DELAWARE

ALSO INTHISISSUE: ________________ How to insure volunteers Proposals’ E&O power Why not to ignore Google+

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Contents PRIMARY AGENT MAGAZINE Growing agency-carrier relationships Goodbye, paragraph of legal jargon and resulting paralysis. Hello, definitive analysis and enhanced agency-carrier relationships. IA&B’s new agency agreement analyses empower agencies and open lines of communication with carriers.

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Page 12 2013 Company Satisfaction Index Members can have their cake and eat it too with IA&B’s Company Satisfaction Index. The survey, which remains open until May 15, allows them to share praises and frustrations – and to contribute to a tool that benefits agencies, carriers and the association alike.

Page 18

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IA&B Marketing Center Share your insight with consumers (customers and prospects) through local media outlets. The new Marketing Center offers public relations strategies, template press releases and a print-media contact database, along with step-by-step instructions on how to use each.

Page 20 Mission Statement Primary Agent delivers ideas to help Insurance Agents & Brokers’ members negotiate their unique position as guardians of trust between insurance consumers and companies while facing the challenges of maintaining a small business. Primary Agent also supports IA&B’s mission to preserve and advocate the American Agency System.

Get social with IA&B

In every issue 4 5 6 8 10 15

Chair of the Board’s Message Member FAQ State News Preventing E&O Coverage Corner Glance at Events

17 22 IBC IBC IBC

IA&B Partners Technology Update Advertisers Index Classified Ads Last & Least

Subscriptions: Non-member price: $2.25 per copy or $15 per year. All communications for publications, including news, features, advertising copy, cuts, etc., must reach the editor by 1st of month two months prior to publication. Advertising rates furnished upon request. Address inquiries to: Primary Agent Editor 5050 Ritter Road Mechanicsburg, PA 17055-0763 Phone (800) 998-9644 or (717) 795-9100 Fax (717) 795-8347 Periodical postage paid at Mechanicsburg, Pa. and additional entry post office. Ride-along enclosed. Postmaster: Send address changes to above address. Primary Agent (ISSN 1543-3110), Permit # 638-620, Issue # 2013-5 is published monthly by IA&B Service Group Inc., a subsidiary of IA&B.

Copyright 2013. All rights reserved. No material may be reproduced in whole or in part without written consent of the publisher. The information in this publication is general in nature and is not intended to serve as legal, accounting, financial, insurance, investment advisory or other professional advice as to any reader’s particular situation. Users are encouraged to consult with competent legal, financial, insurance, investment advisory and or other professional advisors concerning specific matters before making any decisions and we disclaim any responsibility for any decisions or actions by readers. Statements of fact and opinion in Primary Agent are the responsibility of the authors alone and do not imply an opinion on the part of the officers or the members of the IA&B. Participation in IA&B events, activities and/or publications is available on a non-discriminatory basis and does not reflect IA&B endorsement of the products and/or services.

Board of Directors

Norman F. Basso, CPCU

Officers

Chair of the Board’s

Norman F. Basso, CPCU Chair of the Board York, Pa. G. Greg Gunn, CIC Vice Chair of the Board Lemoyne, Pa.

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Robert B. Hall, CPCU, CLU, ChFC, ARM, ARM-P Immediate Past Chair of the Board West Chester, Pa.

Members

The latest in a long line of member benefits

Joyce M. Bailey, CIC, CRM, CPIW Newark, Del. Henry “Butch” Bradley, Jr. Forest Hill, Md. Timothy P. Burris Mifflintown, Pa. N. Lee Dotson, CIC, AAI Wilmington, Del.

Greetings, and welcome to the May issue. This spring, we have something beyond warm weather, longer days and vacation countdowns to celebrate. The IA&B team unveiled a new tool that is going to have a pretty exciting impact on the agency/carrier relationship. It’s a whole new approach to agency agreements. The new resource is detailed on page 12, but the gist is that the association revamped the review process. It’s unlike anything anyone else is doing. So now instead of going into an agreement blind or stumbling through legal jargon, member agencies can approach an agreement with confidence — or with specific suggestions for improvement.

Michael P. Ertel Columbia, Md. John L. Frankenfield Telford, Pa. John B. Hollister Milford, Pa. Diana M. Hornung Hanby, ACSR Wilmington, Del.

Robert S. Klinger, LUTCF, CPIA Germantown, Md.

This is just the latest in a long line of resources your association has delivered. I encourage you to take advantage of your membership by using this and IA&B’s other tools. They’re yours for the taking. Just visit your association's website at www.iabgroup.com.

Douglas A. Loesel, CPCU Erie, Pa.

Until next month,

Jocelyn R. Howard-Sinopoli, CIC, CISR Butler, Pa. +

Michael F. McGroarty Sr. Pittsburgh, Pa. Craig S. Mader Gambrills, Md.

Norm Basso

Ann Gallen Moll, CIC Reading, Pa. Joseph R. Pastor, CPCU, AAI Oil City, Pa. April E. Ressler, CIC Altoona, Pa. Scott C. Rogers, CPIA* York, Pa. David B. Wasson Sr., CIC State College, Pa. Lawrence A. Wilson, CIC, CPIA, CPCU, ARM** New Castle, Del.

* Pa. IIABA National Director ** Del. IIABA National Director + Md. PIA National Director

Driving members to distinction. [4]

Member FAQ same way they do, and view the offer as an attempt to force us to accept coverage that we just don’t want.

