resulted from Hurricane Harvey.

someone who lives around the corner from him keeps posting pictures and updates. They are all binding together and saying, ‘If anybody needs dog food, I have some,’ to a broader level of ‘here are resources,’” she said.

PIA National Executive Vice President Mike Becker said, “Our hearts go out to the people of Texas who are experiencing what may be the worst flooding in their history. When disasters strike, PIA members are there to help. The PIA Insurance Foundation is happy to do its part to help people in Texas recover from these unprecedented floods.”

Her site is also offering lists of places where people can find shelter and food.

Click here to donate to the PIA Disaster Relief Fund.

Click here to apply for a PIA Relief Grant.

If you have questions about the process, click here.

Another site helping was Reddit and its live Hurricane Harvey Megathread. It kept people up to date on the storm as did Snapchat’s Snap Maps. “I think it really shows the great nature of humanity and people really do want to help each other and they have this platform to do it,” Matherly said.

Unless you’ve been vacationing on the Moon most of you know the whole Hurricane Harvey story. The Trump administration is asking for $7.85 billion in aid for victims and at the same time is asking Congress to raise the debt ceiling so it can spend the money.

White House Budget Director Mick Mulvaney said, “if the debt ceiling is not raised, it may not be possible to outlay the requested supplemental appropriations or funds for other critical Government operations.”

One of the most interesting rescue efforts is coming from social media. The hurricane knocked out power and phone lines and smartphone batteries for phones that worked needed to conserve power. So social media became a critical cog in staying informed and in getting help if needed.

And the Federal Emergency Management Agency only has $7.6 million available for the crisis and of that $7.6 billion, and spokesman Andy Read said $5.9 billion would need to be borrowed. “The National Flood Insurance Program has $1.7 billion available to pay claims. Additionally, the NFIP has $5.9 billion in borrowing authority to pay claims resulting from Hurricane Harvey. This does not include additional resources that reinsurance may provide,” he said.

Allison Matherly is a coordinator of digital engagement at Texas Tech University. A ways away from the storm at her home in Lubbock, Matherly started a Facebook group. “I managed to find a neighborhood Facebook group. Now

Hurricane Harvey dumped trillions — as much as 11 trillion — gallons of water on Texas and most of it in the Houston area. Those trillions of gallons averaged in some places to 51 inches of water in a very few days.

September 2017 | Main Street Industry News | www.pianeia.com | 12

TOP STORIES AIR Worldwide says insured losses from the wind and storm surge will range from $1.2 billion to $2.3 billion. Most of those losses are not insured. Only a few of those in Hurricane Harvey’s path have flood insurance. Robert Hunter of the Consumer Federation of America (CFA) says those flooded basements, ruined rooms and possessions that are destroyed will not be covered by homeowners’ policies and many — who cannot afford repairs — will lose everything.

Hunter — a former insurance commissioner — thinks the flood damage alone to hit $35 billion.

Morgan Stanley predicts insurers in Texas will end up losing billions in claims. Like Hunter, the bank thinks damages will be very high and will hit $30 to $40 billion. When you adjust for inflation, Harvey could end up as the most expensive storm in U.S. history. Here’s the bank’s estimates as to which insurers have the most insured in the area:

Homeowners Market Share • • • • •

State Farm — 21.5% Allstate — 12.7% Farmers — 10.9% USAA — 10.1% Liberty Mutual — 8.2%

Commercial Multi-Peril Property Market Share • • • • • • • • • •

HIG — 8.2% TRV — 7.7% Nationwide — 6.9% Farmers — 5.8% CB — 5.7% Liberty Mutual — 5.4% Argo Group — 4.7% AIG — 3.9% Allstate — 3.6% State Farm — 3.4%

One positive with the hurricane is that it will get Congress moving on the renewal of the National Flood Insurance Program (NFIP).

It is currently $24 to $26 billion in debt — depending on who you talk to — and Hurricane Harvey will definitely add to that debt.

