Page 1

also in this issue: Business interruption basics Embracing employee-driven IT FAQ: Who signs ACORD 35?

Rated A+ (”Superior”) by A.M. Best Company

A Strong Company Just Got Stronger We are now part of Berkshire Hathaway – giving us an immense base upon which to grow. We feature the same products, services, and personalized attention that marked our first three decades of success as a specialist in small- to mid-sized risks . . . but with one very important difference. We now have a new ultimate parent – Berkshire Hathaway – and BILLIONS of dollars of capital and invaluable expertise to support us.

a Berkshire Hathaway company

To participate in our good fortune, visit

Does your E&O policy restrict carrier insolvency claims? ThinkRisk’s revolutionary new E&O policy—[in]FUSE®—is designed specifically for agents and brokers. It includes comprehensive professional liability coverage including no carrier insolvency exclusion as well as network security, privacy coverage, media liability and more—all in one policy form. Coverage is backed by an “A” (Excellent) A.M. Best currently-rated insurer. Limits are available up to $10 million. For a competitive E&O coverage proposal that offers exactly what your agency needs in today’s technologically-driven workplace, contact Reza Khan at 646.380.1888; Cell 646.467.4266; Note: Program is available to agencies with annual GWP of at least $15M.

347 West 36th Street, Suite 203 | New York, NY 10018 | ThinkRisk Underwriting Agency is a series of RSG Underwriting Managers, LLC. RSG Underwriting Managers is a Delaware series limited liability company and a subsidiary of Ryan Specialty Group, LLC, specializing in providing underwriting management and other services to insurance companies, whose insurance products are distributed through agents and brokers. In California: RSG Insurance Services, LLC License # 0E50879 © 2013 Ryan Specialty Group, LLC



Contents Primary agent MagazinE

Agency pre-planning pays off during Superstorm Sandy In late October 2012, IA&B-member Lisa Parry Becker found her agency, her customers and her family in the path of monstrous Superstorm Sandy. As the storm bore down on the region, Parry Becker relied on her agency’s extensive pre-planning to assure her customers’ needs were met swiftly. Read on for her best practices — and lessons learned.


Page 12 Hope for the best, prepare for the worst From frozen pipes to fires, hazmat incidents to hurricanes, common accidents and natural disasters cause thousands of businesses to close each year. And at least 25 percent never reopen. An insurance agency, in particular, cannot afford to be out of commission. The pun is intended because insureds — and an agency’s viability — depend on accessibility. Think about the unthinkable — and prepare with IA&B’s Emergency and Business Continuity Planning Manual.

Page 24

26 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

Four ways to transform the consumerization of IT It used to be that any change in an organization would flow from the top down — from the executives to the front line workers. But today, especially when it comes to the consumerization of IT, the change process is quite different. What we have been seeing in the past few years is a “bottom-up” approach, where the end user (the employee) is pressuring the C-suite leaders to change. This article shares how to respond.

Page 26

In every issue 3 4 5 6 8

Glance at Events Chair of the Board’s Message Ask the Expert State News Preventing E&O


Coverage Corner IA&B Partners 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. Postmaster: Send address changes to above address. Primary Agent (ISSN 1543-3110), Permit # 638-620, Issue # 2013-9 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.


Glance at Events september calendar Date




William T. Hold Seminar: Commercial Lines

Lehigh Valley, Pa.

CPIA—Module 1

Philadelphia, Pa.


William T. Hold Seminar: Commercial Lines

Mechanicsburg, Pa.

CPIA—Module 2

Philadelphia, Pa.


William T. Hold Seminar: Commercial Lines

Frederick, Md.

CPIA—Module 3

Philadelphia, Pa.


Your Brand Defines You Seminar

Pittsburgh, Pa.

CISR Commercial Casualty I

Pittsburgh, Pa.


P&C Licensing Study Course

Mechanicsburg, Pa.


Your Brand Defines You Seminar

Lancaster, Pa.


CIC Life & Health

Pittsburgh, Pa.


Your Brand Defines You Seminar

Baltimore, Md.


CISR Commercial Casualty II

Mechanicsburg, Pa.


CISR Personal Auto

State College, Pa.

William T. Hold Seminar: Commercial Lines

Reading, Pa.


CIC Commercial Casualty

Harrisburg, Pa.

30-Oct. 1

James K. Ruble Graduate Seminar

Ocean City, Md.

Get the best of branding expert Robert Paul in a new, one-day seminar Robert Allan Paul’s unique ability to help independent agencies brand themselves for success was evident with his keynote presentation at last fall’s Executive Management Conference. Paul is president of marketing/branding firm Company of One, and in September, he returns with a regional, full-day program entitled “Your Brand Defines You — Wear It Well.”

Robert Allan Paul President Company of One

Locations/Dates: Pittsburgh—Sept. 17

In just one day, Paul will demonstrate how small agencies should be developing their brand vision, defining their brand values, delivering on their brand promise and driving their team to the top. For an investment of $225 and a day away from the office, members will return to their agencies with a complete marketing program they can start using immediately. Key takeaways will include: w an agency brand profile to guide your marketing w a brand strategy with key action steps and tactics w a copy of Paul’s “Company of One Branding Workbook” Lancaster—Sept. 18

Baltimore—Sept. 19

Read more and register at [3]

Board of Directors Officers G. Greg Gunn, CIC Chair of the Board Lemoyne, Pa. Diana M. Hornung Hanby, ACSR Vice Chair of the Board Wilmington, Del.

G. Greg Gunn, CIC

Chair of the Board’s M






Norman F. Basso, CPCU Immediate Past Chair of the Board York, Pa.

Members 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. Michael P. Ertel Columbia, Md. John L. Frankenfield Telford, Pa. John B. Hollister Milford, Pa. Jocelyn R. Howard-Sinopoli, CIC, CISR Butler, Pa. Robert S. Klinger, LUTCF, CPIA+ Germantown, Md. Douglas A. Loesel, CPCU Erie, Pa. Michael F. McGroarty Sr. Pittsburgh, Pa. Craig S. Mader Gambrills, Md. Ann Gallen Moll, CIC Reading, Pa. Joseph R. Pastor, CPCU, AAI Oil City, Pa. April E. Ressler, CIC Altoona, Pa.

Kick off autumn on the right foot Fall always makes me think of new beginnings. Fresh starts. Opportunities. The kids are headed back to school with their new backpacks and notebooks (even if many of them are electronic). The crisp weather is more conducive to accomplishing, well, just about anything when compared the lazy, hazy days of summer. It’s also my favorite time of year because of college football and trips to our office and home in Nittany Lion country. And at your agents’ association, September marks the start of a new administrative year — a year during which I am honored to serve as chairman. When I look to the year ahead, I sense energy — on the IA&B board, with the IA&B staff, among fellow agents. It’s invigorating. I invite you to capitalize on this momentum. Join us next month in Gettysburg, Pa., for the annual executive management conference, which will showcase some of the best presenters and target the hottest issues in the industry. And explore the association’s new website (( to take advantage of the resources (such as the emergency planning manual highlighted on page 24) that come with your membership. It’s going to be a great year. Stay tuned and watch what IA&B can do for you. Until next time,

Scott C. Rogers, CPIA* York, Pa. David B. Wasson Sr., CIC State College, Pa.

