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Congratulations to the winner and four finalists of the 2003 National Outstanding CSR of the Year Award! Customer service representatives are frequently given the title of “account manager” and are referred to regularly as the “front line.” Perhaps an even more applicable description of this position would be “troubleshooter and problem-solver.” The National Outstanding CSR of the Year Award was established to honor the insurance industry’s most valued troubleshooting problem-solvers…its customer service professionals. The 2003 Outstanding CSR of the Year, Dewinda A. Ford, CIC, ACSR, CPIW, of The Bramlett Agency, Inc., in Ardmore, Oklahoma, was selected for this prestigious honor from a slate of finalists after the list of state winners was narrowed to five. Her essay on the topic, “How CSRs Find Success Using Five Essential Service Skills,” defined five important areas of service as “making our clients feel special, creating a bond of trust, providing a certain level of service, extending product knowledge, and developing strong producer/company/coworker relationships.”

Finalists Jacqueline A. Cameron, CISR SWBC Insurance Services, Inc. San Antonio, TX

Ann C. Tharp, CIC, CISR, ACSR, CPIW, DAE Collins Insurance Agency


Dewinda A. Ford, CIC, ACSR, CPIW The Bramlett Agency, Inc. Ardmore, OK

Ms. Ford received a cash award of $1,000, a distinctive gold and diamond lapel pin, and her name inscribed on a sculpture on permanent display at The National Alliance headquarters in Austin, Texas. A scholarship has been awarded to her employer, The Bramlett Agency, Inc., for participation in any National Alliance program. Nominations are now being accepted for the 2004 National Outstanding CSR of the Year Award. Closing deadline for all materials is May 1, 2004. Call The National Alliance at 800633-2165 or go to for more information about how to nominate and compete for this prestigious award.

Peggy J. Fletcher, CIC Charles L. Crane Insurance Agency St. Louis, MO

Elaine Slate, CIC, ARM, CPIW, AU Holmes Murphy & Associates, Inc. West Des Moines, IA

From the President Your Update: Burden or Benefit? Your update is not a cost. It’s an investment. It really doesn’t matter what we pay for an investment. What’s relevant is what we get in return. One way to jeopardize your future in today’s world is to look at an update requirement as a cost. Many say they find it difficult to find the time for updating. This is a false economy. When designees say they cannot afford to take 21/2 days out of their year for an annual update, they are looking at training as an “expense,” and not as an “investment.” Their viewpoint is that 21/2 days out of five is 50% of the work week, and that it is a big expense. But 21/2 days out of 365 is a drop in the bucket. If that investment provides just one idea that saves one hour per day, every day, the payback on the investment of 21/2 days is more than 250 hours just in the next year. Other non-insurance professional associations understand the value of continued education: Physicians ............................................50 CE hrs/yr CPAs ...................................................40 CE hrs/yr CFPs....................................................30 CE hrs/yr Professional greyhound judges .............16 CE hrs/yr Wastewater system operators...............15 CE hrs/yr Continued learning is what separates success from failure and mediocrity. Your update is not only an investment in your sustained success, it also gives you substantial benefits: • You can enjoy a change of pace at a destination location • You have an opportunity to grow and develop your career • You learn something new and increase your knowledge base • You meet other people and attain new contacts • You learn how to achieve peak performance and make lasting contributions to your agency’s or company’s growth


Features 4

Changes to the Dwelling Forms


William T. Hold, President The National Alliance

Deferred Compensation The right fit for large and small businesses


Interest Rates and the Cost of Risk Calculating the price of coverage


Customer Retention What it’s really worth


It’s About Time! How to take charge of yours


Agency Growth Options One size doesn’t fit all

Departments 7

Take the Quiz! Homeowners and Dwelling Policies—How much do you know?


A Look at Imaging and Productivity Academy survey results


2003 National Outstanding CSR of the Year The winning essays

Alliance News 14

The New National Alliance Website Now showing on a screen near you


Read It, Don’t Delete It Inbox alert!


The National Alliance National Program Schedule


Join Us for the Ruble MEGAdventure

• You keep distinguishing yourself from others In short, the power of CIC is the power of the update. Everyone would like to be considered professional. But “professional” is not a title that is awarded—it’s earned. The professional knowledge you gain at your annual update is an excellent way to earn respect from others.

ISO’s Been Dwelling on These

Denver, Colorado • March 22–26, 2004


The National Alliance at 35 A great ride!


In the News Our own headline grabbers 2007-1103

Website: ◆ Email: ◆ Phone: 800-633-2165


Resources Fall/Winter 2003

LAST YEAR, Insurance Services

Office (ISO) revised its Dwelling Policy Program, and although the new version is Dwelling 2002, the forms are dated 12-2-02, so they really became available in 2003. The revised forms are available only in those states in which ISO files forms, and only in those states in which the forms are approved or states that have “file and use” regulations. As of this writing, the new Dwelling Forms have been filed in 23 states, and approved in the following ones (effective or distribution dates are listed): Arizona Arkansas Colorado Delaware Indiana Iowa Kentucky Pennsylvania South Carolina South Dakota Utah Wyoming

5-1-04 1-1-04 8-1-03 11-1-03 12-1-03 2-1-04 1-1-04 2-1-04 4-1-04 3-1-04 2-1-04 3-1-04

This article will only deal with the changes in the language in the multistate forms. We won’t be discussing any statespecific exceptions.

Who Needs It?

To begin with, what is the purpose or purposes of the Dwelling Forms? Wouldn’t your client be better protected with one of the Homeowners Forms? The answer to the latter half of the question is, probably yes. However, sometimes, for whatever reason, maybe due to the value of the home or its status as a non-owner occupied property, a Homeowners Policy isn’t available, and the only coverage available is a Dwelling Form. Agency owners are often surprised to see how much dwelling fire premium the agency is generating. So we have a reason to be at least sort of familiar with the Dwelling Program. The danger for an agency is that we get used to issuing Homeowners Forms; a nice package

of coverages all bundled together and providing broad coverage to the insured. Once in a while, we issue a Dwelling Policy and if we depend on our Homeowners habit, we can forget that a Dwelling Form doesn’t automatically include all of the same coverages as a Homeowners Form. For example, there is no Liability or Theft coverage in a Dwelling Policy; those coverages must be endorsed. That hasn’t changed. However, a lot of other provisions have changed. First of all, the revision includes incorporating into the Dwelling Forms the nationwide language that was contained in the Special Provisions Endorsement in use in each state. For example, Ordinance or Law is now part of Other Coverages in the policy forms. A reading of the filing memorandum and the Notice to Policyholders tells you that a lot of the revisions are clarifications in the language, and if you’re familiar with the Homeowners 2000 Program you’ll recognize many of the changes as those that ISO made to that program in 2000. There isn’t room here to cover all of the changes, so we’ve had to skip a few. Here, at least, are the more significant changes.

Revisions to the Dwelling Policy Forms

Coverage B now covers other structures that contain business property, as long as the property is owned by the insured or a tenant of the property. If the insured is incorporated, and the property was owned by the corporation, there would be no coverage. There is also no coverage if the property is gaseous or liquid fuel, unless it’s in a tank of a vehicle or craft parked in the structure. Grave markers are no longer covered under Coverage B Other Structures or Coverage C Personal Property. If the insured owns grave markers, up to $5,000 coverage can be purchased by endorsement. Stored value and smart cards have been added to property not covered. Examples

of these are gift certificates from Borders, Barnes and Noble, Home Depot, and Lowes. Hovercraft are now excluded property. The previous program provided coverage for vehicles not registered and not required to be registered for public road use, if the vehicles were used to service the described location. The wording now reads, “used solely to service an insured’s residence,” so there is a significant narrowing of coverage here. Water and steam are listed as property not covered. ISO says, in the Notice to Policyholders, that they are a utility such as electricity and not personal property. Whether water and steam are or are not personal property, they are now specifically excluded. The definition of collapse in Other Coverages in a Dwelling Form 2 or 3 is revised to clarify that a building in danger of falling down or caving in is not in collapse. This means the building must actually fall down for the damage to be covered under the Other Coverage. This same wording in the Homeowners Policies was upheld by the California Supreme Court. The Other Coverage, Ordinance or Law, which provides 10 percent of Coverage A Dwelling, or 10 percent of Alterations, Improvements and Betterments if you are a tenant, is clarified to definitely not apply to any loss involving pollution. It clearly states that there is no coverage for loss in value to the structure, or the cost to test for, monitor, clean up, remove, contain, treat, detoxify, or neutralize pollutants or the effect of pollutants. The vacancy provision for vandalism and malicious mischief is doubled from 30 to 60 days. The peril providing coverage to personal property from artificially generated electrical current is narrowed. In addition to damage to tubes and transistors, it does not apply to damage to electronic Continued on page 6.

Resources Fall/Winter 2003


components or circuitry that are part of appliances, fixtures, computers, home entertainment units, or other types of electronic apparatus. So most of the damage done by a power surge will be excluded. Tearing out and replacing part of nonbuilding structures to repair covered water damage is covered. So if a leaking pipe under a driveway causes covered damage under the accidental discharge or overflow of water peril, the cost of digging up and repairing that part of the driveway is covered. Emission or puffback of smoke, etc. from a furnace or boiler is now covered under the smoke peril. The Liability Endorsement has been significantly revised as well. Watercraft liability, hovercraft liability, and motor vehicle liability are specifically defined and excluded. The definitions include negligent supervision and failure to supervise people using any of these vehicles or craft, so there is no coverage for negligent supervision and failure to supervise. There are some exceptions to the watercraft liability exclusion and these track with the exceptions in Homeowners Policies, so both forms provide the same limited coverage for liability claims arising out of the use of watercraft. There are also exceptions to the motor vehicle liability exclusion. The most significant change is in the area of coverage for owned golf carts. The changes are in the form of


Resources Fall/Winter 2003

two exceptions to the exclusion. If an insured owns a golf cart that is not registered, nor required to be registered, for use on public roads or property, it is covered for liability if, at the time of the accident, the golf cart is within the boundaries of: A private residential community that contains an insured’s residence and the community has control over the use of the roads in the community. An example is a development that is built around a golf course and the development owns and controls the roads. If the development allows residents to operate their golf carts on the roads, there is liability coverage for the use of the golf cart. A golfing facility and the golf cart is being used to play golf or being used for any other non-business activity that the facility allows. So if a country club allows children to drive golf carts inside the premises of the club, a child is covered operating his parent’s golf cart. There is also an endorsement available to provide physical loss coverage for described golf carts. There are two coverages, all direct physical loss except collision and what is excluded, and collision coverage. The list of exclusions is short. The definition of business is expanded. It is now clear that any full-time, parttime, or occasional trade, profession, or occupation of the insured is business, and any liability arising from same is excluded. In addition, any other activity of an insured done for money or other compensation is also business, and therefore any liability arising from the activity is excluded. The definition then lists four activities which are not business and therefore covered. These include mutual exchange of child care

for no money and paid child care by a relative. There is an exception to the business exclusion for occasional, part-time work performed by minors, so these activities are covered. Examples are lawn mowing, gardening, computer work, and baby-sitting. The definition of insured is revised in an attempt to narrow coverage for a student who lives away from home. The definition states that a student who lives away from home and attends school full time is an insured if either (1) the student is your relative and 24 years of age or younger, or (2) not your relative and 21 years of age or younger. In the second case the student must also be in the care of an insured. ISO says that a student who is outside of this definition can be covered by adding him or her to the policy as an additional insured. The definition certainly causes some difficulty. Note the requirement of being a full-time student. A literal interpretation says that a child who goes off to school, registers for full-time study and then drops a course, is no longer an insured. The definition also leaves out any student over the age of 24. The limit of liability for the Additional Coverage Damage To Property of Others is increased from $500 to $1,000. There are some new endorsements available in the program and the real availability will depend on the exposure and the underwriting guidelines of the company. One of the endorsements that you may find useful is Assisted Living Care Coverage. Using this endorsement, an insured can add to that insured’s Dwelling Policy a relative who resides in an assisted living care facility. The relative and the facility are scheduled on the endorsement. The coverage is for property and additional living expenses only. There are some special limits for certain types of property, Continued on page 7.

TRUE OR FALSE questions are usually pretty easy—or are they? Try to correctly answer all the questions below. If you get them all right, you may be a personal lines expert. If not, it may be time for a review. The National Alliance regularly conducts personal lines CIC institutes and CISR courses across the country. If you work in personal lines, consider attending to update your knowledge and learn the latest changes. This is where you really get tested. In the meantime, we hope you do well on the quiz! Questions 1–8 apply to the 2000 Edition of the ISO Homeowners Policy. Questions 9 and 10 relate to the 2002 ISO Dwelling Property Policy. Answers are shown on page 33.

A special thanks to Rod Rezac, CIC, CPCU, ARM, and Darrelle White, CIC, CPCU, for developing this quiz.


For the first time, Hovercraft is excluded for liability under Section II– Liability of the Homeowners Policy. True

In the Homeowners Policy, business is defined as an activity for which an insured receives $4,000 in total compensation for the 12 months before the beginning of the policy period. False


Business is defined as providing home day care services for no compensation other than the mutual exchange of such services. True



An insured location includes a hotel room while you are on vacation. True



The Homeowners Policy now covers Bodily Injury, Property Damage, and Personal Injury as part of the Basic Form. True


Changes to the Dwelling Form…continued from page 6. such as hearing aids, glasses, contact lenses, dentures, canes, wheelchairs, etc. Additional living expenses are limited to $500 per month for a maximum of 12 months.

Residential Property Course and the Personal Lines James K. Ruble Seminar.

So take note of all the changes in this article—even if you have to dwell on them for a while. Your agency may have more dwelling policies written than you think, and some of these changes are very important for you and your clients.

Bob served as assistant vice president of the Society of CIC, where his responsibilities were centered around curricula and faculty. Bob is now semi-retired but still consults, teaches in-house programs, and serves as an educational consultant, as he conducts faculty development clinics and teaches personal lines subjects. Prior to CIC, Bob was the director of education for the PIA of New York, New Jersey, and Connecticut, and worked in

Learn More About this Topic from The National Alliance If you’d like to learn more about the Dwelling Policy, consider attending a CIC Personal Lines Institute in your area. Information on this subject is also presented in the CISR Insuring Personal

An insured restoring an antique auto has coverage for the parts until they are installed on the vehicle.





