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“La Voz” is the official monthly e-publication of the
Independent Insurance Agents of NM 1511 University Blvd. NE Albuquerque, NM 87102. (505) 843-7231. Fax (505) 243-3367. Web site www.iianm.org.
"The Voice" of Independent Agents since 1934
This publication is intended to provide accurate and authoritative information on the subject matter covered, but is distributed with the understanding that neither IIANM, nor any contributing author, publisher, contributor or advertiser is rendering legal, accounting or any other professional service and assume no liability whatsoever in connection with its use. Further, the electronic links to our advertisers and/ or contributors found in this publication are provided as a courtesy to our readers and do not necessarily indicate an endorsement by IIANM.
IIANM Events
VoZ
July’s “What’s Happening” Clickable Calendar
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IIANM’s Convention Registration 05 Last Chance Seminar 07
Features
News items from members of Independent Insurance Agents of New Mexico and the general insurance industry are encouraged. The advertising deadline is the fifteenth day of the month, preceding publication.
The PAP and College Students 11 PRINCIPAL - Can Insurers Keep Up with Consumer Website Demands? 12 PRODUCER - Insuring Wineries & Breweries
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Advertising rates are available upon request.
CSR - Prospect Effectively 16
Please contact Rachel Sheffield at rachel@iianm.org for details
WCA Golf Tournament 18
IIANM Staff
PRINCIPAL - Ins Agencies are Failing to Meet Customer Expectations
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PRODUCER - Homeowners Claim Frequency Volatile & on the Rise
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CSR - Ten Ideas to Help You Obtain Customer Loyalty
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President/CEO Thom Turbett COO Consuelo Trujillo
In Every Issue
Insurance Programs Administrator Renee Trujillo
IIANM 2015 Company Partners! 06
Social Media Director Jacob Grant
Snap Stats 26
Communications Director Rachel Sheffield Reception Eric Crisostomo
2014-2015 Officers Chair Gabe Portillo
Tech Talk 08 Odds n Ends 27
Advertiser Index Acuity 09 Burns & Wilcox Back Cover Market Finders, Inc. 13
Vice-Chair Connie Sevier
MHI General Agency 10
Secretary/Treasurer Mike Parisi
New Mexico Mutual 02
National Director Sam Conlee
Union Standard 25
Immediate Past Chair Diana Hobbs
Mountain States Insurance Group
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Trustco / HCIT 15
Click here to reserve advertising space in an upcoming issue of La Voz magazine.
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Au gust
2015
Click on a class to register: Monday
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Tuesday
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Wednesday
5 P&C Exam Review
Thursday
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Friday
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sts a c web
Kitty Leslie
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2CE
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Liability Issues to Worry About Indemnity Agreements & Additional Insureds 2CE
Webcast: Commercial Lines Claims That Cause Problems
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13 Webcast:
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Guaranteed Sales Success
Training New Employees
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Webcast: Procedures Manual 1, 2, 3 – An E&O Overview
Time Management
3CE
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(No CE Credits)
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Last Chance Seminar
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28 All Day Ethics
Business Body Language
Phone Etiquette
15 CE hours
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Employment Law
Start Your Adventure CompanyReps
Exhibitors 5
These carriers have partnered with our association to support the vitality of the independent agent system in New Mexico. Take a moment to visit their new page on our site and take advantage of their varied products and services. Independent agents have the freedom to choose!
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August 25th & 26th, 2015 IIANM Building, Albuquerque, NM
Don’t Be Late! It’s your “Last Chance” to get your 15 hours of Continuing Education in a classroom setting
Last Chance seminar
August 25th Morning Class 8:00 - 12:00pm / Homeowners
Full Seminar (15 CE hrs): Member: $200 / Nonmember: $240
Afternoon Class 1:00 - 4:00pm / Commercial Crime 4:00 - 5:00pm / Ethics Hour August 26th Morning Class 8:00 - 12:00pm / Liability for Contractors
One Full Day (8 CE hrs): Member: $105 / Nonmember: $140 One Half Day (AM 4 CE hrs / PM 3 CE hrs): Member: $70 / Nonmember: $75
Afternoon Class 1:00 - 4:00pm / PL Related Coverages
Half Day with Ethics: Member: $90 / Nonmember: $100 Ethics Only (1 CE hrs): Member: $35 / Nonmember: $45
Ethics All Day
NextGen Registration (15 CE hrs): Member: $150
August 27th
Register
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Steve
ANDERSON.com by, Steve Anderson (Always feel free to email me with comments, new ideas or products that have worked for you. I will check them out and spread the word!)