House Financial Services Committee Chairman and Texas Republican Jeb Hensarling said, “I’m just hopeful this will provide the urgency and onus to get this bill on the floor. We need to make sure we don’t compound a physical tragedy today with a fiscal tragedy tomorrow.”

The NFIP expires on September 30th.

The House has a bill already done but the Senate — typically — is lagging. One is sitting in the Senate Banking Committee but not much has been done with it and a new proposal is being kicked around.

Ohio Democrat Sen. Sherrod Brown is the top Democrat on the committee. He says a shortterm extension can be done if no agreement is reached. “It is too early to determine how hurricane Harvey will impact the timeline. But it is likely that Congress will pass a shortterm extension to ensure the program doesn’t lapse,” he said.

David Sampson is the president of the Property Casualty Insurers Association of America (PCI).

He wants to see at least a six-month extension of the NFIP if Congress can’t get it figured out by the end of September.

“While PCI and our members support meaningful reforms to the program, passing a minimum six-month extension of the program will allow time for many of the claims from Hurricane Harvey to be settled and any ongoing concerns identified and addressed before Congress and FEMA make significant reforms to the program,” he said.

September 2017 | Main Street Industry News | www.pianeia.com | 13

TOP STORIES Hensarling is not in favor of a short-term deal. Neither is R.J. Lehmann who is a senior fellow at the conservative think tank R Street Institute. “Harvey should make it clearer that the way we’ve been doing things has not been sustainable and changes need to be made.

But lawmakers are not going to want to whack people who are already suffering from the hurricane with more costs,” he said.

What’s most interesting about the flood insurance renewal debate and Hurricane Harvey is that private insurance — still — wants to be involved in the renewal and wants to be able to sell flood insurance.

Sampson said the House bill calls for more involvement by private insurers. “The bill would

allow more private sector risk-bearing, thus relieving some of the taxpayer burden that the program is under now. One immediate lesson that we have already learned from Harvey and recent previous storms is that too few homeowners and businesses have flood protection and this bill also would expand consumers’ flood options,” he said.

Robert Gordon — who is a senior vice president of policy research for the PCI — agrees. “I don’t think [Harvey] changes the dynamic for insurers. Insurers are becoming increasingly comfortable with the modeling” and are willing to start writing policies.

Sources: NBC, The Washington Post, Insurance Business America, PropertyCasualty360.com, Insurance Journal, Associated Press, Bloomberg

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Congress in September All Eyes on Flood Reform

Congress has ideas on how to reform the National Flood Insurance Program (NFIP). And that task needs to be completed by the end of September. Both the House and Senate have bills they’re considering but neither has passed.

Insurance agents and agencies, realtors, banks and others involved with flood insurance are holding their collective breaths.

The Trump administration also has a big interest in what happens with the NFIP. Brock Long is the new administrator of the Federal Emergency Management Agency (FEMA).

He wants homeowners, cities and states to

bear more responsibility for the cost of flood damages.

Long says taxpayers ought not be on the hook for homes that keep flooding. He also thinks the threshold where government steps in to help is too low. “I don’t think the taxpayer should reward risk going forward. We have to find ways to comprehensively become more resilient,” he said.

Here’s another angle. Long says he can shift those costs to state and local governments without legislation passed by Congress.

Environmentalists — to a certain extent — support Long’s contention. They want cities and counties to enact stronger and more stringent building codes and fewer things built in flood zones.

September 2017 | Main Street Industry News | www.pianeia.com | 15

TOP STORIES As expected cities, counties and homeowners are complaining but clearly something needs to be done. It’s heavy on the mind of both Houses of Congress whose bills — if they ever get passed — address a number of important issues. Some of them — like eliminating homes from the NFIP that flood over and over again — have Long’s support.

“There are a handful of properties that create a large portion of that cost burden. We’ve got to start there, and at some point cut that off,” Long said.

That handful is 30,000 homes FEMA classifies as severe repetitive loss and Laura Lightbody of Pew Charitable Trusts says that’s too many.

“Why is the federal government continuing to foot the bill to rebuild properties we know are going to flood again?” she said.