About the Author: Bob Bisaillon, CIC, CPCU




Medical Payments Liability provides coverage for injuries to a plumber injured on the insured’s premises while repairing a water faucet. True



The Special Limits of Liability in the Homeowners Policy are in addition to the coverage C–Personal Property Limit of Liability. True



Dwellings under construction are eligible for a Dwelling Property Policy –Form 3. True


Additional Living Expenses are covered for Civil Authority requests for a period of three weeks. True


claims for Merchant’s Mutual Insurance Company. You may hear Bob teach at the following CIC institutes in 2004: Commercial Casualty Jan. 14-16 Personal Lines Jan. 28-31 Feb. 11-14 May 5-8 May 12-15 Dec. 8-11

Reno, NV

Metairie, LA Albuquerque, NM Houston, TX Cromwell, CT Little Rock, AR

Bob will also teach at these Ruble seminars: Graduate Seminar Feb. 25-27 March 10-12 Aug. 4-6

Round Rock, TX Atlantic City, NJ Westbrook, CT

MEGA Seminar March 22-26

Westminster, CO

Resources Fall/Winter 2003



Resources Fall/Winter 2003

Problem #1

Business owners offer retirement plans in order to be competitive in the market, but they are not able to save enough for their own retirement. They are restricted, under a qualified retirement plan (including the popular 401k), from contributing for themselves to their own company’s retirement plan until all others in the company have contributed. Then, they can only put away 125 percent of the average of what all other non-highly compensated employees have put away, the “average deferral percentage.” (Non-highly compensated is defined by the IRS as having no more than 5 percent of the stock and/or not making more than $80,000 per year.) Solution: A promise by the business to pay a significant additional retirement benefit to a business owner could provide a solution to their inability to fund retirement through qualified plans.

Problem #2

An even bigger problem could be, how can an owner create a barrier for a competitor trying to hire away a key employee during his/her most productive years—the years when training and education investment in the employee are just beginning to pay off? Solution: A promise by the business to pay a significant additional retirement benefit to an employee, based on that employee remaining in the employment of the business for a stipulated period of time. These “golden handcuffs” could keep that employee from going to a competitor.

Problem #3

Because of our current gradient tax system, a person could receive a pay raise and actually net less. The next dollar of income could tax all dollars at a higher rate, so if there is a slight push into the next tax bracket, net income may slide backwards. Consequently, many business owners and executives do not want more income now. They want it later, when their tax bracket may be lower.

Solution: A promise by the business to defer some current compensation to a future date might mean significant tax advantages to a current employee or business owner. Deferred compensation arrangements can differ in the duration of payments, the amount of each payment, and the person receiving the benefits. The business has the opportunity to be selective, flexible, and discretionary as to the duration and amount of the payment, and the person receiving the benefits, which makes this tool very powerful and attractive. Employees and/or business owners receiving the future benefits prefer a plan that is funded with dedicated dollars, providing them security for backing up this promise to pay something down the road. However, if the plan is formally funded, then the IRS ascribes baggage to the concept. The IRS does allow a business to offer an informally funded (unfunded) plan that has significant benefits to the business and the employee or business owner.

That’s Life Insurance

A life insurance policy can be used to informally fund a deferred compensation plan. The life insurance policy sits on the business’ balance sheet and informally “backs up” the deferred compensation contract. Life insurance can develop cash values, on a tax-deferred basis, to pay the contractual obligation to the employee or business owner benefits at some point in the future. It also can provide a death benefit to pay benefits in case of premature death of the employee or business owner. Even though the premiums are not taxdeductible, the tax benefits and leveraged aspects of this concept are incredible. The life insurance policy backing up the plan is shown as an asset on the company’s balance sheet. The cash value grows internally with no current tax due on the growth. The business borrows against the cash value to pay future obligations to the employee or business

owner during the payout period. Caution needs to be taken not to let the depletion of cash values cause the policy to lapse. If the policy lapses, the cash value withdrawn in excess of the premium paid will be subject to tax. If the employee or business owner dies before normal retirement age or the payout period ends, a death benefit goes to the business—free of federal income tax—and is used to pay the contractual obligation to the heirs. The business deducts the payout amounts as payroll, a fully deductible expense. When the employee or business owner dies, the remaining death benefit is paid to the business, free of income tax. The business loses any opportunity to do something with the money that is paid as premiums. However, it has solved some major problems by enhancing retirement programs and keeping key employees tied to the business. At the same time, the business funded the program with cents on the dollar and enjoyed substantial tax deductions when paying the benefit. The advanced underwriting departments of many life insurance companies will work for the P&C agent to design these plans and implement products to fund them. Deferred compensation is not just selling life insurance, as much as it resolves the universal business challenges of funding retirement and retaining top employees on a selective basis.

About the Author: James E. Krist, CIC

James E. “Jamie” Krist owns and operates The Krist Insurance Group, a regional life and health and employee benefits firm, and Krist Insurance Services, a large P&C agency in Des Moines, Iowa. Jamie is a member of the CIC national faculty and a frequent industry speaker.

Learn More About this Topic from The National Alliance You may attend any one of several National Alliance programs to learn more about deferred compensation. The CIC Life & Health Institute includes topics such as Financial Planning and Retirement Planning. And, Split Dollar and Executive Bonus are topics discussed at the James K. Ruble Life & Benefits Seminar.

Resources Fall/Winter 2003


gencies are using the high-tech efficiencies of imaging as a method to save time for more productive activities. Imaging, the process of scanning documents and storing them in a digital format, has had a significant impact on the way that today’s agencies are operating. This prompted The Acad-

emy of Producer Insurance Studies to develop a monograph on imaging, titled Imaging at a Glance, to give agencies some guidance on how to use imaging in their own businesses. The exhibit below shows the types of information agencies are imaging.

WHAT TYPES OF INFORMATION ARE AGENCIES IMAGING? Correspondence ........................................................................................76% Signed Acord applications ........................................................................ 75% Company-specific applications ............................................................... 74% Appraisals ............................................................................ 66% Endorsements ...................................................................63% Policies............................................................................ 62% Experience modifier worksheets ............................. 59% Loss runs................................................................ 59% Written statements ....................................... 53% Details on lawsuits .................................... 52% Claims information on new losses ............. 52% Rating .................................................. 49% Reporting forms ................................... 49% Repair estimates............................... 46% Monthly inventory reports ........... 42% Other ..............................32%


Resources Fall/Winter 2003

As these results demonstrate, agencies are scanning all types of documents and storing them for future use, in many cases as a substitute for storing the paper files. Some of the documents not specifically mentioned in the exhibit, but listed in the “Other” category include: audits, checks, emails, endorsement requests, faxes, financial statements, invoices, letters, photos, premium finance agreements, property valuations, quotations, renewal questionnaires, signed statements from insureds, etc. In fact, some agencies indicated that they scan everything; all paper that comes into the office is scanned. As you can see, the applicability of imaging in agencies today is widespread. The greatest benefit from using imaging is the time saved and increased efficiency enjoyed by CSRs and other employees who are handling the bulk of the paperwork. Overall, the survey participants identified a number of benefits from using imaging, as the exhibit on the facing page details:

WHAT BENEFITS DO AGENCIES REALIZE WITH IMAGING? Time saved not pulling or looking for files ..................48% Easy access to information all the time .......................28% More office space with less paper files .......................21% Ability to email or fax documents from computer .......14% Reduced expenses—paper, faxes, mail, file clerks, dead file storage ..........................................................7% Harder to lose files .......................................................3% Source for disaster recovery .........................................1%

With imaging, agency employees don’t have to pull hard copy files. They can directly access the documents that are stored in the computer. Sometimes, a hard copy file may be out on someone’s desk and time must be spent hunting it down. With a digital copy, the file will always be there, all the time, for someone to access whenever they need it. Agencies have more office space, and employees may even have more desk space, by using scanned images instead of the hard copy files. The agency can avoid stacks of files that take up physical space, and employees can avoid piles of paperwork on their desk if everything they need is in the computer. Agency employees also have the convenience of emailing or faxing documents from their desktop computers if the files are stored electronically. This certainly saves time from the old process of making a copy of a document and either using regular mail or sending it through on a walk-up fax machine. The ability to send documents electronically from their desktops saves valuable time. Imaging reduces expenses in some areas. Less paper and copying is needed, and there is less faxing and mailing being done. File clerks do not have to be hired to file all the documents and retrieve them as needed. Plus, agencies can simply store their old files on the computer, instead of paying for some off-site storage facility. Some survey respondents stated that imaging reduces the likelihood of losing files. Paper files can easily be misfiled or misplaced. With electronic files and a proper computer backup system, there is less chance of losing the files because the files are not moved once they are scanned and stored under the client’s name.

Lastly, relying on electronic files makes it easier for disaster recovery. If the agency has adequate backup off-site, then they can recover their files in case of a fire, flood, or other catastrophe. If paper files are stored in the office and a catastrophic loss occurs, most files would be lost without a chance for recovery. As mentioned, time saved with imaging can positively impact staff productivity. But by how much? The survey participants estimated the improvement in productivity gained from time saved with imaging, and their results are summarized in the following table:

the personal scanners. As the agency uses the scanning technology more often, and if the price of personal scanners drops, then agencies can make added use of this still-evolving technology. Similar to the personal scanners, CSRs can improve their efficiency with desktop faxing. The desktop faxing is more widely used than the personal scanners, as all CSRs have the ability to do desktop faxing in 79% of the surveyed agencies. In 6% of the agencies, some, but not all, CSRs have the ability. Only 15% of the agencies are completely without the ability to send faxes from their desktops. With this technology, CSRs don’t have to walk to the fax machine and wait in line to send a fax. They can do it quickly and efficiently from their desks. Related to the use of the scanning technology is transactional filing. Transactional, or T-filing, involves filing documents by transaction date, rather than by client name. Computer technology made T-filing attractive and saved agencies on filing time. Many agencies that use imaging are also using transactional filing, as the

WHAT PERCENTAGES OF IMPROVEMENT IN STAFF PRODUCTIVITY DO AGENCIES REPORT? 16% of agencies report an improvement of more than 50% 11% of agencies report a 41-50% improvement 14% of agencies report a 31-40% improvement 26% of agencies report a 21-30% improvement 20% of agencies report a 11–20% improvement 13% of agencies report a 10% or less improvement

The above results show that the perceived increases in productivity from using imaging can be significant. Over 40% of the agencies surveyed feel the staff productivity improved by more than 30% with the use of imaging. These agencies were obviously performing productive activities with their additional free time. Some agencies are making maximum efficiency gains by equipping CSRs with personal scanners at their desktops. In nearly one-fourth of the agencies surveyed, all agency CSRs have a personal scanner. In another 15% of the agencies, some, but not all, CSRs have personal scanners. Still, in 61% of the agencies, no one has a personal scanner. Agency owners and managers must evaluate the productivity increases with time saving personal scanners and compare these to the costs of

survey results demonstrate in the chart below: The use ofPERCENTAGE transactional filing WHAT OFis highest


Personal lines ............................... 52% Commercial lines ......................... 30% Claims ......................................... 21% Life and health ............................. 10% Accounting .................................... 9% Human resources ........................... 2% Other ........................................... 10%

with personal lines business, but it is used in all areas. The use of T-filing would be even higher, but a number of agencies inContinued on page 12. Resources Fall/Winter 2003


dicated that they stopped using T-filing when they switched over to imaging. However, many agencies are still using T-filing and imaging together. To use imaging and T-filing most successfully, agency employees must buy into the idea and treat the computer files as the primary files. Regarding personal lines, 86% of the agencies regard the computer files as primary. In commercial lines, 54% of the agencies regard the computer files as primary. For life and health accounts, only 39% of the agencies regard the computer files as primary. Since personal lines accounts are smaller and less complicated, agencies seem more apt to do transactional filing and/or imaging in personal lines. For commercial lines or other types of accounts or documents, agencies are not using T-filing to the same degree. However, imaging is readily being used for scanning many of the documents that are part of the commercial lines files, and there is a movement for less reliance on paper files in this area as well. Scanning and imaging certainly has its advantages. Many agencies save time and increase productivity. Readers should also note that there may be some problems or drawbacks to using imaging. Survey participants identified the following items as difficulties with using imaging:

be an adjustment and learning period when introducing the use of imaging. Of course, if the computer system goes down, all the scanned files will be inaccessible until the system comes back up. This problem doesn’t exist with the old filing system (unless T-filing is used). This is one obvious drawback with imaging. With imaging, misfiling can still occur. Scanned documents can be saved under the wrong file; just like hard copy files can be misfiled. This may not occur as often with imaging, but filing errors are still made. Also, some scanned documents may be difficult to read if the type is real small, if there is color involved and the scanner doesn’t do a good job of reproducing the file, or if the file gets tilted when it is being scanned. The quality of the scanned copy can never be better than the original, and sometimes it is significantly worse. As you can see, there can be a number of problems or difficulties with using scanning. It is not a perfect system for storing and retrieving documents. Overall, however, the scanning system does seem to be an improvement over the old filing system for many of the agencies that are now using it.

AGENCIES REPORT THESE DIFFICULTIES WITH IMAGING Learning how to use equipment and accept change .................................................. 17% Documents not accessible when system is down ........................................................ 14% Filing errors (document electronically filed under wrong account) ........ 14% Scanned documents are difficult to read (i.e. color, small print, tilted) .. 13% Time-consuming process with older equipment ................................... 10% Takes too much computer memory or storage space................................. 6% Lack of consistent, detailed descriptions for documents ............................. 4% Deciding what should and should not be scanned ...................................... 1% None—no difficulties ................................................................................ 21%

Agency employees have to learn how to use the scanners, how to store the data, and how to retrieve it. Plus, they have to buy into this new system. They may be used to doing things a certain way, and may be uncomfortable with using the imaging and not the hard copy files. So, there appears to


Resources Fall/Winter 2003

Generally, agencies are looking favorably upon the advantages imaging has to offer. Agencies that are not using this technology at all should consider switching to this system for some of their business and files. Agencies that are already using this system may consider using it to an even greater extent. The move away from paper and relying on computers more is here to stay. The amount

of paper that can be eliminated is still uncertain, but many agencies would be wise to take advantage of imaging technology and achieve the benefits of time saved, increased production, extra office space, and reduced expenses.