QUESTION: One of my carriers is asking us to send a letter to our homeowner policyholders, notifying them that we will be adding Identity Theft coverage to their policies at renewal. In the letter, we will ask them to “opt out” if they don’t want it. Can we do that?

As the saying goes, “The road to hell is paved with good intentions.” While your goal is to protect customers whose coverage you view as lacking, from the regulators’ standpoint, it is an unfair trade practice. The coverage selection needs to be based on an opt-in mechanism. From a marketing standpoint, you need to rethink the offer so that your customers make the decision to add the coverage onto the policy, not to remove it. Will it be as effective? Probably not. Will you be less likely to explain yourself to the regulator and pay a fine? Absolutely.

ANSWER: No. The regulators in Delaware, Maryland and Pennsylvania have long viewed this as impermissible. Sometimes referred to as “negative automatic roll-on,” the gist of the practice is that customers are forced to monitor and opt out of offers in order not to be charged extra at renewal.

DO YOU HAVE A QUESTION? Email it to us at iab@iabgroup.com. Please use “Primary Agent FAQ” in the subject line of your message. You can also fax your question to 717-795-8347. We look forward to answering your questions!

While as independent insurance agents, we often have strong feelings about some of the coverage choices made by our customers, the reality is that if we were on the receiving end of this kind of offer, we would likely react the

[5]

State News Primary Agent | May 2013

Using replacement cost estimators without fear Arming oneself with a disclaimer can be the best protection when handling a double-edged sword like replacement cost estimators. Producers using estimators sometimes are uncertain about the value calculated by the software. And they sometimes worry it could expose their errors & omissions if customers over-rely on the amount — or claim they did — when selecting their policy limits. To help members limit their exposure, DAIAB developed a disclaimer that producers can use and tailor to their agency as they see fit. The disclaimer reminds applicants that the use of the estimator is not a guarantee that the actual cost to repair will match the amount calculated. In addition, language is also available for those who choose a lower limit and could be exposed to a loss settlement penalty if they do not meet the insurance-tovalue requirement. www.iabgroup.com/ de/rc_estimator

CGL and CP changes in effect; class addresses revisions Don't be fooled post April 1. That was the effective date of multistate filings submitted by the Insurance Services Office (ISO) for the Commercial General Liability (CGL) and the Commercial Property (CP) forms and endorsements. From liquor liability, blanket additional insured, water exclusion or coverage for roof surfacing, and more, the changes impact many different facets of the policies. To help members keep up with the revisions, and keep E&O at bay, DAIAB developed a course that will allow producers to understand how the changes expand or reduce coverage, and ultimately how their insureds are impacted. Several course offerings remain this spring, including on Tuesday, May 21 in Baltimore, Md. And on Thursday, May 23 in Lancaster, Pa. DAIAB members must start preparing for carrier implementation. As with any ISO filing, some carriers will automatically adopt the changes, others may delay the adoption, and others still may adopt some of them and file their own separate forms, picking and choosing the items they wish to retain. www.iabgroup.com/education

[6]

DAIAB members talk shop in D.C.

Mapping out DAIAB’s future

Independent agents’ voices were heard on Capitol Hill. DAIAB members — along with agents from across the country – congregated in Washington, D.C. on April 17-18 for the annual IIABA (Big “I”) National Legislative Conference.

DAIAB members, staff and leadership put their heads together at the April 25 Member Agent Panel (MAP) meeting in Dover. The issues at hand? How the association can best support members in their disaster preparedness, technology needs, and marketing and branding efforts.

Participants met with their congressional delegation to discuss terrorism risk insurance, health care, insurance regulation and agent licensing, among other hot-button federal legislative issues. A sincere thank-you goes out to the agents who participated, as well as to Travelers, which sponsored DAIAB’s dinner reception for attending members on April 17.

The now-annual MAP allows members, most of whom are agency owners and principals, to weigh in on their needs, industry issues and the association’s direction. Each meeting also includes overviews of the regulatory and legislative climate and DAIAB’s recent activities, as well as an open forum for attendees to swap struggles and solutions.

As always, participants’ feedback now heads to the DAIAB Board of Directors. Watch for updates and outcomes of the April MAP meeting in Agent Headlines and upcoming issues of Primary Agent.

WELCOME

New Members Garrity Insurance Agency Smyrna, Del.

May 29-30 • Atlantic Sands Hotel • Rehoboth Beach • Delaware

ts, en g y an na d Joi comp an es s, v i R t CS ra s, nta ese ors fo ivitie r p s t c re n nd spo x of a on a i i t a m n uc at tio gre ity ed ogni nual n ec al rr qu 's a . pee year n o i s t thi ven n at co

Elite Sponsors:

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Preventing Primary Agent | May 2013

ERRORS AND OMISSIONS

INSURANCE PROPOSALS — A POTENTIALLY POWERFUL E&O PREVENTION TOOL CURTIS M. PEARSALL CPCU, AIAF, CPIA Curtis M. Pearsall, CPCU, AIAF, CPIA, president of Pearsall Associates Inc. and special consultant to the Utica National E&O Program, supplied this article. Insurance Agents & Brokers Service Group Inc. is the exclusive agent for the Utica

this proposal. Does the proposal help you understand the insurance program? Does it include references to terms such as ACV/RC or co-insurance? Are these terms defined?

Most agencies and their respective producers probably look at the insurance proposals they provide to customers and prospects as one of the key tools that will determine whether they land the account. In many respects, this is correct. While a great proposal does not guarantee success, a poor proposal almost certainly guarantees failure.

