September 2015 by Independent Insurance Agents of NM

resort â&#x20AC;˘ casino IIANM 81st Annual Convention

Congratulations to the

2015

graduating class! Kenny Byrd

Charlene Fairchild Heather Fortner Carolyn Hardwick Randy Hobbs Jim Lafferty Connor Payne Derek Riewe Samantha Sanchez Matt Saiz Ray Strom Kendra Zacharias

Come and see them graduate on the evening of Friday, September 25th, at Isleta Casino & Resort, during the Big Iâ&#x20AC;&#x2122;s Convention Dinner.

Proud Sponsor:

“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

September’s “What’s Happening” Clickable Calendar

IIANM’s Convention Event Highlights 08

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. Advertising rates are available upon request. Please contact Rachel Sheffield at rachel@iianm.org for details

IIANM Staff President/CEO Thom Turbett Chief Operations Officer Consuelo Trujillo Insurance Programs Administrator Renee Trujillo Social Media Director Jacob Grant Communications Director Rachel Sheffield Reception Eric Crisostomo

2014-2015 Officers

a L

CSR - Customer Retention Awareness Test

PRINCIPAL - Is Your Insurance Agency’s Online Presence a Couch Potato?

PRODUCER - Six Simple Sales Tools

PRINCIPAL - Value Added Services Could Pose an E&O Exposure

Business Income Coverages... What Does “Necessary” Mean?

PRODUCER - Why Aren’t Insurance Shoppers Switching?

CMS and Certificates of Insurance Upcoming Webinars

In Every Issue IIANM 2015 Company Partners! 06 Tech Talk 18 Odds n Ends 27

Advertiser Index

Chair Gabe Portillo

Acuity 16

Vice-Chair Connie Sevier

Market Finders, Inc. 19

Secretary/Treasurer Mike Parisi

Mountain States Insurance Group

National Director Sam Conlee Immediate Past Chair Diana Hobbs

Burns & Wilcox Back Cover MHI General Agency 21

New Mexico Mutual 02 Docusign 22 Click here to reserve advertising space in an upcoming issue of La Voz magazine.

September 2015

Click on a class to register: Monday

Tuesday

Wednesday

Thursday

Friday

sts a c web

(No CE Credits)

Guaranteed Sales Success

Training New Employees

Webcast: Procedures Manual 1, 2, 3 â&#x20AC;&#x201C; An E&O Overview

Time Management

3CE

Webcast: Comm Property Endorsements that Can Make You $

Convention! 30

Business Body Language

Phone Etiquette

Employment Law

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

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!

Customer Retention Awareness Test How Well Do You Know Your Customer Loyalty? Circle your answers to the questions below, then tabulate the results. 1. How many customers did your agency replace last year?

(a) I know

(b) I'm not sure

2. How much did it cost to replace the profit from the customers you lost last year?

(a) I know

(b) I'm not sure

3. Do you have a formal customer retention program in place?

(a) Yes

(b) Probably

4. How many of your agency's customers have done business with you for less than five years?

(a) Many

(b) Some

5. What percentage of your agency's customers have done business with you for less than five years?

(a) I know

(b) I'm not sure

SCORING: Give yourself . . . 5 points for every (a): ________ 3 points for every (b): ________ 0 points for every (c): ________

TOTAL: ________

SCORE 19 to 25 Excellent 12 to 18 Fair

Big “ ”dea You should use the results to initiate a staff discussion on how to improve your customer retention!

6 to 11 Poor

CSR

0 to 5 Precarious

Adapted from “Test Your Customer Retention Awareness” by The Michaelson Company (http://www.increase-loyalty.com) Used with permission.

et L os t G t ' e n t r f n e og t n i o he

Dn t i

Breakout Sessions 9:00 - 10:15am

Friday, Sept 25, 2015

Don't Get Lost in the Internet Fog!: How a great website is a beacon for your success,

10:15 - 11:30am Brand HO!:

and how one can be built on almost any budget. How independent’s are capturing new clients with TrustedChoice.com tools.

10:15 - 11:30am 2016 Individual Health Challenges:

Alternate session for L&H agents.

Lunch Keynote speaker John Franchini, Superintendant of Insurance We have a treasure trove of events at this year’s Industry Luncheon as we: • Recognize our past leadership • Induct your 2015 - 2016 Board of Directors • Announce your Company of the Year winner • Welcome keynote speaker, Superintendent, John Franchini

UR E “I” LAN D S A E TR st iianm’s 81 annual convention & isleta casino resort Convention’s Tentative Agenda

Thursday, September 24th 8:00am – 6:30pm

Registration

9:00am – 10:00am

IIANM Annual Board Meeting

11:00am

Golf Tournament Registration (Isleta Golf Club)

Attire: Casual or Business Casual

(Boxed Lunch & 2 Drink Tickets Provided)