Long says the current threshold for when the federal government steps in is $1.43 of damage per state resident. That started at $1 per person in 1986 and Long wonders if the threshold is way, way too low considering that number hasn’t really kept up with inflation.

One thing we are likely to see with the reforms being planned is more flood insurance being sold by the private sector. Poulton Associates has one of the largest private flood insurance programs. Its CEO Craig Pouton said, “It is inevitable that the private market will assume the dominant position of flood (insurance) in the United States. When you look at how much of each dollar is available to pay a claim and what is paid in, you understand why there’s a $24 billion deficit,” he said.

Poulton — like Long — says the taxpayers have had enough. “Whatever works for homeowners [market] is going to work for flood. Let’s get it insured and let’s move forward. Overall, both the NFIP and the private market will deliver lower rates if you unleash the invisible hand.

That’s the way we see it, and we think we’ve demonstrated that.”

New ways of doing catastrophe models will help private insurers keep flood insurance affordable.

Sources: Insurance Journal, Insurance Business America, PropertyCasualty360.com

“Is it a true indicator? Some would argue that it’s too low,” he said.

September 2017 | Main Street Industry News | www.pianeia.com | 16

TOP STORIES The average cost — as noted earlier — is $8,469.

AAA’s John Nielsen said, “Determining the cost of a new vehicle car is more than calculating a monthly payment. While sales price is certainly a factor, depreciation, maintenance, repair and fuel costs should be equally important considerations for anyone in the market for a new vehicle.”

Here is how those factors factor into the AAA study:

The High Cost of Driving On average — in 2017 — it costs you $8,469 a year to drive a vehicle in the United States.

That’s how AAA’s Your Driving Costs survey sees things. That averages out to $706 a month.

This year four new vehicle segments were added: • • • •

Small SUV Pickup trucks Hybrids Electric vehicles

Small sedan — $6,354 Small SUV — $7,606 Hybrid — $7,687 Medium sedan — $8,171 Electric vehicle — $8,439 Minivan — $9,146 Large sedan — $9,399 Medium SUV — $9,451 Pickup truck —$10,054

This is the biggest and most overlooked. A new vehicle can lose as much as $15,000 in value in the first five years. The lowest depreciation was found in: • Small sedans — $2,114 • Small SUVs — $2,840 The most value loss is in: • Minivans — $3,839 • Electric vehicles — $5,704

Maintenance and repair

Here’s the chart based on driving 15,000 miles a year. Small sedans are the least expensive and pickups are the most expensive: • • • • • • • • •

Depreciation

This is recommended maintenance, extended warranty and normal wear and tear services.

A new vehicle costs about $1,186 a year to maintain.

AAA says this is one new car shoppers need to pay close attention to before a purchase. Close to a third of those polled could not afford an emergency repair.

Fuel

Those costs vary depending on the vehicle and go from 3.68 cents per mile for an electric vehicle to 13.88 cents a mile for a pickup. New vehicle owners spend about a dime a mile or $1,500 a year for gas, diesel or electricity.

September 2017 | Main Street Industry News | www.pianeia.com | 17

TOP STORIES A word about electric vehicles. They’re the lowest to maintain at about $982 per year. Fuel costs are also significantly lower and sit under 4.0 cents per mile. However, depreciation on these things is huge. They have an average of $6,000 in value per year.

Nielsen said that’s why just one in six of us would choose to drive one and those that do are motivated by the long-term lower costs of operation. “Although electric vehicles can have higher up-front costs, lower fuel and maintenance costs make them a surprisingly affordable choice in the long run. For even lower costs, car shoppers can avoid high depreciation costs by selecting a used electric vehicle,” he said.

Source: AAA

Driverless Vehicles Never Thought of This One Here’s something those working on driverless vehicles didn’t think about: graffiti on road signs. Researchers at Washington State University say road signs that have been tampered with can totally confuse a driverless vehicle.

The discovery is now being viewed as a big threat to the budding industry.