Educate customers and prospects If your proposals are structured strictly to provide an overview, you may be missing an important element — one that may actually play a role in landing the account while also providing some quality errors and omissions protection. What is it? Look for your proposals to educate your prospects and help them understand their insurance program. Educating customers and prospects has been shown to be a key issue in minimizing E&O claims activity.

E&O program in Delaware, Maryland and Pennsylvania. For questions regarding this article or your E&O coverage, contact IA&B at 800-998-9644 or iab@iabgroup.com.

Typically, the insurance proposal is broken down by line of business and lists the coverages offered/proposed and the corresponding premium. That’s fine and probably serves the purpose. For example, say you are providing a proposal to a hardware store. The store’s owner undoubtedly knows the hardware store business well, but how knowledgeable is he or she on the finer points of the insurance business? Imagine you are the hardware store owner who is receiving

If an E&O claim developed, the defense attorney (defending the agency) and the plaintiff’s attorney

[8]

(defending your customer) would review the agency file as well as all of the specific documents involved in the procurement of the coverage. You can bet that the proposal provided will be reviewed in depth. The goal is to ensure that when this occurs, the proposal helps your case, not hurts it. Customers and prospects heavily rely on proposals to make informed purchasing decisions. The best proposals clearly lay out the coverages offered, with documentation ultimately being made to detail what was — and was not — purchased. To ensure there is no misunderstanding, it is highly suggested to secure the insured’s signature/ acknowledgement detailing his or her buying decision. Moreover, to ensure thoroughness and consistency, the agency should have a standard template detailing what the

proposal should include and how it should be communicated. Without this, the potential exists that proposals will lack the necessary detail and explanation.

Where applicable, include a statement that clearly denotes that higher limits are available. This would certainly be applicable in references to an umbrella or excess limits policy.

Key ingredients of a proposal Detailed explanations and definitions of key terms. Just because the agency understands the terms does not mean the client does. Educating your client on the finer points of the proposal will help him or her better understand the insurance program and should also help minimize the potential for an E&O claim. As you present the proposal, look for opportunities to ensure that the prospect understands the material. Avoid abbreviations if there is any chance the customer will not understand what they mean.

Include A.M. Best information for each of the carriers, with an explanation of what the rating means. It is recommended to use the exact definition as provided by A.M. Best.

Look or your proposals to educate your prospects … a key issue in minimizing E&O claims activity..

Easy-to-understand information. The language should not be above the ability of the prospect to understand it.

If any of the carriers referenced is non-admitted, provide an explanation of what this means. Verbiage such as the following is suggested: The insurance company does not participate in any of the insurance guarantee funds created by [the applicable state] law should the insurance company become insolvent and be unable to honor claim payments. A clearer understanding At the end of the day, while your proposals may be a little longer, your client will have a much clearer understanding of the coverages proposed and how they work. This could very well be the difference that helps you land the account. Plus, if a problem develops down the road, the detail provided in your proposal could be key in the defense of your agency.

Include a disclaimer. There is no way the proposal can include every single aspect of the insurance program. A disclaimer, such as the following, will provide a degree of E&O protection:

Reference any mortgagee or loss payee you know of. Be as detailed as necessary. For example, if you are providing a proposal for Commercial Auto and some drivers are excluded, a reference to the excluded (or conversely acceptable) drivers is appropriate. When dealing with Workers’ Compensation, based on the corporate structure of the entity, reference should be made to whether the policy affords coverage for sole proprietors/partners. On General Liability, it should be clearly stated if the policy is “subject to audit.” For a Professional Liability/D&O policy, provide clarification on issues such as “retro date” and whether the defense is within or outside of the limit of liability.

Information contained in this proposal is intended to provide you with a brief overview of the coverages provided for reference purposes only. It is not intended to provide you with all policy exclusions, limitations and conditions. The precise coverage afforded is subject to the terms, conditions, and exclusions of the policies issued. In addition, if your agency has relied upon information provided directly by the prospect, consider including a statement such as “this proposal is based on information provided and we cannot attest to the accuracy of this information.”

[9]

Coastal Homeowners Insurance

Coastal Agents Alliance, LLC

ISO HO3/HO6 Immediate Quotes 15% commission Primary & Secondary Homes are eligible AM Best •A• Rated

For an appointment, contact:

Sharon Karlsson

Phone: 201-407-7151 skarlsson@coastalagentsalliance.com

Coverage Primary Agent | May 2013

CORNER

VOLUNTEERS — WHAT COVERAGE DO THEY HAVE? JERRY M. MILTON, CIC Jerry M. Milton, CIC teaches and consults on industry issues. The legal profession recognizes him as an expert on insurance coverages. He is also the education consultant for IA&B, working with CISR, CIC and continuing education programs.

Two questions. First, did the church’s Workers’ Compensation policy cover the medical expenses for Ms. Morse’s injuries? Second, was Ms. Morse an insured under the church’s Business Auto policy?

Margaret Morse, a member of Christ King church, was delivering a statue of the Virgin Mary to a parishioner on behalf of a volunteer service organization which consisted of members of the church. Ms. Morse ran a red light and crashed into a vehicle being driven by Hjalmar Heikkinen, an 82-year-old barber. Mr. Heikkinen suffered permanent paralysis as a result of the collision. In the case of Heikkinen v. United Services Automobile Association (USAA), Margaret E. Morse, Catholic Mutual Relief Society of America, and the Archdiocese of Milwaukee, the Wisconsin trial court awarded Mr. Heikkinen $16,308,366 for past and future medical expenses and past and future pain and suffering. In addition, the jury also awarded Mr. Heikkinen’s wife $500,000 for loss of consortium.