Automatically Run Programs at Windows Startup My primary computer is a laptop. When I start my computer – either in my office using a docking station or when I’m on the road – I usually open Outlook (my preferred email client) and Chrome (my favorite browser) immediately after the computer finishes its startup sequence. If you always open the same programs after starting your computers, such as a web browser or email program, you might find it convenient to have these programs start automatically when you start Windows. The Windows operating system provides an easy way for you to tell it what pro-
grams to start automatically. Programs or shortcuts placed in the Startup folder will run whenever Windows starts. It is easy to add shortcuts to this folder. Here are the steps for Windows 7: 1. Click the Start button, click All Programs, scroll down to the Startup folder and right-click, and then click Open. This will open the folder in File Explore. 2. To find a program you want to add to this folder, click the Start button again and using the search box to locate the program you wish to add to the Startup folder. You can also open the location that contains the item you want to create a shortcut for. 3. Right-click the item, and then click Create Shortcut. The new shortcut appears in the same location as the original item. 4. Drag the shortcut to the Startup folder. You can also navigate to the Startup folder and select Paste to add the shortcut to the folder. The next time you start Windows, the program will run automatically. Note: You can also make an individual file, such as a word processing document, open automatically by dragging a shortcut to the file into the Startup folder. While this may seem like a small savings in time and effort, I believe anytime you can automate a repeating task the savings add up quickly
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For All That Matters
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Virtual University’s Ask an Expert
by, Bill Wilson
the pap and college students
Your 20-year-old daughter is away at college. She does not have a car on campus, but her roommate does and she drives the auto occasionally. Would your unendorsed personal auto policy respond if she has an accident driving the car? If not, is there anything you can do about it? You might be surprised... Courts have generally held that students away at school are still considered to be "family members" under the PP 00 01 06 98​and, thus, are covered while operating autos at school. However, there is an important exclusion in the PAP that says [emphasis added]: B. We do not provide Liability Coverage for the ownership, maintenance or use of: 3. Any vehicle, other than "your covered auto", which is: a. Owned by any "family member"; or b. Furnished or available for the regular use of any "family member". However, this Exclusion (B.3.) does not apply to you while you are maintaining or "occupying" any vehicle which is: a. Owned by a "family member"; or b. Furnished or available for the regular use of a "family member". As you can see, IF the vehicle is "furnished or available" for the "regular use" of a "family member," there is no coverage under the parents' policy while the student drives the car. Without debating the issues of "furnished or available" or "regular use," let's assume that the student does have regular, unrestricted access to her roommate's car. In that case, she is at the mercy of the insurance on the vehicle, if any, since her parents' policy will not provide any coverage. Is there anything her parents can do do extend coverage to her under their policy while driving her roommate's car? Well, speaking of the word "extend"... ISO has an endorsement, the PP 03 06 06 94 - Extended Non-Owned Coverage for Named Individual that may provide coverage. If you'll open this endorsement, you'll see that it buys back several exclusions, including B.3. above. However, note the following wording from the endorsement [emphasis added]: III. This endorsement does not afford coverage under Part A or Part B of the policy for any accident involving a vehicle owned by the individual named in the Schedule or in the Declarations, by a member of the same household, or any accident involving a temporary substitute vehicle for such owned vehicle. So, even though this endorsement provides coverage to family members for vehicles furnished or available for their regular use, it does not provide coverage IF the vehicle is owned "by a member of the same household." Exclusion B.3. in the PAP applies to vehicles owned by family members but not scheduled on the parents' policy and also to vehicles furnished or available for the regular use of family members (e.g., a company car). What Item III. in the endorsement means is that the coverage provided by the endorsement only buys back the "furnished or available" part of Exclusion B.3. and coverage still does not apply to vehicles owned by a member of the same household. How does this apply to the college roommate situation? On at least one occasion (and probably more), a claim involving a college student's roommate's car was denied under the PP 03 06. According to the insurer, the roommate was a "member of the same household." But, is this true? Do two college student sharing a dorm room constitute a "household?" In deciding the coverage issue, we must examine what is meant by a "household." Click here to view the Black Law Dictionary definition of a household, Bill’s interpretation and also other related articles. You will need to log-in to view, so if you do not know your log-in info, send Rachel an email.
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Can Insurers Keep Up with Consumer Website Demands? by Morgan Smith, IA assistant editor For existing customers, the IWES reports that insurance websites exceeded only 18% of customer’s expectations for the speed of paying a bill online - the biggest decline of all service-related tasks - and that 26% of consumers did not or only partially understood policy information. “Service satisfaction is higher when they completely understand their policy,” Monet says, adding that this may be an opportunity for agents to increase consumer education efforts.