12:00pm – 5:30pm

Golf Tournament

6:00pm

Chair’s Welcome Reception

Attire: Golf Casual Shot Gun Start

Attire: Casual Heavy hors d'oeuvres and cocktails

Friday, September 25th 8:00am – 6:30pm 9:00am – 11:30am

Registration Breakouts: “Brand HO!”, “Don’t Get Lost in the Internet Fog” & “2016 Individual Health Challenges”

12:00pm - 1:30pm

Industry Luncheon

2:00pm – 5:00pm

Trade Show

5:45pm

Innovative Leadership NM Graduation

5:45pm

Cocktail Reception

6:30pm

Dinner & Entertainment

Invitation Only

Your Convention Contact: Consuelo Trujillo consuelo@iianm.org 505-999-5805

Is Your Insurance Agency’s Online Presence a Digital Couch Potato? by Chris Langille The first one is the foundation of your entire digital existence — your insurance agency website.

Your insurance agency website should be the hub of not only your digital marketing efforts, but your local community

For your insurance agency to be successful in generating leads in the digital space we exist in today, you have to posses a variety of different skills. Managing social media accounts, blogging, SEO, link building, guest blogging, podcasting — these are all part of a well rounded digital insurance marketing strategy. Sometimes as agency owners and producers, we become so entrenched in the day-to-day grind of managing relationships in the physical here-and-now, that we pay little to no attention to much else, let alone our online brand. Aside from being in the web design business, I’ve been in the insurance industry both as a principal, producer and marketer for 10+ years. I’ve been the chief cook and bottle washer just like you. Answering phone calls, taking out the trash, scanning documents, talking to claims adjusters, talking to mortgage companies, talking clients off a cliff, and everything else in between.

In the year 2015 I’m quite frankly surprised at how many local small business owners (not just insurance agency owners) are still putting their websites on the back burner. There are normally two reasons for this: business owners either lack the digital wherewithal to manage their own website, or, they don’t want to invest any money into one. Or worse — both. I’ve consulted insurance agency owners and other small business owners who have told me, “Well Chris, we don’t really get any leads from our website, so why would we put more money into it or learn how to use it?” It’s like, what came first, the chicken or the egg? I look at their website, and it’s the equivalent of a dusty, 1980 wood panel Chevy Citation. I then look at their blog and see their last post was 150 words and published in 2012. Their social media accounts are like barren wastelands if they even exist. They’re not even trying.

It’s hard work. I get it.

Here’s the thing you need to realize though— the same opportunities and relationships that exist in the physical world, exist in the digital world as well. If you’re like me, a non-salaried, commission compensated producer in an industry fighting a daily battle against commoditization, you need to make time for those opportunities and relationships as well. There is a certain algorithm of sorts that you need to adhere to in order to create and nurture these digital relationships. Some of the skills and strategies I mentioned earlier are essential to this advanced relationship equation. There are two common denominators in every successful digital marketing strategy. There is absolutely no way you can execute on any of these strategies without them. They are quite literally the foundation of your entire digital existence.

PRINCIPAL

Be where your prospects and customers are

I saw someone on Facebook the other day talking about their brand new agency website, and how they were hoping it would generate some new business for them. Question for you before I address this:

What do you tell customers who complain that their auto insurance rate increased, even though their car is now another year older? I get this question at least twice a week and personally, I explain to them that there are hundreds of other variables that go into the rate, and other coverages that make up an auto insurance policy. Their car is only one of those variables. The same thing continued...

applies to your online presence and website. There are so many other variables that go into generating leads online. Your website is only one cog in that wheel, albeit a big one. It’s not the only reason for your online successes or failures. The content on your site, local citations, SEO, on page SEO, link building, and of course, design, all go into it.

Let’s talk web design for a second If there’s one thing I’ve learned as a web designer, it’s that great design will make you more money — period. I see agencies spending thousands of dollars per month on Pay-Per-Click, Facebook ads, SEO, and referral services like Dave Ramsey’s ELP program, only to then complain about the lack of R.O.I.. It’s because they’re driving traffic back to a website that looks abandoned and out-dated. If you’re driving leads, or even your own customers to an out-dated website that lacks a clear pathway to a solution, you’re not going to be very successful online. With all this talk about design, it’s important to note that no matter how pretty or optimized your website is, assuming that it will just hand you leads by itself is simply not realistic.

Understanding online buyer personas There are normally 2 buyer personas who are visiting your website: 1.Someone who already knows who you are like a current customer looking for customer service or info. 2.Someone who doesn’t know who you are looking for a quote, or trying to kick the tires and learn more about you. To have any success with the latter, you need to be able to attract people to your brand, typically via a search engine or social media search query. In order for that to happen, you need to have quality content on your website that will rank your agency website in Google. That’s what Google wants, and that’s what they will rank your website for. You need to feed Google more of what they want — quality long form content.

Use it or lose it Let’s talk about crawl rate for a second. Crawl rate is the speed and frequency at which Google crawls and indexes the content on your website. One of the ways to significantly increase Google’s crawl rate is to publish content consistently.