Workers’ Compensation The large majority of states, including Pennsylvania, Maryland, Delaware and Ms. Morse’s state of Wisconsin, do not extend coverage to volunteers under their workers’ compensation statutes. There are exceptions. Some states do extend workers’ compensation coverage to volunteers, especially volunteer firefighters, under their statutes. In some of those states that do recognize the volunteers’ rights to workers’ compensation, the coverage is mandatory. In other states, workers’ compensation coverage for volunteers is optional.

[ 10 ]

Since workers’ compensation premiums are based on payroll, how can a premium be determined for unpaid volunteers? The states use various methods. For example, the State of Washington charges $0.0478 per volunteer hour. One final note. Do not be misled by the Voluntary Compensation And Employers Liability Coverage Endorsement. It does not extend coverage to volunteers. It is used to extend coverage to exempt employees; e.g., domestic, farm and casual. Since a volunteer is not usually covered under the workers’ compensation statutes, then the “exclusive remedy” of workers’ compensation for workrelated injuries does not apply. Therefore, the volunteer can bring suit against the organization for any work-related injury or occupational illness.

Business Auto If the organization has a Business Auto policy and their Liability coverage is triggered by Symbol 1, Symbols 2, 8 and 9, or Symbols 7, 8 and 9, the organization and the volunteer are covered if the volunteer is driving a covered auto owned, hired or borrowed by the named insured. Therefore, volunteers are not covered under the Business Auto policy when driving their personally owned autos (the usual situation). If you want to push the envelope and say that the organization borrowed the volunteer’s auto, it won’t work. The Business Auto policy specifically excludes coverage for the owner of a hired or borrowed auto. If the Employees As Insureds endorsement is added to the Business Auto policy, coverage is extended to employees when they are using autos they own, hire or borrow on behalf of the named insured. It does not extend coverage to volunteers. Unlike the Commercial General Liability policy, the Business Auto policy makes no reference to volunteers. They are treated as any other member of the general public. They must rely on their Personal Auto policies, which likely also covers the organization. Commercial General Liability Good news. The Commercial General Liability policy includes volunteers as insureds while performing duties related to the conduct of the named insured’s business. In addition, the Medical Payments exclusion for any insured, does not apply to volunteers. This exception exists since there is usually no workers’ compensation coverage.

One final question. How many of you think Ms. Morse’s Personal Auto liability limits were sufficient to pay her share of the $17,000,000 judgment? Y’all take care!

Previous editions of Jerry Milton's Coverage Corner column are available on the IA&B website.

Read up! www.iabgroup.com/ de/coverages

Personal Liability coverage in a five-minute phone call.

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CARRIER RELATIONS

Growing agency-carrier relationships IA&B breaks new ground on agency agreements

Goodbye, paragraph of legal jargon and resulting paralysis. Hello, definitive analysis and enhanced agencycarrier relationships. IA&B’s new agency agreement analyses empower agencies and open lines of communication with carriers.

Primary Agent | May 2013

A A

gency agreements come in various shapes and sizes, and have long been a source of tension for independent agencies. A perceived (or, in some cases, actual) imbalance in power in the agency-carrier relationship, the lack of time or legal knowledge for proper analysis, and a wariness of carriers’ openness to discussion have prevented agencies from being able to provide input and having an active role in the agreement-review process. Until now.

IA&B recently unveiled a new process to improve agency-agreement analyses. While the review continues to address the same key provisions of agency agreements (see sidebar), the resulting report differs drastically from what agencies — and carriers — have seen before. The final product is now summed up into a “meets/does not meet” overview, so agencies can recognize immediately if the agreement is generally consistent with industry standards and adequately protects an agency’s interests. From there, IA&B provides a complete picture of the agreement, including an assessment of the core provisions and, when necessary, sample language agencies may suggest as a substitute.

Key provisions IA&B’s analysis considers these agency-agreement components: Agent’s authority Agent’s duties and representations Handling of funds Billing responsibility

Reaching a turning point Agency-agreement reviews are nothing new. IA&B and other state and national agents’ associations have offered them as a service to members for years. The cookie-cutter approach to those reviews and resulting lack of usefulness are nothing new either. Then two years ago, IA&B had an epiphany of sorts. Erie Insurance approached IA&B with a draft of its revised agency agreement and asked for the association’s input before the insurer released it to agents. From there, IA&B worked with Erie to make substantial edits that resulted in a “clean” product. The process was constructive and, in the end, a win-win: Erie avoided the potential influx of questions and requests for revisions from agencies, and agencies had peace of mind signing the agreement. The process was a turning point for how IA&B approached agency agreements. It gave precedence for a collaborative review process and a truly useful outcome for agencies and carriers alike.

Providing a complete picture From discussing agencies’ needs at IA&B Member Agent Panel meetings to poring over and comparing countless existing agency agreements, IA&B employed a holistic

[ 13 ]

Commissions E&O Indemnification/hold harmless Ownership of expirations Privacy/confidentiality/security Agency change of ownership Terminations Broker of record Dispute resolution

CARRIER RELATIONS

Law 101 While an agency agreement is, by definition, rooted in contract law, some of its provisions may overlap with statutory and/or common law. When this happens, some provisions of the contract may be preempted or overruled by applicable statutory or common law. Knowing these key concepts and terms will aid in understanding the agencycompany relationship. Statutory law: is clearly rooted in a statute that was promulgated either by Congress (federal statute) or a state’s General Assembly (state statute) Common law: also known as case law, is driven from decisions made by the courts Contract law: defines rights and obligations that are derived from a contract, where parties agree, for adequate consideration, to perform or not to perform certain things

approach to revising its agreement-review process.