More and more insurance shoppers use smartphones (42%) and tablets (43%)—up 14 and 11% from 2014, respectively, according to the J.D. Power 2015 Insurance Website Evaluation Study (IWES). And the 2014 Future One Agency Universe Study reports that independent agencies recognize this digital shift: 18% say clients are increasingly requesting apps to access agent/insurance information from mobile devices. Is your agency’s mobile and digital presence on par with consumer demands? It may be time to take a closer look. Measuring online consumer experiences among both shoppers looking for quotes and existing customers seeking policy servicing activities on a 500-point scale, the IWES finds that online shopping experience satisfaction improved 17 points to 369 since 2014, but service experience satisfaction declined five points to 420.
PRINCIPAL
Valerie Monet, director of insurance practice at J.D. Power, attributes these divergent satisfaction shifts to industry-wide shifts in mobile and tablet website optimization. “Every insurance company’s customer base is going to be different,” she says. “It’s important for insurers to understand interaction channel preferences among their existing customers, as well as prospective shoppers that may be doing research on their website.” As overall consumer demands continue to rise in regards to mobile, recognizing that a new shopper coming to a website has different needs than an existing customer becomes vitally important. While essential elements for current clients involve viewing policies and updating their profile, shopping customers may just need to request a quote. “The most important aspect for shoppers is the ability to research policy information and request a quote,” Monet says, noting speedy quotes and frequent discounts are high on consumers’ wish lists when it comes to improving the quote process. Informational multimedia capabilities can also be key: 39% of survey respondents watched videos regarding policy information and found them helpful when navigating a website.
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The Agency Universe Study finds that effectively marketing on the Internet (46%) and keeping up with the pace of technology changes (39%) are among the top five technology challenges for agents - and many aren’t equipped with the finances and resources necessary to start the journey. Where to start? One method taking storm is responsive design: “You only have to maintain one website for all of your devices - one shared pool of assets, and your messaging is consistent across all devices,” Monet says. The strategy seems to be working: The IWES reports a satisfying experience among shoppers (373 responsive design vs. 365 traditional design) and current customers (421 responsive design vs. 420 traditional design) who used a responsive design website compared with a more traditionally designed website. “Insurers that don’t address the demands may suffer,” Monet says. “There are customers out there that may choose to do business with a company that offers the communication and interaction channels they want.”
Special Invitation
Join us on Friday, September 25th for two incredible breakout sessions that will increase your knowledge and give you the tools to keep up with today’s consumer demands. Plus, these sessions are free!
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Proudly Serving the Independent Agents of New Mexico since 1977
5201 F Venice Ave NE - P.O. Box 90280 Albuquerque, NM 87199-0280 (800) 530-8711 (505) 822-8711 Fax: (505) 822-1165
www.market-finders.com
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Insuring Wineries & e ries w e r B H
ch Do You Know ow Mu ?
by Jacquelyn Connelly
By the end of 2014, the number of craft breweries in the U.S. topped 3,400 - up more than 19% since 2013, according to the Brewers Association. Meanwhile, Wines & Vines magazine reports a 6.3% increase in production at more than 8,300 U.S. wineries in 2013-2014. Although they all belong to the craft beverage establishment niche, wineries, breweries and distilleries pose distinct challenges for the liquor liability insurance market, which has remained relatively unchanged when it comes to more traditional clientele like restaurants and bars. Interested in entering this burgeoning market? Here’s what you need to know.
PRODUCER
Different Animals The manufacturing class code for a winery entails tasting rooms on the same premises where manufacturing takes place. But “off-premises tasting rooms - locations where no manufacturing is done - are rated as beverage stores,” explains Paul Martinez, program manager at Winery/Brewery/ Distillery/Cider Pak Insurance Programs. For each scenario, “the manufacturing class gets a liquor liability charge and the beverage store gets a liquor liability charge because they are two different types of exposures,” Martinez says. “Those rules also apply to hard cider manufacturers, which are rated as sparkling wine manufacturers - they’re made in a similar fashion [as wine], just using apples instead of grapes.” Liquor liability exposure for wineries, hard cider manufacturers and distilleries, then, lies largely on the manufacturing end. “If you’re not consuming it on-premises, it’s kind of hard to prove that a server was negligent,” Martinez points out.
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But breweries are a different animal - patrons are far more likely to spend significant time drinking beer than they are tasting wine. At a winery, “usually it’s a couple of tastes and you buy your bottles and you go home,” Martinez says. “Same deal with the hard cider and even distilleries—you’re not going to sit there and spend three hours drinking spirits.”
