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In This Issue 2020 Impact Special Section: 2021 Outlook Technology, Cybercrime & Marketing Thrive in the New Year




Texas PIA P.O. Box 700877 Dallas, TX 75370 (972) 862-3333 www.piatx.org

A Year Like No Other

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2021: A Year For Success

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How Sales & Selling Have Been Changed by 2020

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The E&O Risks of Insurance Agents and Brokers

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Texas News Round-Up

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David Gorman So long, farewell! As much as we’re all thrilled to put 2020 behind us, obviously many of the challenges will continue well into 2021 and beyond. The independent insurance agency community has done a stellar job of adapting to the changes and providing excellent service to our clients and communities. While there is more ahead, I have every confidence in our ability to continue to thrive. It may take new tools and a new attitude at times, but the basics of establishing relationships won’t ever change. In this issue, we look at the impacts of 2020, the outlook for 2021, and tips for having your best possible future.

Get Social with Texas PIA

Let us know what you’ve learned from 2020 and how best to serve you in 2021. Yours,

David David (Red) Gorman Office: 214-374-9997 Email: david@redgormaninsurance.com





A Year Like No Other It was a year that changed things. Many think forever. News of COVID-19 dominated our lives. But it was far from the only consideration. Hurricanes, wildfires, protests and riots, a roller coaster stock market and a contentious presidential election all vied for our attention. “Murder hornets” didn’t even make the list.

The insurance industry is on the front line of defense for every imaginable peril, so our lives and our businesses will continue to deal with 2020 impacts into 2021 and well beyond.

Natural Disasters An extremely active hurricane season directly impacted Texas. Among other storms, Hurricane Hanna and Hurricane Laura wreaked havoc on coastal areas. The estimated economic damages of the 2020 hurricane season are placed between $60-65 billion. Texas was also a victim of the West Coast wildfires that raged in multiple states. San Saba County saw over 8,000 acres on fire. The year’s unprecedented wildfire damage is estimated to be $130-150 billion in losses. Drought and excessive heat also had an averse effect on Texas farmers and farmland. A costly year for Texas and insurers.

Protests and Riots Protests occurred in many parts of the nation in the days, weeks and months following the death of George Floyd in Minneapolis. Unfortunately, some of those peaceful protests turned into looting, arson and vandalizing a wide range of stores, restaurants and other businesses. The price tag for these protests is expected to be a record $1-$2 billion in insurance claims according to the Insurance Information Institute. The riots involved approximately a half million people in nearly 550 locations (including 140 cities in more than 20 states). And the presidential election sparked an ongoing series of pro-Trump protests and counterprotesters, leading to a number of clashes and arrests. The good news for home and business owners who suffered losses is that property damage caused by riots, protests and vandalism is usually covered by insurance.





Worldwide Pandemic The coronavirus closed down schools, businesses, manufacturing and travel, affecting entire industries from hospitality, film, television and sports to banking, legal, finance and retail. Insurers and other businesses transitioned to working virtually almost overnight. While the coronavirus locked down countries around the globe, its full impact on the insurance industry is yet to be determined. Experts anticipate both short-term and long-term claims that will affect most lines of insurance including workers’ compensation, business interruption, cyber, general liability, travel, health, auto and several specialty lines to name a few. Lloyd’s anticipates $110 billion for coronavirus-related claims in 2020 alone. Allianz Global Corporate and Specialty has reserved $571 million for them and reported an uptick in claims as policyholders questioned how coverage might apply to their different business areas. “It has accelerated the use of technology to communicate with customers and process claims more efficiently and effectively,” shares Eric Sanders, head of claims for QBE North America. “Initiatives we started years ago involving virtual inspection tools, chatbots powered by artificial intelligence and straight-through processing matured just in time for COVID-19 and the rise of social distancing, travel restrictions and increased working from home.” Companies also found creative ways to connect in this new reality, such as virtual ice cream socials and wine tastings over WebEx and Zoom. “We found ways to connect internally and externally,” says Lynn Neville, EVP, global head of insurance claims at Sompo International. “From an operational standpoint, transitioning an entire workforce overnight was a herculean effort for most companies. It made you rethink how you do your business from technology investments to efficiencies and streamlining processes.” As businesses shut down and economies slowed down, companies sought financial relief through their business interruption policies only to find that pandemic-related events were excluded or the policies covered physical damage from events TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL




like hurricanes and fires, but not business disruption due to the coronavirus. Cases are now making their way through the courts. “Several important areas are in a wait-and-see mode. The litigation over the applicability of business interruption coverage has been mostly favorable to insurers so far, but we will still have to deal with it for some time,” explains Sanders. “Long-tail lines remain an open issue — for instance, we could see a rise in securities litigation claiming lack of or misleading disclosures by businesses about the impact of COVID-19.” Sanders also believes that the broadest impact from the coronavirus will be in workers’ compensation due to the occupations where contracting COVID-19 is presumed. “This has mainly included healthcare workers, but [also] other occupations considered essential — e.g., police, transportation and critical retail workers.” The role of technology has expanded tremendously as claims professionals utilize drones, mobile apps and remote adjusting to keep adjusters and policyholders safe. “Clearly, one of the most critical issues facing the global insurance industry, for some time now, has been the increasing necessity of digitization. The COVID-19 pandemic hasn’t changed the fundamental realities of the digital landscape, or the execution imperatives for our industry — it’s brought issues to the fore, and accelerated change that was already underway, albeit unevenly,” shares Bill Pieroni, CEO of the Association for Cooperative Operations Research and Development (ACORD), in a written statement to Claims. “The gap between the digital ‘haves’ and ‘have-mores’ was already growing — now it’s widening even further. Digital laggards are finding it increasingly hard to execute, while digital competitors are gaining profitable share.”

Impact on Gender Equality In an abrupt shift, 1 in 4 women are now considering leaving the workforce. McKinsey’s sixth annual “Women in the Workplace“ report for 2020 illustrated the depth and magnitude of the pandemic’s detrimental consequences on women and working mothers, in particular. In 2020, McKinsey research found that women are now 1.3 times more likely than men to have considered stepping out of the workforce or slowing down their careers, particularly mothers, senior women, and Black women. McKinsey partner Jess Huang says in the worst-case scenario, if women leave the workforce at the rates they say they are considering, corporate America could lose over two million women in the workforce and over 100,000 women in senior leadership roles in the short term. According to Huang, this could potentially wipe out the progress made over the last six years. TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL




Some Positive Changes As we bid a fond (?) farewell to 2020, there are a few aspects of our work life that have disappeared or been replaced. No one can say which changes will be permanent and which will fade quickly away, but as we enter 2021 we’ll welcome new ideas and solutions. GOODBY IN-PERSON CONFERENCES. HELLO VIRTUAL EVENTS. Stymied by travel restrictions and limitations on gathering sizes, many industry events were forced to cancel or switch to a digital platform. Organizers quickly moved into online-mode for conferences that annually attracted hundreds or thousands. POSITIVES: Content integrity remained high, better use of funds, time savings, and less waste. GOODBYE LONG BORING MEETINGS. HELLO ZOOM. Businesses had to get used to a new way of communicating. Zoom emerged as a platform of choice for most virtual meetings. POSITIVES: Ensures social distancing, remains personal interaction, better attendance, recordings capture information. GOODBYE MEDICAL OFFICE WAITING ROOMS. HELLO TELEHEALTH. POSITIVES: Rapid response to simple requests or questions, increased patient knowledge with patient portals, reduced clinic workload.






LESSONS LEARNED “Unprecedented” was the word of 2020, and described everything from infection rates to Supreme Court nominees. The insurance industry has seen its own dose of unprecedented, as many insurers went to completely digital interactions, employees transitioned to work from home and new technologies were incorporated for communication, collaboration and customer service. However, a recent COVID-19 Technology and Business Process survey found that 74 percent of workers experienced challenges with business processes when working from home, in spite of 64 percent of companies implementing new technologies to improve remote workers’ productivity. How do we tackle these challenges as we move past “unprecedented”? Here are three lessons learned:

Look Before You Leap A lot of insurance leaders jumped in too quickly when they automated manual processes with robotic process automation (RPA) and moved on-premise systems to the cloud. According to a report by McKinsey, only 55 percent of companies believe their automation program has been successful to date. Going forward, do a complete evaluation of your business processes, and how employees interact with them. Bosses often think they know how processes work based on opinion or bias, which is often not the reality. It may be that simply dropping in a new piece of technology is not the solution, and that a complete transformation of the system is required.

Content is King Having access to policy information is critical to serving customers. Customers were frustrated enough with social distancing constraints, health and safety concerns and constant changes without having to deal with an agent incapable of answering a question or approving a claim in a timely manner. TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL




AI is Actually Not That Hard Insurance leaders learned that AI is not as complicated as it seems. 46 percent of respondents deemed the RPA bot and other AI tools successful in helping them do their job better. In 2021, you will see a new generation of low code/no code tools that empower more businesses to have access to AI technology without needing to rely on IT. Having sophisticated tools at agents’ fingertips will improve processes and ultimately improve customer relations.