Enhancing agent-carrier relationships

The result is a consistent process that IA&B employs to review an agreement. For any criteria that is not consistent with industry standards or do not protect an agency’s interests, IA&B notes the agreement’s current stance, shares how other agreements address the provision and then provides sample language for consideration. The criteria are weighted by how critical they are, so IA&B can accurately provide an overall rating on the agreement.

The overarching goal of this effort, in addition to providing a unique educational tool, is to improve the agency-carrier relationship. Member agencies, as well as carriers, can submit agreements to IA&B. From there, the process will be open, with IA&B notifying carriers when their agreements are under review and encouraging dialogue when analyses are complete. The finalized reviews will be posted in a library on IA&B’s website.

IA&B’s final analysis is available in two forms — a summary sheet and a full review. The summary sheet provides an overall rating that designates whether the agreement “meets” or “does not meet” agencies’ interests and industry standards. It then lists any critical provisions that are not “met” and provides possible alternatives, to include sample language. The full review provides a more in-depth assessment of the agreement, including an overview of the criteria considered in the analysis. Member agencies, in many cases, can gain enough insight from the summary sheet to decide if they want to request revisions from the carrier and, should they choose, to know how to approach them.

[ 14 ]

The process is a win-win. Agencies gain confidence in the agreements they sign and improved rapport with the carriers they represent, while carriers receive a unified response to their agreements and, when necessary, concrete ideas and sample language for consideration.

To submit an agreement for review, member agents (and carriers) may contact IA&B at 800-998-9644, option 0, or iab@iabgroup.com.

Glance at Events MAY CALENDAR Date 1

Topic

Location

William T. Hold Commercial Lines

Baltimore, Md.

CISR Commercial Property

Pittsburgh, Pa.

CISR Commercial Property

Altoona, Pa.

CISR commercial Property

Salisbury, Md.

7

CISR Commercial Property

Philadelphia, Pa.

8-11

CIC Personal Lines

Hunt Valley, Md.

8

E&O Risk Management

Mechanicsburg, Pa.

9

Commercial Changes Seminar

Wilkes-Barre, Pa.

14

CPIA Module 1

Pittsburgh, Pa.

14-15

James K. Ruble Graduate Seminar

King of Prussia, Pa.

14-16

P&C Licensing Study Course

Mechanicsburg, Pa.

15

CPIA Module 2

Pittsburgh, Pa.

16

CPIA Module 3

Pittsburgh, Pa.

21

Commercial Changes Seminar

Baltimore, Md.

22

CISR Personal Residential

Frederick, Md.

CISR Personal Lines Miscellaneous

Reading, Pa.

Commercial Changes Seminar

Lancaster, Pa.

CISR Commercial Casualty I

Lehigh Valley, Pa.

CISR Elements of Risk Management

Mechanicsburg, Pa.

2

23

29

CERTIFIED INSURANCE COUNSELOR (CIC) PROGRAM

JAMES K. RUBLE GRADUATE SEMINARS—CIC Update Option

Learn how coverages work in the real world from nationally recognized instructors who’ve been there. The CIC curriculum expands your knowledge beyond the basics, developing a keen awareness of special coverage types and the ability to detect hidden exposures.

Concurrent sessions give you flexibility to focus your learning on more complex or specialized coverage type. Update your CIC, strengthen your client relationships and increase your business with the knowledge gained in just two days at a Ruble Graduate Seminar.

Upcoming CIC institutes: Personal Lines May 8-11 Agency Management* June 17-20 Life & Health June 17-20

Upcoming James K. Ruble Graduate seminars: May 14-15 King of Prussia, Pa. June 3-4 Annapolis, Md.

Hunt Valley, Md. Erie, Pa. Lancaster, Pa.

For more information or to register, go to: iabgroup.com/Ruble

*Approved for loss-control credit for Utica policyholders.

For more information or to register, go to: iabgroup.com/CIC

[ 15 ]

Platinum Profile Insurance Agents & Brokers proudly recognizes Selective Insurance Company of America as one of its Platinum Partners. IA&B Platinum Partners dedicate the highest level of sponsorship to our organization.

FEATURED PARTNER Selective Insurance Company of America CHIEF EXECUTIVE OFFICER Gregory E. Murphy Chairman, President and CEO HOME OFFICE LOCATION Branchville, New Jersey A.M. BEST RATING A (Excellent)

I

n 1926, Selective was started by a small business owner committed to providing prompt, fair settlements and exceptional personal service. Today, Selective’s outstanding performance continues, and can be credited to people at every level of the organization who turn individual creativity, skill, purpose and hard work into the collective innovation, strategies and energy that characterize excellence. Their expertise at delivering the distinctive combination of high-touch through strong relationships and high-tech through ease of seamless automation has created a powerful engine for profitable growth. The company’s value-added products and services are offered through approximately 1,100 independent agents in 22 Eastern and Midwestern states. Commercial insurance for small and medium-sized businesses, light industry, and public entities represents about 83 percent of the company’s insurance operations.