A Class All Their Own Because visiting a brewery tends to be more of a social gathering, it poses the greatest liquor liability exposure of all craft beverage establishments, Martinez says. But different types of breweries involve different levels of risk, too. A production brewery, for example, makes most of its revenue from off-premises beer consumption. On the other end of the spectrum are restaurants that brew their own beer, making most or all of their revenue from on-premises consumption. Agents may also encounter brew pubs, which make 100% of their profit from on-premises consumption and may or may not produce their own beer and serve wine and spirits as well. That’s “getting into being more of a bar or tavern than an actual production brewery,” Martinez explains - and it’s a tough one to insure. “We don’t want that bar/tavern exposure. We don’t want tasting rooms that are open until 2:00 in the morning. If it’s a true brewery with a tap room, more likely than not the tap room will not be open that late.” Brewery insurance needs will vary depending on when and where the beer is being consumed. Like wineries and distilleries, they have liquor liability for manufacturing, but they also often receive a restaurant code for liquor liability for on-premises beer consumption. “With the larger breweries, we’re seeing more and more that they have their own restaurants,” Martinez says, citing examples like Stone Brewing and Firestone Walker in California. “In addition to their huge manufacturing facilities, they have full-service restaurants where they’re selling food and beer for on-premises consumption as well as growlers to go - which are considered off-premises consumption, so the revenue would be lumped into the manufacturing class code.” That means whether patrons are drinking the beer on or off the manufacturing premises will “determine which class code would be most appropriate,” Martinez explains. “A lot of times when I get a new agent looking to write their first brewery and I’m trying to explain how we break up the rev-
enues between on-premises vs. off-premises consumption, the concept can get confusing for them. But that’s really what our primary concern.” Another important factor is the age of the business. “If it’s a new venture, when you’re starting you want to get your brand out there, so you have to do a lot of on-premises serving in the beginning,” Martinez says. “That’s the reason we ask for business plans for new ventures so we can see where they’re going to steer their ship.”
Dram Shop Law As with any liquor liability exposure, the most important element to watch as an independent agent is dram shop law - not only in your state, but in any other location for which you’re writing business. In British Columbia, Ontario and the 42 U.S. states where Pak Insurance Programs provides liquor liability, regulations range far and wide. “In a state like California, the dram shop law is super specific: the server is found negligent only if he serves a visibly intoxicated minor,” Martinez says. “A state like Colorado will have similar language, but
they’ll have a limit on their judgment of $150,000. On the other side of the coin, Alabama poses a very strict liability on alcohol servers and does not require patrons to be visibly intoxicated for the server to be found negligent.” Considering some patrons may opt to make a day of visiting various craft beverage establishments, hopping from brewery to winery to distillery over an extended time period, understanding your commercial clients’ unique liquor liability exposures is vital to providing them effective service and coverage. What if someone leaves a craft beverage establishment, drives a car and causes a fatal accident? “Patrons visiting several craft beverage establishments in a given period of time complicates a loss immensely because now you have to go through timelines,” Martinez says. “What time were you here? What time were you there? What time did you leave here? Did you eat something in between here and here? It can get very convoluted. The major problem is you as the client can get dragged into the lawsuit, and at the end of the day the court might find that you were not negligent, but that doesn’t mean your insurance company didn’t pay $100,000 in legal fees.”
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An independent agent can spend countless hours investigating leads and thousands of dollars in advertising in the pursuit of new business. Knowing the best methods, investigating new marketing trends, and creating a referral pipeline can make prospecting more customer-centric and more efficient for overall agency growth.
Prospect Effectively Use Traditional Marketing Methods In spite of the social media revolution of the 21st century, some traditional methods of marketing outreach are still crucial. • Maximize your value to potential clients. Customers value the attributes primarily held by independent agencies: ◦ Agent familiar with account ◦ Agent analyzes needs and finds best coverage ◦ Expert to meet with face-to-face • Focus advertising on strengths of independent agent: ◦ Finds best policy for price ◦ Available locally ◦ Builds personal relationship ◦ Finds tailored coverage • Communicate with current customers. It’s as important as publicizing to potential customers. ◦ Use emailed company newsletters and ask people to forward it at the bottom (see “Content Marketing” below). Reinforcing the choice made by current clientele through ongoing publicity reduces defections as well. ◦ Articles should highlight new and most popular services and specialty coverages as well as accomplishments. (More than one-third of small commercial customers say they don’t rely on their agent for advice on coverage. Perhaps a more consistent communication strategy to clients will demonstrate what your agency can offer.) • Trade associations are important sources of information on insurance. They influence the decision-making process, particularly for businesses that may not be mainstream (e.g., day care, nail salons).
CSR
• Identify which current customers can be targeted for new services. Stimulate cross-buying (auto, home and umbrella). Small commercial buyers indicate an interest in packages designed for their business: key person life, investment services, personal property/ casualty, credit products and personal life. Some potential clients are willing to switch providers to get these services.