HIGH-IMPACT TECHNOLOGIES FOR THE INSURANCE INDUSTRY The identification of these as the top transformational technologies is based on SMA’s research with insurance executives and varies slightly for personal and commercial lines. For example, commercial lines executives also rate blockchain as a highimpact technology. A quick synopsis of the implications of these technologies follows. •

Machine learning: A revolution in machine learning (ML) has occurred in the past few years, spurred by massive computing power, big data analytics and huge investments. Both incumbent tech companies and InsurTech startups are harnessing ML for purpose-built insurance solutions, addressing use cases in every corner of insurance. Examples abound in submissions analysis, underwriting decisioning, claims fraud and many other areas. The impact on people, processes and the business overall will be profound.

The IoT: Virtually everything that the industry insures is becoming connected to the Internet, with real-time data streams providing useful information for insurers. Insurers are offering smart home and building devices to their customers at discounts, offering premium discounts where devices are installed, and, in some cases, giving away the devices to select customers due to their loss mitigation potential.

New user interaction tech: Messaging and collaboration platforms, real-time video sharing, chatbots, voice assistants and others are changing the way the world communicates. Insurers are beginning to adopt these technologies to respond to customer demands.

Autonomous vehicles: “Vehicle insurance is dead. Long live vehicle insurance!” Much has been said about how autonomous vehicles will spell the doom of auto insurance. While the potential to reduce accidents is tremendous, the evolution toward the autonomous future will be a long one, with consumer adoption, the regulatory environment, technology sophistication, legal liability, the roadway infrastructure and other issues to be tackled over time. There will be plenty of opportunities for insurers to adapt and address new emerging risks along the way.

Blockchain: Distributed ledger technology (aka, blockchain) is another longer-term play, but one with foundational implications for computing. The way that information and money is exchanged is likely to be based largely on this technology in the future, although the big impacts may be a decade away. Today there are important implementations for complex commercial and reinsurance transactions.





BOLDER BETS ON INSURTECH This year, speed-to-market and innovation became the key to capturing customer adoption, including in insurance. In fact, InsurTechs, nimble and tech-native by nature, became the backbone of the insurance sector by driving innovation and collaboration across the sector. As a result, 2021 will be one of the biggest years of industry transformation yet.

Pace of Investments Will Increase With the flurry of mergers, acquisitions, and IPOs this year, there’s never been more interest in InsurTech, and there’s every indication that we’re about to see another strong year of funding in 2021. Private investors who were once skeptical of the strong headwinds of the insurance industry, from regulatory hurdles to increasing catastrophes, will search for opportunities to fuel the next round of up-and-comers.

Non-Insurer Competition Over the next couple years, vertically unique companies will take a more serious look at insurance. We’re starting to see the auto industry lead more consumers to consider purchasing their own insurance packages, such as Tesla and GM. As vehicle systems become more technologically advanced, insurance may become a commodity bundled with new-car purchases. As the move to digitization continues, we’ll see property insurance sold directly through ecommerce sites or home insurance policies sold along with new homes tailored to the property’s specific needs, just as we’ve been doing at Hippo with [home builder and investor Lennar] since 2019.

Catastrophic 2020 = Bold 2021 Innovation Bets From extreme weather conditions to historic wildfire destruction, 2020 quickly became one of the costliest years for the industry in U.S. history. Insurance companies took a hard look at their balance sheets with pressure to adapt quickly, leading to higher investments in technology to predict risks faster and more accurately. In 2021, I expect we’ll see more granular uses of data such as hyper-specific flood maps that can better evaluate risk and price it appropriately. We’ll see big bets on these types of technology companies, which will help drive more consumer understanding and protection. We’ll also see creative capital structures become more commonplace to protect companies from rising catastrophic exposure and risk. New capital providers will participate in first-dollar coverage, adding diversification and premiums to support catastrophic events.

A Few Surprises Ahead If 2020 has taught us anything, it is to expect the unexpected. These rapid and unexpected changes will help InsurTechs gain a larger foothold in the industry, increasing the rate of acquisitions and partnerships. Meanwhile, the insurance industry as a whole will recalibrate to keep up with global shifts by developing ways to offer easier-to-secure insurance policies that take advantage of the latest technical advancements, and creative uses of capital to support the ever-changing catastrophic environment. If it can do that, 2021 will be an even bigger year for InsurTech than 2020. TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL





EXPLOSIVE INCREASE With an increased dependency on tech, comes the increased risks for cyberattack. The nearly universal transition to a full-time remote workforce through the COVID-19 pandemic exponentially increased the ‘attack surface’ for cybercriminals in 2020. According to a new report from Guidewire, FBI cybercrime reports quadrupled during the first phase of the pandemic. Phishing attacks spiked 350%, and ransomware demands exploded in 2020 as hackers took advantage of the pandemic and deployed increasingly sophisticated tactics against individuals, businesses, hospitals, and schools. Even with a vaccine on the way and an eventual return to the office in sight, these evolving, worsening cyber threats won’t let up in 2021. In fact, cyber threats will only worsen, experts say, as the potential targets for criminals to exploit will continue to expand, and corporate networks will be at greater risk of ransomware and cyber attacks. A new report from Guidewire forecasts the state of cyber risk and prevention tactics in the year ahead, identifying key risk factors and trends. The 2021 Cyber Risk Outlook report examined what is driving these statistics, and what the implications are for cyber insurers heading into the new year.