You are a licensed expert and that needs to shine through in the content on your website.

The more frequently you produce content, the more frequently Google will send it’s spiders to index that content on your site. If you aren’t creating any content, you aren’t giving Google a good reason to come crawl your site more frequently.

You get out of your website what you put into it.

That’s how it works. It’s very much a use it or lose it type of deal.

You still need to apply yourself.

Don’t get me wrong though, quantity isn’t always better than quality. Have you ever searched Google for something and found a search result from 2002? Your first thought is usually, “How helpful could this be if it’s over 10 years old?” To Google though it’s very important. They’re still displaying that information in their results because it is quality information, and even though it’s older content, it’s still relevant to the searcher. That’s how Google works. They’re job is to display the most relevant and quality content possible. A Lamborghini is one of the worlds fastest cars, but unless someone is inside pushing the pedal, it won’t even go 1mph. You have to put some effort into it whether with your time or your money. Your website is much more likely to get a lot of eyeballs on it than your physical office location (unless you’re in downtown Manhattan). What’s more, you to understand how to your website like the tool that it is.

Give search engines what they want and you win Google’s search engine spiders crawl text and follow links. This means your website should have a great amount of text content and links. Links to other articles within your site, and links to other relevant articles outside of your website. Carefully crafted, original blog articles (never copy and paste content from another site) are an absolute necessity if you want your website to do anything in search. What’s more, you need to point that content and those links

at your local community by focusing your keywords and content around your geographical location.

attention to something for more than a few minutes, chances are, it’s pretty impactful stuff.

Want more leads? Become a trusted voice in your community

One of the key take aways from this book for me was that in order to be successful, not just online, but in life in general is you have to out-work your competition.

I said a minute ago that your agency website should be the hub of your local community. What I mean by that is you need to tailor your content for people who are local to your agency since you are far more likely to close a local lead than you are someone who is 500 miles away from your agency. This is part of what’s called a “Hyper Local” marketing strategy. This means that you shouldn’t just create content about insurance. There are people in your local community who are looking for a ton of other things that could be driving traffic and creating ranking opportunities for your agency website. Here are some examples of content topics you can blog about on your agency website that will drive some local search engine traffic: • • • • • • • • • • • •

Restaurants Schools Government Culture Climate Events Sports Shopping Reviews Business profiles Parenting tips Kids activities

There. Now you have no excuse that you don’t know what to write about on your blog :) But seriously, ranking a website isn’t rocket science. Sure there are a lot of variables that go into it, but in the end, there’s one thing that virtually guarantees you traffic and conversions — producing quality content consistently. There’s no excuse folks. If you can think, you can blog. Speaking of excuses, this leads me to the second common denominator in having a successful agency website.

Hustle. I recently read an awesome book, authored by this guy named Ryan Hanley, maybe you’ve heard of him. It was seriously a great book. You want to know how I know that? I literally have the attention span of a flea with A.D.H.D. and I couldn’t put his book down. If you can make me pay

I fully understand there are only 24 hours in a day. Trust me I do. I have a 3 and 6 year old (both boys) who quite literally bounce off the walls on a daily basis. When I walk through the door after work, I have no other choice but to give them my undivided attention for the rest of the night. My 3 year old is still in that “I don’t understand bodily harm yet” phase, so I literally have to follow him around my house to ensure he doesn’t try a backflip off my coffee table onto my couch (<— actually successfully landed one once which is why he keeps trying it). I understand that it can be hard to produce content sometimes and be active on social media, but as Charles Buxton once said, “You will never find time for anything. If you want time, you must make it.” The point is, you’re never going to survive online (or offline) using the time excuse. I’m sitting here writing this post at 11:48pm. I was up this morning at 5:45am. I’m making time. I don’t say this to brag, because trust me I could very much use the sleep. I say this to show you this is what it takes. And honestly, it’s not digging ditches. It’s spending 45 minutes a few times a month to create some content for your site, or hell, even get something off your chest. You can do that right?

Conclusion I would say that approximately 90% of the agency sites I personally have seen online are still doing it all wrong. Sometimes it’s not the agency owners’ fault. Sometimes, people just don’t know, what they don’t know. I get it — we’re in an old-school industry that up until about eight years ago was still relying on phone book ads to generate leads. Eight years is a long time ago though. There’s really no excuse for not having a strong digital presence in 2015. This one thing I can promise you — if you invest in your digital footprint a little bit more, both with your time and money, you can easily be in the 10% of agencies who are doing it right, and actually seeing R.O.I.

Big “ ”dea Want to learn more? Plan on investing your time attending our free Breakout Sessions on Sept 25.

Six

Simple by KJ Prince

Tools That Will Give Your Producers An Unfair Advantage Do you want the inside scoop on the sales tools that are helping professionals in the insurance industry be more productive, build deeper relationships, and close more deals every day? Then you’ve come to the right place. Let’s dive in.