Selective’s highly regarded field force is dedicated to servicing and supporting agents and customers. Living and working in their territories provides Selective’s field-based employees with unlimited opportunities to develop extraordinary relationships and to deliver a level of service unmatched by competitors. The 49th largest property and casualty group in the U.S., Selective is a customer-focused, super-regional company providing a broad range of insurance and alternative risk management products and services. Selective’s financial stability in the marketplace, coupled with the nimbleness of a regional carrier, provides security for policyholders and the capacity for profitable growth for the company and its agents.

“Since our founding in 1926, Selective has remained committed to building strong relationships with all of our stakeholders. We value the relationships we have built with a select group of independent agents, and are dedicated to supporting their success through the powerful combination of our ‘hightouch’ business model and leading-edge technology.” Gregory E. Murphy, Chairman, President and CEO

Listed below are those companies that strongly support the independent agency system and Insurance Agents & Brokers. Thank you for your continued sponsorship.

WHAT IS IA&B PARTNERS? The IA&B Partners program gives company and allied businesses the opportunity to demonstrate their commitment of support to independent agents and receive maximum market exposure. As an IA&B Partner, you will also realize the benefits of IA&B membership to help you succeed in the insurance industry.

DO YOU SEE YOUR NAME? To become an IA&B Partner, choose the sponsorship package that matches your commitment of support. Contact the Member Sales Center at 800-998-9644, 717-795-9100 or visit us online at www.iabgroup.com to get started.

PLATINUM LEVEL

BRONZE LEVEL

ACUITY Berkley Mid-Atlantic Group Donegal Insurance Group Erie Insurance Group Harleysville Insurance HM Insurance Group Insurance Agents & Brokers Service Group Inc

Aegis Security Insurance Co

Liberty Mutual Insurance

Encompass Insurance

MMG Insurance Company Millers Mutual Group Millville Mutual Insurance Co Mutual Benefit Group Penn National Insurance Selective Swiss Re The Main Street America Group Utica National Insurance Group

First General Services

Agency Insurance Company AmWINS Program Underwriters Inc Auto-Owners Insurance Company Briar Creek Mutual Insurance Company Builders Insurance Group Chubb Group of Insurance Companies Countryway Insurance Company

Foremost Insurance Group Goodville Mutual Casualty Company Guard Insurance Group Harford Mutual Insurance Co Hanover Fire & Casualty Insurance Company Insurance Alliance of Central PA Inc Insurance House Insurance Placement Facility of PA Keystone Insurers Group Inc

GOLD LEVEL ISU insurance Agency Network Progressive Westfield Insurance

SILVER LEVEL Access Insurance Company Allied Insurance American Mining Insurance Co Cumberland Insurance Group Frederick Mutual Insurance Co Juniata Mutual Insurance Co PSBA Insurance Trust The Philadelphia Contributionship

Lebanon Valley Insurance Company Mercer Insurance Group Merchants Insurance Group Mercury Casualty Penn PRIME Municipal Insurance Reamstown Mutual Insurance Company Rockwood Casualty Insurance State Auto Mutual Insurance Company TAPCO Underwriters Inc The Brethren Mutual Insurance Company The Motorists Insurance Group The Mutual Service Office Inc Travelers Tuscarora Wayne Insurance Company Zenith Insurance Primary Agent May 2013

ASSOCIATION AT WORK

2013 Company Satisfaction Index Member participation is key ingredient in survey’s success

Members can have their cake and eat it too with IA&B’s Company Satisfaction Index. The survey allows them to share praises and frustrations — and to contribute to a tool that benefits agencies, carriers and the association alike.

Primary Agent | May 2013

CSI in a nutshell The survey is a gauge of IA&B members’ collective experiences with carriers’ products, underwriting, claims and technology.

TT

he proof is in the pudding. Slicing in half the time necessary to participate in IA&B’s Company Satisfaction Index (CSI) contributed to an 80 percent increase in completed surveys last year. For member agencies, that means a more comprehensive look at the agency-company relationship and, in turn, a greater benefit when comparing their experiences or considering new appointments.

Recipe for success

Food for thought from the 2012 CSI The 2012 CSI gauged members’ experiences with personal lines carriers. A record-setting 507 participants completed the survey. Comprehensive results and analysis are available at www.iabgroup.com/csi; a synopsis follows. Members' overall satisfaction with personal lines carriers remained nearly constant between the 2010 and 2012 CSI.

Last year, IA&B separated the eight-year-old CSI into two annual surveys, which alternate between personal lines and commercial lines, thus reducing participants’ time commitment. The 2013 index, which opened April 15, focuses on commercial lines carriers.

Collectively, larger regional carriers received the highest satisfaction rating, while national carriers, as in past surveys, received the lowest rating.

Participants rate their top three carriers on a series of statements using a four-point scale, where 4 indicates satisfaction and 1 denotes dissatisfaction. Categories include products, pricing and underwriting; policy service and claims; agency/company relationship; and technology.

When dissected by category of questions, survey respondents' satisfaction remained the highest with their carriers' policy service and claims and lowest with technology — a trend continued from previous surveys.

Worth its salt Completing the CSI helps carriers to improve their performance. There are tangible benefits to member agencies as well: Results provide the ability to compare relationships with those of their peers and to benchmark companies before accepting appointments. And globally, the tool is vital to IA&B’s dialogue with carriers. As member participation increases, the CSI is gaining credibility within the industry. Results are showing up in trade publications, as well as in carriers’ marketing materials and agency-visit discussions. And company executives are touting the results’ use when evaluating their agent relationships.

What it boils down to In the day where agency-company relationships are strained by mounting pressures, growing competition and an uncertain market, opening up lines of communication is more important than ever. And IA&B’s CSI accomplishes just that. All member agency employees are encouraged to share their experiences with commercial lines carriers before the 2013 CSI closes on May 15. Participation has never been easier and the results never more valuable.

