March-April2016

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Y DA CTS X A TA N F FU

“I’M NOT CREATIVE.”

FIVE MISTAKES

ORGANIZATIONS (UNKNOWINGLY) MAKE THAT DRIVE CUSTOMERS AWAY



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by Jon Spaugy, BIG’s Chief Executive Officer

SPRING HAS SPRUNG As of this writing, spring is about to, well, be sprung on us all. There are two religious holidays associated with this time of the year -Passover and Easter -- that have something to do with transition and renewal. For most of the country (Southern California excepted), the last vestiges of winter are disappearing and flowers are beginning to bloom. Everything seems fresh and our personal and professional outlooks hopefully have a renewed positivity.

Other ways to learn techniques for improving your office dynamic is listening to people who have tried different things. There is no better teacher than experience. Try bouncing ideas off others. Maybe they have already tried them and have some advice on what worked and what didn’t. Of course, networking is key to building and maintaining a successful business. There is no better venue than a BIG convention for doing just that.

It is appropriate that the annual BIG convention takes place in the spring. The event is a showcase for fresh innovations and ideas, opportunities to meet new friends and renew old relationships are endless, and the insurance professionals who attend each year leave with a renewed sense of purpose. Is this just idle boasting? Why not ask a colleague who has been there, or better yet, find out for yourself.

So take advantage of the spring mindset and do something to move your business forward. Maybe you don’t necessarily need a “rebirth,” but just a revitalization. Very often, the best way to get a fresh perspective is to get away from the office for a bit. The BIG convention is planned for doing just that. Take a long weekend in May (3/5 - 3/8 to be exact) to play some golf for charity, attend a few seminars, walk around the trade show, and be part of the conversation.

This is the time of the year in which many people end up doing some “spring cleaning.” That’s not a bad idea for your business. Are there some projects you have on the back burner? Maybe you were thinking of expanding your book of business but haven’t gotten around to exploring different options. Utilize the trade show at the convention to do a little shopping around. Not only will you find different markets, but there are also non-insurance options you can add to your professional menu to enhance your business and draw in new customers.

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Maybe you have some plans for revitalizing your staff. We are pleased to offer expert articles in BIG Times Magazine about human resources, team building, and other staff issues.

Big Times Magazine | Mar/Apr 2016



Sidebar with

Harper &

Heim

Lawyers

FILL ORDERS OR FULL SERVICE? By Jon. S. Heim, Partner, Harper & Heim Lawyers Many professionals strive to expand the services and advice they offer to their clients. I am pleased to counsel insurance producers on insurance questions, but as well on employment, commercial contract or real estate and many other legal issues. It’s good for business. It builds goodwill. And it seems like a right thing to do. However fuller service entails fuller costs and exposures. Under California law, “[i]nsurance brokers owe a limited duty to their clients, which is only to use reasonable care, diligence, and judgment in procuring the insurance requested by an insured. Accordingly, an insurance broker does not breach its duty to clients to procure the requested insurance policy unless (a) the broker misrepresents the nature, extent or scope of the coverage being offered or provided, (b) there is a request or inquiry by the insured for a particular type or extent of coverage, or (c) the broker assumes an additional duty by either express agreement or by ‘holding himself out’ as having expertise in a given field of insurance being sought by the insured. California law is well settled as to this limited duty on the part of insurance brokers.” (Mark Tanner Construction, Inc. v. HUB International Insurance Services, Inc. (2014) 224 Cal.App.4th 574, 584, italics added, citation, inner quotations and editorial symbols omitted,

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citing Pacific Rim Mechanical Contractors, Inc. v. Aon Risk Ins. Services West, Inc. (2012) 203 Cal.App.4th 1278, 1283.) This law provides good protection to insurance brokers who just want to follow client orders. A client wants comprehensive auto policy with certain limits, the broker provides it, and the broker’s job is done. It is up to the client to recognize any need for policy changes, for example when the client buys another car that requires coverage or amasses assets that warrant higher policy limits. But, sales pro and service maven that you are, you may want to offer and provide more to your client. Indeed you would like to fulfill all the client’s insurance needs. You’d welcome an opportunity to review the clients’ coverages and exposures. Do a little risk management. Perhaps you discover that the client has a business or activity you specialize in writing. And you say so. Misrepresentation aside, the line between limited and expanded broker duties under the foregoing law is neither bright nor fine. The hold-out exception in particular is easy for an insured to assert, and difficult for a broker to overcome without a trial or hearing. So it is important that you not promise or offer more than you can and shall do. Moreover, if you call yourself an expert in an area, you will be held to expert knowledge, standards and performance.