G. Greg Gunn, CIC

Lawrence A. Wilson, CIC, CPIA, CPCU, ARM** New Castle, Del. * Pa. IIABA National Director ** Del. IIABA National Director + Md. PIA National Director



Ask the Expert QUESTION: Which producer should sign the Cancellation / LPR form (ACORD 35)?

When in doubt, remember that you always can review the instructions that come with ACORD forms. These instructions can help ensure forms are completed consistently by your staff and also can settle some differences of opinion, if not disputes, that sometimes arise within or between agencies. DO YOU HAVE A QUESTION? Visit the new Ask the Expert section of to submit your question and review answers to other frequently asked questions. You can also email your question to us at We look forward to hearing from you!

answer: Interestingly, the answer to this question has changed several times in the last couple of years. In June 2013, ACORD released revised instructions allowing both the current producer and the new one to sign the form. The exact wording is: “Sign here: Accommodates the signature of the authorized representative (e.g. producer, agent, broker, etc.) completing this form.� This wording recognizes that the producer can be acting in different capacities, and may draw his authority from the company or from the customer. It is true that, in the past, the current producer (the one losing the account) was the one expected to sign the ACORD 35. However, the number of producers who drag their feet in processing the cancellation has increased in recent years. By allowing both producers to sign the ACORD 35, the cancellation form is valid even if signed by the new producer and can be sent to the carrier for processing if the agent of record is uncooperative.


Primary Agent | September 2013

State News PID now emailing license-renewal invoices Mind your email inbox (as well as your standard mailbox during the transition) to maintain your insurance license. The Pennsylvania Insurance Department (PID) began sending renewal invoices electronically, starting in July for September license renewals. The department assured stakeholders that the transfer will be secure and display no non-public information. In addition, be on the lookout for a PID outreach campaign which will aim to capture additional licensees’ email addresses. For those licensees who do not have an email address on file, and for those whose emails bounce back to the department, a hard copy invoice will continue to be printed and mailed.

Prepare for wave of Oct. 1 NFIP changes This fall marks the implementation date of several flood insurance reforms, including those that will trigger rate hikes. Visit FEMA’s online repository of information on the impact of the Biggert-Waters Flood Insurance Reform Act of 2012. And this fall watch for IA&B to unveil its revamped On-Demand flood course, which incorporates the latest changes. flood-insurance-reform-act-2012 [6]

Walk to make wishes come true Plan to participate a fundraising walk to benefit Make-A-Wish®. And capitalize on your agency’s tie to Trusted Choice®, a bronze sponsor of the events. Sunday, Oct. 20 – Morris Arboretum, Philadelphia area Saturday, Nov. 2 – City Island, Harrisburg Trusted Choice agencies across the nation have joined forces to support Make-A-Wish. Collectively, when independent agencies unite, the benefit of their generosity on Make-A-Wish – and the secondary benefit of advancing the image of the independent agency system and the Trusted Choice brand – grow exponentially. Note: These are two of several sponsorship and partnership opportunities that IA&B has organized throughout the year. Keep tabs on these and other fundraisers at our Marketing Center. (Resource Center)



Our fifth annual Executive Management Conference will bring back your favorite presenters to provide more insight and advice on agency management, marketing and more. Register at Oct. 29-30 Wyndham Gettysburg Gettysburg, Pa.

Meet Enid Holcomb, Pennsylvania’s Outstanding CSR of the Year “Do whatever you can to help the customer,” she offers. “They usually have no idea what insurance is and often come to you in a bad way.” That philosophy has served her – and her customers – well through the years and, most recently, led to her award as the state’s Outstanding CSR of the Year. Enid Holcomb, CISR, entered the insurance industry as many people do – by chance. Her high school business teacher’s husband worked at a local agency, where the owner was looking for help. Holcomb went to the interview, full of nerves and with no insurance knowledge, and was hired on the spot.

IA&B congratulates member agent Enid Holcomb on winning the state award. She will now move on to a countrywide competition, overseen by The National Alliance. As part of the nomination process, Holcomb submitted an essay on overcoming communication barriers. Excerpts follow:

The agency had a strict policy that employees spent a year behind the scenes before they interacted with customers. So Holcomb began in personal lines, spending 12 months doing paperwork, typing policies and learning the ins and outs of insurance. She emerged with a background that many agency employees today miss out on.

With today’s hard market and double-digit rate increases, strong relationships are of the utmost importance in the insurance industry. We must keep the lines of communication open with our clients, coworkers and companies….

“Today, with computers, you don’t know why you’re doing what you’re doing,” shares Holcomb. “But I knew exactly what I was doing because I had a stack of rate cards on my desk.” Holcomb spent eight years with the agency before taking a job with the Bush Agencies Inc. in Cambridge Springs, Pa., where she has worked for 27 years and now serves as a commercial lines CSR. A born people person, Holcomb cites helping people as the best part of her job. And that shows when she’s asked to provide advice for new CSRs just entering the field.

Taking time to communicate is a daily challenge…. A skilled customer service professional must be patient and willing to listen. Take time to ask questions, answer questions and obtain a full understanding of the client’s needs…. Many clients have difficulty understanding common insurance terminology. We must simplify our language and converse using more familiar words and terms. It is essential to educate the client and to provide accurate information and simple explanations…. Our infatuation with technology has created the greatest communication barrier. Technology provides a means of instant access, quick responses and permanent records. All this at


the expense of fewer interpersonal communications…. Faces, voices and words are all integral parts of communication. Relationships are the key to success in the insurance industry. A variety of communication skills are required to build these relationships. Each person we speak with, email or meet personally must be left with a sense of personal significance. There will always be barriers, but the battle can be won using the proper tools.

w e l co m e

New Members

Elite Insurance Services LLC Quakertown, Pa. Shiner Insurance Agency PC Mechanicsburg, Pa. Associated Insurance Management Inc Danville, Pa. Best Choice Insurance Agency Philadelphia, Pa. Rizzi Insurance LLC New Brighton, Pa. American Select Insurance Brokers Inc Monroeville, Pa.

Primary Agent | September 2013

Preventing e r r o r s a n d o m i ss i o n s

The basics of business interruption coverage and having the right limit

The Utica National E&O Program supplied this article. Insurance Agents & Brokers Service Group Inc. is the exclusive agent for the Utica 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

Most commercial customers should have business interruption coverage, yet judging by some industry articles on Superstorm Sandy, that issue may be debatable. One article cited a survey from a national carrier stating that only 30 percent of the small businesses in New Jersey had business interruption coverage, and only 10 percent had coverage for off-premises utility interruption.

Complexities Each year, the businessinterruption line-ofbusiness seems to generate a significant number of errors-andomissions claims. This could be partly due to Mother Nature and the numerous weatherrelated catastrophes the United States has been experiencing. A common saying among errors-andomissions carriers notes that “nothing brings out an agent’s mistake as quick as a catastrophe.”