Email - The Old Faithful Sales Machine

Sales Tool #

PRODUCER

Say what? Yes, you read that correctly. Email is (still) one of the top sales tools professionals use every day. But I’m not talking about your run-of-the-mill email system. No, I’m talking about email on steroids: Google Apps. Why Should I Care About Google Apps Email?

Google Apps is a suite of cloud-based software that includes the Gmail-based email client. (You know, the world’s second most popular email client.) So, what’s the magic behind Google Apps email? It’s the add-on tools (usually browser extensions) available in the Google Apps Marketplace that set Gmail apart from the competition. How often do you send a proposal via email? How frequently do you reach out to “lost prospects” by email, or follow up on a closed deal? Would you like to know if your emails are getting opened and making an impact? Would you like to create email templates and give your producers a set of best practices for follow up or appointment setting? Google Apps can help. The Gift That Keeps on Giving

Email is one of the most effective online marketing chan-

nels, consistently producing a meaningful return on investment. That should be no surprise, as email marketing creates a one-to-one connection with your clients and prospects, allowing you to send a personalized message in a matter of seconds. And with more and more people viewing email on their mobile phones, email marketing will continue to be effective for the foreseeable future. Email Tools You Can Use Right Now Tools like Yesware and Tout can help you scale your sales process, understand what happens after you click “send,” and provide clarity and structure for new producers (I’ll provide a list of resources at the end of this article that you can use to improve your email marketing communications). For instance, Yesware can tell you when folks open your emails, how many times they’ve opened them, and even geographic information about the recipient. Over time, this data can be used to fine-tune your email correspondence, proceduralize (and scale) your sales process, and inform you of your overall sales activities. Understand Your Prospect to Fine-Tune Your Pitch Other Google Apps add-ons like Crystal and Rapportive can give you detailed information about a prospect or customer and tell you the best way to communicate with them. Good salespeople can use this information to fine-tune their pitch, improve the effectiveness of their communication, and better understand potential customers. Crystal takes a unique approach with their sales intelligence add-on. The screen shot below depicts Crystal telling me exactly how I should communicate with Katie, including sample language to use and phrases to avoid. You can also see the Rapportive add-on that pulls in Katie’s LinkedIn profile—giving me information I can use in our conversation.

Sales Tool #

Strike While the Iron is Hot with Electronic Signatures

What percentage of your deals are closed on the phone versus email or face-to-face? If your agency is like hundreds of agency owners I’ve spoken with, you probably do a lot of business over the phone and via email. And that’s ok, people are busy and they prefer to do business their way. One great tool to reduce the time it takes to close a deal is electronic signatures. Electronic signatures allow your prospects to sign and download documents right from the comfort of their home or office–and they save you the time and money wasted on copying, mailing (or faxing), and receiving policy docs from your clients. This is a big bonus if your agency is “paperless”—you never have to print policy documents, just store them in your digital filing cabinet. Does your agency use digital signatures at the point of sale and when conducting business by phone or email?

Sales Tool #

Competition Breeds Success

Gamification is a buzzword that’s been tossed around technology circles for years. The idea is that you can utilize game design and mechanics to engage and motivate people to achieve their goals. If you’ve developed a sales culture at your agency, you know that if you challenge and reward folks for certain behaviors, they’ll tend to repeat those behaviors. Game design takes this one step further by building in hooks and rewards that influence people to perform the actions that create results—like disciplined prospecting and follow up. Most agencies have some form of old-school gamification at their offices—a leaderboard in the break room or an excel spreadsheet with monthly results. But some CRM and sales management systems take gamification to new levels, allowing sales managers to incentivize top-of-the-funnel sales activities that are known to lead to better results. Take InsideSales.com, one of the leading sales acceleration platforms. Inside Sales features a gamification feature called PowerStandings™ that creates a digital leaderboard, badges, and a reward system that motivates sales people and creates a competitive (and fun) sales culture. Are you still using an old-school leaderboard stuffed into the back corner of your office? Or have you adopted the latest technology that’s proven to increase performance?

Local Presence

Sales Tool #

If you’re doing outbound phone prospecting, local presence should be at the top of your “must have” technology list. The idea is simple—if you’re calling outside of your local area

code, a dialer with local presence will automatically call from your target’s area code—increasing connection rates, conversation durations, and ultimately improving sales. Many lead management systems and CRMs include local presence dialers.

Sales Tool #

Get Personal with Video

This is a little known trick that can help you connect on a deeper level with your clients and prospects. I’ve met agents that have great success selling and retaining clients by integrating video chat like Google Hangouts, Skype or FaceTime. When your prospects see you, they’re more likely to engage with you at a deep level. This positions you as the trusted expert you really are, and differentiates you from the folks manning the call centers at the faceless corporations you compete with. Your customers and prospects don’t mind talking to a real live human either. Other agents use video messages in their email communication, monthly newsletters, or record a quick 20-second summary when emailing a quote. It’s a great way to set yourself apart and become more approachable and trustworthy. If you want to use video at scale, check out the Switch Merge platform, which allows you to integrate personalized video into bulk email campaigns.