New Study on Imaging Will Soon Be Available

Imaging at a Glance is now available for advance purchase for $17 plus $3 shipping and handling. Robby Dunn, CIC, is the author of this monograph (and author of The Academy monograph, Transactional Filing: An Integrated Approach). This new monograph focuses on how to use imaging efficiently in agencies, and the author points out the advantages, disadvantages, and unique perspectives on obtaining maximum benefit from this still evolving technology. Order your copy in advance by calling 800-526-2777 or visit our website at www.TheNational

About the Author: Jim Cuprisin, CIC, CRM, ARP

Jim is the research director for The Academy and the editor of Resources magazine. After working as an underwriter for the first six years of his career, he now has over 20 years of experience in the industry and 15 years with The National Alliance.

Learn More About this Topic from The National Alliance You can learn more about imaging through a variety of National Alliance programs. The Agency Operations topic is part of the CIC Agency Management Institute. The CISR Agency Operations program includes Agency Workflow Concepts and Automation, and Understanding Agency Systems. And, Auditing Your Agency’s Automation Efficiency is part of the James K. Ruble Agency Management Practices Seminar.

iscounting, or present value calculations, has a variety of uses in casualty insurance. Its most important use is related to the pricing of insurance coverage. Whenever losses are expected to be paid out over an extended period of time, discounting is used to assess how much money should be set aside today to pay for those losses. Discounting is used to reflect the time value of money and is based on the concept that if a sum of money is set aside today to make future loss payments, such as in settlement of litigation, the funds can earn investment income between today and the time at which the loss must be paid. The question often asked is, if a payment of $1,000 is required to be made one year from today, and I can invest money at a 5 percent interest rate, how much money do I need to set aside today? The answer in this case: Current Fund + Interest Dollars = Future Payment We can set up an equation to solve for the current fund: Fund x (1 + .05) = $1,000 Fund = $1,000/(1.05) = $952.38 This type of calculation has an impact on the price that will be paid for longterm payout coverages such as workers compensation, medical malpractice, and products liability. It has much less use for coverages where claims are paid faster, such as property insurance and automobile physical damage insurance. The impact of discounting is generally hidden in the more arcane processes used by actuaries in the pricing of commercial insurance. It becomes more visible, however, for self-insureds. Companies with retained losses, through self-insurance, large deductible programs, or retrospectively rated programs, are required to carry reserves for unpaid losses in their financial statements. These reserves may be carried on either a discounted or undiscounted basis at the discretion of the company. Similar choices are available in captive insurance companies. Also, when a merger or acquisition of a company with retained losses takes place, the valuation of reserves has an impact on the purchase

price and should be performed on a discounted basis.

Loss Reserving

One of the more controversial aspects of discounting is a determination of the appropriate interest rate to use. The higher the interest rate, the lower the amount of money that needs to be set aside today. Some of the possible interest rates for setting loss reserves are: 1) A risk-free interest rate as determined by U.S. Treasury instruments of a similar duration. The advantage of this is that there is very little uncertainty with respect to the availability of funds at a predetermined point in time. This is the preferred rate when a balance sheet entry is made for loss reserves and there are no specific assets assigned to pay off the reserves. This is the most common situation for self-insureds, as companies typically have a better use for cash than letting it sit in a fund to pay retained losses. 2) The cost of borrowing funds is frequently suggested as an appropriate interest rate to use for discounting. The difficulty with this approach is that financially troubled companies have a higher borrowing rate. Therefore, as a company approaches bankruptcy, the higher interest rate will reduce the

amount of funds that it needs to set aside to pay losses, which have already occurred. For that reason, this approach is frowned upon as potentially resulting in non-payment of claims. 3) Sometimes, funds are set aside in the form of a trust or some other investment vehicle. This is frequently the case with hospitals that set up trusts, companies that own captives, or entities that are members of risk retention groups. In this case, if there is an investment portfolio in place that exhibits a stable rate of return, the portfolio rate of return can be used for discounting. In these situations, if the portfolio return is not stable from one year to the next, then the return should be risk adjusted. 4) Another interest rate that is sometimes proposed is the internal rate of return that a company gets on investing in operations. Thus, if internal projects need to generate a 12 percent rate of return in order to get funded, then this rate could be used for discounting. The difficulty with this approach is similar to the cost of borrowing funds approach. Again, if the entity runs into financial difficulties, then the internal rate of return can disappear and assets Continued on page 14.

Resources Fall/Winter Fall/Winter2003 2003 Resources

13 13

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Plus, the “Find a CIC” Member Directory, which puts designated CICs within reach of millions, can now be accessed more efficiently. Through, potential customers can locate CICs in their areas. If you’re a CIC, your directory listing—which includes your area(s) of specialization—can be edited by you alone. You can even pay your 2004 dues here! (To update your specialization or pay your dues, go to, click on CIC, then click on Member Directory.)

Review our new site for yourself and let us know how you like it—we think you’ll give it two thumbs up!

Interest Rates and the Cost of Risk…continued from page 13. cannot be converted into investible funds that can earn the higher yield. Therefore, the preferred interest rates to use for discounting loss reserves are U.S. Treasury risk-free interest rates. As of 2003, these are in the 3 to 4 percent range.

Alternative Risk Financing

For evaluating alternative risk financing programs, a different interest rate is used. In this case, we are interested in the cost of funds to finance the premium or self-insurance. By comparing the discounted cash flow cost of a self-insurance program with the insurance premium, a determination of the most economical alternative can be made. The cost of borrowing funds will vary from one entity to the next, but is an indication of the value of cash to the organization. Some organizations also have a hurdle rate that is used to evaluate investments. If a program generates a posi14

Resources Fall/Winter 2003

tive cash flow when the cash flows have been discounted at the hurdle rate, then the project will be implemented. Depending on the organization, hurdle rates of 10 to 15 percent are common. The reason for these higher interest rates is that a margin for uncertainty is often built into the rate. This reflects the uncertainty concerning the timing of cash flows (in insurance, when a claim will actually be paid) and the amount of the cash flow (how much the claim will cost).

consulting services to self-insured corporations, governmental institutions, and associations. He has over 30 years of experience in the property/casualty insurance industry, holding senior management positions in actuarial and operational functions for insurance carriers and insurance brokerage firms, and is on the CRM faculty.

While the impact of discounting is lessened in today’s low interest rate environment, the underlying principles are important to understand. Becoming comfortable with this form of analysis today will lead to better decisions tomorrow.

Learn More About this Topic from The National Alliance

About the Author: Roger Wade, ACAS, MAAA

Roger is a senior manager in KPMG’s Financial Service Practice where he provides casualty actuarial and risk management

You may learn about the basics of risk management, and much more, by participating in The National Alliance’s CRM (Certified Risk Manager) Program. The cost of risk is explained in the Principles of Risk Management course, cash discounting concepts are covered in the Analysis of Risk course, and alternative financing options are part of the Financing of Risk course.

Resources Fall/Winter 2003


by W. L. Richard, CIC, ARM, AAI

An Agency Without a Customer Retention Plan Will Lose Revenues—and Value! Even though customer relationships are some of an agency’s most valuable assets, they are often some of the most undervalued assets, as well. In the constant battle to gain new customers, it is easy to overlook the value existing customer relationships hold. Ultimately, all agency profits are earned from conducting successful relationships with customers. As the source of all your profits, customer relationships should be valued and protected. In addition, studies have shown there is a direct link between customer retention and the value of an agency.

Every customer relationship has an economic value or Lifetime Value (LV). A customer’s Lifetime Value is determined by taking your annual average customer revenue (commission income) and multiplying it by the number of years he or she will remain a customer with your agency. For example, if your annual average customer revenue is $700 and they stay with you for five years, then your If your customers begin to feel ignored or neglected, won’t they ultimately take their business elsewhere? average cus-tomer’s LV is: $700 x 5 = $3,500. Agencies that devote the majority of their energies and resources to obtaining new customers usually do so at the expense of their existing customers. The resulting neglect can erode the trust and “equity” found in repeat customer relationships. Reasons Customers Leave: No customer contact strategy ...... 67% Product dissatisfaction.............................. 15% Competition.......... 9% Other company friendship ........ 5% Move or die 4%


Resources Fall/Winter 2003

What happens if you lose a customer after only one year’s worth of transactions? In the preceding example, your company would have received only $700 of the $3,500 that would have come from maintaining a better relationship. Every agency gains and loses customers. Customer satisfaction is critical to gaining more customers and losing less of the ones you already have. Customer retention, or keeping customers, can be improved by explaining to your employees—especially those on the front line who deal directly with your customers—just how much each customer is worth to your business. Customer attrition, or losing customers, can be dramatically reduced when all of your employees work together to keep your existing customers satisfied. Developing a customer retention strategy is one way to keep existing customers

Lou Xifaras

cont e n t and your new customers coming back for more. So when is the last time you looked at your customer retention plan? Or do you even have one? Do you contact customers at regular intervals, other than renewal time? Do you have an agency newsletter? Are customers featured in the newsletter? Do you send thank-you cards and letters? Does each customer have a service plan? Are they aware of the service plan and know what they can expect from the agency? Do you regularly survey customers to find out why they do business with you? Why they left you? Are existing customers referring new customers to the agency? Why not? Does every customer have an assigned customer service representative or are some agency orphans? Do customers know the name of their representative? Maintain high customer satisfaction levels and protect your customer relationships—because satisfied customers are truly one of your agency’s most valuable assets. A recent study by The Academy of Producer Insurance Studies, Critical Factors Impacting Agency Value, revealed that customer retention is the single most important factor affecting the value of an agency. Other studies have also shown that the longer a customer remains with the agency, the number of policies they have with the agency will increase. Thus, high customer retention aids account development. In

turn, the more of the customer’s business the agency writes, the greater the annual average revenue and the greater the Lifetime Value. Additionally, other studies have also proven that account development leads to increased customer retention. One final note: increased retention and account development often result in better coverage and reduced E & O claims. Overall, it’s a win, win, win for everyone. About the Author: W. L. (Will) Richard, CIC, ARM, AAI Will is the founder and managing partner of Insight Consulting Group located in the Phoenix area. Insight Consulting Group provides insurance, risk management, and educational services to a variety of agencies and companies. Will has served the industry for over three decades in agency and company positions and at one time was a senior vice president with The National Alliance.

Learn More About this Topic from The National Alliance Several National Alliance programs cover elements that relate to this article. The CISR Agency Operations course discusses Minimizing E&O Exposures. The CIC Agency Management Institute covers Client Retention and Services. And, Superior Customer Service and Keeping Customers Loyal are part of the Dynamics of Service curriculum.

The National Alliance lost a true and longtime friend with the recent passing of Lou Xifaras on July 21, 2003, from Parkinson’s disease. Lou was a trusted insurance agent and advisor, former president of the Professional Insurance Agents of New England, and was once honored as the Outstanding Agent of the Year in New England. Lou served on all three boards of The National Alliance between 1977 and 1996, one of only three people in 35 years to have done so. He held the office of chairman of both the CIC and CISR Boards. Always a leader and staunch supporter of National Alliance programs, he was a member of the first group to earn the CIC designation in New England in September, 1976. “Lou’s contributions to the development and growth of The National Alliance will be remembered with fond appreciation and gratitude,” commented Bill Hold, a friend of Xifaras for 28 years. “He left his mark on all of us—the mark of an uncommonly good man.”

Resources Fall/Winter 2003


Last year, when The National Alliance surveyed a sample of its CICs, they told us that they were overwhelmed by the flood of mail crossing their desks daily, and the vast majority preferred that we communicate with them by email. In February, our direct email program hit cyberspace at full speed, and now we’re alerting you via email blasts—as exciting Ruble Vacation Destination Seminars, special CRM courses, and CIC-related events arise. Our emails feature a descriptive subject line, striking graphics and photos, a short description of the course or event, and a click-through button for registering immediately for the course. The feedback we’ve received has been very positive. We hope you’ll continue to read our emails and always give them a good once-over before hitting the delete button. The subject line will explain what the email is about and will always open with “CIC, CRM, or CISR:” then the topic. This will help you find our message in a crowded inbox, and it lets people who use auto-organizing systems correctly identify the message. So “read it, don’t delete it,” and maybe you’ll be inspired to register on the spot for some of our great program offerings!