Let’s look at three key questions:

Potential issues include a customer not having the coverage at all, not having the right type of coverage, not understanding the coverage he or she has, or not having the right amount. How well do professional agents understand the need and the value for a customer to have business interruption coverage? This coverage has complexities to it, so it is

w How many of your agency’s commercial lines customers have business interruption coverage? w For those that do, when was the last time the limit was updated? w Do those customers know how the coverage would respond in the event of a loss? [8]

important that agents and agency staff understand the types and how they work. Doesn’t have the coverage Business interruption coverage is designed to cover the loss of business income/profits if normal business operations are disrupted by a covered physical damage loss to property. An effective approach to handle this with a customer is by using an exposure analysis checklist. Most industry checklists will enable you, by SIC code, to get a firm handle on all the business interruption forms that might be applicable to a particular customer. Each of these forms is fully defined with extensive explanations regarding issues for you to consider. After you recommend business interruption coverage, your customer might reject it. If so,

document these discussions and decisions. It is best to either require the customer’s signature on the proposal noting the rejection or documenting back to the customer a recap of the discussion and decision in an e-mail or letter. This documentation is invaluable should an E&O claim arise in this area. Doesn’t have the right type of coverage As you will note from the exposure analysis checklists, there are many forms available, so it is important to ask the customer questions to better understand the exposure and which form and limit will achieve the desired result. Questions might include: w Can the business operate at a temporary location rather than suspend operations? w Could your client’s business be interrupted because of a loss at one of its suppliers? w What would happen if a key piece of machinery was damaged — how long would it take to get a replacement? What if the manufacturer is overseas? w Would the customer suffer a loss if one of its service providers — electrical, fuel, water, heat, refrigeration, communication, etc. — suffered a loss? w Is there a need for Extra Expense Insurance? w Are there any new state Ordinance or Law requirements or code upgrades that could delay the customer from getting back in business? Doesn’t understand the current coverage Agents should realize that after a loss, it is possible the customer will state that he or she was not truly aware of the business interruption coverage,

what it covers and how a loss would be adjusted. To address this, an agency’s insurance proposals should include the industry definition of that specific type of business interruption and any unique terms/phrases, such as “waiting period” or “co-insurance.” When reviewing the proposal with the prospect/customer, dedicate the necessary time and attention to this line of business. If possible, include some real-life claim examples to help your clients/prospects understand the importance of this key coverage. Here is an actual claim where the issue of co-insurance played a significant role: The insured procured a boiler machinery policy with $884,000 of coverage for business interruption written with a 100 percent co-insurance provision. The client was a long-time customer of the agency. The limit in place had been the same for 10 years as the agent never asked for updated earnings information during that time. A loss occurred, which the carrier determined to total $250,000. However, the carrier also determined the annual income for the risk to be $2.2 million. Due to the 100 percent co-insurance provision, a 60 percent co-insurance penalty was assessed, resulting in a $150,000 shortfall. The case was settled with the E&O carrier paying $180,000 primarily due to 1) the agent telling the client the $884,000 limit was sufficient and 2) the agent not explaining or informing the client of the 100 percent co-insurance on the policy. Imagine how including the definition of co-insurance could have altered the settlement of this claim. Agents should also look to provide, if applicable, explanations such as: w Waiting periods – These can be fairly common with different duration periods. Losses incurred during the period directly following [9]

an event will not be covered. If possible, try securing coverage without a waiting period. w Specific clauses that could impact the settlement of a claim – including any exclusions/ limitations/war clauses, etc. Is the limit adequate today? Updating the limits is much easier with property coverage, especially building coverage. This assumes the current coverage was calculated correctly. However, with business interruption, determining the proper limit can be much more challenging. In many cases, the coverage and limit from last year may no longer be adequate. Many carriers have worksheets to help determine the proper limit. Using this worksheet, it is highly recommended that you work with the customer’s accountant to ensure calculation of the right coverage amount. As evidenced by the claim above, business interruption is definitely not a coverage you want to renew “as is.” Having business interruption coverage is extremely important. Your customer must also understand where property coverage ends and business interruption coverage begins. Take the necessary time to ensure your customer know the importance of business interruption, how it works and what coverage form best fits them. This education will go a long way toward selling more insurance and minimizing the possibility of an errors-and-omissions claim being made against your agency.

Primary Agent | September 2013

Coverage co r n e r

What is “permissive use”?

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.

New Hampshire Insurance Company insured a sailboat owned by William Carleton II under a marine insurance policy. After a sailing regatta in Michigan, Carleton docked his sailboat at the Bayview Yacht Club. The sailboat was not actually tied off the dock. Instead, a smaller inflatable dinghy, owned by a Mr. Prophit, was tied to the dock and the sailboat was tied to the offshore side of the dinghy. In order for Carleton to board his boat from the dock, it was necessary to climb from the dock into the dinghy and then climb aboard his sailboat. All parties agreed that when boats are moored in this fashion a boat owner has permission to walk across one boat to get to his own boat.

Carleton’s sailboat. When they entered the dinghy, they stopped and engaged in sexual relations. After they were interrupted by another person, Dietz asked Carleton to leave. Carleton left Dietz, in a highly intoxicated state, on the dinghy. Her body was recovered from the Bayview harbor two days later. The cause of death was listed as drowning. Her blood-alcohol level was quite high. Dietz’s estate sued Carleton for negligence. Carleton’s marine policy with New Hampshire contained the following provision: COVERAGE FOR VESSELS YOU DO NOT OWN: We shall pay bodily injury and property damage arising out of the permissive use of a private pleasure vessel which you do not own or rent….

That night, Carleton met Layla Dietz at a party at the Bayview Yacht Club on the Detroit River. They left the party to see [ 10 ]

New Hampshire denied coverage and filed for summary judgment based on the argument that Carleton did not have permission to use the dinghy for sexual relations but only to access his sailboat. The court granted New Hampshire’s motion. But wait. That’s not the end of the story. On appeal, the Sixth Circuit Court reviewed the case and explained as follows: Carleton testified that in order to see the sailboat, it was necessary to go aboard the dinghy and, obviously, to get back off of it. Although they did linger, there is no dispute that Carleton and Dietz had ceased having intercourse and when Carleton left her, Dietz was sitting on the dinghy. A reasonable inference from these facts is that Dietz fell into the water as she was attempting to leave.

A rational trier of fact, therefore, could conclude that the reason they got onto the dinghy was to gain access to the sailboat and that Dietz drowned while she was getting off the dinghy, a use for which Carleton had implicit permission. The Sixth Circuit reversed the district court’s decision and remanded for further proceedings. New Hampshire then moved for summary judgment a second time. New Hampshire contended that the issue of how Dietz entered the water was determined in the negligence action brought by Dietz’s estate against Bayview Yacht Club. Dietz’s estate claimed that Bayview had been negligent in its maintenance of the marina area by failing to install adequate lighting, ladders, buoys and railings on and near the docks. Bayview filed for summary judgment, which was granted by the circuit court and affirmed by the Michigan Court of Appeals.