Sales Tool #

Position Yourself as a Trusted Expert Your website could be one of your best marketing assets—if you’d only use it.

Here’s a quick tip that you can implement this week to help overcome objections, address concerns, and demonstrate value during the sales process… Take the most frequent 5-10 questions you get about your top selling products or services, and just start writing. The next time a prospect asks you a question like, “Why is the coverage on my home so high—it’s not even worth that much!” you can answer their question and provide a reference to an article you’ve written on your agency’s website. Every time a prospect asks a question, it’s an opportunity to set yourself apart from the pack. Using the example above, you could explain the differences between actual cash value and replacement cost, then mention that you’ve written an article on this very subject and include it in a follow up email. Now you’re the trusted expert—not the call center salesman. Want to take this a bit further? Create a content calendar and syndicate your producer’s writing to LinkedIn, Facebook, your email list, etc. Don’t let that content go to waste! By developing your producer’s reputation as “the insurance guy/girl,” you’ll improve their credibility, amplify their lead flow, and make prospects feel more comfortable.

For All That Matters

facebook.com/acuitywow

Value-Added Services Could Pose an E&O Exposure

An employer probably should review the MVR of every employee who drives a vehicle on company business. Many employers also routinely require drug tests of employees and job candidates. But an insurance agency should not be the source an employer turns to for these and any other protected private information. However, there are legitimate third-party providers available for such information, which is where an employer should go, not his insurance agent.

by Mike Edwards

Question “I currently write a very nice tree service account,

which is coming up for renewal in a couple of months. Last year, we had some stiff competition, and barely kept the renewal. I suspect that this year will be no different, so I’ve already touched base with the underwriter about renewal pricing. During the current policy, we also got very involved with helping the insured get a claim paid, and I think that will be a “plus” for us come renewal time. Along those lines, we’re also working on some ideas to present to the insured about value-added services we can offer. As appreciative as he was about our help with the claim, I think he would be interested in some of the additional benefits we offer. “For example, one of his concerns is his liability exposure for the 3 arborists, who drive their personal cars to job sites. We could offer to review the limits of liability on their auto insurance, as well as determine if the tree service is covered under the employee’s policy, or if an endorsement is needed. In addition, we would recommend that employees carry a liability limit that we thought was adequate. We could also furnish our insured the MVRs on any employees who drive on behalf of the company, whether they use a company auto or their personal vehicle. “Any additional ideas you can offer would be appreciated.”

But a word of caution. In today’s legal environment, care should be used to evaluate which value-added services are prudent, and which could possibly lead to an E&O claim. As one example, providing the MVRs of employees to your insured – who is their employer – is almost universally discouraged by legal and E&O experts. Motor Vehicle Reports (MVRs), CLUE Reports, and credit reports/insurance scores, are an everyday part of insurance underwriting. However, all are considered “consumer reports” which are protected under the Fair Credit Reporting Act (FCRA). The FCRA prescribes very strict guidelines on who can access any defined “consumer report,” and what can be done with it, such as sharing it with third parties.

One example dealt with MVRs. An agency CSR handled the personal insurance for a friend who was involved in a bitter child-custody case with her ex-husband. The friend knew he had a drinking problem, and was concerned about her kids being in the car with him. The CSR offered to pull his MVR, which listed two DUI citations. The CSR gave the MVR to her friend, who gave it to her attorney, to support her request for a restraining order against the husband having the kids in his car. During cross-examination, the source of the MVR came to light. The ex-husband successfully sued the agency for $250,000. As to the agency reviewing the auto insurance of the arborists, I frankly have a concern that this, too, is unwise. Many employers do set insurance guidelines – such as minimum required limits of liability – for employees who drive, but in my view, they should obtain evidence of insurance from each employee. Also, my preference would be that the agency not recommend “a liability limit that we thought was adequate.” Lastly, your successful efforts to help your insured with his claim are laudable, and possibly risky. In my 30+ years working with independent agents, I’ve always felt that collaborating with insureds and insurers to get legitimate claims paid fairly was one of the hallmarks of the independent agency system. At the same time, I know from an E&O standpoint that any type of “service activity” with insureds carries some risk of an adverse outcome. And the current focus by nearly every business to provide “value-added service” only magnifies the potential risk of something going wrong.

PRINCIPAL

Answer? You’re right. In today’s competitive marketplace, independent agents need every advantage we can find. And service (now elevated to “value-added service,” in the current vernacular) is as important today as ever. While the old Big I slogan “Your Independent Agent Serves You First" has faded into history, many of us old timers wish we could bring back Raymond Burr (“Perry Mason”), who did those great commercials back in the 1980’s.