How Criminals Exploited a Crisis The transition to a remote workforce triggered an unprecedented increase in the use of personal devices and residential networks for business operations, creating a feeding frenzy for cybercriminals. Ransomware attacks increased by 40% in the first three quarters of 2020, compared to the same period in 2019, totaling roughly 200 million incidents globally. In the U.S., the surge in ransomware attacks nearly quadrupled the international rate, with reports indicating a 139% increase in ransomware attacks YoY, according to Guidewire. The cost of not paying ransoms worsened as well Employers deployed defenses early in the pandemic as threats evolved and are continuing to adopt new precaution measures as risks worsen. TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL




According to Guidewire, the use of virtual private networks (VPN) surged 112% in just the first six weeks of the pandemic. At the same time, Guidewire says businesses have been digitizing operations “at a record pace” to adapt to new remote working trends, increased virtual consumption, and the need for contactless services. In a nearly universal shift, a global survey found 93% of small businesses reported having more reliance on technology since the start of the pandemic.


The Impact on Cyber Insurance The explosive, continuous surge in cybercrime activity and the evolution of attack tactics have triggered a simultaneous surge in demand for cyber insurance. As policy uptake has increased, so have prices. According to Advisen, brokers have reported increases of 5–10%, with many buyers frequently requesting higher limits. The manufacturing and industrial sectors generated the most new-to-market buyers to the standalone cyber market, an Advisen survey found, with nearly half of respondents identifying the sector among their top three. Price and capacity remain “notable barriers,” though, researchers say, and could determine whether or not this market growth sustains. At the same time, underwriting cyber has become more challenging. Three years ago, cyber was a highly profitable line of business with loss ratios as low as 10-15%, the report reads. In 2019, rising claims pushed this figure up to nearly 50%. In 2020, anecdotal evidence suggests cyber loss ratios rose well above 50%. “While ransomware is not the only risk at play, it is the primary exposure driving change,” the report states. “According to one major insurer, ransomware accounted for almost 41% of cyber insurance claims in the first half of 2020.” TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL




GETTING AHEAD OF RANSOMWARE With the drastic uptick in ransomware attacks, what can we do to help keep our clients informed?

Proprietary Problems More than half of today’s ransomware attacks can be traced back to vulnerabilities in Remote Desktop Protocol (RDP). Security gaps like poorly secured RDP ports are found so frequently in part because of the size and complexity of modern IT systems. Just one lonely server with an unsecured port among dozens, hundreds or thousands is potentially enough to let an attacker into the network. When it comes to mitigating cyber risks, brokers can now lean on AI and machine learningbased tools to automatically detect vulnerabilities in an organization’s IT infrastructure. With so many attack vectors, such as RDP vulnerabilities, outdated software, phishing and many more, leveraging these tools to detect potential gaps in security is becoming more imperative as cyber attacks ramp up. Security scanning and alerting technology offers brokers an opportunity to bring additional value to clients in two ways: They can help identify present threats at the point of purchase of insurance, and give clients peace of mind knowing that, throughout the policy year, any significant new threats will be brought to their attention.





Securing the Network There are many ways for companies to secure their network, which can include closing down open RDP ports that are no longer necessary or moving needed ports that were vulnerable behind Virtual Private Networks (VPN). This not only helps the organization itself secure its network; it also helps make the web safer for everyone. The more fully secured networks there are, the harder it is for criminals to get their hands on easy credentials, affecting the supply on the dark web. This makes their job more difficult, and more expensive.

Leveraging Tech Tools Especially in today’s remote working environment, brokers need to leverage AI and machine learning tools more than ever. This demand will extend past the length of the pandemic, as companies further digitize work-places and even choose to operate completely remotely. This is an opportunity for us to provide extraordinary value for clients and attract new ones.