Coastal Agents Alliance, LLC



The court of Appeals found that Dietz’s estate failed to establish causation and stated: Indeed there was no evidence concerning the manner or means by which Dietz actually entered the water. No admissible evidence tended to establish that Dietz fell into the water from the dinghy while she was attempting to get out of the dinghy, from the dock, or from any other part of Bayview’s property. As explained earlier, speculation and conjecture are insufficient to create a question of fact concerning causation. On June 24, 2013 the United States District Court, Eastern District Of Michigan, Southern Division reversed the Sixth Circuit’s decision and granted

[ 11 ]

New Hampshire’s motion for summary judgment. The case is entitled New Hampshire Insurance Company v. William T. Carleton II and Ursula St. Clair, personal representative of the Estate of Layla Dietz. A win for the insurance company! But it took almost four years, and a lot of money. However, it seems to me that the Michigan Court of Appeals and the United States District Court never did address “permissive use.” Their decision appears to be based on the failure of Dietz’s estate to show the cause of death. Maybe we’ll never know what constitutes “permissive use.” Y’all take care!

Agency management

Agency pre-planning pays off during Superstorm Sandy One independent insurance agency’s experience with the storm

In late October 2012, IA&B-member Lisa Parry Becker found her agency, her customers and her family in the path of monstrous Superstorm Sandy. As the storm bore down on the region, Parry Becker relied on her agency’s extensive pre-planning to assure her customers’ needs were met swiftly. Read on for her best practices — and lessons learned.

[ 12 ]

Primary Agent | September 2013


ver the past few years, our region has faced flooding numerous times. Most often, it’s local — involving the Delaware River, which separates New Jersey, where I live, and Pennsylvania, where our family insurance agency is located. What’s been described as the largest of these floods took place in 1955, before I was born. More recently, we’ve seen flooding brought on by extraordinary amounts of rain associated with tropical storms and hurricanes — Floyd in 1999, Ivan in 2004, Irene and Lee in 2011, and other events. So in the latter part of October, when buzz started about potential mid-Atlantic impact from what then was Tropical Storm Sandy — a system hundreds of miles away from the Florida coast — we thought we knew what was coming. We were wrong. This time was different. I was actually in Florida as Sandy began her approach. Early in the week, we talked about the storm at an industry dinner and while we gathered to watch the final presidential debate. On Wednesday, I flew home and on Friday, our world was turned upside down as we began implementing our disaster plan — and not our annual Halloween party preparations. Warnings coming from our insurance companies, local and state emergency preparedness officials and our ever-so-dramatic local weather forecasters were much different than they had been in previous years. The messages were much stronger. Everyone, including our agency staff, was in emergency mode.

Take advantage of free emergencyplanning resources

We believed we were ready for this storm and its potential impact, thanks to information and ideas I picked up from the Agents Council for Technology (ACT) website’s Disaster Planning page (independentagent. com/ACT, select “Planning & Security”) and from fellow agents I knew through my volunteer work with ACT, AUGIE (ACORD-User Groups Information Exchange) and ASCnet (Applied Systems Client Network).

There’s no time like the present to prepare for the future – whatever it may bring. Resolve to develop your agency’s business-continuity plan should the worst occur. After all, that’s when your customers need you most.

Getting ready We had our agency disaster plan in place from the 2011 storms, which allowed us to act before the storm hit. We had thought through potential scenarios that could affect our agency and clients and were ready as Sandy approached. It was nice to have all of that work done ahead of time. All we had to do that Friday was go through the checklist and follow the steps we had outlined. Things were pretty much on autopilot. We had laptops, cell phones and, most important, extra chargers on hand to keep our portable electronics powered up. Given the likelihood that we would probably be operating without power, we printed expiration lists and client lists. This advice, from Gulf Coast independent agent Angelyn Treutel, who has lived through hurricanes, including Katrina and Rita in 2005, was invaluable, and had served us well in 2011.

[ 13 ]

Access IA&B’s free, members-only Emergency and Business Continuity Planning Manual to develop a customized plan for preparing for, responding to and recovering from a business disruption. Best yet, the end result is housed online, so you can access it offsite. (Read more on page 24) (select Resource Center, then Agency Management)

Agency management

We updated and printed a spreadsheet that contained all of the contact information for our company claims offices so we’d have information handy and would be prepared to respond to customer calls. We needed to be able to go into action quickly. As independent agents, that’s what we do — we respond and act on behalf of our clients. It is emotionally stressful to have a claim; if we’re there when customers need us and if we can walk them through the process, we’ve done our job. By Friday afternoon, we had posted our claims cellphone number and my personal email address on our website, so customers could reach us in the event our office or our

office phone system were not accessible. We posted similar information to our Facebook page and our LinkedIn pages, and shared it via Twitter. I am amazed at how many people saw the information online — I know because I received calls, text messages and emails on those otherwise private numbers and email addresses. We shared hurricane preparedness information on our blog, including links to local resources and information we received from one of our carriers during Hurricane Irene that was worth saving. We distributed the blog post through Facebook, LinkedIn and Twitter. We used these forums to update readers on what was

As independent agents, that’s what we do — we respond and act on behalf of our clients. It is emotionally stressful to have a claim; if we’re there when customers need us and if we can walk them through the process, we’ve done our job.

We See a Bright Future More options await you with Preferred Property Program’s umbrella policies Our umbrella programs are designed to offer the most comprehensive coverage so the future is never in doubt. Our umbrella liability policies are written by XL Insurance, with Chubb Insurance Group for the excess layer, featuring flexible, broad coverage that includes: • $5 to $25 Million in umbrella coverage with up to $50 Million in total limits. • Hi-Rise apartments up to 35 stories eligible, with higher eligible by referral. • Excess of D&O, General Liability, Auto, Employers Liability, Employee Benefits and more. • Developer-sponsored boards eligible.

Contact us for a quote:

888.548.2465 A subsidiary of



Service is our specialty; protecting you is our mission ®

960 Holmdel Road, Holmdel, NJ 07733 XL Insurance is the global brand used by XL Group plc's insurance companies. Preferred Property Program’s XL policies are underwritten by Greenwich Insurance Company.


[ 14 ]

see how everyone was doing and to make sure they and their properties were OK. It’s important to take care of your employees and to make sure they’re prepared. When claims arrive, if their personal affairs are in order, they’re better able to help clients.

occurring. Using our various lists, we spent much of Friday calling flood customers and making priority arrangements with tree-removal companies, cleanup and restoration companies, contractors and others. We knew if the storm were less severe than predicted, we could always remove folks from the priority cleanup list — a lesson we learned a few years back during a different storm.

Given the dire forecasts, my dad broke with tradition and decided he and mom would evacuate their home this time and stay with us. Usually, he likes to stay put so he can manually operate the sump pumps and get water out of the basement when it starts to come in. But this time he didn’t. I’m not sure why, but he apparently sensed things — including the wind — would be different this time.

Waiting it out

Over the weekend, I started receiving texts from clients — flood clients, in particular. We started receiving status updates from as far away as the Jersey Shore. This is actually the first time in 15 years we’ve seen much flooding there, so this was new and different—and we were glad we were ready. We started reporting claims right away, which enabled our clients to have first response from claims adjusters. As one of our carriers put it, we want to be first in to adjust and first out to pay claims.

Because we were able to do so much agency work ahead of time, we were able to spend time preparing my parents’ house on the river for potential flooding, including sand bagging and moving furniture from the first floor to higher ground. We continued to make work preparations, but we didn’t really have to spend a lot of time thinking about what we needed to be doing because all of the planning was already done. Again, we just continued to work through the checklist.