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The following carriers received the highest satisfaction ratings: Goodville Mutual Casualty Co., MMG Insurance, Donegal, Penn National Insurance and Selective.

Save the dates Who:

all IA&B member-agency personnel

What:

2013 Company Satisfaction Index survey

Where: www.iabgroup.com/csi When: April 15 through May 15

IA&B Marketing Center PR/Media Relations Resources Position yourself as the industry expert you are

Share your insight with consumers (customers and prospects) through local media outlets. All too often the insurance industry receives a bum rap in the press. You can counteract that by sharing tips to reduce risk, local commentary on national (or international) insurance news and tales of your agency’s good deeds. And building a rapport with local media outlets will pay dividends. IA&B streamlines media outreach. Resources include media outreach strategies, template press releases and a print-media contact database, along with step-by-step instructions on how to use each. IA&B simplifies creating and implementing a PR strategy.

Best practices: Commit to the task. The benefits of earned media (publicity) far outweigh the efforts that media outreach requires. However, understand that developing and implementing a public relations strategy and creating media relationships take time and perseverance. Establish media relationships. Reporters and editors appreciate reliable, knowledgeable sources who make their jobs easier. Build lasting media relationships by being concise in your communications and prompt in your responses. Select a media contact. Choose one agency staff person to serve as the media conduit for disseminating press releases and responding to requests. While this person doesn’t need to be the one who handles interviews, he or she does need to be readily accessible to coordinate your agency’s responses.

Visit the Marketing Center: www.iabgroup.com/de/marketing

Marketing Center tip! At a loss for press release content? Look no further than IA&B’s consumer education pieces. Vetted by insurance and legal experts and reviewed by independent agents, the content is available as raw text for copying and pasting into a press release — or other communication. Read more in the Marketing Center.

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[ 21 ]

Primary Agent | May 2013

Technology U P DATE

WHY GOOGLE+ SHOULD BE PART OF YOUR AGENCY’S ONLINE STRATEGY

MATTHEW MARKO Matthew Marko is a marketing process manager for Progressive Insurance and can be reached at matthew_marko@progressive.com. He works to provide local marketing strategies and tools to help independent agencies grow their business and has developed online marketing programs and webinars for Progressive agents on ForAgentsOnly.com. He is one of 40 local search experts invited to contribute to the authoritative annual Local Search Ranking Factors (www.davidmihm.com/ local-search-ranking-factors.shtml) study. Matt also recently did an Insurance Journal podcast on this subject which can be found at: http://www.insurancejournal.tv/ videos/8821/ This article reflects the views of the author and should not be construed as an official statement by ACT.

If you’ve been following Google’s social experiment from afar, you may have lost Google+ in the shadow of social media’s 800 pound gorilla, Facebook. But before you dismiss the search giant as an also-ran in social, take note of Facebook’s own pet project, Graph Search. Facebook’s foray into search despite Google’s clear dominance (two out of every three searches online are conducted using Google1) reveals the cracks forming in the wall separating search and social. Both companies are preparing for when the wall comes tumbling down, and now’s the time to position your agency to capitalize. If Progressive’s marketing data hold true, many more agents are opting for [ 22 ]

a place on Facebook over Google+. Here’s why you should diversify by building a strong presence on both. Google+ is much more than social Google+ does have social strengths, such as the ability to easily segment and target communications to customers using Circles and host Hangouts with customers on insurance topics. However, for now the primary insurance agency benefit of Google+ is local search optimization. Americans conduct 3.6 billion local searches on Google each month, and Google+, acting as an online business directory, is the most effective way to capture those prospects.2

Primary Agent | May 2013

Personalized help It’s also the best way to do so without having to compete with big brands’ multi-million dollar online advertising budgets. A key reason to engage with Google+ is to acquire new customers in a way that no other social media site or online directory can currently offer. From Places to Plusses Google reports that one in three searches have local intent, and 83 percent of consumers search online for local businesses.2 If a search query suggests local intent, Google includes the Google+ local pages in the search results, typically near the top. Formerly called Google Places, Google+ local business pages now include social elements as well, making an agency’s participation in Google+ (and customer interaction on the platform) a growing factor in showing up in local searches. Here are five steps to start taking advantage of Google+ for local search:

1. Claim and verify it If you haven’t done so already, claim and verify your Google+ listing. This is something you can easily do on your own (www.google.com/+/business/getstarted.html). Be sure not to create a duplicate Google+ listing for your agency if one already exists. It’s against Google’s rules. To check if your business already has a Google+ listing, simply go to www.google.com/maps and enter your business address and phone number into the search bar. If a listing shows up reflecting your business name, then your agency already has a Google+ local business page.

Ensure it is under your control through the owner-verification process. If someone in your agency does not have the log-in information to manage your Google+ listing, click on “Manage this Page” on your business’ Google+ page to begin the verification process. Owner verification is a critical step in building trust with Google and guaranteeing that you control your business information on Google+. Progressive research indicates that

Americans conduct 3.6 billion local searches on Google each month, and Google+, acting as an online business directory, is the most effective way to capture those prospects. as of November 2012, more than half of independent insurance agencies had failed to complete this critical first step, significantly diminishing their ability to rank highly in local search results. If you’re not the do-it-yourself type, programs like Progressive’s ListAgent or local search packages from Project CAP can help you with claiming your business listings online and optimizing your local presence. While you’re at it, it’s an excellent idea to also claim local search listings at sites like Yahoo, Bing, and Yelp.