California law generally protects insurance brokers from some post-sale liabilities. Brokers need not to investigate the financial solvency of insurers with which they lawfully place coverage, and they are not responsible if such an insurer becomes insolvent. (Wilson v. All Service Ins. Corp. (1979) 91 Cal.App.3d 793, 798.) Brokers have no duty to inform insureds of an insurer’s insolvency during or after the policy term. (Pacific Rim Mechanical Contractors, Inc. v. Aon Risk Ins. Services West, Inc., supra, 203 Cal.App.4th 1278, may be boundrequired by words thatto objectively mean “I 1284-1285.) Brokers aren’t give named do” even when the party privately thought “well, insureds notice of maybe an insurer’s intent to cancel a poli-- if everything still looks good.” cy; that duty rests with the insurer. (Kotlar v. Hartford whenever you are entering into a Fire Ins. Co. (2000)Obviously, 83 Cal.App.4th 1116, 1123.) Howlegally binding contract, you need to know it. ever, in any particular case, these broad protections Just remember you can’t tell from a title alone. You must the entire contract for binding or too may be dispelled by aread broker’s misrepresentation disclaiming words. In some cases you may also of fact or commitment extrawhat service. have toto consider actions taken pursuant to

For many, that decision is difficult. Most brokerages with several offices or producers will elect to confine services and promises to order fulfillment. In those contexts, more expansive approaches risk losing control of the representations and promises of several sales employees. Of course, if your big brokerage specializes in one or a few lines of insurance or so advertises, you already have heightened duties and exposures. But in such a niche busiago.ness, The title LOIpresumably will never be banished you knowfrom what you’re doing and the commercial lexicon; yet the nature of an LOI welcome your clients’ extra expectations. will never be standardized. We’ll all keep using LOIs, even though most do either too little or too much, and even if we aren’t sure what any particPresident Dwight D. Eisenhower ular one really does.

notably said: “The supreme quality for leadership is unquestionably inCall tegrity. Jon Stanley Heim atit,(510) 725-7593, or is possible, no matWithout no real success e-mail him at jshinslaw@gmail.com or harpter whether it is on a section gang, a football field, in erandheim@gmail.com. an LOI may suggest that you thus mean or don’t an army, or in an office.” If your sales offers and statemean to be bound. ments consistently honor that truth, you will need If you are a sole proprietor or a principal in a brome and my firm only for growth and acquisitions. kerage, you should decide from time to As areview matter ofand professional preference and style, I dislike the business title LOI and approach prefer to avoid it. For time what your own basic should my money, or more properly for my esteemed Call Jon Stanley Heim at (510) 725-7593, or e-mail be. Do you want clients’ simply to filla writing insurance ordersterms and money, of commercial is eitherand a binding contract or or will preliminary nehim at jshinslaw@gmail.com or thus limit commitment exposure, you risk gotiation, and it should be called only what it harperandheim@gmail.com greater and perhaps less predictable exposure for the really is. Nothing in between and nothing with prospect of more an lines, sales, title goodwill income? encouraging is useful. and Indeed anything hybrid can be confusing to all and disappointing to one side. But my cause here was lost long

7 | Big Times Magazine


PROBLEM: “I’M NOT CREATIVE.” SOLUTION: BELIEVE YOU CAN BE! By Mona Patel, CEO, Motivate Design