We were able to communicate via text with our employees. It was reassuring to check in and [ 15 ]

At our home, we all waited for the full force of the storm to arrive. On Monday it hit with a vengeance. We lost power at around 8 p.m. Sunday evening and continued our wait by candlelight. We tried to sleep, knowing we’d need to be rested, but the wind and driving rain outside were relentless.

It’s important to take care of your employees and to make sure they’re prepared. When claims arrive, if their personal affairs are in order, they’re better able to help clients.

After the storm When we woke up early the next morning, Dad and I boiled water for coffee and headed out to check on his and mom’s house, as well as neighboring houses. There was no power anywhere — generators were operating traffic lights. Everywhere we went, all we saw were trees, trees and more trees strewn about. The downed trees had created a monstrous debris field down their lane and in the yard. Fortunately,

Agency management

there were no trees on the house and water had not entered the basement. Later in the morning, I headed to the office — about 30 minutes away. The scenery was the same. Downed trees all around. When I arrived at the office, fire alarms were sounding, even though there was no fire. A sprinkler within our condo unit complex had burst.

Because we weren’t scrambling for info …, we could help our clients when they were scrambling and when they needed us most. Without power or telephones, it would have been difficult to work in the office. But with the constant ringing of alarms, it was impossible. So I set up my office in the parking lot — in the front seat of my SUV. I was equipped with chargers, powered-up cell phones, my Netbook and an iPad. I had printed ACORD loss notices from 2011 along with my printed expiration lists. I took calls from clients and called others. I received emails and text messages — some with pictures of storm damage. And I responded to clients and forwarded information to claims offices and adjusters. As the day went on, the magnitude of losses became more apparent. We had a number of claims at the Jersey Shore, and numerous claims in eastern Pennsylvania and into central New Jersey.

The worst property damage claims we had involved property damage resulting from falling trees. One was rather significant: The tree apparently caused the foundation to crack and some walls to move. After our contractor was out to assess the damage, we realized we needed the assistance of an engineer to identify, interpret and advise the needed repairs so the home could be structurally sound again. The engineer’s report was instrumental in settling this claim for our client. Another property claim — just 10 minutes up the road from our office — was caused by a number of trees falling on the insureds’ home and cars. On the less-severe-but-kindof-humorous end of the scale was fence damage caused when a flying trampoline landed. Knowing nobody was hurt, and property damage was minor. The image of an eight-foot trampoline soaring Frisbee-style through the air makes me chuckle. (It turns out this is a liability claim for the trampoline’s owner since she had not anchored the trampoline prior to the storm.) A local bank we insure, which had been decked out with Halloween decorations, had a tree come through the roof. Tree branches poking through the bank’s drop ceiling seemed to complement the holiday décor. We worked quickly with the insured and the contractor to tarp the roof to prevent further damage, conduct some initial cleanup and prepare estimates. I received a call from the claims adjuster the following Sunday evening for follow-up—all parties

[ 16 ]

in the claim system worked diligently to service and respond to claims.

Agency and carriers expedite the claims process In addition to claims for property damage caused by trees and trampolines and flooding, we also handled calls on loss of refrigerated products, business interruption, business income and more. We worked with insureds and contractors to shore up properties, get emergency repairs done quickly and get estimates

Some risks are

out of


We make sure they’re never out of mind. At PennPRIME, we specialize in risk management for municipal entities. We start by helping you define the factors that affect your total cost of risk, including insurance premiums, proactive loss control and claims reduction. Then, we tailor a solution to help you manage it.

Why take the risk without PennPRIME? 800.848.2040 717.236.9469

“We are now engaged in a great battle for insurance business...” 2013 Executive Management Conference The battle wages on. October 29-30, 2013 | Gettysburg, Pa. Join independent agency principals from north and south of the Mason-Dixon Line for two days of strategic planning on topics that include: w w w w w w

An evening with Lincoln

Courtesy of Thompson Photography

Activities include a welcome reception with our 16th president just weeks before the 150th anniversary of his historic Gettysburg Address.

Winning the marketing game Managing your agency culture Building business through social media SMART agency financial management Advertising that knocks ‘em dead Becoming the leader you need to be

[ 17 ]

Agency management

put together for cleanup and repairs. And we worked with carriers to get claims moving. In many cases, when we did the pre-work and submitted photos, invoices and repair estimates to the insurance companies, they were able to adjust claims with this information which expedited check issuance. On Tuesday — the day after Sandy hit — one of our carriers sent out an email announcing it was hosting a series of webinars to provide claims response info. The company let us know it had positioned two teams of adjusters just outside of the impacted areas on the east coast, and it was ready to move. The company’s goal was to be first in and first out, to be first responders. The communication was fantastic, just like the claims response. Discussion with a commercial client from Sea Isle City, N.J., drove home our agency’s and carrier’s value. We had texted the weekend before Sandy hit and before they evacuated the island. On Monday afternoon,

when they were able to return to the island, she let me know one of her two commercial buildings had sustained three feet of water damage within the building. We set up a flood claim that day. An adjuster was assigned right away and was available to go out to look at the building that same week. We were able to have him send an advance of $15,000 to the insured prior to completing a proof of loss. In contrast, she did not see an adjuster at her residential condo, which we don’t insure, for at least a couple of weeks. Two flood claims with two totally different response scenarios. Two days after Sandy hit, we were able to return to our office; power had been restored and the sprinkler (and the noisy alarm) had been dealt with, but the phones were still down. When everyone returned to work, my brother Ryan and I divvied up the claims that had been coming through our cellphones, and fellow employees worked them using their own cell phones. We were able to tie all of our

[ 18 ]

mobile communication back to our management system, so we have permanent records of what transpired.

Lessons learned Needless to say, going through another major storm like Sandy taught us some important lessons. First and foremost, we’ll continue to trust Dad’s intuition. If he decides to evacuate his home, we know things will be serious. We also learned the value of preparation, which was aided by the information available through ACT and other industry sources. One of our carrier calls drove that home. On that call, other agents were asking for FEMA’s phone number and the number to report National Flood Insurance Program claims. They asked if they could report claims with just a name and/or property address. All I could think was, “Wow! I’m so glad we were prepared” and “I’m so thankful for the ACT documentation.” Because we weren’t scrambling for info like this, we could help

our clients when they were scrambling and when they needed us most.

If you’re looking for targeted coverage for farm and ranch,

I learned the importance of mobile technology and power. When the office is without power and phone service, we could respond, thanks to our laptops, iPads, cell phones and chargers. We could text pictures to claims offices, so adjusters could see first-hand what they were dealing with, and we could exchange info with clients anytime, anywhere.

take AIMS. Agricultural Insurance Management Services 3PVUF"t4VJUF Bow,/)  wwwBJNTDFOUrBMDPN

AIMS’ Agribusiness insurance products are underwritten by Great American Insurance Group.

Being first in with claims ‌ put us in a priority position with carriers, and got the ball moving early‌. That’s huge: In a disaster like this, being able to move money makes all the difference in the world.