IT GETS PERSONAL Traditionally the realm of commercial lines, more consumers are hoping insurance professionals can help them with policies that protect against costly cyberattacks, according to Accenture‘s 2021 Insurance Consumer report. In fact, 75% of consumers welcome assistance from insurers when dealing with cybersecurity threats, particularly as these incidents increase in volume and severity. This is moving many to consider steps beyond traditional identity theft solutions, with insurers becoming a key outlet for cybersecurity protection, Accenture reported. “We’re at the beginning of a new movement in personal cyber insurance,” Kenneth Saldanha, who leads Accenture’s Insurance industry group globally, said in a release. “The pandemic had a profound impact on customers’ lives, which will likely realign their expectations of insurers to help them in a more vulnerable and digital world. Insurers are reimagining their role in their customers’ lives by helping them deal with cyber incidents and build on their long-standing trust with customers to ensure them that they feel their identity and personal data are protected.” An unfortunate side effect from growth in work-from-home arrangements was an uptick in malicious digital attacks. With a majority of people who can work remotely planning to do so more frequently moving forward, turning the home into the center of their work-life, 54% of consumers said they’d be interested in home cybersecurity insurance with premiums that are tied to the use of the latest anti-virus protection software, according to Accenture. Accenture’s survey, which polled more than 47,000 consumers worldwide, also uncovered that consumers today cite “value for money” as the main reason they stay with their insurer. The battle for the consumer still remains in offering trusted, personalized customer experiences, adapting to new risks, and really being there for them to protect their best interests.” TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL





INFLUENCE LEADS AND WIN CLIENTS The good news is that the techniques and technologies we adapted in 2020 will stay relevant in 2021. Although much interaction moved to the virtual environment, it’s clear that relationships are still what drives our business. Here’s some tips to build on the successful adaptations we’ve made:

Embrace Virtual Meetings There was an initial fear that the quality of relationship between client and agent would suffer through a screen. The reality is that clients have actually found the convenience of virtual meetings superior to in-person interactions and it has strengthened relationships. Because agents are able to quickly and consistently connect with clients virtually, many have even increased the frequency of contact. These quick video check-ins are actually helping agents keep existing clients happy and secure new business. Video meetings have become the norm, so get to know all the features and controls of your meeting platform of choice. Backgrounds, lighting and noise reduction all matter.

Expand Your Platforms Your clients are on multiple platforms, you should be too. The more places you are, the more opportunities you provide to connect with clients and prospects. Be it website, email, text or social media, it only matters what your client’s preference is, not your own. Blogs, newsletters, podcasts and videos are now much easier to put together than ever, and provide additional touchpoints to the markets you want to reach and establish you as an expert. Clients want their insurance agent — the person handling some of the most important matters in their lives — to be a well-informed expert. In addition, clients expect consistency. One note of caution: don’t ‘set it and forget it’. If you have a profile or page set-up and don’t check it, anyone attempting to communicate with you there will think you are unresponsive.





Mobile-First It’s not enough to be just mobile-friendly. The average American spends 3.6 hours a day on a mobile device, accounting for over half of their daily digital media usage. Agency management systems and any other software that you use should be easily accessible on the go. Any transactions that require paper or online documentation should be optimized for mobile screens, including text messaging. Forrester Research says text-based marketing messages will increase by 40% next year, and as inboxes fill up, agents that break through the noise via text and mobile will stand out.

MAKING RELATIONSHIPS MATTER Here’s some tips for 2021

Be Truly Considerate One thing I can say about the pandemic is that it has made everyone more open to conversations; everyone has something in common. Some examples of conversation starters could be: How are you doing in the pandemic? Has it impacted you or your family personally? Has it impacted your business? Authentic consideration of the experience of others is not only the right thing to do, it will further bind the relationship into a long-term partnership.

Get Back to Basics Research your prospects, know their business, ask more questions to learn of their pain points and offer suggestions that solve a problem for them. Do what you do best and streamline your activities.

Don’t Be ‘Salesy’ By that I mean do not turn into “that guy” that is always pitching a service or a product before fully knowing and understanding what the client/prospect needs. The success of sales lies within the daily routine — making the calls, sending outbound messages — in general, filling the top of the funnel so that opportunities flow out of the bottom. Many have difficulty with this on a consistent basis or lack the patience over the long term. However, the successful ones put in the hours to perfect their trade. As we face what’s next for the industry, there is a lot to celebrate. While things may be different in 2021, many of the new technologies that emerged will actually lead to improved client relationships and generate more qualified leads than ever before. Insurance agents who are able to embrace these changes will see a prosperous new year. The coming year will continue to bring challenges for our industry. However, with a slow progression, the in-person meetings will gradually return, although highly scrutinized with a measured ROI for justification. In a few years, the clients with whom you helped in these trying times will remember and stay loyal to you. Stay dedicated and committed. Work the grind and in 2021 you will find your new adaptation of normal. TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL




2021: A Year for Success First, the Bad News Here’s the bad news: Your insurance agency is very likely to see a drop-in revenue over the next two years, even as COVID-19 vaccines are distributed in the coming months. It will take a while for enough people to be vaccinated to achieve herd immunity and for the economy to rebound. Payrolls are going down amid higher than usual unemployment, which means workers comp premiums will be down. Liability premiums are based on sales, which are also down. Finally, some businesses are closing. Their insurance policies will be canceled or not renewed. During the Great Recession, premiums went from growing around 4% annually to dropping at least 2% over two years. It then took another two years to recover to the prerecession level of written premiums.