A friend of mine, who is an E&O defense attorney, did a program several years ago for a group of independent agents, which was called, “E&O That Comes From Being Too Helpful.” He cited many E&O cases that had resulted from some well-intentioned “value-added services.”

A couple weeks ago, I sat in on a very interesting webinar presented by the Independent Insurance Agents & Brokers of America (IIABA) and SwissRe, titled “Avoiding E&O Exposures When Advocating for Customer Claims.” The basis for the webinar, according to IIABA, was a 2012 survey of panel counsel attorneys for SwissRe, which revealed that improperly advocating for customer claims was one of the most common errors and most dangerous things agents could do to expose themselves to E&O claims.

Initially, the title of the webinar seemed to suggest that “advocating” for claims on the customer’s behalf was a significant source of E&O claims. But during the webinar, which included two E&O attorneys along with a coverage expert, I think the key point was that agents need to be aware of when they have taken “advocating” for claims too far, and strayed into legal difficulties.

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!)

Updated Agency Security Information The Agents Council for Technology (ACT) has just released an updated resource for agencies addressing a variety of client information security issues. This information comes from the ACT Security Issues Work Group led by Steve Aronson. The workgroup has been working on gathering this information since early this year. The workgroup has created both a high-level Pocket Guide and a companion reference Summary Guide addressing the top security issues agents and brokers need to address. Included in this information are various resources that agencies can use for their organization. These resources were created by the Work Group, and vetted by industry leaders, legal staff, and the IIABA Communications department.

The Pocket Guide The Pocket Guide is intended to be a high-level tool in strategic discussions to develop or enhance an agency’s security roadmap. The guide can be printed as a double-sided, tri-fold brochure, or sent/viewed as an electronic file. The guide was designed to be printed and shared with agents so it does not contain any live hyperlinks. The Guide does reference a shortened link — IndependentAgent.com/ ACTSecure — that takes readers to the full online summary including all the resource links.

The Summary Guide The Summary Guide is a complete reference guide and broken down into the following areas: 1. Prevention — Mitigate Cyber Risk 2. Knowledge — Understand Data Breach Laws 3. Document Retention — Understand the Issues Surrounding Electronic Documents 4. Security — Internal Information Security Guidelines

This expanded content covers 15 top security issues and addresses risks, possible solutions, and resources. Each section includes links to other resources that will help agencies better understand their responsibility and compliance requirements. These links will be updated as information changes. This new and completely revised resource on the security and compliance issues your agency organization faces is an excellent resource that everyone in your organization should review.

Check out our new website! www.market-finders.com

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

Virtual University’s Ask an Expert

Business Income Coverage... What Does “Necessary” Mean? ulty

VU Fac

Loss payment under the CP 00 30 06 07 business income form includes loss of profits during the "necessary suspension" of operations, plus "operating expenses, including payroll expenses, necessary to resume 'operations' with the same quality of service that existed just before the direct physical loss or damage." What does "necessary" mean? "Necessary" from whose perspective...the insured or adjuster?

"If an insured includes coverage for Ordinary Payroll, that cover provides the ability to make a claim for Ordinary Payroll, but only to the extent that the payroll claimed went to people "necessary" to return to business. For example, a restaurant burns and the insured makes a claim for the payroll of the dish washer, who was kept on payroll but is not a key or hard to replace employee. If all employees are necessary, the claim could be made for all as the coverage is there, but only to the extent that they are necessary. Since the dish washer is not even involved in getting operations back up, no coverage is afforded? What are your thoughts?" Good question. What does "necessary" mean and who determines what is "necessary," the insured or adjuster? Is the adjuster qualified to make this determination about the conduct of someone's unique business? If the business is run by two partners, you probably couldn't get agreement from them on all counts. Below are some thoughts from the VU faculty.

Faculty Response

I helped an agent get a similar claim paid years ago and wrote an article about it, but I don’t have it anymore. My opinion has always been that it’s the INSURED’S determination of what/who is “necessary.” They paid for the coverage and as long as there’s money still available, they’re entitled to draw it. The adjuster shouldn’t be telling them how to run their business. At the very worst, there’s a major ambiguity and the insured wins again.

Business income means net income and continuing normal operating expenses, including payroll. The form says that we will pay for the actual loss of business income you sustain due to the necessary "suspension" of your "operations" during the "period of restoration". The word "necessary" refers to the suspension of operations.

Faculty Response The dishwasher's duties may have changed following the loss. His efforts in re-opening may be necessary. Employment in the restaurant business is so transitory, that it's often difficult to assemble a staff that is experienced within that particular business. He may have value beyond his dish washing skills.

Faculty Response Just because there’s not a lot of dishwashing to be done while they’re getting back into business doesn’t mean that the dishwasher can’t do other things. I think that’s very common. Should the insured hire someone new for that or keep employees on payroll so they’ll be around when they do open for business? An adjuster should not be telling an insured how to run his business and which employees are necessary and which aren’t. The insured paid his premium for $X amount of coverage and is entitled to use it for payroll as he deems necessary.