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• Use integrated marketing. Work with car dealerships and realtors for joint advertising and cross referrals of services and products. • Get involved in community causes and participate in special events: ◦ Staff a booth at your next fire station open house.
◦ Donate child safety seats to your local police department for the needy. ◦ Adopt a local school during fire safety week. ◦ Sponsor a local youth group or sports team. • Use affinity merchandise to gain name recognition: ◦ Offer safety “seals of approval” to school kids during safety awareness campaigns. ◦ Print a small, quick-reference guide for emergency road services. ◦ Provide other low-cost tools that educate and motivate. • Ask for customer feedback: ◦ Invite your customers in to an employee meeting to give feedback on their recent experience with your agency. Customer service will improve, and word will get around.
Capitalize on Internet Marketing Experts in the Big “I” Agents Council for Technology (ACT) say it’s urgent and critical that agencies participate online. Those that don’t are invisible to the majority of potential customers, who are searching for insurance information online. Agency Websites No marketing plan is complete without a robust Web site. • Must be professionally designed. • Add content regularly to optimize search engine results. For ideas see “Ten Things Agents Should Know about SEO” • Must meet customers’ expectations: ◦ Offer quote capability. According to the comScore Online Auto Insurance Shopping Report, in 2012 69% of shoppers went online to obtain price quotes on auto insurance. Only 25% called toll-free numbers or visited a local agent. ◦ Offer a self-service portal for customers to access their policies, download ID cards, etc., day or night. You can outsource this service to vendors like Artisan and others.
Social Media ACT experts say it is both urgent and critical that agencies participate in social media.
ees’ social media behavior, see “Creating a Social Web Policy Guide” • Monitor social media to learn what’s being said about your agency. • Monitor social media, because some of your customers expect to contact you that way. • To attract new customers through social media, see “Content Marketing” by clicking the button below. • Ask for customer feedback. If you’re developing a mobile app, ask customers, “What functions would you like to see on it?” • For more about success with social media, see Item 11 in “Attributes of Successful Independent Agencies of the Future” • Or see Item 5 in “5 Ways Agency Principals Can Seize the Future” • For further guidance on social media marketing, see ACT’s materials. • For links to top social media influencers, can be found here. • Click here for a great articleon using social media in your agency For information on a balanced approach to using technology for sales and marketing, see ACT’s article, “A Balanced Approach to Agency Marketing.” For information on how to develop as a business in the new social culture, read ACT’s “Becoming a Social Business.” View Ernst & Young’s report on U.S. insurance trends, including the need to use technology, here. To read on about referrals and community engagement, click the button below:
Finish the Story!
• Develop a social media strategy. Make it an integral part of your marketing plan. Resources to help you plan and execute a social media strategy are posted on the ACT Web site. • Give employees who are already good at social media responsibility for it. For reports to help you guide employ-
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Insurance agencies are failing to meet Caitlin Bronson, customer expectations: Report byInsurance Business America Independent agents and brokers are falling behind in providing their clients with the kind of customer experience many insurance shoppers now expect, a joint report from Market Insight Group and Applied Systems reveals. The report, “Adaptability: The insurance customer experience imperative in an online digital mobile society,” is based on a recent survey of 1,200 North American and UK agency/brokerage owners and customer service representatives (CSRs). According to the results, independents both fail to understand the expectations of today’s consumer and do not have the resources to bring those expectations into reality.
PRINCIPAL
Nearly 90% of North American agents, for example, identified email and face-to-face meetings (F2F) as the primary methods they plan to use in interacting with clients in the next two to four years. Researchers at Market Insight Group aren’t certain this is the best strategy.
“Insurance firms believe that email and face-to-face communications will reign supreme in the next two to four years. Possibly,” the report said. “But we believe that this will depend on the line of insurance, the nature of the interaction, and the desires of the customers concerning the interaction options they want to use.” Researchers said they are “doubtful” F2F will still be important for personal life property/casualty insurance, and are similarly unconvinced that F2F will satisfy the increasingly important small business customer. Given the time crunch facing small business owners, researchers do not believe such customers will be satisfied with F2F “for administrative transactions or even investing their time in email threads to get service interaction resolved.” Instead, consumers are much more likely to look for click-to-chat or click-to-call options for interacting with their insurance agent. Indeed, while most agencies seem to rely on communication platforms in Phase 1 or Phase 2 of the following Market Insight Group graph, customer are starting to show dependency on platforms offered in Phases 3 and 4.
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Unfortunately, agency owners say providing customers with these technologies is difficult thanks to time and budget constraints, as well as a lack of appropriately skilled staff.