Resources Fall/Winter 2003



Agency Management Commercial Casualty Commercial Property Life & Health Personal Lines

DECEMBER 2003 03–06 03–06 03–05 03–06 03–06 03–06 03–06 03–06 03–05 03–06 03–06 04–06 04–07 10–13 10–13 10–12 10–13 11–13 15–17

Tempe, AZ Albany, NY Indianapolis, IN Annapolis, MD Portland, OR Louisville, KY Westminster, MA Myrtle Beach, SC Denver, CO Richardson, TX Houston, TX Lansing, MI Altamonte Springs, FL Albuquerque, NM Blue Springs, MO Cincinnati, OH Baton Rouge, LA San Ramon, CA Waukesha, WI


JANUARY 2004 07–10 08–10 14–17 14–16 14–16 14–16 14–17 15–17 21–24 21–24 21–23 21–24 21–23 22–24 28–31 28–31 28–31 28–31 28–31 28–31 29–31 29–01

Edina, MN Grand Rapids, MI Louisville, KY Indianapolis, IN Reno, NV Denver, CO Windsor, CT Edison, NJ Austin, TX Oklahoma City, OK Nashville, TN Appleton, WI Springfield, IL San Diego, CA Metairie, LA Dallas, TX Springfield, MO Philadelphia, PA South Portland, ME Sandston, VA Lansing, MI Saint Petersburg, FL


FEBRUARY 2004 04–07 04–06 04–06 04–07

West Des Moines, IA Birmingham, AL Atlanta, GA Phoenix, AZ


04–07 04–06 05–07 11–14 11–13 11–13 11–14 11–14 11–13 11–14 18–20 18–20 18–21 18–20 18–21 18–21 24–26 25–27 25–28 25–28 25–28 26–29 26–28

Gaithersburg, MD Bellevue, WA Concord, CA Albuquerque, NM Indianapolis, IN Columbia, SC Little Rock, AR Houston, TX Nashville, TN Lehigh Valley, PA Jackson, MS Denver, CO Topeka, KS Hoffman Estates, IL Cranberry Twp, PA Charlotte, NC Ronkonkoma, NY Omaha, NE Cambridge, MA Fort Worth, TX Lake Oswego, OR Altamonte Springs, FL Costa Mesa, CA


MARCH 2004 03–06 03–05 03–06 03–06 03–06 03–06 10–13 10–13 10–12 10–12 11–13 11–13 17–20 17–20 17–19 17–20 17–20 17–19 24–27 24–27 24–26 24–27 24–27 24–27 25–27 25–27 31–02 31–03

Salt Lake City, UT Jackson, MS Lubbock, TX Madison, WI Wilmington, DE Blue Springs, MO Tulsa, OK Edina, MN Cincinnati, OH Atlanta, GA Ontario, CA Edison, NJ Boise, ID Anchorage, AK Memphis, TN Cary, NC San Juan, PR Las Vegas, NV Fargo, ND San Antonio, TX Springfield, IL Mansfield, MA Nashua, NH Syracuse, NY Sacramento, CA Lansing, MI Lynnwood (Seattle), WA Austin, TX


APRIL 2004 01–03 05–08 07–09 14–17 14–16

Costa Mesa, CA Harrisburg, PA Birmingham, AL Las Cruces, NM Hoffman Estates, IL


14–17 14–16 15–18 19–21 21–24 21–23 21–24 21–24 21–23 21–24 21–24 21–24 22–24 22–24 28–30 28–30 28–01 28–01 28–01

Edina, MN Lincoln, NE Fort Lauderdale, FL Honolulu, HI Casper, WY Denver, CO St. Louis, MO Phoenix, AZ Independence, OH Lake Oswego, OR Little Rock, AR Roanoke, VA Burbank, CA Troy, MI Gainesville, GA Indianapolis, IN Dallas, TX Mystic, CT Lenox, MA


MAY 2004 04–06 05–08 05–08 05–07

Las Vegas, NV West Des Moines, IA Great Falls, MT Greenville, SC


05–08 05–08 05–08 05–08 06–08 11–14 12–14 12–15 12–15 12–15 12–15 12–15 12–15 12–15 12–15 13–16 13–15 18–20 19–22 19–22 19–22 20–22 20–22 26–28 26–28

Saratoga Springs, NY Rapid City, SD Houston, TX Louisville, KY San Diego, CA Milwaukee, WI Flowood, MS Oklahoma City, OK Edina, MN Lehigh Valley, PA Greensboro, NC San Juan, PR Cromwell, CT Twin Falls, ID Metairie, LA Altamonte Springs, FL East Windsor, NJ Plainview, NY Olathe, KS Stowe, VT Buffalo, NY San Jose, CA Lansing, MI Birmingham, AL Springfield, IL


Go to for more dates in 2004.

CALL TO REGISTER To register for any CIC institute, call the corresponding state association or Society number listed below. Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Missouri Mississippi Montana Nebraska Nevada New Hampshire

205-326-4129 800-633-2165 602-956-1851 501-221-2444 800-633-2165 303-512-0707 800-424-4244 717-795-9100 800-277-1171 770-921-7585 800-633-2165 800-633-2165 800-628-6436 800-438-4424 800-633-2165 785-232-0561 502-875-3888 800-633-2165 508-628-5452 717-795-9100 508-628-5452 517-323-0041 952-835-4180 573-893-4301 800-633-2165 406-442-9555 402-392-1611 775-882-1366 508-628-5452

New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Puerto Rico Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia-DC Washington West Virginia Wisconsin Wyoming

800-424-4244 800-633-2165 800-424-4244 800-849-6556 800-633-2165 800-555-1742 405-840-4426 888-246-4466 717-795-9100 787-792-7849 508-628-5452 803-731-9460 800-633-2165 800-280-6082 800-633-2165 800-633-2165 508-628-5452 804-264-2582 360-571-7100 800-633-2165 608-274-8188 800-633-2165

BEFORE YOU RESERVE The dates and locations of the programs in these schedules are subject to change. Before making any travel arrangements, always verify the dates and location when registering for a program.

Resources Fall/Winter 2003



CISR Courses 11 11 16 16 16 17


Agency Operations Insuring Commercial Casualty Exposures Insuring Commercial Property Exposures Personal Auto Personal Residential Property Advanced Lecture Series*

Dynamics of Service

DECEMBER 2003 01 02 02 02 02 02 02 02 02 03 03 03 03 03 03 03 03 04 04 04 04 04 04 04 04 04 04 05 08 09 09 09 09 09 09 09 09 09 09 10 10 10 10 11 11


Cary, NC Columbus, OH Lansing, MI Cary, NC Sacramento, CA Stockton, CA Richardson, TX Waterloo, IA Houston, TX Columbus, OH Tulsa, OK Birmingham, AL Cary, NC Pasadena, CA Las Vegas, NV Lehigh Valley, PA Austin, TX Oklahoma City, OK Montgomery, AL Columbus, OH Cary, NC Lancaster, PA Tyler, TX San Antonio, TX Kalispell, MT Edina, MN Anaheim, CA Cary, NC Albuquerque, NM Indianapolis, IN St. Paul, MN Greenville, SC Blue Springs, MO Blue Springs, KS El Segundo, CA Knoxville, TN Albuquerque, NM Glendive, MT Saint Paul, MN Nashville, TN San Diego, CA Arlington, TX Topeka, KS Tucson, AZ San Jose, CA

Resources Fall/Winter 2003



*Advanced Lecture Series is available to CISRs, CICs, CRMs, ACSRs, & CPSRs only.


Memphis, TN Hilton Head Island, SC Columbia, SC Phoenix, AZ Great Falls, MT Denver, CO


07 07 08 13 13 13 13 13 13 14 14 14 14 14 14 14 14 15 15 15 15 15 20 20 20 20 20 21 21 21 21 21 22 22 22 22 22 22 23 27 27 27 27 27 27 27 27 27 27 28 28 28 28 28 28 28 29 29

Columbia, SC Lexington, KY Phoenix, AZ Montgomery, AL Rock Hill, SC Mechanicsburg, PA Grand Rapids, MI Sacramento, CA Houston, TX Cary, NC Dothan, AL Richmond, VA Florence, SC Altoona, PA Hays, KS Ann Arbor, MI Lubbock, TX Sheffield, AL Myrtle Beach, SC Lake Havasu City, AZ Salisbury, MD Fresno, CA Birmingham, AL Champaign, IL Reading, PA San Juan, PR Austin, TX Mobile, AL Lancaster, PA Seattle, WA Glenwood Springs, CO Tewksbury, MA Phoenix, AZ Tuscaloosa, AL Greenville, SC Chicago, IL Seattle, WA Plymouth, MA Framingham, MA Fayetteville, AR New Orleans, LA Rock Island, IL Erie, PA Salina, KS Saginaw, MI Anaheim, CA Dallas, TX San Francisco, CA San Antonio, TX Louisville, KY Springfield, IL Pittsburgh, PA Denver, CO White River Junction, VT Amarillo, TX McAllen, TX Pasadena, CA Baton Rouge, LA


29 29 29 29

Phoenix, AZ Orlando, FL Portsmouth, NH San Diego, CA


FEBRUARY 2004 02 03 03 03 03 03 03 03 03 03 03 03 03 04 04 04 04 04 04 04 04 04 05 05 05 05 05 09 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 11 11 11 11 11 11 11 11 11 11 11 11 11 12 12 12 12

Cedar Rapids, IA IC Lafayette, LA PR Cornelius, NC PR Hickory, NC IC Central, NJ PA Gering, NE PR Columbus, OH IP Philadelphia, PA PA West Des Moines, IA IC Westport, MA PA West Springfield, MA PA Beaumont, TX IC Harlingen, TX IP South, NJ PA Lisle, IL PA Norfolk, NE PR Scranton, PA PA St. Paul, MN ALS Toledo, OH IC Wilmington, NC IP Concord, NH IC Los Angeles, CA IP Shreveport, LA PR Deerfield (Bannockburn), IL PA Lincoln, NE PR Portland, ME IC Costa Mesa, CA PA Albuquerque, NM IP Providence, RI PA Modesto, CA IC Little Rock, AR PA Winston Salem, NC ALS Overland Park, MO AO Charleston, SC AO Wausau, WI PA Springfield, IL IP Overland Park, KS AO Grand Rapids, MI PA Baltimore, MD AO Framingham, MA IC Burlington, VT IC Albuquerque, NM PR Houston, TX IP Greensboro, NC PA Richmond, VA AO Brookfield, WI PA Gilbertsville, KY PR Aurora, IL IP Cleveland, OH PR Colorado Springs, CO IP Ann Arbor, MI PA Wilmington, DE AO Clearwater, FL IP Davenport, IA AO Arlington, TX PA Visalia, CA AO Birmingham, AL AO Saint Louis, MO AO Madison, WI PA Tucson, AZ AO

12 12 12 12 12 12 16 17 17 17 17 17 17 17 17 17 17 17 18 18 18 18 18 18 18 18 18 19 19 19 19 19 19 19 20 20 24 24 24 24 24 24 24 24 24 24 24 25 25 25 25 25 25 25 25 25 26 26 26 26

Hoffman Estates, IL Indianapolis, IN Fort Lauderdale, FL Pleasanton, CA Woodland Hills, CA Waco, TX Grenada, MS Jackson, MS Fletcher, NC Springfield, MO Bluffton, SC Edwardsville, IL Mechanicsburg, PA Reading, PA Elko, NV Danvers, MA Tyler, TX Corpus Christi, TX Greenville, NC Mobile, AL Cape Girardeau, MO Tulsa, OK Rockford, IL Reno, NV Baltimore, MD Waterloo, IA College Station, TX Phoenix, AZ Sheffield, AL Oklahoma City, OK Edina, MN Las Vegas, NV Randolph, MA Dallas, TX Lawton, OK Hyannis, MA Austin, TX Tuscaloosa, AL Norfolk, VA Greenville, SC Mendota, IL Portland, OR Allentown, PA Northampton, MA Odessa, TX Fort Worth, TX San Jose, CA Cary, NC Lexington, KY Mount Vernon, IL Portland, OR Lancaster, PA San Juan, PR Denver, CO Topeka, KS Stockton, CA Montgomery, AL Kingman, AZ Duluth, GA Santa Barbara, CA


Go to for more dates in 2004.

To register for CISR courses, refer to phone list top of page 21.


CISR Courses




CISR is available OnLine.

To register for any CISR course, Advanced Lecture Series, and/or Dynamics of Service program, call the corresponding state association or Society number listed below.


ducation, Designation, Anytime, Anywhere

BEFORE YOU RESERVE The dates and locations of the programs in these schedules are subject to change. Before making any travel arrangements, always verify the dates and location when registering for a program.

Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisana

205-326-4129 800-633-2165 602-956-1851 501-221-2444 800-633-2165 303-512-0707 800-424-4244 717-795-9100 800-277-1171 770-921-7585 800-633-2165 800-633-2165 800-628-6436 800-555-1742 800-633-2165 785-232-0561 502-875-3888 225-766-7770

Maine Maryland Massachusetts Michigan Minnesota Missouri Mississippi Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma

508-628-5430 717-795-9100 508-628-5430 517-323-0041 952-835-4180 573-893-4301 800-633-2165 406-442-9555 402-476-2951 775-882-1366 508-628-5430 800-424-4244 800-633-2165 800-424-4244 919-755-0847 800-633-2165 800-555-1742 405-840-4426

Oregon Pennsylvania Puerto Rico Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia-DC Washington West Virginia Wisconsin Wyoming

888-246-4466 717-795-9100 787-792-7849 508-628-5430 803-731-9460 800-633-2165 800-280-6052 800-633-2165 800-633-2165 508-628-5430 804-264-2582 360-571-7100 800-633-2165 608-274-8188 307-283-2052


Agency Mgmt. Practices Contractors Financial Institutions Graduate Seminar Insuring Healthcare Providers Large Commercial Life & Benefits MEGA Managing People Marketing & Sales Multiple Topic Personal Lines Small Commercial Truckers Truckers II

DECEMBER 2003 01–03 10–12 10–12

Springfield, VA Oak Brook, IL Westminster, CO


JANUARY 2004 21–23 28–30 28–30

Flushing, NY Salt Lake City, UT San Juan, PR


FEBRUARY 2004 04–06 04–06 18–20

Plymouth, MN Nashville, TN Columbus, OH


18–20 24–26 25–27 25–27 25–27

Las Vegas, NV Orlando (Altamonte Springs), FL Orlando (Altamonte Springs), FL Austin (Round Rock), TX Cambridge, MA


MARCH 2004 03–05 03–05 10–12 10–12 10–12 10–12 17–19 17–19 17–19 22–24 22–26 24–26 31–02 31–02 31–02

Williamsburg, VA PL Battle Creek, MI GS* Indianapolis, IN LC Atlantic City, NJ GS* Des Moines, IA AM Atlanta, GA GS* Louisville, KY GS* Phoenix (Scottsdale), AZ GS* Baltimore, MD GS* Indianapolis, IN GS* Denver (Westminster), CO MG Portland, OR MP Myrtle Beach, SC GS* Houston, TX FI New Orleans (Metairie), LA GS

APRIL 2004 07–09 28–30 28–30

Asheville, NC Minneapolis, MN Freeport, ME


MAY 2004 05–07 12–14 12–14 17–19 19–21

Albuquerque, NM Nashville, TN Seattle, WA Las Vegas, NV Boston, MA


JUNE 2004 09–11 09–11 21–25 23–25 23–25

St. Louis, MO Excelsior Springs, MO Orlando, FL Hershey, PA Newport Beach, CA


23–25 28–30

North Falmouth, MA Green Bay, WI


JULY Go to 2004

for more dates in 2004.