[ 23 ]

Project CAP, which provides digital marketing products and services to agencies and oversees the new trustedchoice.com agentlocator infrastructure, offers a local search optimization package that focuses on Google+.

ProjectCAPMarketing.com

2. Build trust in it Review your Google+ listing for accuracy and be sure that you’re using the identical name for your agency and its contact information across all directories, on the Internet and on your agency website. Search engines like Google look for consistency in your agency’s name, address and phone number (NAP) online, and your visibility in search results improves if you have consistent listings. Exact NAP match is important. For example, you don’t want your agency website to say “ABC Insurance Agency” while your Google+ listing says “ABC Ins Agency.” GetListed.org and Yext.com offer free, simple tools to assess the consistency of your agency’s name, address and phone online. You also can improve your local search ranking over time by creating references to your agency NAP on additional local directories. There are hundreds of local directory sites where you can submit your NAP information for free, with the only cost being the time it takes you to manually claim them. Alternatively, Progressive’s ListAgent program can do this for your agency for under $100 a year.

TECHNOLOGY UPDATE

3. Connect it Google changed its local ranking algorithm in 2012 to favor Google+ business listings that link to welloptimized websites, making your agency website’s search optimization an important factor in both organic and local search results. While website optimization can be time-consuming and expensive, here are a few simple changes to help your website’s local search optimization: w Include your agency’s name, address and phone number in text (not as an image) in the header or footer of every page on the site. w Include your city or town name in your title tags, meta descriptions and header (H) tags. w If you have multiple agency locations, create a separate “location” page on your website for each location, and a separate Google+ local business page for each location. Submit each location’s page to its respective Google+ local business page. w Start using Authorship Markup (http://webmarketing today.com/articles/authorshipthe-top-search-marketingtactic-in-2013/) on your agency website and blog posts. If you don’t have a website, consider using a carrier directory page in place of a website in your Google+ listing. For example, the

ProgressiveAgent.com agent directory offers Progressive agents free locally optimized agency pages that work well for this purpose.

4. Populate it Populate your Google+ profile with content. Thoughtfully consider your business description, including key search terms that describe what your agency does. Make use of all business listing categories available

Owner verification is a critical step in building trust with Google…. More than half of independent insurance agencies [have] failed to complete this critical first step, significantly diminishing their ability to rank highly in local search results. and include photos and videos. Providing this content not only helps your agency rank higher in local searches, but it also makes your listing stand out to consumers and increases the likelihood that they’ll do business with you. Read Local Search Ranking Factors (www.davidmihm.com/localsearch-ranking-factors.shtml) for more tips on optimizing your local listings.

[ 24 ]

5. Legitimize it On your agency website and within your established agency referral processes, ask for reviews on Google+ as well as other sites like Yelp and Citysearch. Not only are reviews important to your prospects – 70 percent of consumers say that they trust online reviews as much as personal recommendations, according to BrightLocal. Reviews are also known to be an important local search ranking factor. Progressive research indicates that the average independent insurance agency has less than one online review, so creating a slow-but-steady review generation process can really make your agency stand out. The battle between Facebook and Google remains fierce, and both are making big moves to enhance their value to consumers and businesses. Questions may remain over social ROI, but there’s no question local search is critical as more and more people start their insurance shopping online. Adding Google to your online strategy brings a few social benefits, but the local search impact makes it a clear plus.

References: 1 http://techcrunch.com/2012/10/11/coms core-googles-search-engine-marketshare-increased-in-september-yahoodown-another-0-6-percentage-points/ 2 http://blumenthals.com/blog/2012/11/ 13/ed-parsons-1-in-3-searches-atgoogle-are-local/

Classified ADVE RTI S E M E NTS

SOUTHEAST PA PRODUCERS & AGENCIES Professional agency since 1926 located in Feasterville, Bucks County, Pa. Call for confidential information and a review of our services. Contact Ray Reinard at 215-375-8600, Ext. 119.

If you would like to place a Classified Advertisement, simply fax your ad on company letterhead to 717-795-8347, and we will take care of the rest.

Jokes du jour Q. How many producers does it take to change a light bulb? A. None. They’ll just have a CSR do it.

Ad Index

Q. How many CSRs does it take to change a light bulb? A. Eight. One to change it, and seven to stand around and complain about how producers do it.

Coastal Agents Alliance . . . . . . . . . . . . . . . . . . . .9 Donegal Insurance Group . . . . . . . . . . . . . . . . .1

Q. How many actuaries does it take to change a light bulb?

GreenWing Solutions . . . . . . . . . . . . . . . . . . . . .5

A. It depends. How many did it take last year?

Guard Insurance Group . . . . . . . . . . . . . . . . . .21 Harleysville Insurance . . . . . . . . . . . . . . . . . . . . .3 IA&B Partners Program . . . . . . . . . . . . . . . . . . .17 Interstate Insurance Mngmnt. . . . . . . . . . . . .OBC Millers Mutual . . . . . . . . . . . . . . . . . . . . . . . . .IFC Preferred Property Program . . . . . . . . . . . . . . .21 TAPCO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11

Source: www.barricksinsurance.com

----------------------------------------------------------------———————------The Last & Least column is dedicated to the industry’s oddities — from creative claims and kooky coverages, to (tasteful) jokes and strange stories. Submit yours to iab@iabgroup.com, subject line: Last & Least. The editor will happily protect sources’ anonymity upon request.