These kinds of mismatches could come back to hurt agencies in the very near future, the report authors say. “Technology advances are ratcheting up customers’ expectations of immediacy, ease of use, and accessibility of people and information, regardless of where they are or the time of day,” the report says. “Insurance firms and their teams have to become adept at using these technologies in order to offer strong [customer experience].” The report authors suggest insurance agencies create a “practical vision” of how clients will want to interact in the next two to four years, prioritize those strategies—particularly client self-service portals and mobile capabilities—and consider reaching out to technology vendors to create solutions.
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Homeowners Claim Frequency:
Volatile and On the Rise by Morgan Smith
Despite an almost 20-year decline in homeowners claims frequency, the average cost of a claim payment - also known as average claim severity - has rapidly increased, according to the Insurance Research Council’s (IRC) “Trends in Homeowners Insurance Claims, 2015 Edition.” The report cites a 7.8% annual jump in average claim severity - more than three times the annual rate of inflation. Meanwhile, the average claim payment, rising from $229 in 1997 to $625 in 2011, increased 5% annually beginning in the late ’90s - more than twice the rate of the 2.4% annual increase of inflation. If trends are considered transitory, what does a 17-year long trend indicate? Collecting and analyzing data from 1997-2013, the report emphases just how volatile and severe homeowners claim costs trends have become.
PRODUCER
“If you look at costs in terms of average payment per insurance per home, it wasn’t as high as average paid claim severity because the frequency was coming down at the same time,” says David Corum, vice president of the Insurance Research Council (IRC). “Those things average out. But costs have been increasing, whether you’re looking at it in terms of claim severity or claim payments per insured home, much more rapidly than inflation.” The report found volatility more prevalent in claim frequency trends than claim severity trends - a characteristic based on catastrophe risk and events. “Around 2005, the percentage of total claim payments that were attributable to catastrophes increased pretty dramatically,” Corum explains. “Over this 17-year period, the second half averaged about 35% of total claim losses attributable to catastrophes while the first half averaged about 25%. So there has been some increase in the total claim dollar that’s related to catastrophe events.” The proportion of cat-attributed payments jumped from 17% in 1997 to 49% in 2005. And looking at average cost of claims only makes the instability clearer: Based on modeled trends, cat claim severity produced a volatility index of 20% compared to 2% for non-cat claim severity. “There are a number of states in the south central U.S. - Okla-
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homa, Colorado, Kansas - that in the last five years have seen a very noticeable spike in claim costs as a result of the increase in frequency of claims,” Corum says. “When you talk about volatility from year to year and across states, it’s usually due to the frequency of claims. On the severity side, the increase is two or three times the rate of inflation - that seems to be happening everywhere and is a result of systemic cost factors affecting all kinds of claims.” The IRC attributes the increase in homeowners insurance claim costs to a number of factors. For one, the average square footage of newly constructed homes increased 21% between 1997 and 2013 - and it’s 56% greater than in 1973. The cost of building materials for these larger, more complex homes isn’t helping either - the majority of materials are oil-based, such as roof shingles, vinyl siding and asphalt. According to the report, the producer price index for oil-based roofing and siding materials increased at a 7.1% annualized rate over the 17-year study period. What’s to blame? “In the latter part of the last decade, the oil refining industry adopted some new technology with an intent to get more usable fuel out of raw crude oil,” Corum says. “Oil refineries installed devices called ‘cokers,’ that basically left less waste - or flux - in the oil refining process. They were trying to improve the efficiency of the refineries, but as a byproduct there was less of this flux left over.” But we need as much flux as we can get. It’s the raw material used to produce asphalt, shingles and other oil-based building materials. “As a result, the price skyrocketed for those products,” Corum says - and that majorly impacts cost factors in repairing damaged homes and buildings from storms and other disasters. The report also cites the growing frequency and severity of storms as a contributing factor to the claim cost upsurge. But this is uncontrollable. “The industry and society in general can’t change the severity of storms and can’t affect very much the frequency of claims,” Corum says. “What we can and will do is more research to try to understand what’s driving claim severity because those might be things that can be affected and help reduce costs.” “There are a lot of things that can be done to try to bring that severity trend under control,” Corum adds. “And those are things that we’re not helpless to affect such as factors for reducing the damage, ways of minimizing the damage when there is a storm and reducing the cost of repair.”
Workers’ Compensation. You Asked. We Listened.