Equally important was social media. Being able to communicate early and often— and not having to learn social media as the storm approached, but knowing how it worked because we use it to connect with clients and prospects all the time — made a huge difference in response and customer reassurance. I suspect we’ll continue to build on the communication we started before and after the storm and help clients prepare even more for possible future disasters.


AIMS’ Agribusiness insurance products are underwritten by Great American Insurance Group.

A.M. Best upgrades Harford Mutual to a Financial Strength Rating of

A (Excellent) Financial Strength Rating


BEST A Excellent


Being first in with claims (thanks, again, to having info at the ready as part of our agency disaster

W W W. H A R F O R D M U T U A L . C O M


[ 19 ]


Agency management

plan) put us in a priority position with carriers and got the ball moving early. I learned how valuable this was when our customers were getting checks before some of their neighbors had even heard from an adjuster. That’s huge: In a disaster like this, being able to move money makes all the difference in the world. Getting advances lets our insureds pay contractors and keep things moving. We’re rethinking our phone system. Our local phone company was affected by the storm; as a result, we had no service and we couldn’t retrieve voice mail. An Internet-based phone system could offer more flexibility and allow us to manage and route calls more easily if we face another similar disaster. Because school was cancelled for a week and we were camping at home without electricity for nine days, I wasn’t the only one learning things. My eight-yearold son received several days of on-the-job “claim adjuster assistant” training. He learned about roofs and tree damage,

partial payments, deductibles and coverage triggers. This learning builds on other expertise he developed accompanying me on underwriting risk inspections starting when he was 18 months old. He also learned about how insurance agents respond when disaster hits. On Friday, at the end of one of the most draining weeks we’d encountered as a staff, he put his artistic skills into motion and drew pictures for everyone in the office under Uncle Ryan´s guidance. He even wrote my dad a letter, complimenting him on his hard work and client response. It made me proud — and a bit hopeful that the sixth generation of Parrys is being groomed to keep our local business moving forward. Ten weeks after the storm, I’m amazed at how much our region — and our staff and customers — went through. And how far we’ve come. I’m honored to be an independent agent, and I’m privileged to have resources, like fellow agents

[ 20 ]

and groups like ACT, that help me to support my clients and community, in good times and bad.

Lisa Parry Becker is a principal of Parry & Son, an independent insurance agency located in Langhorne, Pa., as well as a member of the ACT Committee. Lisa wrote this article for ACT (, and she can be reached at lisa-parry@ This article reflects the views of the author and should not be construed as an official statement by ACT.

Platinum Profile Insurance Agents & Brokers proudly recognizes ACUITY as one of its Platinum Partners. IA&B Platinum Partners dedicate the highest level of sponsorship to our organization. Featured Partner ACUITY president & cheif executive officer Ben Salzmann company location Sheboygan, Wis. A.M. BEST RATING “A+” (Superior)

ACUITY began writing business

in Pennsylvania in 2010 and hit the ground running, growing premium at a remarkable, sustained pace thanks to the commitment of Independent Agents in the Keystone State. The mutual insurer finished 2012 with a premium growth of greater than 70 percent in Pennsylvania, wrapping up the year with $20 million in written premium. In 2013, ACUITY is still growing in excess of 50 percent in the state. Importantly, this has been profitable growth, with the company running a combined ratio of just 94.2 in 2012. “We’ve exercised underwriting and pricing discipline in a market where other carriers were doing crazy things,” says Ben Salzmann, ACUITY President and CEO. “Our agents in Pennsylvania have supported that strategy and propelled our growth that continues today. In fact, with adequately priced, good business on the books, we can grow even more.” According to Salzmann, no company is more committed to agents than ACUITY. “For nearly 90 years, we have done business exclusively through independent agencies,” he says. “We bring our experience and dedication in building strong partnerships to agents in Pennsylvania.” “Agents always know what to expect when they do business with ACUITY,” adds Wally Waldhart, Vice President -

Ben Salzmann President & CEO Sales and Communications. That includes ACUITY’s unwavering focus on providing the technology, products, and valueadded services that make the insurer a powerful business ally. “Almost all insurance carriers are sound in either relationships or technology, but rarely both,” says Salzmann. “We bring that unique combination of the two, along with franchise value in Pennsylvania, which makes us a highly coveted market for independent agents.” On the technology front, ACUITY has focused on developing and investing in ease-of-business solutions for agents. ACUITY provides real-time, online policy quotation and application and automatically issues and delivers policies to agents within seconds in both personal and commercial lines. The company has also earned more technology awards from ACORD than any other P&C carrier in the nation. When it comes to building relationships, no company does more for independent agents than ACUITY. Over the past five years, agents have earned in excess of 100,000 continuing education (CE) credits thanks to ACUITY’s free CE courses and in-agency training. The company is expanding that program in 2013 with the creation of new online courses, also available at no charge. Additionally, ACUITY knows the bottom line is vitally important to agents. “We

[ 21 ]

pay more in contingent commissions as a percentage of written premium than our peers,” Waldhart reports. With strong growth and profitability, ACUITY offers independent agents remarkable financial stability. A fiercely independent company firmly committed to remaining mutual, ACUITY is also remarkably well-run: the company is rated A+ by both A.M. Best and Standard & Poor’s and has been named to the Ward Top 50 Best-Run Companies for 14 consecutive years. ACUITY also offers independent agents stability in staffing, with a remarkable voluntary turnover of less than two percent. Salzmann credits this achievement to being a great place to work. In fact, ACUITY is ranked as the top mid-sized employer in the nation by the Great Place to Work Institute. As a result of its comprehensive and well-rounded strategy, ACUITY, which generates $1 billion in revenue and manages nearly $3 billion in assets, provides consistency and security in an industry marked by wide market swings and financial uncertainty. “We are a healthy, strong, stable, and truly regional mutual carrier,” Waldhart says. “We are thankful to Pennsylvania agents for the trust they have placed in us, and we are incredibly optimistic about our continued success in the state.”

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

Featured Partner HM Insurance Group President Mike Sullivan President & Chief Operating Officer Company Location Home Office – Pittsburgh, with regional locations in Camp Hill and Philadelphia Website

Mike Sullivan President & COO

HM Workers’ Compensation

provides full service management of Workers’ Compensation coverage and focuses on keeping work environments safe while reducing costs from all angles. Our approach has helped to reduce lost time incidents and improve outcomes for clients across Pennsylvania. HM provides clients dedicated service teams; a preferred, cost-saving network; and effective physician-to-physician case management to help control loss. To ensure the best outcome for all involved, we work side-by-side with our clients, helping to reduce injuries in the workplace and returning employees to their jobs as quickly as possible. We know that effectively managing Workers’ Compensation is essential to our clients’ financial success. Using our expertise, we develop and implement customized, effective programs that incorporate loss control, case management, network discounts, proactive risk management techniques and returnto-work programs. We manage the entire process to help keep employees safe while generating cost savings that our clients depend on to keep their companies financially strong. The outcome is clear in our operational performance results and our approach to service. [ 22 ]

Through our network savings program, total claims costs were reduced by 57 percent in 2012, and we passed that savings on to our clients. We also achieved greater than 99 percent technical and financial accuracy when processing both lost time and medical claims. Such accomplishments, along with our commitment to service excellence, have helped us earn high levels of client satisfaction, which is reflected in our retention rate that exceeds 90 percent.* HM Workers’ Compensation is marketed in Pennsylvania and targets low to medium hazard industries in which employers are committed to return-to-work and thorough safety programs, including health care, social services, hospitality, education, auto dealers, retail/wholesale stores and light manufacturing. Our loss cost multiplier ranges offer flexibility that helps to price each account on its own merits. HM Workers’ Compensation is underwritten by either Highmark Casualty Insurance Company or HM Casualty Insurance Company, member companies of HM Insurance Group, a Highmark company. *Performance statistics based on HM Workers’ Compensation Operational Performance – 2012 Report, March 2013.