Imagination is the difference between the problems plaguing our every day and the future solutions to those issues; imagination is step one for answers that work. Imagine that you could work on an app that better informs financial decisions to help users get out of debt; imagine working with technology that helps patients and doctors better manage illness and health; imagine being stuck in the rain with a crappy umbrella and allow the experience to spark the curiosity that leads to a better design – these problems are amazing! Problems are amazing because of the innovative and creative solutions that often follow. There are so many big, juicy problems out there that remain blank canvases just waiting for the answers to improve the quality of life for us all. The problem that often hobbles problem-solving, however, is the “I can’t” mindset, which we all suffer to a greater or lesser extent, she says. It’s the hurdle separating problem recognition and imagination. But if we can get past “I can’t,” we enable wonder, curiosity, creativity and, sometimes, groundbreaking innovation. How do we overcome the “I can’t” mindset? • Believe you can or, if needed, get unstuck. If you believe that you are creative, good. You’re going to need that creativity, so just trust yourself. If you don’t, trust in a process that begins with “Why?” If you’re stuck in doubt and “I can’t,” then attack it with “Why?” – “Why do I feel stuck?” It’s a great device for questioning and can help you understand the root cause of an issue. “Why?” sheds light on a usually irrational belief of “I can’t” and begins to liberate your mindset. The factor causing self-doubt gets put into perspective, enabling you to move on.

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• Shift the way you see “The Problem.” The shift is deceptively simple and is similar to how we can get unstuck. Problems are usually perceived to be much bigger than they really are, causing intimidation and avoidance. Be sensitive to this intimidation, and train yourself: rather than allowing anxiety to take root, allow yourself to see problems as an invitation, or challenge, to keep asking questions. See problems as an opportunity to change your mind about what you think is possible. • Ask, “What if?” There is a technique to “What if?” Creativity is like a muscle. A well-designed workout matters. So we created one to help people access and strengthen their creativity muscle. Think of this workout as high intensity interval training. Is it the only way to access the muscle? Of course not. But it works. The workout starts with a silent warm-up ideation round of three minutes, followed by a sharing round with a team, repeated three times. In the silent ideation, you write down as many “What if?” or open questions as possible. Participants come up with ideas at the same time and write them down, so louder and more vocal people don’t


have an advantage. A necessary general guideline in this sharing process is positivity – show support for good ideas or voice that you have a similar one in mind, and keep the vibe open and friendly with other positive language.

ABOUT THE AUTHOR

that otherwise could have been avoided. There are some companies who have just fell on hard • Manage the creative momentum. While collectimes and are really well managed. Left alone and tive brainstorming and discussion can be fun they while allowed to work through the problems, will yielding group bonding, the more important be fine and will become great firms again.takeThis aris NOT targeted them. away is thatticle the process hasat helped participants

get out of their own way to grab and distill the best You decide folks! ideas that are out there. Having too many ideas can be its own problem, deduce and Thank yousotoit’s Jonimportant Spaugy andtothe Board of BIG connect the for best ones.my viewpoints. I’ll be back next time! allowing By now, “I can’t” looks pretty ridiculous and unnecessary. This is a lesson that not only yields creative solutions for one problem, but a general principle with which to address all problems … or, rather, opportunities.

Mona Patel (www.motivatedesign.com) is the CEO and Founder of Motivate Design, a user-centered design agency based in New York City. Motivate Design helps clients discover customer needs and ABOUT THE AUTHOR design solutions that meet those needs. Through Stephen Santoro is aMona formerdeveloped senior executive her experience, theofficer Reframework, from TWO Fortune 200 Insurance Holding Companies. an 8-step process that any company can use. In reBoth firms were/are traded on the NYSE. His background cent her book, “Reframe: Way focused on reinsurance in both USAShift and taxthe haven ven- You Work, ues. Stephenand has worked in the insurance business and how this Innovate Think,” Mona demonstrates related businesses since 1981. Stephen also has owned approach helpsin 3companies innovate and design controlling interests managing general agencies in simple, experiences. Inssantoro@ addition to helpCA and GA.beautiful Contact him at (310) 305-0459 or stephensantoro.com. ing clients and other Fortune 500 companies feel unstuck, Mona is also a teacher at Parsons The New School for Design.​

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Q&A: Jon Spaugy by Don Lukenbill

It was exactly two years ago that we launched BIG Times Magazine. April 2014 was our inaugural issue and the publication has certainly evolved since then. OK, in the world of publishing, maybe two years is not a huge span of time, but we don’t pretend to be the New York Times. On the other hand, many trade associations have stopped publishing altogether.

customer service rep, personal lines underwriter, commercial lines underwriter, marketing rep for five different insurance carriers, husband of an agency owner and finally owner of my own agency.