The researchers said the vehicles they tested can potentially misread signs and could — in some instances — endanger the lives of passengers. Much of the problem is being blamed on hackers who — knowing how easily confused the vehicles can get — can deliberately alter a road sign and cause it “to misbehave in unexpected and potentially dangerous ways.”

Here’s an example researchers used. They applied stickers to a stop sign and they read “love/hate.” That caused the vehicle’s computer system to read it as speed limit 45. So instead of stopping the vehicle continues into the intersection.

Another experiment had them print out a right turn sign that was identical to the real thing. When they placed it on the road the vehicle was confused by the colors and thought it was a stop sign and stopped.

The report said the goal of the research is to help builders build a safer self-driving vehicle and it concluded: “Both of our attack classes do not require special resources — only access to a color printer and a camera.”

Source: Insurance Business America

September 2017 | Main Street Industry News | www.pianeia.com | 18

TOP STORIES impact on the premium dollars paid by farmers and no impact on payouts for losses.

The report’s bottom-line said about a third of the costs to the federal government for the crop insurance program is subsidies to private insurers to take care of overhead. And that overhead — specifically mentioned — is 12,500 agents who write and service the policies for 1.2 million farmers.

The GAO & Feinstein Target Crop Insurance The General Accounting Office (GAO) says the U.S. Department of Insurance could save millions of dollars by cutting the profits of private crop insurers. The report said it can be accomplished by cutting profits and putting a cap on payments that cover the administrative costs of the insurer. It also suggests the department take on more of the risk itself and share it with companies that have earned $240 million a year in every year but two since 1986.

The idea for the report came from California Democrat Sen. Dianne Feinstein. She wants to know how the government can save more money on the upcoming 2018 farm bill. And here’s why she’s interested.

A report issued earlier this year by the GAO said the crop insurance program will cost the federal government $7.9 billion from this year through 2026. The federal government — the report noted — pays most of the premiums with farmers paying about 38% on average.

All combined and totaled up, the GAO says between now and 2026 insurers will earn $1.3 billion in profits. That — the GAO noted — could be reduced by $364 million a year with no

That didn’t work for Feinstein who said, “Crop insurance is a vital piece of our farm safety net, but this analysis by GAO suggests that changes could be made to save taxpayer dollars and improve program efficiency for our farmers.

It deserves full consideration by members of Congress.”

PIA National — and the independent insurance agents that sell crop insurance that belong to PIA — no doubt disagree with the GAO’s report that the income of the 12,500 agents selling crop insurance is overhead. It is earned and the contribution of those agents is important.

“The Federal Crop Insurance Program (FCIP) is a highly technical program that relies on the expertise of independent insurance agents. The FCIP provides our nation’s farmers with the ability to manage their risk and continue to produce a safe, strong, and dependable food supply,” PIA National says in its policy on crop insurance.

Agents have been delivering insurance for the federal government since the 1980s and to make the cuts Feinstein and the GAO might be thinking is not a good idea. “As the face of the FCIP, crop insurance agents work every day to deliver unprecedented financial protections, service, and value to farmers. By navigating through the technicalities inherent in the program, crop insurance agents help agricultural producers make sound risk assessments.”

Sources: Insurance Business America, PIA National

September 2017 | Main Street Industry News | www.pianeia.com | 19

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Insurers & Data Now What?

Data is being gathered just about everywhere.

Use your computer, your phone, your tablet, start your car — heck — even open the refrigerator or turn on the microwave and someone, somewhere is gathering information about that use.

Insurers — for decades — has been gathering data about clients but the International Institute for Analytics (IIA) says insurers are among the lowest ranked industries for using that data and interpreting what it means.

Aite Group senior analyst Samantha Chow says insurance ranks 12th and needs to improve.

“We have this data, but we can’t make heads or tails of it because we have data integration problems and there’s no data governance.

Insurance carriers are hiring data analysts and data scientists, but it’s very fragmented. They don’t have the support they need [to improve] their targeting, products, pricing — all of these things they’re trying to do,” she said.