Mountain States continues to evolve! We are committed to offering greater options and flexibility for our clients. Mountain States Commercial Insurance Company has been established and now offers Workers’ Compensation coverage for small businesses throughout New Mexico. For more information about our newly available Workers’ Compensation options, contact James Lyons at 505.764.1494 or jlyons@msig-nm.com.
www.msig-nm.com Albuquerque, New Mexico 505.764.1400
Sandia Mountain Range Central New Mexico
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Ten Ideas to Help You Obtain Customer What is customer loyalty? I asked a number of business people this simple question and received similar answers from most of them. Most agree that customer loyalty means that the customer will come back, again and again.
Loyalty
However, what customer loyalty doesn’t always mean is that the customer is loyal to you, and only you. In other words, they may do business with you, but are also or still doing business with your competitors. The concept of “wallet share” came to mind. I’ve been talking (and writing) about the concept of “wallet share” versus “market share” for many years. Quick explanation: The concept of market share has to do with how many customers that are able to buy your product actually buy it. For example, if there are 100 customers in a given area that could buy your product, and 60 of them buy it, then you have 60% market share. Wallet share takes the concept of market share to another level. Of those 60 people who buy from you, how many of them will still buy from someone else? If they only buy from you, then you have 100% of their “wallet share.” If they split their loyalty between you and someone else, you only have 50% “wallet share.”
by Shep Hyken
Shep Hyken, CSP, CPAE Shepard Presentations, LLC 711 Old Ballas Road, Suite 215 St. Louis, MO 63141 (314) 692-2200 shep@hyken.com http://www.hyken.com
1.Deliver great customer service. It’s expected. 2.Always do what you say you will do. 3.Don’t be late. 4.Don’t make excuses or blame others – be accountable. 5.Help solve their problems. 6.If you catch a problem, call them before they call you. 7.Trust them, if you want them to trust you. 8.Be accessible and easy to reach. 9.Return phone calls, emails and social media comments quickly. 10.Create confidence. (Do all of the above and you will have a good start.)
At the highest level of loyalty, your customer only buys from you. In other words, they give you 100% wallet share.
So maybe the goal shouldn’t just be customer loyalty. It should be 100% customer loyalty.
So customer loyalty has two tiers:
(A few years ago I wrote an article titled “The Gap” which addressed the concept of wallet share. If you want to read more about wallet share, go to: http://www.hyken.com/articles/the-gap/)
1.The first is that the customer is a repeat customer. 2.The second is a repeat customer that doesn’t do business with your competitors – just you.
CSR
This is where my Amazement Revolution strategy of “partnership” kicks in. You want a relationship that is so strong that the customer wouldn’t think of doing business with your competitors. I put together a quick “Top Ten” list of simple ideas to help you get to the level of partnership and 100% wallet share. Realize that these are common sense expectations that are easy to do – and unfortunately, easy not do if you don’t stay customer focused.
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BOOK RECOMMENDATIONS: “Reviving Work Ethic” by Eric Chester – Good customer service requires a good work ethic. While the book focuses on younger employees, those whose habits can be most influenced, I found the book to be beneficial for employees of any age. “Up, Down, or Sideways” by Mark Sanborn – We are currently living in tough, unpredictable and often challenging times. This book will inspire you with ideas and suggestions that will help you succeed through it all.
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Largest IA Gains in Homeowners National and regional independent agency carriers — those booking at least $100 million in homeowners premiums — that show the largest percentage gains in homeowners market share for 2013 include: (Note: It is easier for carriers with smaller books in this line to show larger percentage changes in market share because they are working from a smaller premium base.) National/Regional IA Carrier
% Growth in Market Share
QBE Americas Group ACUITY A Mutual Insurance Co ASI Companies Erie Insurance Group Liberty Mutual Agency Cos Assurant P&C Group Cincinnati Insurance Companies ACE INA Group MAPFRE North America Group National Lloyds Group Tower Group Companies Safety Group Pacific Specialty Insurance Gr Grange Mutual Casualty Pool MetLife Agency Companies Selective Insurance Group Vermont Mutual Group Andover Companies Pool Donegal Insurance Group Mercury General Group Westfield Group
18.4 14.0 12.5 9.4 8.1 8.1 6.7 4.7 5.6 5.6 5.6 5.4 4.5 3.0 3.0 2.3 2.1 2.0 1.9 1.8 1.7
Below are market share gains or losses for captive agencies with more than $100 million in homeowners premiums: Major Direct Response Competitors Ameriprise P&C Companies Texas Farm Bureau Group Liberty Mutual Direct Cos Michigan Farm Bureau Group Farm Bureau P&C Group Auto Club Enterprises Ins Grp American Family Insurance Grp Tennessee Farmers Ins Cos United Farm Bureau of IN Group NJM Insurance Group CSAA Insurance Group