We feel that a member magazine is important because it allows our supporters to read something at a comfortable pace and enjoy a mix of news, marketing strategies, personalities, and maybe a little fun. With so much information coming at us from all corners, it is a good thing to sit back and relax every so often.

JS: I don’t find it difficult because you always make room for the things you love and I can honestly say I love this business and care about the future of this business so I don’t find it difficult. It can be overwhelming at times but you put your heart and soul into getting the results you want in life and in business and things turn out for the best.

Our very first interview was with BIG CEO Jon Spaugy. Many industry people already knew Jon from his many years in insurance, as well as his accomplishments with BIG. Of course, anyone who has been to an insurance trade association convention – BIG’s in particular -- has been astounded by his breakdancing skills. But we felt that it was important that people get to know Jon a little better so they could understand his passion for BIG and insurance producers. What better way than in our first issue of BIG Times Magazine? Now, two years later, we sit back down with Jon and talk about how things have changed for the better. BIG Times Magazine: You were our inaugural Q&A when we launched BIG Times Magazine a few years back. What have you been up to since then? Jon Spaugy: I can’t believe how far the association has come in such a short amount of time. I seem to be planning for events all year long now while growing my own agency. I started S & R Insurance with Rolando Recinos around the same time as our first magazine issue. I have been enjoying the journey of growing a new business and of course I have been working on growing BIG Independent Group. BTM: Quite a few people know you through your work with BIG. How else are you involved with the insurance industry?

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JS: I started my insurance carrier at the age of 21 after serving in the United States Navy. This industry has been my life for 26 years. I have always tried to stay involved with what is going on in the industry by attending insurance meetings, tradeshows, reading industry magazines, participating in local events. I have been and agent, broker,

Big Times Magazine | Mar/Apr 2016

BTM: Do you find it difficult juggling your insurance duties with running BIG? How do you balance it all?

BTM: Obviously, BIG is far from a one-man show. Name drop a little and tell us who is contributing to the association’s success. JS: I could never do this by myself. The first person I need to thank is my wife Rosa Spaugy for having the patience to let me do this and she is always helping me at the events. The pressure is on and I want to apologize if I forget anyone. This is not in any particular order. James Russ, Carlos Uribe, Jessie Davis, Matt Speed, Adam Meyerson, John Wright, Faith Wright, Andy Bloom, Rita Marquez, Josephina Duran, Querubina Wuence, Missy Alizadeh, Sal Ayala, Rolando Recinos, Sharron Varga. I know I am missing some people but honestly it takes a village to run this association and I could never do it without the support we have always gotten from everyone since day one. I am always looking for inspired and energetic people to help us grow. BTM: If someone wanted to join the BIG management/ support team, how could they do that? We are always looking for people that would like to help. JS: We are looking for chapter presidents that would like to help shape the future of BIG in local communities. If you are interest send us an email or come out to one of our events and we would be more than happy to talk to you. BTM: One question we ask most of our Q&A subjects is why they are supporting BIG. Explain why someone should become a member of the extended BIG family. JS: The insurance industry is a BIG industry and you can never fully gain the knowledge to navigate through every aspect of this industry. BIG Independent group is all about helping the industry come together and grow through sharing and supporting each other. We put meetings and


events that help the entire industry come together. BTM: It seems like there are a lot of getaways planned – baseball games, cruises, etc. How do these excursions help someone with their business? JS: As most of you know I was a marketing representative prior to opening my own office. I learned so much from visiting offices and I have always known that the best way to learn from people is by being with people that have your same interest. The social events that we do give us an opportunity to come together and share ideas in a relaxing environment. We are no longer competitors we are family. BTM: Lately, the BIG local meetings have been taking center stage. What is the goal for these networking events? JS: The primary goal of all of our events is Education and Networking. We the people that attend our events to leave with more understanding of the insurance industry. This is one industry that you can never know it all. Things are always changing and it is nice that we can learn from each other to help grow our businesses.