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

Aegis Security Insurance Co Agency Insurance Company AmWINS Program Underwriters Inc Auto-Owners Insurance Company Briar Creek Mutual Insurance Company Chubb Group of Insurance Companies Conemaugh Valley Mutual Insurance Co Countryway Insurance Company Encompass Insurance GMI Insurance Goodville Mutual Casualty Company Guard Insurance Group Hanover Fire & Casualty Insurance Company Harford Mutual Insurance Co

gold Level

Insurance Alliance of Central PA Inc

ISU Insurance Agency Network Progressive Westfield Insurance

Insurance Placement Facility of PA

silver Level

Mercury Casualty

Keystone Insurers Group Inc Mercer Insurance Group

Access Insurance Company Allied Insurance American Mining Insurance Co Burns & Wilcox Limited Cumberland Insurance Group Farmers Mutual Insurance Company of Western Pennsylvania Frederick Mutual Insurance Co Juniata Mutual Insurance Co PSBA Insurance Trust Selective The Philadelphia Contributionship [ 23 ]

Mutual Aid Exchange 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 Zenith Insurance Primary Agent September 2013

Agency management

Hope for the best, prepare for the worst IA&B’s Emergency and Business Continuity Planning Manual

From frozen pipes to fires, hazmat incidents to hurricanes, common accidents and natural disasters cause thousands of businesses to close each year. And at least 25 percent never reopen. An insurance agency, in particular, cannot afford to be out of commission. The pun is intended because insureds — and an agency’s viability — depend on accessibility.

[ 24 ]

Primary Agent | September 2013

“For me, IA&B provides valuable agency-management resources.” – Tod Aronson, E.R. Munro and Company

Think about the unthinkable — and prepare with our Emergency and Business Continuity Planning Manual.

How it works The manual contains two sections: an input, where you catalogue your business relationships, inventory your equipment and identify back-up locations; and an output, which incorporates your information from the input and serves as a finalized plan of action. The personalized output outlines the various scenarios that can disrupt your agency’s operation and then delves into the implementation of the plan, which is broken down into timeframes — the first 12-24 hours, day one through end of the emergency, and termination of the plan and restoration of normal operations.

What makes it unique The planning manual is Web-based. The input process is completed online, and the output (a.k.a. finalized plan) is available online or as a Microsoft Word document. Besides ease of personalizing the plan, the benefit of housing it online is availability. We recommend that you store your plan in multiple locations (onsite and offsite) and in various formats (in print and on an electronic storage device), but thanks to the Web-based structure of the planning manual, your plan is available anywhere at any time via the Internet.

How to access it The manual is an exclusive, complimentary member benefit. Access it from the new by selecting Resource Center, then Agency Management.


Divvy up the input work, such as cataloging business relationships, inventorying office equipment and identifying back-up locations.

[ 25 ]

How one member agency coped with disaster It was Friday, Sept. 17, 2004, and Hurricane Ivan had dumped inches upon inches of rain in downtown Pittsburgh. Tod Aronson’s agency, E.R. Munro and Company, was housed on the ninth and tenth floors of an office building located along the Monongahela River. Eight feet of water flooded the basement, where Aronson rented storage space and where controls for the building’s phone lines, electrical circuits and elevators were kept. The office building was closed for 10 days, six of them workdays. During that time, Aronson funneled phone calls and emails into his home, where he operated an exhausting temporary operation. It was a spur-of-the-moment plan of action — one that kept him afloat but required him to scramble. Aronson vowed to be better prepared for a future disruption of his agency’s operations. He secured alternate office space, hired a recovery-management firm and, most recently, utilized IA&B’s planning manual to formulate a strategy.

Primary Agent | September 2013

Technology update

Four ways to transform the consumerization of INFORMATION TECHNOLOGY

Daniel Burrus Daniel Burrus is considered one of the world’s leading technology forecasters and business strategists, and is the founder and CEO of Burrus Research (, a research and consulting firm that monitors global advancements in technology-driven trends to help clients understand how technological, social and business forces are converging to create enormous untapped opportunities. He is the author of Flash Foresight (available at

It used to be that any change in an organization would flow from the top down—from the executives to the front line workers. But today, especially when it comes to the consumerization of IT, the change process is quite different. What we have been seeing in the past few years is a “bottomup” approach, where the end user (the employee) is pressuring the C-suite leaders to change.

This new paradigm is extremely disruptive for the leaders. Not only is the change coming in the opposite direction from what the executives are used to, but it’s also coming so fast that many leaders are unsure what to do. What’s really behind this consumerization of IT trend? In a word … mobility. Because of advances in bandwidth,

[ 26 ]

storage, and processing power, the tools an average consumer can purchase are extremely powerful. Even as recent as five years ago, technology tools for the consumer weren’t that impressive and didn’t have much business application. As such, leaders simply had to make mandates like “no video games on your work computer” or “don’t bring your personal computer

or outside CD-ROMs to work,” and the problem was solved (or so they thought). But that was then, and this is now. Today the average person can purchase, understand, and easily implement an array of new technologies designed to make work and life easier. Consider this. A recent survey found that… w 45 percent of employees felt that their personal consumer devices and software are more useful than the tools and applications provided by their IT departments w 43 percent of employees felt comfortable and capable in making their own purchasing decisions to apply technology tools for work w 27 percent were willing to pay for their own devices and applications to use at work Now here’s what’s really eye-opening: Only 27 percent of executives have begun to address the consumerization issue in a structured way. Now it’s easier to see why the consumerization of IT trend is so disruptive. Realize that this trend is not just in the United States; it’s global. In fact, the leaders in the consumerization trend are China and India, followed by Brazil and Mexico. In other words, it’s spreading and growing rapidly. So if you’re one of the 73 percent of executives who has not addressed this trend yet, you need to do so now. The big boost What really gave the consumerization of IT a big push was Apple with their game-changing iPhone and iPad. Apple took the concept of a smartphone and raised it to a new

level. Additionally, it launched the mobile apps trend, which also started as a consumer oriented offering rather than a business one. Now, with an iPhone or iPad, consumers could have a true multimedia computer in their hand. Of course, competitors quickly came and launched even more consumer oriented powerful tools, making the trend grow quickly.

“My personal technology is better than what my employer gives me to use. By using the device I want to use, I can be more productive.”