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% Growth in Market Share 22.5 8.1 8.0 6.3 5.9 4.3 3.2 1.8 1.4 1.2 -1.0
Among those booking at least $100 million in homeowners premiums, companies that reported the largest percentage losses in homeowners market share for 2013 include: National/Regional IA Carrier
% Growth in Market Share
Hartford Insurance Group Motorists Insurance Pool NYCM Insurance Group Universal Ins Grp Puerto Rico Frankenmuth Insurance Group Universal Ins Holdings Grp Quincy Mutual Group Allianz of America Companies Kemper P&C Group Travelers Group Main Street America Group Hanover Ins Grp P&C Cos
Major Direct Response Competitors
-1.4 -2.3 -2.6 -2.6 -2.9 -4.3 -4.6 -5.3 -6.0 -6.8 -7.9 -9.3
% Growth in Market Share
USAA Group 7.2 Amica Mutual Group 6.5 Progressive Direct Companies 3.9
Major Direct Response Competitors
% Growth in Market Share
North Carolina Farm Bureau Grp Auto Club Group American National P&C Group Georgia Farm Bureau Group Munich-American Holding Corp Cos Kentucky Farm Bureau Group Alfa Insurance Group Allstate Direct Companies
-1.3 -1.9 -2.0 -3.3 -5.0 -5.5 -5.5 -7.6
s d n e s Odd &
Return of the mighty Brontosaurus
The giant dinosaur formerly known as the Brontosaurus may return. Not in a real-life Jurassic Park, but as an official designation long after being dubbed an Apatosaurus by scientists. Confused? Here’s the short version from the Live Science website: In 1877, a team of paleontologists unearthed the skeleton of a long-necked dinosaur they named Apatosaurus ajax. Two years later, the scientists uncovered a similar specimen but concluded it belonged to a separate species, which they dubbed Brontosaurus excelsus. However, in 1903, another paleontologist decided that the two specimens belonged to the same species. The name Apatosaurus took precedence because it had been discovered and named first, although “Brontosaurus” was preserved in popular culture. A recent reevaluation of the research, though, discovered significant and numerous differences between the Apatosaurus and the Brontosaurus, leading paleontologists to argue that lumping the two together was a mistake. How the issue shakes out will be debated for years, but don’t write the Brontosaurus off yet...
@
Where the @ came from
These days, most people recognize the @ symbol as part of every email address, but it didn’t start out that way. According to historians, the @ symbol was created by monks during the Middle Ages, when each copy of a book had to be painstakingly transcribed by hand. The task went to monks, who developed ways to reduce the number of pen strokes for common words. The result was to loop the “t” in the word at around the “a.” The @ symbol doesn’t have a single, universal name, but some cultures have given odd names to it: • apenstaartje: Dutch for “monkey’s tail” • snabel: Danish for “elephant’s trunk” • kissanhnta: Finnish for “cat’s tail” • klammeraffe: German for “hanging monkey” • papaki: Greek for “little duck” • kukac: Hungarian for “worm” • dalphaengi: Korean for “snail” • grisehale: Norwegian for “pig’s tail” • sobachka: Russian for “little dog”
Little-known facts about books and language The world of books, reading, and words is full of surprises. Take a look at some of these stories about writers and other creative people (from the Buzzfeed website): • Thomas Jefferson. The third U.S. president (and writer of the Declaration of Independence) invented more than 100 “American” words to distinguish U.S. writing from British usage - including the word “anglophobia.” • Gone with the Wind. Margaret Mitchell began work on her first (and only) novel after recovering from an auto accident. During her convalescence, she read so many books from the local library that her husband got tired of going back and forth - so she suggested she try writing a book of her own. • Green Eggs & Ham. This Dr. Seuss classic was written on a bet. Publisher Bennett Cerf wagered $50 that Ted Geisel couldn’t write a children’s book using fewer then 50 different words. Geisel won. • Amazon. The first book sold on the now dominant website was Fluid Concepts and Creative Analogies, by Douglas Hofstadter. Its subject: whether machines could be taught to think like people.
‘Appointment TV’ a thing of the past? Not too long ago, the only way to watch your favorite show was to make sure you were home when the networks decided to broadcast it. Not so much anymore. Modern technology is taking hold of our viewing habits. The study of more than 2,000 U.S. consumers age 14 and up found that 56 percent of viewers are streaming movies on their laptops, tablets, or other devices, and 53 percent stream television shows once a month. More than 42 percent of U.S. households use a video streaming service like Netflix to watch their shows and movies. Meanwhile, only 45 percent prefer to watch TV live. Video streaming also makes binge-watching a thing, according to the survey: Sixty-eight percent of consumers report sometimes watching at least three episodes of a TV program in one sitting, and 31 percent of them do it once a week or more.
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