we did not have the support from our sponsors at all of our events we could not put on the quality of shows and events we have been doing. BTM: If a company wanted to be a BIG convention sponsor for this year, is it too late? JS: It is not too late. We are always looking for additional sponsorship for the event and the charity golf tournament we hold before the convention. I do like to have the sponsorships in as early as possible so that we can advertise our appreciation for the support our sponsors give us. BTM: Another BIG event that is growing is the Northern California Minivention. Tell us a little about any expansion plans for that area. The BIG and BIG Latino is growing in Northern California and we are looking at putting together more meetings and events in 2016 to get our Northern California Brokers,Agents, Carrier reps and Vendors involved. JS: We will be putting together the same kind of networking event we have in Southern California in 2016 so stayed tuned and keep an eye out on your email and our events calendar.

BTM: Speaking of networking, the annual BIG convention is coming up in early May. What can attendees look forward to this year?

BTM: We’ll close with a little about you. First, if you could go back 10 years and talk to Jon Spaugy, what would you say to him?

JS: This is our 7th annual convention and we are celebrating lucky #7 with a Vegas themed convention. We have themed events and parties to help celebrate our seventh convention. The biggest value we have to offer at any of our events is knowledge and this year we have combined education, networking, and professional development into three days.

JS: If I could go back 10 years I would have told myself to take a chance and start your agency. The last three years have been the most rewarding times of my life. The Independent channel is underestimated in my opinion. If you enjoy what you are doing its not work and I love being an Independent Agency owner

BTM: There is a nice mix of seminars, speakers, fun activities, and the trade show. How would you suggest people plan their convention experience? JS: The convention is the best place to network with your peers, carriers and vendors al in one place. We always tell people to have a plan. If you need CE make sure to show up early on Friday as we will have most of our CE classes in the morning. If you are looking for markets make sure to review our program guide prior to the event. We have brought together numerous companies to help you succeed in the industry. We have them all in one place and this is your chance to talk with them. Evaluate the needs of your office prior to the event and come prepared. BTM: It seems like the registration fee for the BIG convention is far less than for other associations. How do you keep the cost down? JS: The price for the convention for both the attendees and the vendors has been a focus for BIG since we started. If

BTM: Now fast forward ten years, what would you want to hear from the 2026 version of Jon Spaugy? JS: You did it. You put people around you that saw your vision and had the same passion to be successful and you absolutely knocked it out the park. BTM: In a sentence or two, describe your personal and professional philosophy. JS: Nothing comes easy in life even if you make it look easy. Hard work, vision, and determination make you successful. I always tell myself you can’t teach people to care. They do or they don’t. I chose to care because it is who I am. BTM: Any final thoughts? JS: We say it at our meetings all the time. Insurance is a BIG industry but a small community. Treat people good and always be willing to take someone’s hand and help them on their way up and don’t be afraid to ask for help the industry is full of amazing people. GET Active, GET Involved. GET BIG.