The policy will pay for loss of business income caused by the necessary suspension of operations due to loss to property at the described location caused by a covered cause of loss. In the extra expense section of the form, the word "necessary" refers to expenses. Payroll is not an extra expense, but is a normal operating expense. As an employer, the insured can choose to continue to pay employees during the period of restoration. They certainly would have been paid had no loss occurred. The insured has the option to eliminate payroll or reduce payroll to a specific number of days. If the insured does not choose one of these options, then payroll is covered. The adjuster would certainly include payroll in the determination of a coinsurance penalty. If I'm going to resume operations with the same quality of service that existed before the loss, then I'm going to need the same people. Otherwise, I'll have to hire and train new people, which will lower my quality of service. I have paid a premium to include payroll. I have an option to eliminate payroll from operating expenses or reduce the time payroll will be paid. With business income coverage, I'm trying to assure that my business will be disrupted as little as possible. At best, the provision is ambiguous.

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Why Aren’t Insurance Shoppers Switching? Answer: We’re All the Same Independent insurance agents are all the same.

by Ryan Hanley

Sure we’d love to talk about being different. But we’re really not. We all sell on service. But if everyone is selling service, can service possibly separate one independent insurance agency from another? Before you answer that question, let’s look at some data from JD Power & Associates 2015 U.S. Insurance Shopper Survey. In 2013, 32 percent of the auto insurance market “shopped” their insurance. In 2014, this number jumped up 39 percent of the auto insurance market. TAKEAWAY: Price-based marketing and marketplace availability are creating an insurance consumer culture of “shopping.” In 2013, 37 percent of the auto insurance market who shopped, actually switched their auto insurance. In 2014, this number dropped to 29 percent of auto insurance shoppers switched their auto insurance. TAKEAWAY: Shopping in-and-of-itself doesn’t guarantee insurance consumers are switching their insurance provider.

Why? The answer lies in JD Power’s Key Findings from the survey: • With increasing shopping and decreasing switching among shoppers, insurer close rates—the ability to convert a prospective shopper from quoting to closing—decreases to 13 percent in 2015 from 18 percent in 2014. • Optimizing marketing and advertising efforts to ensure strong brand awareness among prospective customers is critical for insurance providers. Despite the industry increasing its advertising spend by 6 percent in 2015, compared with 2014, brand awareness of insurance providers among their prospective customers declines to 60 percent in 2015 from 62 percent in 2014 (Taken directly from Key Findings). TAKEAWAY: An increase in shopping with a decrease in switching has yielded lower conversion rates for auto insurance carriers creating an increased need for marketing and advertising optimization.

When your only value proposition is service, (the same value proposition as the agency they’re currently with), there is no reason to take the risk of changing providers. In the digital age, customer experience is the only differentiator.

What makes your agency special? Why should an insurance shopper believe your agency is better fit than their current provider? Auto insurance consumers are enticed to shop by the opportunity to save, but are only making the move if the entire experience makes sense in the course of their life. Savings are always possible. The modern insurance consumer knows that if they look hard enough, there is always a cheaper price. By why then, if more insurance consumers are shopping, aren’t more insurance consumers switching? The answer can only customer experience. • How do you answer the phone? • What are your clients saying about you online? • What does your website look like? • How easy is it to do business with your agency? • What closely does your agency’s culture match that of the consumer?

PRODUCER

More people are shopping while less people are switching.

Basically, insurance consumers are being driven to shop by price, but are only switching if they believe the customer experience (which include service and claims handling but is ultimately so much more) is a significant upgrade from their current provider.

These are just a few of the questions insurance buyers are asking themselves about your agency.

The answers determine whether or not you get the business. Is Customer Experience More Important than Marketing to the Digital Business?

A couple weeks ago I asked this simple question on Facebook. Here are over 50 comments from your insurance professional peers on what customer experience means to the success of their business. How does customer experience differentiate your agency? Thank you and good luck

Upcoming Webinars... CMS Opens Registration for FFM Webinars

by Wyatt Stewart

In September, the Centers for Medicare & Medicaid Services' (CMS) Center for Consumer Information and Insurance Oversight will host several webinars for agents and brokers about registration and training for Federally Facilitated Marketplace plan year 2016. The first webinar is scheduled for Sept. 9 at 1 p.m. ET and, according to the CMS, will cover topics such as the registration process and requirements, the vendor training option and changes in registration since plan year 2015. The entire webinar schedule is available on the CMS website. Agents and brokers may register for the webinar online. Registration closes 24 hours prior to the start of the webinar. If any Big “I” members have questions regarding logistics and registration, they can contact CMS directly.