CALL TO REGISTER Call 800-633-2165 to register for all Ruble Seminars EXCEPT Graduate Seminars marked with an asterisk (GS*). For all Graduate Seminars marked with an asterisk, call the corresponding state association listed below. Alabama Arizona Connecticut Delaware Florida Georgia Illinois Indiana Kentucky Maine Maryland Massachusetts Michigan Minnesota Missouri New Hampshire New Jersey New York North Carolina Ohio

205-326-4129 602-956-1851 800-424-4244 717-795-9100 800-277-1171 770-921-7585 800-628-6436 800-438-4424 502-875-3888 508-628-5452 717-795-9100 508-628-5452 517-323-0041 952-835-4180 573-893-4301 508-628-5452 800-424-4244 800-424-4244 800-849-6556 800-555-1742

Oklahoma Oregon Pennsylvania Rhode Island South Carolina Tennessee Vermont Virginia-DC Washington Wisconsin

405-840-4426 888-246-4466 717-795-9100 508-628-5452 803-731-9460 615-385-1898 508-628-5452 804-264-2582 360-571-7100 608-274-8188

BEFORE YOU RESERVE The dates and locations of the programs in these schedules are subject to change. Before making any travel arrangements, always verify the dates and location when registering for a program.

Resources Fall/Winter 2003




Principles of Risk Mgmt. Analysis of Risk Control of Risk Financing of Risk Practice of Risk Mgmt.

Any individual actively engaged in risk management or a related field, including accounting, finance, insurance, loss control, legal, claims, and others, is eligible to attend the CRM Program.

14–17 21–24 28–31

Houston, TX Orlando, FL Honolulu, HI

FEBRUARY 2004 04–07 11–14 25–28

MARCH 2004 03–06 03–06 10–13 24–27

Seattle, WA Philadelphia, PA Nashville, TN Milwaukee, WI

APRIL 2004

03–06 03–06 10–13 10–13 10–13

14–17 21–24 21–24 28–01

JANUARY 2004 14–17

Burlingame, CA


Denver, CO San Antonio, TX Costa Mesa, CA


02–05 09–12 23–26

Portland, OR San Diego, CA Indianapolis, IN



Atlanta, GA FIN Salt Lake City, UT ANA Boston, MA PRI Austin (Round Rock), TX PRI

MAY 2004 05–08 12–15

19–22 26–29 26–29

JUNE 2004

Kansas City, MO PRI Atlantic City, NJ FIN Arlington (Washington DC), VA ANA

DECEMBER 2003 Philadelphia (Langhorne), PA PRI Seattle, WA PRA San Diego, CA CON Fort Lauderdale, FL FIN San Antonio, TX PRI


07–10 07–10 14–17 14–17 21–24

Anchorage, AK Atlanta, GA San Antonio, TX Cleveland, OH Costa Mesa, CA


REGISTER BY PHONE OR ONLINE Call The National Alliance at 800-633-2165 or go to to register for any CRM course.


DS Dynamics of Selling DSM Dynamics of Sales Mgmt.


The Dynamics programs are some of our most popular, highly rated programs, often taken more than once, as “shot-in-the-arm” courses that are proven for giving individual motivation a good jump-start, careers a solid push, and agencies’ bottom-lines a measurable boost.

The dates and locations of the programs in these schedules are subject to change. Before making any travel arrangements, always verify the dates and location when registering for a program.


New Orleans (Metairie), LA DSM

JANUARY 2004 21–23

Orlando, FL




03–05 17–19

06–08 20–22 27–29

Austin (Round Rock), TX DS Chicago, IL DS

APRIL 2004 14–16

Kansas City (Excelsior Springs), MO DS

Atlantic City, NJ


JUNE 2004 02–04

Burlingame, CA

Virginia Beach, VA Newport, RI

New Orleans (Metairie), LA DS Destin, FL DSM Pittsburgh, PA DS

Oklahoma City, OK Los Angeles, CA


DECEMBER 2004 01–03

Palm Springs, CA




JULY 2004 14–16 28–30


NOVEMBER 2004 03–05 17–19

MAY 2004


Call The National Alliance at 800-633-2165 or go to to register for any Dynamics of Selling or Dynamics of Sales Management course.

Resources Fall/Winter 2003

Atlanta, GA





MARCH 2004



Lake Tahoe, NV

CIC Editor Rodney R. Rezac, CIC, CPCU, ARM

CISR Editor Mark J. Rolland, CIC, CISR

Go to for more dates in 2004.

Dynamics Sales Training PROGRAM KEY

Managing Editor James R. Cuprisin, CIC, CRM, ARP

CRM Editor Marilyn B. Hollar, CRM, ARM


Chicago, IL ANA Ft. Lauderdale (Dania), FL PRI

Publisher William T. Hold, Ph.D., CIC, CPCU, CLU

The dates and locations of the programs in these schedules are subject to change. Before making any travel arrangements, always verify the dates and location when registering for a program.

Contributing Writers Carolyn Smith Lonni Swanson Publications Art Director Becky Veach Contributing Designer Rhea Groepper Resources is published by The National Alliance for Insurance Education & Research, P.O. Box 27027, Austin, Texas 78755-2027, 800-633-2165, Fax: 512349-6194, Internet: www.TheNational, email: alliance@scic. com. At present, Resources is available to dues-paid Certified Insurance Counselors (CICs), Certified Insurance Service Representatives (CISRs), Certified Risk Managers (CRMs), and affiliates of The Academy of Producer Insurance Studies. Entire contents Copyright © 2003, The National Alliance for Insurance Education & Research. All rights reserved. Material in this publication may not be reproduced in any form without permission. Authorization to photocopy items for internal or personal use, or the internal or personal use of specific clients, is granted by The National Alliance, provided that the following words are included on any copy: “Reproduced from Resources with permission of The National Alliance for Insurance Education & Research.” Resources is designed to provide accurate and timely information in regard to the subject matter covered. It is published with the understanding that the publisher is not engaged in providing legal, accounting, or other professional services. If legal advice or other expertise is required, the services of a competent professional should be sought. The publisher has taken all reasonable steps to verify the accuracy and completeness of information contained in Resources. The publisher may not, however, be held responsible for any inaccuracies or omission of information in any article appearing in Resources.

IN-House Programs

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Our courses are perfectly suited for training an entire staff at your own place of business – when and where you want it.

Benefits ■

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Hassle-free: We take care of the details—from continuing education filings and faculty travel arrangements to course workbooks and supplies.


Bring out your employees’ personal best when you bring these popular programs in-house: CIC institutes CISR courses CRM courses Dynamics of Service Dynamics of Selling Dynamics of Sales Management The National Alliance School for Producer Development

©2003. The National Alliance for Insurance Education & Research

Resources Fall/Winter 2003


TIME. We all need and want more

of it. Unfortunately, we only get 24 hours per day, 1,440 minutes. There are no second helpings. Everyone gets the same daily ration. Many of us rush through the day trying to accomplish as much as we can. Sometimes we feel we’ve accomplished nothing at the end of the day. Perhaps we can alleviate this frustration by managing our time more effectively and freeing up precious minutes. We need to work smarter.

If you’re sending a simple email message such as, “I’ll be leaving at noon today,” put the message in the subject section. It makes it easier and quicker for the recipient to delete. If your computer greets you with tons of new emails, quickly delete any frivolous, non-business and unrecognized senders. Now go through and read the ones you think are most important, finishing up with the rest.

a must. Be sure to clearly and s-l-o-w-l-y state your name and number at the beginning and end of your message. If someone needs to replay your message again to hear your number, it’s a great timesaver to find that info at the beginning of your message and avoid having to listen to the whole message again to obtain the phone number at the end. It’s good to leave short concise messages containing enough data to obtain needed information.

If you’re sending an email that is “for your information,” put FYI in the subject line. This allows the recipient to skip that message until they have time to read it. Likewise, “Urgent” in the subject line will usually attract the recipient’s attention. By the way, telephone “hold time” is a great time to review emails.

One last reminder on voice messages: be sure to change your voice message. There is nothing worse than calling on Wed., January 6th and hearing that you will be gone until Tues., January 5th.

The Message is the Medium

• Leave an urgent message.

In talking with many insurance professionals, predominantly Customer Service Representatives, I have found some common time-wasters. Following is a list of the top 10 time-wasters. Do these things waste your time too? 1. Emails 2. Telephone tag and voice mail 3. Equipment meltdowns 4. Interruptions 5. Lack of objectives 6. Inappropriate delegation 7. Meetings 8. Procrastination 9. Lack of efficiency (having to do things over again) 10.Trying to do too much

Trim Your Emails

Emails top the list. Being away from your computer for a day or two can easily rack up 40, 50, 100 emails greeting you upon your return. It is clear that emails have certainly gotten out of control. Reserve your work email address for work. Unsubscribe from anything not work related. If you’ve fallen victim of a chat room, take charge and eliminate it immediately. Look at your server and the ability to filter unwanted emails, then prevent them from ever reaching your desk. Unnecessary internal email can also eat up those precious minutes. Be mindful of the emails you send. Eliminate the frivolous. Do you really need to carbon copy all those people? What about the pleasantries that can go on forever such as: a “Thanks” responded by “Your welcome” responded by “Any time,” etc. It seems like the last responder wins. That’s one contest I’d prefer to lose.


Resources Fall/Winter 2003

That brings us to number two on the list, telephone tag and voice mail. Telephones are truly the umbilical chord of the insurance industry. I have never met a CSR who does not spend a large portion of her day connected to a telephone. Let’s use it effectively. Detailed messages are

Sometimes voice mail won’t suffice. Sometimes you simply must talk with someone NOW. Here are a few hints: • Check with a receptionist or someone whose desk is located close to the person you need to speak with to be sure the person you need is actually there. • After making your first call, call back within 10 minutes. If they were on the

phone, they’ll probably be off, as most phone calls are completed within 10 minutes.

Prepare for Breakdowns

Equipment meltdowns are our third biggest time-waster. Computers, phones, air conditioners, copy machines, printers, etc., will inevitably break down at some point. The key here is to be prepared with a backup plan. If the computers crash, plan to use the time for phone calls, reading trade journals, filing, etc. There is always something that can be done without the computer, phone, copy machine, etc. Set up your “time emergency plan”

a friendly interruption and use of the hold button explaining you are being paged or that you have an urgent call you must take, also works. When using this method, always be polite and ask if you may call back. Usually, they say they’re done anyway. Be creative! • Producers have a tendency to think you are poised at your desk, patiently waiting to answer their questions and help with their accounts. A scheduled meeting time seems to work well. Have everyone, including management, agree to this at a staff meeting. Remind any imposing producer that you can help him at the appointed meeting time, unless it’s an emergency. • Bosses can often be the worst offenders of the agreed upon meeting time. If your paycheck depends on it, you’ll have to make an exception. • Vendors should be notified in advance that they need to set up an appointment and allocate a specific amount of time for the meeting.

in advance. Knowing what can be done and being prepared when experiencing an equipment meltdown will save time. By the way, if the electricity goes out, you might as well go home! If you have equipment that is constantly breaking down, it will probably be a lot cheaper to replace the equipment. The cost of lost production time is extremely high.

Control Interruptions

Interruptions must be controlled. There are different types of interruptions and many ways to control them. • Customers—They provide our income and should never be viewed as an interruption. However, tactful maneuvering may be a useful tool, as some customers may enjoy our company a little too much. Certainly, standing at your desk helps to end a visit as does accompanying the client to the door. A quick (not too obvious) glance at your watch also helps. If on a long-winded phone call,

• Fellow workers can be one of the worst time-wasters. If answers to questions can be found elsewhere, such as in a procedure guide, show them where the answer is in the procedure guide, manual, computer, etc., and point them there in the future. It will take a little longer at first, but will save lots of time in the long run. If the answers are all contained in one person’s brain, consider developing a manual or additional training. We need backup. Remember, you cannot advance to another position unless there is someone knowledgeable to handle your position. Also remember, “You can give a man a fish and he eats for a day. You can teach a man to fish and he eats for a lifetime.” If the interruptions are of a personal nature, be bold. Explain you need time to do your work and suggest a personal talk at lunch or after work. Take charge of your time.

tons of time. This is easily accomplished by using a “To Do” list. If you’re not using one, you’re not accomplishing as much as you could be. No, it’s not a suspense system. It is an actual list of what you plan to accomplish today. Needless to say, you probably won’t accomplish it all today. If necessary, simply carry it over to tomorrow’s “To Do” list. The act of writing it down and looking at it several times a day has a huge psychological impact, allowing you to quickly move from one task to another. It keeps you focused and helps to avoid procrastination and errors and omissions. It also helps you feel extremely good about accomplishing items in your allotted time. If I had more time, I could go into more detail on points 6 through 10 of the timewasters list. I could also think of additional ways that time is wasted. For now, I encourage you to make your own top 10 list and see how you can better control these items to manage your time better. TIME. We only have 24 hours a day. Use it effectively.

About the Author: Lynn DellaCroce, CIC, CPIW

Lynn DellaCroce is the owner of LDC Insurance Education in Nipoma, California. She is also a producer for ByarsThompson-Buchanan Insurance Services of Santa Monica. Along with experience as a CSR and producer, she has been teaching for 22 years, including the CISR and Dynamics of Service programs.

Learn More About this Topic from The National Alliance To learn more about effective time management, consider attending a CISR Agency Operations course. Agency Operations covers workflow concepts, automation issues, and agency systems.

Make a List

That brings us to the last time-waster we will be discussing here, and that is a lack of objectives. Planning your day and efficiently managing your desk will save you

Resources Fall/Winter 2003


Denver (Westminster), CO March 22-26, 2004 • On an average day, there are 17 million meetings in America. • The average worker sends and receives 190 messages per day. • The average person today receives more information on a daily basis than the average person received in a lifetime in 1900. • Half of what is known today, we did not know 10 years ago. The amount of knowledge in the world has doubled in the last 10 years. And it is said to be doubling again every 18 months. • By taking one hour per day for independent study, seven hours per week, 365 hours in a year, one can learn at the rate of a full-time student. In three to five years, the average person can become an expert on the topic of his choice, by spending only one hour per day. Make the time NOW for your update requirement with the knowledge and confidence that it will be time well spent: networking with your peers, gaining the most current information available, and rejuvenating your career. —Productivity Institute Study


ocated in the foothills of the Rocky Mountains, the March MEGA promises to be a week jam-packed with educational AND recreational opportunities.