But Wait: Here’s the Good News Insurance agencies are in much more stable positions than many businesses. Here are three reasons why: 1. People are required by law to have car insurance and workers compensation insurance. 2. They are required by their lenders to have homeowners coverage and business property coverage. 3. They are required by contracts to carry liability coverage. As you are making plans, one temptation may be to begin laying off staff. But study after study has shown this hurts your business in the long run. While layoffs cut costs quickly — and payroll is often one of the biggest — they end up doing major damage to the business down the road. My observation has been when a business must let people go, everybody else there starts wondering if they are going to be next. Some of them will start looking for other jobs right away. You really cannot blame them. Your best employees will always be able to find other jobs faster than your less valuable staff. That makes sense. Do you really hope to hire so-so employees away from your competitors? Will layoffs lead to more staff leaving and your company losing your top staff?

Focus on Your Customers Your customers’ premiums are going to go down as the economy struggles. To keep your commissions from decreasing, you need to have more customers. It is more profitable to keep existing customers than it is to acquire new ones. But in a recession, that may take a little more work. This year and next year, many more of your existing customers are going to shop around as they look to cut costs. So think about how your existing customers could be enticed to move their insurance. Is it lower premiums? Bundled policies? Added services? Write all these ideas TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL




down. Highlight the things in that list that are things you do not or cannot currently do.

Create Your Priority Action List Most people start with the low-hanging fruit. You need to start with the actions with the largest impact. Next, start looking at attracting new business. Past customers should be reviewed for reasons you lost the business. Can you address these reasons? Have you already tried and failed to get them back?

What about prospects you have presented to in the past but not acquired. Make a list just like the past customer list above and prioritize actions on this list. Do you have a list of prospects you have never done business with? How have you approached them in the past? What were the results? Review this list, analyze and prioritize. You could just make a list of everyone in your target market. Maybe that would be all the businesses in your town or county. Maybe that is a specific market like antique car collectors. Decide if you represent carriers who offer a strong program for these prospects. There is no need to go after apartment complex owners if you do not have a carrier who will write coverage for them. Match your strengths with new lists. In the coming 12 to 18 months, your prospects’ pain is likely to be the cost of coverage as much as anything else. Address cost savings, but remember, price is generally fourth or fifth on the list of reasons people decide to buy coverage.

The biggest decider in buying decisions is perceived value. Never forget to emphasize that value is equal to or more important than price. Look at your competitors and make a written list of the features they offer online and the products or services they offer. Compare this list to what your website does. Comparing the table to what your website does, what are the features these carrier’s websites offer that your website does not offer?

The Personal Touch Helps I have carefully watched how local businesses I deal with have changed or improved their marketing during the pandemic. My strong takeaway has been that businesses that have reached out in a personal way on a consistent basis — at least weekly, but sometimes more often — have been able to build more loyalty.





All the new habits and processes you form to deal with the changes being forced on you now are things that will hold long-term value for you and your business long after the pandemic has passed. Take advantage of the change and opportunity and you will not only get through this well, you will thrive for years to come.

Planning for a Successful Year The Aon Programs study surveyed nearly 500 U.S. agents and brokers between October 12-18, 2020, and found three themes that resonated with brokers in 2020 and will continue to define business in the new year. 1. Virtual business. Despite the seismic shift to digital operations during the COVID-19 pandemic, only 6% of brokers who participated in the survey said they plan to be fully virtual by 2021. Also, fewer than half of the brokers (43%) revealed that most of their meetings are virtual, with 28% saying they’re attending in-person business meetings as usual. About one out of four brokers said they could be open to in-person meetings in 2021 but are uncomfortable with that setting currently. 2. Marketing tools. Social media will be a major focus for brokers in 2021, with 33% believing that social platforms will boost their businesses. Facebook and LinkedIn, in particular, are where agents see the best return on their investments to reach new markets and prospects. 3. Business shifts. If it’s not broke, don’t fix it —that’s how many brokers view their business as the year comes to a close, with 34% reporting no major changes in the pipeline for 2021. However, some agents do plan to invest in critical areas of the business, such as professional development (24%), new client retention programs (17%) and product offerings (14%). Regarding new products, brokers see value in adding offerings for professional services firms (21%), catastrophe (17%), nonprofit organizations (13%) and health care providers (11%). “From our perspective, brokers are working hard and planning to make 2021 one of their most successful years yet,” Levine said. “Dedication to planning, even at a time like this, will make all of the difference in an agency’s success.”