“Certificates of Insurance – 2015 Edition” Webinar September 16, 2015, 1:00 – 4:00 p.m. EASTERN TIME (10-minute break each hour)

Well, it’s about that time again…time for an updated certificates of insurance (COI) webinar. This has just about become a bi-annual event and we can usually tell it’s time when COI questions begin to pick up substantially, as we’ve noted in the past few months. Here is a short list of some of the topics we plan to cover in this 3-hour webinar: • • • • • • • • •

A quick look at the past decade Reaffirming the purpose of a COI The bottom line…can you do what you’re asked to do? Update on legislation and regulations from around the country Where the problems most often begin…with the contracts your customer enter into ISO’s bizarre new AI endorsements…be careful what you ask for Terrible non-ISO forms to avoid Dealing with AI requests for auto and other non-CGL policies…be careful what you’re asked for Contractual insurance requirements…what can or can’t you do? • A few dozen examples of what you shouldn’t do and WHY • Beware “following form” requests • How you can decline a “request” to do something illegal or impossible • Dealing with threats against your customers to withhold payment • Sending certificates to insurers…the Nike approach • The future? What’s going on in Michigan that might change the entire landscape of COIs The cost of this webinar is $79 PER CONNECTION. So, if you don’t need CE or CE is not offered for this webinar in your state, your entire agency staff can attend for that single registration fee. We’ve had webinars projected in training rooms with 60 people for this low, one-price-fits-all fee. To register for this webinar, Click Here.

s d n e Odds & 5. 10 Fun Pirate Facts and Myths In conjunction with our pirate theme at convention, we thought we’d do a bit about 10 fun pirate facts and myths. From Blackbeard to grog and the notorious skull and crossbones flag, here’s what we’ve dug up for you (pun intended!) about pirates:

Blackbeard was the most feared pirate of all. Blackbeard (AKA Edward Teach) was known as the most terrifying pirate in the world. Before capturing a ship he would weave hemp into his beard and light it on fire—an intimidation tactic that made him look demonic. Yikes!

The skull and crossbones flag at the top of a pirate ship is called a Jolly Roger. Although the origin of the name “Jolly Roger” has been lost, one theory stems from the use of red flags. Centuries ago, a red flag was commonly used during naval warfare to signal that no mercy would be given, and anyone captured would be killed immediately. Called a Joli Rogue (“pretty red”) by the French, theorists claim this was then translated into English as Jolly Roger. Another theory suggests Jolly Roger derived from “Old Roger”, a term for the Devil.

Not every pirate ship used a Jolly Roger flag. Pirates from The Bahamas had their flags specially made by a sail-maker’s widow who took payment in brandy, while Blackbeard had his own black flag featuring a skeleton with horns. The skeleton held an hourglass in one hand, and in the other he carried a spear pointing to a heart dripping with three drops of blood

There were women pirates, too. Being a pirate wasn’t just for men. Famous female pirates include Mary Read, Anne Bonny, Grace O’Malley, and Ching Shih.

Grog was the pirate’s drink. Grog—a mixture of rum, water, lemon juice, and sugar—was the drink of choice for pirates. (Hmmm, wonder if that’s where the idea for our rum punch came from?)

Captain Woodes Rogers chased the pirates out of The Bahamas. Captain Woodes Rogers, a former privateer, went on to become the governor of The Bahamas, and in the process, helped drive all the pirates off the Islands. He was even an inspiration for the book Robinson Crusoe by Daniel Defoe.

Pirates did have eye patches. It’s been said that one of the reasons pirates wore eye patches was to help keep one eye adjusted to night vision for seeing below deck.

They didn’t really make people walk the plank. Although walking the plank is common in contemporary pirate lore, most pirates just killed people straightaway. When they did torture their prisoners, it was usually through keelhauling (dragging a tied sailor in the water from the back of the ship), marooning a person on a deserted island or remote sandbar, or lashings with a leather whip.

Pirates didn’t always bury their treasure. Some pirates didn’t bury their treasure right away because they wanted their share of the loot beforehand. And a pirate’s treasure didn’t always include gold or silver; most of it was food, lumber, cloth, and animal hides.

10.

Each pirate ship had its own set of rules and code. Almost every pirate ship had their own set of guidelines that all pirates had to agree to. This included how the loot would be divided, who had what chores, and what was expected of everyone. Believe it or not, one of the most common rules was no fighting onboard. If two pirates had a disagreement they’d have to wait, and fight on land. Arrr, matey, did yar learn anything new?

Let's get social! Here at IIANM we want to connect with our members in as many ways possible. One way is through social media. Lately we’ve been increasing our activity on social media platforms such as Facebook, Twitter, LinkedIn, and Google+ in effort to connect and share with our members. IIANM would greatly appreciate any news you may have to share with us. If something exciting happens within your agency let us celebrate with you by sharing on our social media platforms. Lastly, if you need assistance setting up/using a social media platform to connect with clients or potential prospects send us an email and we'd love to talk through setting things up, how to connect with customers, and the benefits of social media. See you all at convention! Jacob Grant - IIANM Social Media Director

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