Armed with these new tools and the widespread deployment of 3G and 4G wireless, improvements in WiFi, and access to the cloud, employees quickly realized, “My personal technology is better than what my employer gives me to use. By using the device I want to use, I can be more productive. And I can use amazingly powerful software tools in the form of apps that are inexpensive or free. They’re easy to install, powerful, and focused. If I don’t like one, I can easily uninstall it with the push of a button.” From the employee’s perspective, they know their job and what they need to do better than anyone in IT, so why shouldn’t they decide what tools they use and how they use them? From an IT perspective, it’s important to keep in mind that perception is reality to employees. The “bring your own device” (BYOD) trend is continuing to grow fast! In a Unisys-sponsored research

[ 27 ]

study of 2,660 information workers, researchers found that employees are bringing personal devices into the enterprise at an increasing rate. In fact, 40 percent of the devices they use to access business applications are personally owned—that’s a 10 percentage point increase from the previous survey year. Additionally, the survey concurred with my statement that the increasing penetration of consumer technology in the enterprise is being driven by a desire for mobility. According to the findings, 65 percent of employees surveyed said that mobile devices such as laptops, smart phones, and tablets were their most critical devices for doing work in 2012, and even more so in 2013. Despite this growing awareness, however, the research found that IT departments are falling further behind in the consumerization race. For example, employees report using their mobile devices for business purposes at twice the rate that IT executives believe to be the case (69 percent usage reported by employees versus 34 percent usage reported by IT executives). In addition, 44 percent of employees report using social media for customer communication, while only 28 percent of employers believe that to be the case. Stop reacting and start anticipating Unfortunately, most IT departments tend to be reactionary. They didn’t anticipate the consumerization of IT trend even though it was relatively easy to see. And when it hit in full force, they became crisis managers rather than opportunity managers. They viewed the consumerization of IT as a threat and tried to protect and defend the company and the

technology update

network, never realizing that the consumerization of IT is a Hard Trend. It’s not here today and gone tomorrow; it’s here today and accelerating tomorrow. Why? Because the trifecta of bandwidth, storage, and processing power is continuing to march on, giving us even more powerful tools in the consumer market in an inexpensive way … and very quickly. If you’re ready to stop reacting and start seeing the opportunity staring at you right now, here are some steps you can take to turn the consumerization of IT trend into your company’s competitive advantage. Start a dialogue. The benefits of the consumerization of IT are clear: It provides greater business agility, faster problem solving and innovation, increased collaboration, increased communication, higher productivity, and overall improved employee satisfaction because people are using the devices they want to use. Additionally, your Gen-Y and Gen-X employees are very techno-savvy and need to use what they consider to be the newest devices so they can feel empowered. All employees like to feel empowered, and the consumerization of IT is empowering the worker. Therefore, survey the people in your own company and find out what’s working and what’s not working for them technologically. Learn what technologies they are using and trying, and then ask them such things as, “How are you using the device or technology when you travel?” “What do you wish you had that we don’t currently provide?” and “What tools do you think are best?” In other words, start the dialogue. Engage your employees so they see IT as a strategic resource rather than a deterrent to technological innovation.

Spur innovation with BYOD. You and I both know that no matter what policies you enact to keep outside technologies away from the enterprise, the employees are going to buy them and bring them into work anyway. So instead of defaulting to “no” when something new comes out, encourage your people to bring their

... And if your people are using it, you want to know how they’re using it so you can replicate their successes with the technology company-wide. new device to IT to look at it, track it, and provide suggestions for how the company can use it. After all, the next new device may have a huge business use. And if your people are using it, you want to know how they’re using it so you can replicate their successes with the technology company-wide. So rather than have employees hide their technology tools from you (which makes IT out to be the “bad guys”), strive to co-create the future with the staff. Create a list of recommendations to help employees make an informed decision. After your IT staff analyzes the potential tools, create a list of the ones you recommend employees use, even though the company does not supply that particular item. In other words, if someone wants to get a tablet, an ultra-light laptop, a smart phone, or even an app, they can go to IT and see which ones IT recommends

[ 28 ]

and why. This approach puts you in collaboration with the employees and elevates IT to the status of a trusted advisor. Help your employees stay safe. Implement tools to help secure consumer technology, and create secure doorways of entry for your staff. Again, your employees are going to find their own ways around any security features you enact on the network. So why not create a path, a “doorway,” to help them get in and work in a secure and productive way. A few years ago, you had to build your own, today there are a number of great options for any size organization. Opportunity awaits The consumerization of IT and BYOD strategies brings change into the organization from a different direction. But it doesn’t have to be that way. You can become more innovative and opportunity focused when you lead the change by embracing the trend rather than fighting it. It’s time to stop enforcing the status quo as so many are still doing, and instead look at the new consumer-focused devices and tools from a business perspective. When you anticipate what your employees want and need to do their jobs better and then devise smart and flexible policies for managing and securing those technologies, you’ll find that the consumerization of IT can unlock new opportunities and revenue streams for your organization.

Classified adve rti s e m e n t s

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.

Ad Index (AIMS) Agricultural Ins Agency . . . . 19 Coastal Agents Alliance . . . . . . . . . . 11 Guard Insurance Group . . . . . . . . . IFC Harford Mutual Insurance Co . . . . . 19 Harleysville Mutual Ins Co . . . . . . . . . 1 IA&B Partners Program . . . . . . . . . . 23 IA&B EMC . . . . . . . . . . . . . . . . . . . . . 17 Interstate Insurance Mngmnt. . . . OBC PennPRIME Municipal Insurance . . 17 Preferred Property Program . . . . . . 14 ThinkRisk (Ryan Specialty Group) . IFC

“Man boobs” develop into insurance claim A budding health enthusiast got more than he bargained for when he grew “man boobs.” The young man suffered the growth after taking a supplement from a nutrition center — a center that failed to remove the USDA-banned substance which contained an anabolic steroid. The development resulted in one of the more surprising claims seen at Burns & Wilcox and continues to give rise to jokes in the casualty claims department today. Source: ________________________________________________________________

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, subject line: Last & Least. The editor will happily protect sources’ anonymity upon request.

Ripe For the Picking Let Interstate help you reap the abundance of summer opportunities. Your clients with outdoor businesses need extra protection for the unique risks that the summer season brings. Interstate can cover: • Amusement Parks, Batting Cages, Kiddie Rides, Go-Karts & Bumper Boats • Festivals, Special Events, Parades and Carnivals • Hole-in-One and Fishing Contests and Bowling Tournaments • Sports Camps and Instructors • Horse Clubs, Boarding, Shows and Races • Pet Groomers, Kennels and Trainers • Outdoor Guides and Outfitters Interstate also offers coverages for a variety of other seasonal and non-seasonal businesses with special coverage needs including: • Flea Markets and Vendors • Driving Ranges • Beauty and Barber Shops • Health and Fitness Clubs • Bars, Taverns and Restaurants • Lawn Care and Landscaping Contractors • Janitorial and Window Cleaning Services • Power Washers • Garbage and Refuse Haulers

Call Interstate for the best coverages for all your hard-to-place risks.


Pennsylvania, Delaware, Maryland, Ohio, Virginia & West Virginia 2307 Menoher Boulevard • Johnstown, PA 15905 814-255-7878 • 1-800-452-0297 • Fax: 814-255-6010

September 2013 pa  
Read more
Read more
Similar to
Popular now
Just for you