Chow and her group say lead generation is one of the areas where insurance does the worst job. Older agents do lead generation but their ranks are declining. Younger agents are more into online prospecting and these days more and more business is being done online. Insurers and agents and agencies haven’t adapted. Chow said lead generation done online involves data, external partners and internal systems working together. When that happens and it all comes together, then and only then can compelling offers be sent to consumers.

“We’re seeing acquisition costs go down [among auto insurance carriers] but [for the rest] it’s going to be learning who your target market is, having the supporting data, and being able

to hone in on that particular consumer. It’s not going to be easy,” Chow said.

Another area that needs improving is triggers.

That’s when clients say they’re interested in a product or need a specific type of insurance.

The industry isn’t able to make the data it has on triggers work to get these people called upon.

Source: Insurance Business America

Another look at Jobs Weekly Industry News often looks at jobs and how we view jobs Last week we saw how the workplace — in the eyes of many employees — hostile, stressful and grim. This week we learn that people start really hating their jobs at about the age 35.

The Robert Half U.K. polled 2,000 employees and one in six over the age of 35 said they are unhappy with their job. That’s double the number under the age of 35. And it gets worse for those over 55: • 33% of those 55 and older say they aren’t appreciated • 16% say they don’t have any friends at work The Manchester Business School’s Cary Cooper said workers over 35 start families and the career path gets interrupted with real life, “There comes a time when either you haven’t achieved success, work has burned you out, or lived experience tells you family is more important.

You ask yourself: ‘What am I doing this for?’”

And this might be something employers will want to note. By 2024 one of four — 25% — of U.S. workers will be over the age of 55.

Source: Bloomberg

September 2017 | Main Street Industry News | www.pianeia.com | 20

Utica’s Agents’ Errors & Omissions Program is all about…

CUSTOM POLICIES TO MEET YOUR NEEDS E&O Postcards 9A2132.indd 1

6/13/11 3:1

PIA of Nebraska & Iowa (402) 392-1611 www.pianeia.com

TOP STORIES

EMERGENCY PLANNING Maybe it’s Time to have THE Talk

Hurricane Irma has devastated Florida and caused untold billions — some say as much as $200 billion — in damages. People were told to evacuate. Some people did. Others did not. In Houston and surrounding areas, people were told to evacuate because of Hurricane Harvey. Like Hurricane Irma, some did. Some did not.

September 2017 | Main Street Industry News | www.pianeia.com | 22

TOP STORIES Some of us just hunker down. But hunkering down often means we have no idea what it will take to survive a long, maybe dangerous event without services like water, electricity, etc. We also don’t think how we’re going to eat during a one, two or even three-week disaster.

Lisa Lindsay is the executive director of Private Risk Management Association (PRMA). It is a non-profit firm that basically offers advice, coverage and service to high net worth insurance consumers.

Her advice to them shared via an article Weekly Industry News found on National Underwriter’s PropertyCasualty360.com — however — is good advice for consumers whether they are wealthy or poor. Since your customers — like most — probably aren’t good at planning, her advice is good advice for you to share with them.

A different kind of storm is hitting the West.

Cities around the West are being threatened by fire. Authorities are telling people to pack up and get out or face great harm or even death.

The point? We are sometimes in an instant told it is time to pack up and leave and we are ill-prepared for that announcement and for disaster. We tend to think it always happens to someone else.

One of the reasons people don’t leave is because they are not prepared and don’t know what to take and what to leave. Or if they leave all of the sudden, key and critical items are left.

“For most insurance agents and brokers, the preparedness topic quickly translates to disaster preparedness. You know, that annual conversation you have with your client right before hurricane season starts on June 1. Or maybe it’s the conversation you have with your client prior to wildfire season or spring flooding. Whatever triggers a preparedness conversation, the fact is that most advisors are simply scratching the surface,” she wrote.