Rocky Mountain Highlights

There will be subjects here for every specialization and experience level, with notto-be-missed presentations by the best in the business. This seminar will include property and casualty coverages, plus life and health and agency management subjects, and the timely risk management courses you’ve been requesting.

A Day on the Mountain, a Night on the Town

MEGA participants can be on the slopes of one of Colorado’s famed ski resorts in less than two hours. And Denver has many other opportunities for entertainment: the Denver Center for Performing Arts Complex and professional sports year-round. Check ahead to see who’s playing!

Total Ticket $365

One price fits all! Create a custom 20-hour (or more!) package for your personal, professional growth. Look over the MEGA Selector for the topics that specifically speak to your needs. You can attend as many sessions beyond 20 hours as you wish, at no extra cost. Be sure to reserve your spot by completing and faxing back the MEGA Selector & Registration Form on page 27.

Hotel Information

Review all your update options at:

The Westin in Westminster is just 15 minutes from both downtown Denver and Boulder, and 30 minutes from Denver International Airport. The Hotel is the centerpiece of the Westminster Promenade—a world-class entertainment and dining venue— so everything you need is right here. For room reservations, call the Westin Westminster at 303-410-5000. The room rate is $129 per night for either a single or double room, and the cut-off date to receive that rate is February 20, 2004.


Resources Fall/Winter 2003

The 2004 Denver MEGA Selector & Registration Form Pick Your Topics In Advance

To meet your state CE requirement and update requirement for CIC or CRM, pick at least five topics (20 hours) from the agenda below. Make your selections by circling the numbers to the left of the topics you wish to attend. Your choices here will not be considered final—you will be free to change your mind later—and this tentative information will greatly assist the Society in preparation for this unique seminar. Remember, one of the great values of the MEGA Seminar is that you may attend more than 20 hours at no extra cost.

Monday, March 22

Wednesday, March 24

Thursday, March 25

7:30 a.m. – 8:00 a.m. Registration with coffee and rolls

7:30 a.m. – 8:00 a.m. Coffee and rolls

7:30 a.m. – 8:00 a.m. Coffee and rolls

8:00 a.m. – 12:00 p.m.

8:00 a.m. – 12:00 p.m.

8:00 a.m. – 12:00 p.m.

1 Inland Marine—A New Perspective

11 Life Insurance Sales Concepts Made Easy

15 Answering Difficult Commercial Lines Questions


Ms. Marjorie L. Segale, CIC, CISR, RPLU, ACSR Insurance Skills Center, Inc. Huntington Beach, CA

2 Personal Lines Questions and Answers Mr. Robert P. Bisaillon Jr., CIC, CPCU Austin, TX

12:00 p.m. – 1:15 p.m. Lunch—on your own 1:15 p.m. – 5:15 p.m.


3 Construction Defect Litigation & Insurance Responses

Ms. Marjorie L. Segale, CIC, CISR, RPLU, ACSR

4 Homeowners 2000 Revisions

Mr. Robert P. Bisaillon Jr., CIC, CPCU

12 Perpetuation, Mergers and Acquisitions, and Agency Valuation Mr. Jonathan J. Persky, CPA, CIC Optimum Performance Solutions, LLC Tampa, FL

Ms. Jo Ann Dickinson, CPA, CIC, LUTCF Dickinson Planning Services San Antonio, TX

6 Ergonomics 101

Friday, March 26

16 Essentials of Automating the Agency Sales Process

1:15 p.m. – 5:15 p.m.

13 Captives: What Are They and Do They Work?

Mr. Ted A. Kinney, CIC, CPCU, ARM, CPIA, AAI, AU

12:00 p.m. – 1:15 p.m. Lunch—on your own

14 The Legal Responsibilities of the Agency Owner as an Employer

1:15 p.m. – 5:15 p.m.


18 Exposures of E-Business and Emerging Insurance Coverages Mr. Richard G. Clarke, CIC, CPCU, RPLU Palmer & Cay, Inc. Atlanta, GA

19 Financial Derivatives As A Risk Man-

Fax It Back!


Mr. Richard G. Clarke, CIC, CPCU, RPLU

Mr. Jerry L. Stevens, Ph.D., CCM University of Richmond Richmond, VA

Mr. Kevin J. Brady, CIC Gallagher Captive Services Inc. Naperville, IL

8:00 a.m. – 12:00 p.m.

22 The Additional Insured Dilemma

17 Financial Statement Analysis for Risk Managers


7:30 a.m. – 8:00 a.m. Coffee and rolls

21 Executive Liability Exposure, Insurance Coverage and Marketing

Mr. Thomas A. Barrett, CIC, AAI SIAA/MidAmerica, Inc. Blowing Rock, NC

12:00 p.m. – 1:15 p.m. Lunch—on your own

7:30 a.m. – 8:00 a.m. Coffee and rolls

5 Current Health Insurance Issues

Mr. Thomas A. Barrett, CIC, AAI

Mr. Ted A. Kinney, CIC, CPCU, ARM, CPIA, AAI, AU Kinney Training and Consulting, LLC Columbus, OH

Mr. Jerry E. Rhinehart, CIC, CLU, ChFC, RHU

Tuesday, March 23


Mr. Jerry L. Stevens, Ph.D., CCM

20 Insurance Sales Solutions and World Class Income



Mr. Jonathan J. Persky, CPA, CIC

8:00 a.m. – 12:00 p.m.

agement Tool

Customize Your Education Experience at the MEGA with Choice and Variety: Select five or more topics, all for the same price!

Please fax back this entire page, with your selections, as soon as possible to: 512-349-6194. (See instructions at the top of this page.) Thank you!

Mr. Mark D. Gaskamp, CRM, CPCU, ARM, CSP, ALCM, CPSI St Paul Company Austin, TX

SS# _____________________________________________________________________________________

Mr. Gerald T. Hargrove, J.D., CIC, CPIA Northside Insurance Cumming, GA

Agency/Company ___________________________________________________________________________

7 Insurance: A Foreign Language

12:00 p.m. – 1:15 p.m. Lunch—on your own 1:15 p.m. – 5:15 p.m.


8 Intellectual Property and Electronic Risk Mr. Gerald T. Hargrove, J.D., CIC, CPIA

9 The Senior Dilemma: Health, Wealth, and Retirement Mr. Jerry E. Rhinehart, CIC, CLU, ChFC, RHU Rhinehart & Associates Lynn Haven, FL

10 The Value of Accidents

Mr. Mark D. Gaskamp, CRM, CPCU, ARM, CSP, ALCM, CPSI

The National Alliance for Insurance Education & Research is registered with the National Association of State Boards of Accountancy as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses. Complaints regarding sponsors may be addressed to NASBA; 150 Fourth Avenue North, Suite 700; Nashville, TN 37219-2417; 615/880-4200.

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new address. Address __________________________________________________________________________________

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General Information Registration Fee: $365* per person. The fee includes materials and reception for participant. All participants must present photo identification to the on-site registrar at the program. Cancellation Fee: Cancellations received within 7 calendar days of a program will incur a $75 fee. If you do not cancel and do not attend the program, you will incur a $125 fee. The balance of the registration fee may be refunded or transferred to another course. You may substitute an eligible person for the same event anytime at no charge with notification prior to the course. * You must be a dues-paid member of the Society of CIC or Certified Risk Managers International to attend a Ruble seminar and receive credit for the CIC or CRM continuing education requirement. The annual dues are $85. In accordance with Title III of the Americans with Disabilities Act, we invite all registrants to advise us of any disability. Please submit your request as far as possible in advance of the program you wish to attend. R-3 Please make payment to: Society of CIC

P. O. Box 27027

Austin, TX 78755-2027


Resources Fall/Winter 2003


ith the recent write-ups about acquisitions by the nation’s largest brokers, we are beginning to see a change in philosophy. Over the past several years, the focus has been on acquisition. We are now noticing that many of the great acquisition opportunities have been exercised. While brokers, banks, and large regional agencies will continue to make acquisitions when opportunities arise, there is a quiet shift toward the hiring of more producers to achieve growth objectives. Why? Simply, there are so many retired agents put out to pasture and so many books of business that have to be serviced that the quest for the “next generation of producer” is now a desperate one. Does that mean you missed the boat on the opportunity to “cash out at the top?” Maybe! As we identify today’s industry challenges, they include captive and direct writers, the Internet, and multiple distribution channels by the insurance carriers that previously distributed their products almost solely with the independent agencies. There are also associations getting into the business, larger accounts going self-insured, and our own agent associations competing against their members. Last week, a hospital called me to ask how to create its own agency to solve their insurance crisis. So, times certainly are changing! Where are we going with this? There are fewer agencies, fewer companies, and a harder market (now leveling off but still difficult). The survivors will be agencies that are focused on growth and profitability, have a solid plan for revenue growth and capturing larger volumes of premium, and are electronically connected to their carriers for ease of doing business. As independent agency owners we are independent, defy the ability to be held accountable for anything from the carriers, want our name on the shingle out front, and have a great need to solve problems for a variety of clients. More than anything, we want to do “what we want whenever we want.” The sad fact is that many agencies have no solid plan for growth and no marketing or sales plan. This year our organization’s survey results show 3 percent had a solid revenue growth strategy for each pro28

Resources Fall/Winter 2003

ducer and 10 percent had a business plan. Agents typically are not savvy marketers, and many suffer from the “cash register mentality” of years gone by—grabbing the next quick sale and neglecting a marketing plan to use throughout the year.

The insurance industry’s biggest need is to attract new talent into our agencies to create new growth and prosperity. With all this as a backdrop, what are the growth options available to you as an agency owner, based on your priorities and your

needs? There are some very viable opportunities to take your agency to the next level and a variety of strategies to make that happen. Let’s explore the options: 1. Keep doing what you’re doing. The positive side of this approach is that you will have no accountability and everything will stay the same. Yes, there have been revenue increases, but many agencies have fewer accounts than before and have lost focus on the new business marketing. So, as the market begins to level off, their revenues will slip. Those agencies will become the acquisition bargains of the future. The downside is that those agencies will be starved for new carriers, have little clout with their existing carriers, and are among the “non-performers” that fall within the carriers’ strategies to eliminate. 2. Broker through a friend. This is great for your friends. While this will solve short-term problems and create temporary revenue for you (today), there are issues of ownership. A very common occurrence is that you could receive a call from the brokering agent to find out that your friend just sold the agency and sold the equity and the revenue stream of the account with it. You’ll average 50 percent commission and your friend gets the other half, the profit sharing, and the equity. Remember, you will not own this account! 3. Use Internet-based markets. Are you sure about this? Have you read about those that are either gone or slowly going out of business because they can’t turn a profit? What protection is there in ownership? Can the Internet-based company sell the book to someone else? Can they one day compete with you for that client? Are you receiving top commissions? Where are the profit sharing and excess compensation checks going? These are short-term fixes to long-term problems— band-aids! 4. Sell to the bank. This is a great perpetuation plan and one that potentially fits the 80 percent of those agents in our business who will be dead or retired in the next 20 years. We see very few agents who want to sell the agency so they can work harder. Normally, the principals slow down, which creates great new business oppor-

tunities for the local competitors. Oh, and they tell you, “Nothing will change.” But in reality, things often do change, and not always for the better. 5. Merge with or purchase an agency. This is a very common practice today and a viable option for an older agent looking for perpetuation. The merger creates clout with carriers and efficiencies in overhead, provided there is a reduction in staff and efficient systems in place. Otherwise we have created a two-headed monster that eats twice the cash. The downside is that someone has to be in control AND they both can’t be ready to retire. There can’t be all chiefs and no Indians. What will the marketing plan, the focus, the business plan be? Answers to these questions are needed before we even begin talking merger or acquisition. 6. Join a franchise. This is popular, but has often failed in the agency business. Are you prepared as an independent business owner to wear the company colors, do as you are told, lose your independence, and learn to ask “Want fries with that?” While this fits around 20 percent of agencies, it rubs the strong, ego-driven, super-producing agency owner the wrong way. 7. Join a cluster. There are millions of dollars in cluster organizations and some have done a very good job. Carriers are concerned about who has the contractual control. With no common decision-makers, an enormous adverse selection issue, historical loss ratio issues, and the fact that agencies view this as the insurance hotel “checking in and out at will,” the instability of the membership and the carrier loss ratios can make for a challenging ride. It is a viable short-term option. Key word here: short-term. 8. Create a joint venture with another agency. This is an option for top performers (10 percent or less of the universe) who are young and aggressive and looking for larger regional agencies in their area that also want to remain independent, but are willing to help their peers in accessing local carriers and expertise. The markets and the expertise are both local and the partner is a pre-existing, successful regional agency. We see this as an excellent way to help an aggressive agency looking for a long-term stable fix. Obviously, there need to be controls, but it provides those

agencies fitting the growth model with opportunities and eliminates the larger agency’s need to hire and house producers. The option will not fit everyone. If you’re late in a career, going into a long-term venture may not be for you. The fact of the matter is that there are no right or wrong answers. There are many “fads” and some viable short-term and long-term fixes. It is important that you search for the option that fits your needs and is best suited to your own unique circumstances.

About the Author: Tom Barrett, CIC, AAI

Tom Barrett is president of SIAA MidAmerica, Inc., an insurance organization with 300 offices. He is on the national faculty of Dynamics of Selling and teaches at the Marketing & Sales, MEGA, and Multiple Topic Ruble Seminars. Tom works with a dozen of the nation’s top 25 brokers as a sales consultant with Dynamics of Selling. If you’d like to hear Tom teach, register for one of the following 2004 events: Marketing & Sales Ruble Seminars Las Vegas, NV February 18–20 Seattle, WA April 28–30 MEGA Ruble Seminar Denver, CO

March 22–26

Multiple Topic Seminar Chicago, IL

August 11–13

Learn More About this Topic from The National Alliance The National Alliance offers several options for learning more about agency growth. We’ve developed the topic into a four-hour session for both the MEGA and Marketing & Sales Ruble Seminars. The Agency Management Practices Ruble covers perpetuation, mergers, and acquisitions. And, the CIC Agency Management Institute discusses agency marketing. In addition, you’ll find that The Academy’s publication, Maximizing Agency Value II, is also a good resource for related information.