How Sales & Selling Have Been Changed by 2020 by John Chapin 2020 has not been a typical year by any stretch of the imagination. Almost everything we know has been changed or affected in some way, shape, or form. So what about selling? How has selling changed and what must we do to adapt to the new environment? Very rarely, if ever, does a disruptor change the core principles of the sales game. Most issues and changes, whether it’s the birth of the internet, social media and e-mail, 9/11, or the 2008 recession, have simply been distractions, causing us to make some small adjustments to our process, but they haven’t changed the foundational principles of sales. The events of 2020, led primarily by the pandemic, have been slightly different in that they have affected some important aspects of how many of us sell. For example, in most cases faceto-face sales calls had to be replaced by phone calls and other mediums of contact. This in turn caused changes in the number of contacts, messaging, use of technology, and the need to be more persistent. To expand on that a bit, here are some areas you should be working on so you’re prepared if you find yourself in lockdown again: •

Work on your phone sales skills. In-person calls are the most effective for selling, phone calls are number two so, you want to get great at selling over the phone. If you think you can’t sell over the phone, realize it is just like any other skill and it can be learned and developed. Remember though that 55% of communication is facial expressions, eye movements, and body language. You obviously miss that over the phone. There are also other subtleties such as the fact that your voice loses 25% volume over the phone. Methods, messaging, and logistics have to be adjusted when selling by phone but if you can’t be there inperson, the phone is the way to go.

Work on your communication skills. As stated above, it’s more difficult to communicate over the phone. The better your communication is in general, the more successful you’ll be. Also, most of us need to be better communicators anyway, even in person.

Persist and persevere. Realize that while making face-to-face sales calls takes persistence and perseverance, calling on people via the phone, e-mail, and other mediums, takes more. It’s much easier to dismiss you when you’re not physically present plus forms of contact other than in-person tend to take more touches and more stick-to-itiveness.

Learn technology and tweak your sales process a bit. Yes, the internet, social media, e -mail, and the pandemic may require us to get more tech savvy and understand things we didn’t need to worry about 30 years ago, but that doesn’t mean we need to completely change the way we do business. Of course, we now ask someone if they prefer an e-mail, text, phone call, or other, but that said, most of the old tried-and-true still apply. For example, the average C-level business executive in their 50’s does not want to get on a Skype or a Zoom call, they want a phone call if they can’t see you in-person. That said, you want to be familiar with technology just in case. You don’t want to be labeled a dinosaur.



CALL FOR NOMINATIONS PIA National is calling for nominations for three prestigious national awards. Nominations for all three awards will be accepted now through Friday, March 19, 2021. • • •

Professional Agent of the Year Award Young Insurance Professional of the Year Award Customer Service Representative of the Year Award

PIA members may nominate candidates for the Young Insurance Professional of the Year Award and Customer Service Representative of the Year Award. We urge you to show your appreciation for your colleagues by submitting your nominations. Email vicki@piatx.org to request a nomination form. •

Stay positive. Part of your job is to be positive and optimistic. You don’t have to be Pollyanna, but you do want to look on the bright side of things. While prospects or clients may be negative, you don’t need to pile on, or start the negative ball rolling to begin with. There’s enough negativity in the world right now. You want to be a pleasure to do business with and you want people to view you as a positive person.

All of the above said, while you’re adding to and tweaking skills needed for the present situation, you also want to make sure your basic sales foundation is in place. Here are some ways to do that: •

Focus on your activity and your numbers. I tell my insurance agents that they need 5 to 8 appointments every week if they’re going to hit their sales goals. I know if they get in front of that number of people, and follow my process: qualify them properly, identify and/ or create big enough problems they can solve, come up with compelling solutions, present, close, and do every other part of the sales process correctly, then five to eight appointments will equal at a minimum one sale a week and usually more. If they have zero, one, or two appointments a week, they probably won’t hit their goals.

Work on your overall sales skills. You always want to be working on your sales skills. The stronger your sales skills, the more confident you will be and the more successful you’ll be with the people you talk to.

Remember that you’re still needed and you’re still the expert. People thought the internet would make salespeople obsolete. During the pandemic, some salespeople have questioned whether or not they are necessary.



The E&O Risks of Insurance Agents and Brokers by Mike Smith, PLRisk The very nature of an insurance agent or broker’s job involves managing the risks and exposures of their clients. Despite this knowledge and expertise, they often neglect their own risk management needs. However, insurance agents and brokers may be more at risk of Errors and Omissions (E&O) exposures than the clients they serve. An ever-changing insurance legislation landscape plus frequent changes in the marketplace means there is a lot of information that agents and brokers have to stay on top of. Failure to stay informed can lead to costly E&O claims and settlements and can even cost an agent or broker their license in a more extreme case. Because insurance agents and brokers are often sought out for their expertise in risk management and reducing exposures. But the term “expert” or “specialist” comes with its own set of liabilities. Below are some of the most common E&O risks of insurance agents and brokers.