Her advice is to — in advance — look beyond the obvious and help your clients assess risks based on their family and lifestyle. Once that is established then Lindsay says create actionable steps to take when an emergency hits. Here’s what she believes is a place to start when helping your clients create a plan. Figure out: • The emergencies most likely to happen • An action plan

September 2017 | Main Street Industry News | www.pianeia.com | 23

TOP STORIES • A communication plan • Personal safety • Protection of property

POSSIBLE EMERGENCIES

for survival: • Names and contact info for all family members • Where to meet if an evacuation is necessary

• Fire

• If children are involved what schools and where

• Weather-related events — floods, tornadoes, winter storms, landslides, etc

• Emergency contact info for family members outside of the local area

• The failure of infrastructures — electricity, water, sewer • Travel troubles • Terrorist threats

ONCE EMERGENCY POTENTIAL IS IDENTIFIED — CREATE A PLAN FOR EACH POSSIBLE EMERGENCY Each member of the family will have an assigned role and responsibility in the plan. Here’s what Lindsay says you need for that plan:

Lindsay said a good communication plan means you need to be asking questions like, “If something happens during the workday, where are my family members likely to be, and how will we stay connected if we are not together?

This question should be considered for everyone in the family and should account for different schedules based on the time of day.”

PERSONAL SAFETY.

Here are some questions she says need to be asked about the home:

• Who is responsible for the disaster kit

• Smoke and carbon monoxide detectors — are they working?

• Who monitors news and updates

• Do we regularly test them?

• Who is in charge of pets

• Fire extinguishers — are they working?

• Who manages family documentation

• Do we all know where they are and how to use them?

• Who manages family medication • Who keeps the family contact and communication plan up to date • Who is responsible for the protection of property

DETAILED COMMUNICATION PLAN.

This is where you make sure everyone is accounted for and that they are safe and that you have access to the resources necessary

PERSONAL SAFETY WHEN TRAVELING: • Who is responsible for keeping up to date on pending danger like wildfires, acts of terror, etc.?

DOCUMENTS ARE CRITICAL, TOO.

The website Smart About Money says people

September 2017 | Main Street Industry News | www.pianeia.com | 24

TOP STORIES also need to plan to protect valuables and important documents. Things to track: • Legal certificates • Wills • Powers of attorney • Insurance policies — of course • Social Security cards • Bank account information • And your checkbook & credit cards • If you can’t take them with you, put them in a safe or a well-protected place

These are the things she says you should be talking with your clients about and it’s a good PR move to give them a hand and help them be ready.

“Raising awareness and helping your client create a personal preparedness plan is crucial to maintaining a personal risk management strategy. The plan should be detailed and specific and should cover all potential risks that can be monitored, updated and tested regularly,” Lindsay wrote.

Key words: updated and tested regularly.

Sources: PropertyCasualty360.com, Smart About Money, City of Virginia Beach

PROTECT YOUR HOME.

On its website, the City of Virginia Beach said a number of things that need done.

• Itemize your furniture and clothing • Itemize other valuables • Make a video recording of your valuables or at the very least take pictures • Learn how to shut off your utilities

LINDSAY TAKES THAT A STEP FARTHER: • Who is responsible for removing what valuable items from the home?

• If the property remains on site who is in charge of making it secure and safe from damage?

• If staying in the home during the emergency who is responsible for making sure back up battery power is available or that the home generator is working and ready to go?

September 2017 | Main Street Industry News | www.pianeia.com | 25

Andy Kraus, CPCU | Vice President of Agencies | 800.742.7433 | akraus@fmne.com

fmne.com

The Markel difference Service | Strength | Specialists

Markel Specialty | markelinsurance.com markelcorp.com Markel Specialty is a business division of Markel Service Incorporated and has over 70 years of experience in niche markets, with a product focus on commercial and personal lines insurance. Policies are written by one or more Markel insurance companies. Terms and conditions for rate and coverage may vary.

PIANEIA.COM 402.392.1611

PIA NE IA EVENTS

Upcoming Events Calendar 2017 For information and to register Click Here or call (402) 392-1611.