Resources Fall/Winter 2003


As an adult, I can think fondly about all those pearls of wisdom our moms picked up, presumably from their moms, and passed on to us. It was all for our own good. And Mom was always right. And although the childhood transgressions that triggered these “Momisms” are long in the past for most of us, Mom’s guidance is still pretty useful. Her

sage words of wisdom are easily translated into risk management axioms. Budget implications come to mind with that famous line, “Money doesn’t grow on trees.” And of course there is this favorite: “I don’t care who started it!” In the past, risk managers reacted to protect the assets of the organization. The risk management profession began as an administrative role—purchasing insurance. The job then evolved into a professional management position. We became responsible for identifying, assess-

ing, and controlling the organization’s risk. We purchased insurance as only one of our options. Yes, insurance is a valuable buffer for the profit and loss statement, but purchasing insurance is no longer our key role. In today’s organizations, effective risk managers have developed a new perspective and a wider range of knowledge. In the fast-changing domain of new risks, especially non-insurable risks, we must adopt innovative approaches. No matter “who started it,” the successful risk manager has evolved beyond a reactive approach and holds a proactive, visionary plan that helps the organization achieve its mission and goals, regardless of any stress, alarm, shock, or surprise.


Resources Fall/Winter 2003

How about: “Would you jump off a cliff if everyone else did?” I remember hearing that one a few times. Usually, it meant that I should think for myself and not let my friends lead me across a busy road—or astray. A few decades later, it applies quite nicely to the discovery of significant risks that are unrelated to insurance. Suddenly, risk managers are expected to be experts in managing new risks—mold, terrorism, market risks, credit risks, technology risks, fraud. You may be asked to manage risks related to trade secret loss, intellectual property, contractual risks, regulatory, and reputational risks. These complex risks have created opportunities for hucksters to bilk us with scare tactics, and we are often urged to spend our money unwisely. In recent events of top-executive fraud, remember how quickly all available limits of insurance were exhausted or denied. The risk manager’s job is not to jump off a cliff by buying more insurance, but to put in place loss control measures to keep bad

things from happening and also determine the least expensive way to finance losses (whether insurable or not) that do befall the organization. “An ounce of prevention is worth a pound of cure.” Risk managers can interpret this to mean, “An ounce of risk control is worth a pound of risk financing.” How valuable is that risk control? Let’s assume that every dollar spent on risk control saves $1.50 on risk financing, or a net savings of 50 cents. If your company spent $15,000 on risk financing last year, then you could have spent $10,000 on risk control instead and saved $5,000. As Mom said, “A penny saved is a penny earned.” If we save 500,000 pennies for our company, then as risk managers we’re creating real value for our shareholders. And isn’t that a

purpose of any manager, including the risk manager? “No dessert until you finish your dinner!” Let’s say your new risk control project just saved your company $4,000. What would you do with that money? Your CFO would say, “Pay yourself first.” But in what would you invest? How do you allocate your scarce dollars—in risk control, or risk financing, or both? “All that glitters is not gold.” The flashy projects the risk financing people propose and the exciting new policies with which the broker is enticing you may not be creating the same value for your firm as a new risk control project. Risk control projects may not be too exciting, but they create real long-term value. In the past, we compensated for loss by receiving cash from an insurer in exchange for a premium paid at an earlier date. This was great risk financing against fire, machinery breakdown losses, and even weather catastrophes. With the risks every organization faces today, you must develop innovative, visionary risk control plans.

Most of us also experienced “Momisms” that were less universal, more likely to be tailored to our individual behaviors—but drummed into us with the same relentless repetition. “You always wear your helmet, don’t you?” I heard this one every time I was ready to take off on my bicycle. But I always obeyed and it always worked. Translated to the risk management realm, wearing your helmet is analogous to having cash on hand to cover those surprise expenses, spreading your money around a lot of different investments, working hard to prepare for upcoming insurance renewals, benchmark-ing your firm against every available source, and even analyzing the pros and cons of broker competition. When you make your budget presentation to your CEO or CFO, make sure you are wearing your helmet—explore all your options before you submit the budget. Think about it enough and you realize our moms really did try their best to prepare us for life as grownups. But it’s up to us to wear our helmets, buckle our seatbelts, and pay attention. After all, “When you don’t listen to your Mom, that’s when you get into trouble.”

For example, a risk manager may be involved in developing a litigation management program, including alternative dispute resolution systems, settlement negotiations, and early-case resolution. “Don’t put off until tomorrow what you can do today.” Mothers borrowed this, probably without realizing it, from Lord Chesterfield, the 18th-century British politician. It applies to risk management just as well as it does to everything else. Specifically: rebalance your portfolio, renegotiate your coverages, identify exposures, determine whether to retain the risk or not. In other words, you need to decide what to do today, rather than tomorrow, after disaster strikes.

About the Author: James W. Kallman, Ph.D., ARM

James is executive vice president and director for The Academy of Producer Insurance Studies and curriculum director for the CRM Program. Dr. Kallman taught risk management classes at The College of Insurance. He is an international lecturer on risk management topics and a former agency owner.

Earn CE credits and a designation with your colleagues at a convenient time and location! Train your entire customer service team at the same time! The National Alliance is pleased to announce that full CISR OnLine registration is discounted for groups of 25 or more people from the same company or agency who register as a group. CISR OnLine provides an ideal group learning opportunity. Take advantage of substantial savings when registrations are purchased in groups: 25–49 people .............. 7% Discount Applies 50–74 people .............10% Discount Applies 75– 99 people ........... 12% Discount Applies 100–125 people ........ 15% Discount Applies More than 125—Contact The National Alliance.

When registering as a group, we request that the “lead” participant fills out the group registration form and acts as the contact for the group. We also ask the lead participant to fill in the names of participating individuals for our records.

Register today for group discounts. Call 800-633-2165, ext. 176, or email

Resources Fall/Winter 2003


THIRTY As The National Alliance for Insurance Education & Research reaches the 35-year mark, we have 110,000 reasons to celebrate—they are our participants! We’ve shared a remarkable 35-year journey with the best professionals in the business. Together, we’ve engineered change, built reputations, and thrived in an economy that continues to surprise us. Reflecting on the past 35 years... On September 10th of 1969, at the Sheraton Crest Hotel in Austin, Texas, 32 dedicated insurance professionals attended a Personal Lines class, and the CIC Program was “instituted.” History smiled on this occasion. The National Alliance—or more specifically, its linchpin and cornerstone, the Society of CIC—began its 35th year this September, and it’s a time of celebration for the insurance industry as well as the not-for-profit organization. The two have grown up together—with shared history and linked destinies. In the course of 35 years, The National Alliance has become—and been widely recognized—as the premier provider of insurance education in the country. That isn’t mere hometown pride speaking—it’s the consensus of the participants in our almost 2,000 courses conducted each year, who recognize great professional education when they experience it. Harder to measure, but still undeniable, is the influence of The National Alliance on the industry’s culture: the commitment to ongoing continuing education; the pride in professionalism that comes with a prestigious designation; and the influence and impact knowledgeable insurance and risk management practitioners have on their customers daily.

In the good old days... What was happening in the insurance industry in 1969, when the Society of CIC was first founded? For those too young (or too old) to remember, here are a few reminders: 1.

There were virtually no CE laws in any state. 2.

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Some of the big carriers were Home, aetna, Aetna, (called “little” and “big” aetna) and INA.

What a Great Ride! FIVE YEARS 3.

The Special Multi-Peril (SMP) was about to get started.


The CGL Policy was called Comprehensive General Liability.


The General Liability Policy came in three versions: the CGL, M&C, and OL&T.


The CGL Policy covered pollution, if it was “sudden and accidental.”


The Homeowners Policy, Section II Liability Limits were a whopping $10,000; but you could buy more if you wanted.


The Personal Auto Liability State Mandatory Limits were in many cases $10,000/$20,000 Bodily Injury and $5,000 Property Damage.


There was no such thing as a BOP.

nationwide. ■

The CRM Program was founded in 1996. Today, there are close to 800 CRM designation-holders.

The first Producer School debuted in 2000. Now, several three-week schools per year train the industry’s top new commercial producers.

CISR OnLine went live in 2001. Today, we’re extending online education to include Ethics and CRM courses.

Moving Forward The National Alliance continues to explore new horizons, yet our goals remain unchanged. You can count on us to: ■

Provide comprehensive continuing education programs to those who have made a career commitment to insurance and risk management.

Structure the programs so individuals can participate at a reasonable cost—in terms of both time and money.

Recognize the successful professionals who have earned the designations.

Maintain the high standards set by the founders requiring that each individual must make his/her own personal commitment to ongoing education.

10. “Direct bill” were dirty words. 11. Insurance company cars came with radios as an option, which most companies wouldn’t allow. And a new Chevy cost around $3,800. 12. Adjusters’ starting pay averaged $200 a week.

Historical Highlights Through the years, as we’ve marked several milestones, our participants have enjoyed more education options than ever before. ■

The CIC Program was launched in 1969; the first designees were conferred in 1970. Today, almost 26,000 CICs proudly wear the gold triangle. The Academy was founded in 1983. Forty publications have now been produced by The Academy, with research and investigation that never quits. The CISR Program was founded in 1986. Today, there are 17,400+ CISRs

Offer a wide spectrum of available program choices, update options, and professional opportunities.

A Big Thank You To... The CIC/CRM Board of Governors; CISR Board of Governors; The Academy Board of Directors. Our Board members invest a

considerable amount of time and energy to “do what is best for the participants.”

A continuing education program is only as good as the faculty who teach it. Ours is the best. Our National Faculty.

Our licensee partners make national presentation of our programs a reality. Together, we conduct close to 2,000 programs annually. Our Licensees/State Associations.

Our Educational Consultants. The presence of an ed consultant at each program ensures consistent delivery; they are responsible for academic content, and construct and supervise the examinations.

To maintain the quality of our programs, education committees review the courses and offer valuable feedback from participants. They represent you, on a completely voluntary basis. Our Education Committees.

What lies ahead? The names may change, but we’re convinced that the desire for success and professionalism through education will remain the same. The National Alliance will continue to make the survival tools of the future accessible and affordable. It will continue to be an organization of vision, innovation, and integrity—transmitting the achievements of past generations and equipping new generations for the future. On our 35th anniversary, it’s a time to look back with pride and ahead with confidence. It’s been a great 35 years, and we’re looking forward to the challenges and fun of the next 35. Our new logo marks the beginning of a new journey—a small, bold reminder of the exciting potential that awaits us all. We have no doubt that the best is yet ahead! Thank you from all of us at The National Alliance!

Answers for Homeowners and Dwelling quiz on page 7. 1. True; 2. False–only need $2,000 comp.; 3. False–exception b.(3); 4. True; 5. False–PI not covered; 6. False–exclusion 4.c.1.a.; 7. False–WC exclusion; 8. False–included within Cov. C limit; 9. True; 10. False–2-week period Resources Fall/Winter 2003


ntroducing Dewinda A. Ford, CIC, ACSR, CPIW, of The Bramlett Agency, Inc., in Ardmore, Oklahoma—Winner of the 2003 National Outstanding CSR of the Year Award. Ms. Ford, a commercial lines manager customer service representative with 38 years of experience in the insurance profession, also serves The Bramlett Agency as vice president and office manager. She recently celebrated her 30th anniverary with the agency. Ms. Ford is very active in her community, serving on the Lone Grove City Council for six years, one year as mayor. Additionally, she volunteers in 4H, her church, March of Dimes, and the American Cancer Society. Ms. Ford is a former Ardmore, Oklahoma “Insurance Woman of the Year” and a previous winner of the Outstanding CSR of the Year for Oklahoma. A blue-ribbon panel of four judges selected Ms. Ford from a field of 42 state winners, based on her contributions to the industry and her community, and on her essay on the topic, “How CSRs Find Success Using Five Essential Service Skills.” Dewinda Ford’s dedication to her profession was apparent throughout her winning essay, reprinted here for Resources readers.


Resources Fall/Winter 2003

To help defer the expenses of a newly married couple just a few months out of high school, I looked for a job, any job. As circumstances would have it, I found a job as a file clerk with an insurance company that was trying to establish themselves in the south central United States. Subsequently, I worked my way up to a commercial lines rater with this company. I discovered immediately that in order to have a good rapport with the agents, I needed to provide them with fast, courteous, and accurate service. These are the service skills I employed then, and more than 30 years later I still adhere to them. However, as I began dealing with insurance customers on the agency side of the business, I came to realize that all insurance agents sell insurance and the most important thing we as CSRs have to offer is service. As I see it, service can be divided into several areas: making our clients feel special, creating a bond of trust, providing a certain level of service, extending product knowledge, and developing strong producer/company/coworker relationships. Over the years I have established a level of friendship with our customers. We relate on a business level as well as a personal level. We discuss their business needs and goals, and how we as insurance professionals can provide products and services to help them achieve their goals. We also get to know each other personally by sharing information about our families and friends. We celebrate together and cry together as the occasion warrants. I value both the business and personal relationships with my customers.

To create a bond of trust, the old saying comes to mind, “A man is only as good as his word.” We have to give our word and make good on it. When we tell our customers that we will do something, we must carry through in a timely manner. Even though we cannot always accommodate the needs and wishes of a customer, if we are forthright about situations and do our very best to keep them informed about their coverage, claims, and market changes, a bond of trust will grow to the benefit of both CSR and customer. Providing the highest level of service has always been my goal and is something for which we should all strive. I was recently reminded of how excellent service affects customers. My boss provided my husband and me with a cruise for my 30 years of service to the agency. While on the cruise I noted several aspects of their service. It seemed as if Mr. and Mrs. Ford were very important people. The various crew members always knew our name. Our cabin steward in particular was very courteous. He always had little surprises in our cabin each day and wanted to know if he could do anything to make our adventure more pleasurable. In other words, he went above and beyond what was required of his position, making us feel special. It was a wonderful feeling to know that if I go above and beyond, my customers too can feel that special. I truly believe that going above and beyond the job requirement will set you apart. I believe that providing quality service is our responsibility. I have always wanted my customers to be knowledgeable about their insurance coverages. In one respect, this is a little selfish on my part because my

job becomes easier when the insured is educated on the various aspects of their insurance coverage, but it also goes back to our responsibility to provide quality service to the customer. As a CSR, I believe that it is my duty to help the insured understand their coverage as well as they can. I do find resistance occasionally, but overall, I find the customer wants to be better informed about coverage, limitations, and deductibles. The same aspects of service relate to the producers, company representatives, and fellow employees. You can be a great customer service representative with regard to customers; however, you also have to have a strong, stable relationship with the producers, company representatives, and coworkers. After all, the producers provide the customers, the companies provide the products, and colleagues work intermittingly to fulfill the clients’ needs. I value my relationship with everyone in our agency and the companies with which we work. I feel as if they are part of my family and try to treat them as such. I find that establishing special relationships with customers, creating a bond of trust, providing a level of service above and beyond the call of duty, extending product knowledge, and producer/company/coworker relationships are skills that are invaluable tools within our industry. They have definitely served me well during my more than three decades in this business. I honestly believe that our industry, as a whole, has the best service representatives and I love being in the service industry. I feel that I have been called to serve my fellow man and look forward to continuing to provide service to the best of my ability.