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RESOLVING CONFLICTS SUCCESSFULLY By Ellen and Dana Borowka, MA, Lighthouse Consulting

Excerpt from the book “Cracking the Business Code” Ever notice that no matter what you do, you can’t avoid conflict! It’s everywhere – at work, at home, at that special social gathering or even at the supermarket. Whether you are discussing the dirty dishes with your spouse, that difficult project with a co-worker, or your barking dog with the next door neighbor – conflict is hard to manage well. And since we can’t ignore it, we might as well handle it the best possible way. In this article, we’re going to explore what makes up conflict, how we usually (and unsuccessfully) handle it, and ways to manage it better. Conflict vs. Resolution First, I’d like to define what conflict is, so we know what we are working with. The first definition is war; and the second is a clash between hostile or opposing ideas, interests or persons. War! That’s a big word! Some might think that their conflicts don’t rate up with war. Yet, just because we don’t pull out guns and bombs, doesn’t mean that we don’t have some casualties in our battles. Many people can go for the kill when they feel hurt and angry, especially in our intimate relationships. Other definitions include, an earnest struggle for superiority or victory; and the state of those who disagree and lack harmony. How many times in conflict do we struggle to be superior to, and have victory over the another, especially when they are acting rude? I think the key phase for conflict is that we lack harmony, and that is not a fun place to be at. So, what is our alternative? Conflict resolution! It’s a way to settle disagreements peacefully by getting to the root of problems and finding lasting solutions.

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Why is conflict resolution so important? Knowing how to handle conflict in a constructive manner can help you in relating with others, like your spouse, children and co-workers. Conflict resolution assists by promoting new ideas, encouraging greater understanding, strengthening personal relationships and keeping people safe from violent conflict escalating out of control. It helps us to work through our issues to find harmony and unity with others. The Three Components of Conflict What do you need to have conflict erupt? It takes very little to create conflict. In fact, you need only three components to have conflict flare up. As they say in commercials, “It’s as easy as 1,2,3!” The first is people. Conflict can occur between individuals, between groups or among members of the same group. Anywhere where you have people, you can have conflict. The second is different points of view. When each person or group sees a situation in a different way, wants a different outcome or has different plans of what to do then you can have conflict. An example that comes to my mind is the family reunion where conflict can start easily, even over where to go for dinner. The third component is strong emotions. Individuals or groups may have strong feelings about the problem or situation. They may feel a variety of emotions, like anger, fear, disappointment, betrayal, hurt, and so on. Strong feelings can set the stage for a potential war.


Common Conflict Styles The following are some ways that we commonly deal with conflict: Avoid or runaway from the conflict. An example of this could be when someone refuses to address a problem with a spouse or co-worker.jumping hoops Pretend the conflict doesn’t exist. This is when we deny that there is even a problem to address! Give in or go along with the other person. When we give in or go along, we deny our own needs and build resentment towards the other person. Attack or try to win through force or power with criticism, insults, manipulation, name-calling or violence, which is a very destructive method to deal with conflict. As you might imagine, none of these styles resolve our problems. Rather, they worsen the situation – allowing conflict to fester and explode out of control. So, how do you handle conflict? Do you have a conflict style that you use in difficult situations? Let’s look at some ways that we can deal with conflict in a healthier manner. Since good communication is the key to successful conflict resolution, we’ll start there. Elements of Successful Communication Have respect for the other person’s feelings and point of view, even though you don’t agree. The goal to successful communication is to have empathy – to understand why someone is doing what they are doing and feeling what they are feeling. We feel that empathy is the glue in all relationships. If you don’t have empathy, you don’t have anything. Don’t take the conflict personally, don’t let it under your skin. Let the other person blow off steam, and be patient. Many people say things in anger that they don’t mean. Be a good listener! To be a good listener, you need to avoid interrupting the other person, and ask questions when they are finished speaking. Also, watch body language to be aware of what is going on with the other person, and to look for mixed messages. Mixed messages are when someone says one thing, yet their body language is saying the opposite. There is an old saying, “The most important thing in com-