Failing to Procure Coverage When an agent does not acquire a specific policy that was asked for by the client, they can be held liable for failing to procure coverage. This happens more often due to paperwork error or accidental omission rather than gross negligence, but regardless of the reason, the agent or broker is still at fault if the client experiences a loss that they believed they were covered for only to find out they were not. To make up for the financial burden of an uninsured loss, the client can sue the agent or agency for the damages.



Failing to Recommend Proper Coverage Similar to a failing to procure coverage claim, an agent or broker can be held liable if they failed to recommend a specific policy to their client. While most agents and brokers strive to recommend all possible coverage options for their clients’ known risks, they aren’t necessarily responsible for mitigating all possible risks in their capacity as an agent or broker. Regardless, a client may go after the agent or agency with an E&O claim in order to recoup money from any uninsured or underinsured losses, but this situation isn’t quite as black and white as other E&O claims are. Even if the claim is unfounded, the agent or broker would still incur costs pertaining to defending themselves against it. E&O coverage for insurance agencies can help pay for defense costs, and settlement costs too, if necessary.

False Information on Certificates of Insurance An astounding 40% of insurance agency-related E&O claims are related to false information on certificates of insurance. False information on certificates is often the result of an administrative error, especially when agents and brokers submit certificates that were completed by admins, vendors or subcontractors without checking them first. This simple oversight can lead to reduced, cancelled or invalid coverage. Ultimately, the agent or broker would be at fault for not ensuring the validity of their certificates prior to submission. No one is immune to making mistakes, and the amount of pressure put on agents and brokers to be experts in their field makes them especially at risk of an E&O claim. Obtaining E&O coverage for your agency and implementing a strong risk management approach can help soften the financial blow when an error or omission does occur. TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL


Texas News Round-Up Houston Rockets Becomes First NBA Team to Sue Insurer Over Denied Covid-19 Claims The Houston Rockets and billionaire owner Tilman Fertitta are suing their insurer for denying the National Basketball Association team’s bid to tap its businessinterruption insurance policy over revenue losses from the Covid-19 pandemic....more Veterans now May Be Reimbursed for Texas Insurance Exam Fees Veterans who passed any Texas insurance exam since early 2019 can now get reimbursed for the fee after the U.S. Department of Veteran Affairs approved the state’s request, the insurance department said....more Estimated 659K Lost Health Coverage in Texas, State with Most Uninsured in U.S. The analysis, published on July 14 by Families USA, a nonpartisan consumer advocacy group, found that 5.4 million laid-off workers across the country lost their health insurance from February to March.…more 412 Motorcyclists Died on Texas Roads Last Year, Officials Say Texas transportation officials say 412 motorcyclists were killed and more than 1,800 were seriously injured on the state’s roads in 2019. Acknowledging that on average, one motorcyclist dies every day on Texas roads, the Texas Department of Transportation is urging drivers to “Share the Road: Look Twice for Motorcycles.”.…more Texas Company Cited After Employee Fatalities; Fined Nearly $500K The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) cited Alpha Technical Services (ATS) – doing business as Quala Rail and Specialty – after two employees were fatally overcome by fumes while cleaning a tank trailer....more Houston Leaders Urge Citywide Lockdown Amid Virus Case Surge Houston Mayor Sylvester Turner and Harris County Judge Lina Hidalgo, both Democrats, said this weekend that a stay-at-home order is needed for America’s fourth largest city to cope with the surge of COVID-19 cases....more

Texas Hospital Sued for Retaliation in Employment Discrimination Case The Woodlands Psychiatry and Counseling Company, a hospital in Conroe, Texas, has been sued by federal officials for allegedly retaliation for firing an employee who had filed a discrimination charge against the healthcare provider....more Texas Bars Ordered to Close Again, Restaurants Reduced to 50% Occupancy as Virus Spreads Gov. Greg Abbott has taken his most drastic action yet to respond to the postreopening coronavirus surge in Texas, shutting bars back down and scaling back restaurant capacity to 50%. He also shut down river-rafting trips, which have been blamed for a swift rise in cases in Hays County, and banned outdoor gatherings of over 100 people unless local officials approve....more

Prosecutors: Trying to Hide Healthcare Fraud, Texas Woman Burned $1.6M Home A woman burned down her $1.6 million suburban Fort Worth mansion while trying to destroy documents from her husband’s health care clinic as authorities were investigating the couple for fraud, prosecutors allege....more Do you have news to share? Email vicki@piatx.org with your story. TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL




Profile for Texas Professional Insurance Agents

Texas Connection Issue I 2021  

Texas Connection Issue I 2021