Resources Fall/Winter 2003


he excerpts from the four finalists’ essays touch on a variety of skills, including trust, knowledge, motivation, communication, attitude, listening, timeliness, negotiation, organization, and accuracy. While the essay limited CSRs to defining only five essential skills, the four finalists obviously possess and use a multitude of skills on a daily basis to be successful in their careers. CSRs have a duty to their agency’s customers, providing them with the proper coverage and quality service. CSRs help their clients to remain or become successful, and this leads to their own success. CSRs work as a team with their coworkers—producers, principals, managers, and other CSRs—collaborating to form a successful agency. CSRs must interact with insurance company employees and a variety of other professionals to provide service for their clients and products for the agency. CSRs use an asssortment of skills and work with many different types of individuals to bring success to their clients and their agencies. The following excerpts give just a glimpse into what it takes to be a successful CSR—and the skills that make it happen. “The divisions of an organization are links in a chain with a single purpose: satisfied, loyal customers.” For success with our customers, it is fundamental to follow the five essential service skills—motivation, knowledge, communication, empathy, and avoidance of complacency. 1. Moving mountains with motivation: The tools that inspire motivation and move you towards your destination of high performance are policies, procedures and personal practices such as setting objectives and performance appraisals. Develop a personal policy to see challenges as opportunities—opportunities to learn, change a customer’s feelings, and distinguish yourself—and, in turn, you will be perceived positively, find satisfaction in your job, and motivate those around you.


Resources Fall/Winter 2003

2. Overcome roadblocks with knowledge: To be customer focused and provide exceptional service, you must completely and thoroughly understand what you are servicing. The customer relies on you to be the expert and the teacher. Being knowledgeable makes the customer comfortable and confident in the product or service he/she is being provided which, in turn, makes your company reputable and your job easier. 3. Communication is the bridge: Carefully listen to your customer to allow you to better diagnose their needs, help prevent problems from arising, and show that you care. Use words and phrases to create a positive image in the customer’s mind.

Jacqueline A. Cameron, CISR SWBC Insurance Services, Inc. San Antonio, TX 4. Explore empathy to find trust: Trust is the foundation for reliability, dependability, and honesty. When customers feel that you care, they are more willing to listen. This will give you the opportunity to accomplish your goal—educating them, alleviating the problem, and encouraging them to become active in finding a solution. 5. Avoid the complacency dead-end: Effective service improvement is the cumulative effort of many small improvements made daily at every level. It often requires changing your attitude from one that accepts the status quo to one that is excited about change and continuous improvement.

Elaine Slate, CIC, ARM, CPIW, AU Holmes Murphy & Associates, Inc. West Des Moines, IA

“Many clients feel CSRs’ top priority is to obtain the best coverage at the best price.” To accomplish this and many other tasks, CSRs should acquire and improve skills by obtaining education from the various educational institutions, belonging to a professional insurance association, and mentoring with an experienced CSR. 1. Negotiation skills: With in-house training, I expanded my repertoire of negotiation styles and improved my ability to seek the “win-win” solution for both the client and the insurance carrier. Years of experience

give me the ability to provide my clients with more than what they asked for. 2. Communication skills: We need to first listen to our clients to find out what they need, and then ask the appropriate probing questions to learn as much about them as possible. Armed with that knowledge, we can approach the insurance marketplace with the tools we need to meet the client’s needs. 3. Organizational skills: We have to be capable of multi-tasking, including an-

swering phone calls and emails, attending meetings, and communicating with our work associates. This is in addition to our daily work, such as checking policies, preparing proposals, and processing audits. 4. Technical insurance knowledge: As licensed insurance professionals, we are held to a higher duty of care in handling the insurance needs of our clients. Because of this higher duty, we are required to take continuing education classes and keep current with the many changes taking place in our industry. 5. Knowledge of our clients: To be truly successful, a CSR must know their clients to anticipate and serve their needs. The Internet now makes it easier to obtain historical, financial, and product information, and knowledge spells success.

“During these hard market times…, it is my service skills Ann C. Tharp, CIC, CISR, that will make a difference in renewing an account.” ACSR, CPIW, DAE Success comes each time that any one of these service skills is used to maintain and keep a customer’s account, or when a new customer is added. The five skills I need on a daily basis are: education, promptness, accuracy, discretion, and a caring attitude. 1. Education: Education is the most important tool for customer service. Education gives me the tools needed to help my customers for a variety of situations, from finding a niche market for a special situation or providing coverage to meet a contractual requirement. 2. Promptness: Prompt handling of a request from a customer is a way to increase

Collins Insurance Agency New Albany, MS our service score with that customer. For example, contractor and trucking clients depend on their certificate requests to be sonal and business handled promptly in order to keep their financial informabusinesses running smoothly. tion is most impor3. Accuracy: A change request, certificate, tant and is the one or bond processed promptly, but inac- area where I feel curately, does not provide our customers success is shown with good service. When dealing with by the trust placed with our agency by our contractors, I provide them with that many customers. extra blanket of security that comes from knowing their request will be handled accurately. 4. Discretion: Lack of discretion can ruin a customer relationship and bring an end to success. My discretion with the use of per-

“Success is best defined by helping people get what they want.” This, in due course, enables you to get what you want. To help others and ultimately succeed, I use five essential service skills which bring an intrinsic reward that you have done your best.

current marketplace and requests from my clients and coworkers as opportunities to improve myself and become better at my job.

1. Team player: Achievement is usually based on the cumulative effects and input of many. With the cooperation and efforts of my brokers, coworkers, underwriters, and claims representatives, we are all able to achieve.

3. Listening: I listen to understand what is truly needed by my clients, underwriters, marketers, and brokers. I ask direct questions to make sure I understand what they need and when they will need it. I use all the resources in my power to provide what they need.

2. Attitude: There is nothing more powerful than the effect of your attitude. It is the only thing you have complete control over, every day. I look at the challenges in the

4. Knowledge: I need to know the insurance coverages and how they should be applied to my clients to best protect their

5. Attitude: Most of the time, my first contact with a customer is by telephone. My customers need to be able to tell by the tone of my voice that I do care about them and am there to assist them in any way I can.

Peggy J. Fletcher, CIC Charles L. Crane Insurance Agency St. Louis, MO assets. I must keep up with changes in carriers’ financial stability to best assist my clients. Expressions such as, “I’ll try,” “I can help you,” and “I’ll look into this,” are windows of opportunities that challenge us to better ourselves and to expect the best from those around us. 5. Expediting: Expediting and disseminating information on a timely basis is crucial. I always try and move information within a day. If I can’t meet this deadline, I let people know the status, and this gives them a sense of reassurance and is the essence of “service.”

Resources Fall/Winter 2003


Independents Merge to Form Bates & Byrne

Two friendly rivals, Kelly J. Byrne, and David “Bubba” Bates, CIC, from the Birmingham, Alabama area, have joined forces to become Bates & Byrne Insurance Inc., located in Irondale. The two independent agents have more than 20 years of combined insurance experience and have known each other since high school. Bates and Byrne—the company’s president and vice president, respectively—have plans to expand their business by acquiring other agencies by the end of the year. Birmingham

Montana CIC is 13 Times a Winner

Vickie J. Woloszyn, CIC, CPIW, received Safeco Insurance Company’s Award of Excellence—the 13th year in a row to receive the honor. The award recognizes agents who produce quality business and demonstrate excellent underwriting skills. Woloszyn is the branch manager of Talbot Insurance Agency in Bozeman. Bozeman Daily Chronicle

Introducing James W. Kallman, Ph.D., ARM

The National Alliance has a new executive vice president and director of The Academy: Dr. James Kallman has joined us from St. John’s University, the School of Risk Management (formerly The College of Insurance), where he taught a wide range of graduate and undergraduate risk management classes. Dr. Kallman will play a leading role in guiding research and product development for The Academy, and will be responsible for updating and expanding the curriculum of the CRM Program. He is an international lecturer on risk management topics and a former agency owner. 38

Resources Fall/Winter 2003

PIANJ President D’Agostino Meets with NAIC

The Department of Banking and Insurance Commissioner’s Office invited the Professional Insurance Agents of New Jersey to participate in the National Association of Insurance Commissioners’ summer meeting held in New York City. Association president John D’Agostino Jr., CIC, represented PIANJ. Topics of discussion were expedited rate approval processes, the excess profits law, withdrawals, and more. Professional Insurance Agents

North Carolina Agent Receives Duo Awards

Buck Harris, CIC, president and owner of the Harris & Company insurance agency in Sanford, North Carolina, has been awarded two top honors in recent months. Harris received the prestigious Founder’s Award from Erie Insurance Group, recognizing a select group of Erie Insurance agents for outstanding sales and profitability achievements. It is the sixth year he has achieved this distinction. Additionally, Harris was voted the “Best Insurance Agent in Lee County in 2003” by The Sanford Herald after the local paper polled its readers. The Sanford Herald

Greensboro Insurance Women Elect Suriani President

Ann Suriani, CIC, CPIW, of Senn, Dunn, Marsh & Roland Insurors in Greensboro, North Carolina, has been elected president of the Greensboro Insurance Women, one of 350 chapters that belong to the National Association of Insurance Women. News & Record

IIAT Elects Reynolds for 2003– 2004 Term

During the 106th annual convention of the Independent Insurance Agents of Texas, Randy Reynolds, CIC, CPCU, managing partner of Texas Associates Insurors, Austin, was elected as vice president of the association. Reynolds’ term began September 1st. Insurance Record

Maddox McCoy Joins Legacy Texas Team

Legacy Texas Insurance Services recently welcomed Patricia A. Maddox McCoy, CIC, to the team as account executive. Maddox entered the insurance field in 1993, working with homebuilders and contractors. She earned her CIC in 2002. Builder Insider

New Mexico Insurance Professionals Honored

A select group of insurance professionals from across New Mexico were honored at a special ceremony August 22nd in Albuquerque. Seven received the CIC designation and six were designated CISRs. The conferment ceremony also served as a celebration of the 25th Anniversary of the CIC Program in New Mexico. News Release Pictured, left to right: William T. Hold (speaker), Shawn Cummings, CIC, Frances Harding, CIC, Jerry Brockman, CIC, Diana Padilla, CIC, Frankie Cordova, CISR, Tonya Huelskamp, CISR, Julie Decker, CIC

Robin Welsch Joins Walenta & Clark

Robin Chase Welsch, CISR, recently joined the staff at Walenta & Clark Agency in Greenville, New York, bringing with her 20 years of experience as a customer service representative. At Walenta & Clark, Welsch will handle all aspects of the insurance business, working directly with clients and assisting them with claims. Catskill Mail

South Carolina Agent Featured in Newsletter

The story of the growth of The Commonwealth Insurance Brokers of North Charleston and its founder and president, Todd R. Tyler, CIC, were featured in the June Applied Systems newsletter. Established in 1997, Commonwealth has grown from two employees to three offices. Tyler was named one of the Charleston Regional Business Journal’s “Top 40 Under 40.” IIABSC Agent News

AIIA Appoints McCarley Executive VP and Harris Education Director

Missouri AIA Installs Officers and Announces Awards

A preponderance of CICs were installed as officers in the Missouri Association of Insurance Agents this past July, during the association’s annual leadership conference in Branson. In key executive positions: Vice president Richard V. Minor, CIC; secretary/treasurer R. Alan Hedrick, CIC; past president H. Butch James, CIC, CPCU; IIAA state national director Richard E. Clift, CIC; and PIA national director, Carrol L. Hess, CIC, CPIA. Award recipients: JoAnn Evans, CIC, the Insurance Person of the Year; Charles T. “Charlie” Brown, CIC, LUTCF, E. Ellwood Willard Outstanding Service Award; John E. Akers, CIC, 2003 Young Agent of the Year; Peggy J. Fletcher, CIC, Missouri’s Outstanding Customer Service Representative of the Year (Fletcher was one of five finalists for the national award). MAIA News Release

Troy Harris

The Alabama Independent Insurance Association announced that Troy Harris, CIC, is the new director of education and technical affairs for the organization. Harris takes over the position formerly held by Victor McCarley, CIC, who is now the association’s executive vice president. McCarley led the state association to win the L. P. McCord Award for seven years in a row. Harris will direct the association’s education programs, including CIC institutes and CISR courses. The Alabama Independent

Ed Chair and VP Education Reappointed to CE Panel

Independent Insurance Agents & Brokers of South Carolina education chairman Kathy D. McKay, CIC, CPIW, of Charleston, and vice president of education Rebecca H. “Becky” McCormack, CIC, CPCU, AAI, CPIW, have been reappointed to the South Carolina Department of Insurance’s Continuing Education Advisory Committee, which approves all CE courses and instructors. McCormack has been re-elected to the position of committee chairman. IIABSC Agent News

Becky McCormack

Have You Been “In the News” Lately? To submit items for editorial consideration, send article with picture to: The National Alliance/Resources, P.O. Box 27027, Austin, TX 78755-2027. Resources Fall/Winter 2003


P.O. Box 27027, Austin, Texas 78755-2027

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Resources Magazine Fall & Winter 2003  

Resources Magazine Fall & Winter 2003