munication is to hear what isn’t being said.” – Unknown State what you’re hearing. Use active listening, which is to paraphase what you think the other person is saying. This tells them that you understand what they are saying, and gives them the chance to explain, if you didn’t understand. This is an extremely effective tool in managing conflict and avoiding miscommunication. Use “I Statements” when discussing hot subjects. An example of an I statement is “I feel really hurt when you snap at me, because it makes me feel like you don’t respect me.” An I statement is composed of three elements. The “I” helps us to maintain our responsibility for our feelings or observations; the “when” gives a specific example for the other person; and the “because” provides our reason for why we are bothered by the situation. I statements helps us to avoid being vague and accusatory with others. State your feelings clearly – express what you think without attacking the other person. Don’t be hostile or use name-calling, criticism or insults – that will only make things worse. Focus on the problem, not the person. Look for common ground – a shared need – something you both want or can agree on. This will strengthen teamwork between the both of you. Are there any hidden agendas? Is there something that is bothering the other person that he or she is not talking about, that might be feeding into the problem. Asking questions is a good way to uncover hidden agendas, like: Is something else bothering you? Is there something else going on? You look like you have something more to say? Take timeouts to keep conflict from escalating. When things get too hot, take some time to cool down – at least an hour or 24 hours. Be sure to schedule a follow-up time to resolve the issue. The Problem Solving Process After you have had a full discussion about the conflict then you may want to brainstorm with the other person to find some ways to resolve the problem. First, set an agenda on working what you both want

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to focus on in the situation. Next, brainstorm for different ideas to solve the problem. One of you should write down the ideas, and don’t evaluate the ideas during the brainstorming process. Sort through the ideas and implement a specific action plan. Consider every idea and think about the consequences. Then arrange a follow-up date to check in on the progress of the action plan. If the plan is not working then recycle through the problem solving process again. Successful Conflict Resolution Takes Practice! These are some tips to manage conflict in a structured and positive format. It takes practice – so don’t throw it out, just because it takes some extra effort. Conflict resolution is not, by any means, the easiest thing to do. Yet, when we don’t deal with our conflicts, they fester and grow worse. It’s like when we feel sick and throw up. Noone likes it, but it cleans out the system and we feel much better. Successful conflict resolution takes practice, patience and respect. There’s an old saying, “Coming together is a beginning, Keeping together is progress, Working together is Success!” How you handle conflict will determine its outcome!

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ABOUT THE AUTHORS Dana Borowka, MA, CEO and Ellen Borowka, MA, Senior Analyst of Lighthouse Consulting Services, LLC with their organization constantly remain focused on their mission statement – “To bring effective insight to your organization”. They do this through the use of in-depth work style assessments to raise the hiring bar so companies select the right people to reduce hiring and management errors. They have over 25 years of business and human behavioral consulting experience. They are nationally renowned speakers and radio personalities on this topic. If you would like additional information on this topic or others, please contact Lighthouse Consulting Services LLC, 3130 Wilshire Blvd., Suite 550, Santa Monica, CA 90403, (310) 4536556, dana@lighthouseconsulting.com, or visit www.lighthouseconsulting.com.


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TAX DAY FUN FACTS Obviously there is nothing fun about filing your taxes. It is a necessary evil so our government can continue operating, budget cuts and political grandstanding notwithstanding. For some, it has turned into somewhat of a social event, with people making the annual April 15th pilgrimage to the post office so their tax returned will be mailed before midnight. Restaurants have $10.40 specials and bars sell “ease you pain” shots. Here are a few interesting tidbits to consider while searching for more deductions. Federal income taxes were first introduced with the Revenue Act Of 1861 to fund the Civil War. The Act was introduced to gather funds for the expensive conflict that lasted for four years, with the price of war coming in at approximately $2.5 million per day. The IRS Whistleblower Office pays money to people who blow the whistle on persons who fail to pay the tax that they owe. If the IRS uses information provided by the whistleblower, it can award the whistleblower up to 30 percent of the additional tax, penalty and other amounts it collects. The 1040 form was introduced in 1913, mandated for U.S. citizens and residents making more than $3,000 for the taxable year. At three pages long, it was much shorter than today’s 1040 forms The Internal Revenue Service’s website features more than 400 tax forms. It is possible to download 1,132 tax-form related files by following specific instructions and schedules. The United States Tax Code began in 1913 with 400 pages. Today it is over 70,000 pages long. It is small wonder that more than four of five taxpayers use a professional tax preparer or tax preparation software to do their taxes. The IRS receives over 140 million individual tax returns and collects over $950 billion in taxes. The biggest tax deductions are those for taxes paid to state and local governments. Next biggest are for interest, especially on home mortgages. The average standard deduction is $7,000 to $8,000 (as of 2014). Itemizers on average claim $26,084 (again, 2014 data). As a percentage of adjusted gross income, people earning $100,000 to $200,000 pay an average federal tax rate of only 12%. Those earning $200,000 to $500,000 pay 19.6%. According to the IRS, the average tax refund is worth $3,539.00, and 96 percent of returns were paid through direct deposit. On average, 80 percent of returns are filed electronically. Thanks to www.wisebread.com and www.forbes.com for the information.​