Date

Class/Webinar

Where

When

September 6, 2017

Regarding Ethics

NE/IA

Webinar: 1:00PM - 4:00PM

September 13-16, 2017

Fall Governance Meetings

Minneapolis, MN

Marquette Hotel, Minneapolis, MN

September 13, 2017

CISR: Agency Operations

Hiawatha

Kirkwood Linn Regional Center

September 13, 2017

CISR: Agency Operations

Hiawatha

Kirkwood Linn Regional Center

September 13, 2017

Home Business vs. Home Insurance

NE/IA

Webinar: 12:00PM - 3:00PM

September 19, 2017

CISR: Dynamics of Service

Des Moines

Hilton Garden Inn Des Moines/Urbandale

September 19, 2017

Commercial Property Claims that Cause Problems

NE/IA

Webinar: 12:00PM - 3:00PM

September 19, 2017

CISR: Dynamics of Service

Des Moines

Hilton Garden Inn Des Moines/Urbandale

September 20, 2017

Top 12 Coverage Countdown

NE/IA

Webinar: 12:00PM - 3:00PM

September 21, 2017

Man Vs. Machine

NE/IA

Webinar: 12:00PM - 3:00PM

September 26, 2017

Executive & Management Liability

NE/IA

Webinar: 12:00PM - 3:00PM

September 26, 2017

Farm Seminar 2017: Propping Up Your Property Placements & Ethics Awareness

York

Holthus Convention Center

September 27, 2017

Commercial Liability Endorsements To Watch NE/IA Out For

Webinar: 12:00PM - 3:00PM

October 4 - 6, 2017

CIC: Commercial Multiline Institute

Lincoln

Marriott Courtyard

October 10, 2017

CPIA 2: Implement for Success

Omaha

Hilton Garden Inn- Omaha

October 11 - 13, 2017

CIC: Commercial Casualty Institute

West Des Moines

Holiday Inn Hotel & Suites

October 11-13, 2017

CIC: Commercial Casualty Institute

West Des Moines

Holiday Inn Hotel & Suites

October 11, 2017

Street Level Ethics

NE/IA

Webinar: 12:00PM - 3:00PM

October 11, 2017

CPIA 2: Implement for Success

Des Moines

Hilton Garden Inn Des Moines/Urbandale

September 2017 | Main Street Industry News | www.pianeia.com | 28

PIA NE IA EVENTS October 13, 2017

Tricks to Fix: Closing Coverage Gaps in Home, Work and Auto

Iowa

Webinar: 8:00AM - 11:00AM

October 16 December 8, 2017

MERG: Commercial Lines Coverage Basics

NE/IA

Online Course

October 16 November 24, 2017

MERG: Delivering Quality Service (to the Customer and the Employer)

NE/IA

Online Course

October 18, 2017

CISR: Agency Operations

Des Moines

Hilton Garden Inn Des Moines/Urbandale

October 18, 2017

CISR: Agency Operations

Des Moines

Hilton Garden Inn Des Moines/Urbandale

October 19, 2017

Cyber Liability - the 21st Century Peril

NE/IA

Webinar: 12:00PM - 3:00PM

October 19, 2017

E&O Loss Prevention

NE/IA

Webinar: 8:00AM - 11:00AM

October 20, 2017

Insuring the Building Project - Builders & Risk Installation Coverage

NE/IA

Webinar: 8:00AM - 11:00AM

October 24, 2017

CPSR: Commercial Casualty

Kearney

Holiday Inn Express

October 24, 2017

Additional Insureds: The Quandry

NE/IA

Webinar: 12:00PM - 3:00PM

October 25, 2017

Construction Defects: Property Damage and the ISO CGL

NE/IA

Webinar: 12:00PM - 3:00PM

October 26, 2017

CISR: Personal Lines Miscellaneous

Davenport

Saint Ambrose University

October 26, 2017

CISR: Personal Lines Miscellaneous

Davenport

Saint Ambrose University

October 26, 2017

Current Trends & Changes: The Homeowner & Auto Marketplace

NE/IA

Webinar: 12:00PM - 3:00PM

November 2, 2017

Certificates and Additional Insureds: Navigating the Maze

NE/IA

Webinar: 12:00PM - 3:00PM

November 6, 2017

FLOOD INSURANCE

Nebraska

Webinar: 12:00PM - 3:00PM

November 9, 2017

CISR: Commercial Casualty 2

Hiawatha

Kirkwood Linn Regional Center

November 9, 2017

CISR: Commercial Casualty 2

Hiawatha

Kirkwood Linn Regional Center

November 9, 2017

Home Business vs. Home Insurance

NE/IA

Webinar: 12:00PM - 3:00PM

November 14, 2017

CISR: Insuring Commercial Property

Des Moines

Hilton Garden Inn Des Moines/Urbandale

November 14, 2017

CISR: Insuring Commercial Property

Des Moines

Hilton Garden Inn Des Moines/Urbandale

November 14, 2017

How to be the Agent Advocate at Claim Time NE/IA

Webinar: 12:00PM - 3:00PM

November 14, 2017

Leases & Contracts Vs. The Insurance Policy

Webinar: 8:00AM - 11:00AM

NE/IA

September 2017 | Main Street Industry News | www.pianeia.com | 29

PIA NE IA EVENTS November 15-17, 2017

CIC: Life & Health Institute

Omaha

Hilton Double Tree Omaha SouthWest

November 16, 2017

Top 12 Coverage Countdown

NE/IA

Webinar: 12:00PM - 3:00PM

November 28, 2017

Regarding Ethics

NE/IA

Webinar: 1:00PM - 4:00PM

November 30, 2017

Commercial Property Claims that Cause Problems

NE/IA

Webinar: 12:00PM - 3:00PM

December 7, 2017

Street Level Ethics

NE/IA

Webinar: 12:00PM - 3:00PM

December 7, 2017

Tricks to Fix: Closing Coverage Gaps in Home, Work and Auto

NE/IA

Webinar: 8:00AM - 11:00AM

December 7, 2017

Street Level Ethics (NE)

NE/IA

Webinar: 12:00PM - 3:00PM

December 11, 2017

Commercial Liability Endorsements To Watch NE/IA Out For

Webinar: 12:00PM - 3:00PM

September 2017 | Main Street Industry News | www.pianeia.com | 30

PIA NE IA EVENTS

SURPRISE!

ObamaCare’s

Death Greatly Exaggerated It was Mark Twain who once quipped: “The reports of my death are greatly exaggerated.”

The same — say many involved in healthcare — can be said for the Affordable Care Act. While some Republicans and President Trump continue to declare ObamaCare dead, statistics say health insurance is going to be sold in every part of the U.S. in 2018. The last holdout — apparently — is a small county in Ohio and now it will be served by CareSource.

names of the attendees have been released yet.

The second hearing will look at pushing a bill that forces President Trump to make the costsharing reductions (CSR) to health insurers for one year.

Source: Insurance Business America

Here’s where the death is not greatly exaggerated. All counties in the country are now covered but that coverage is hugely limited and some places have only one insurer to choose from.

Fixes are in order. What to do about the Affordable Care Act and how to fix the parts that need fixed will start in September. The Senate Health Committee — and its chairman Sen. Lamar Alexander — will hold two hearings on how to stabilize the exchanges.

And this will be a bipartisan effort as both Republicans and Democrats are involving themselves in solutions. A bill is being crafted to slow rising premiums for those buying their own insurance.

The first hearing is September 6th and it will feature state insurance commissioners. No September 2017 | Main Street Industry News | www.pianeia.com | 31

Help Keep Your Agency Active If You Should Become Disabled...

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PIA SERVICES GROUP INSURANCE FUND

Additional information is also available on-line at www.piatrust.com. * PIA National membership, when required, must be current at all times

The policy or its provisions may vary or be unavailable in some states. The policy has exclusions and limitations which may affect any benefits payable.

Underwritten by Unimerica Insurance Company, Association Administrative Address, P.O. Box 17828, Portland, Maine 04112-8828, under Policy Form ADI-4001-A (UIC).

Insurance Program Administered by Lockton Affinity, LLC.