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FIVE MISTAKES

ORGANIZATIONS (UNKNOWINGLY) MAKE THAT DRIVE CUSTOMERS AWAY By Joseph Michelli Loyal customers are hard to come by these days. We all know this. After struggling through years of turmoil and uncertainty, the last thing most leaders would purposely do is take customers for granted. And yet, if your company is like many, all your fervent efforts to attract and retain them are falling curiously flat. It’s not that they’re storming angrily out the door. It’s that their experience with your company is less of an enthusiastic Wow! and more of a tepid Eh. What are you doing wrong? Companies have great intentions. They want to delight customers; they really do. In fact, they’ll often undertake these big service initiatives only to see their efforts fizzle quickly or never take root. Problem is, their great intentions are at odds with their culture. When that’s the case, they’re doomed to make certain, predictable mistakes. The mistakes are inevitable— and what’s worse, companies don’t even know they’re making them. Here are five big mistakes your organization may be making without realizing it: You’re chasing new customers at the expense of existing ones. In other words, you’re directing too much money toward acquisition and hardly any toward retention. The ratio is lopsided. Consider car dealers that spend huge amounts on commercials that scream at people to come in, promising cruise ship vacations, etc. What they’re not spending it on is employee training to make sure that once these customers are in the door they’ll come back. I’ve noticed companies that are good acquirers of customers often are not good retainers of customers. The key to business, I think, is being great at both and at using those you’ve retained to help with your acquisition curve. I see a lot of brands missing the message

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here. The cost of acquisition is so much higher than the cost of retention, so why not invest more in the cost—in the tools of retention—to maximize that multiplier? You make your customers work too hard. Businesses must now compete in an increasingly Uber-ized society. Uber customers simply pull out their phone, push the app, a car pulls up and takes them where they need to go, they are dropped off, no cash is exchanged, and they are done. As people begin to expect this kind of service, business leaders are being forced to find ways to make their customer’s entire experience as effortless, frictionless, and yet as personal as possible. There are companies now that will actually gas up your car for you at the touch of a button—and they wash your windows and leave a little note on the windshield. You can just leave work and go straight home to your kids because you’re already gassed up. Never forget how complex life is for customers. From that starting point, pick apart your deliverable and figure out how to maximize its ease. Customers leave because we don’t think through the degree of effort it requires to do business with us. We don’t provide technology solutions. We don’t simplify every touchpoint. When it’s not almost effortless, customers leave. Wouldn’t you? You hire the wrong people out of desperation. When we hire from a place of being frantic and rushed, we end up with low performers. We hire too quickly because we want to fill a shift, and we get employees who handle customer interaction, but who lack the emotional intelligence to connect authentically with another human being. Frequently we get pressure from our existing teams, who say, Please, send us a body, and then, seemingly


hours later, they’re saying, Please get rid of this body. Somebody can be standing at the front desk or on the phone but if they’re a drag on the service we’re trying to provide, it’s worse than having nobody there at all. We need to hire a little more slowly, be a little more cautious than we have in the past. You’re not training for authenticity. Companies have to strive, first of all, to hire people who truly do care about customers. But that’s just the beginning. They should also be training employees to connect on a human level. This is not about scripting but about helping employees realize what customers really want and need, and then empowering them to provide it. While it’s essential to practice disciplined hiring in the search for people with emotional intelligence, those capabilities have to be awakened and reinforced through the training process. You need to immerse them in your brand so they really understand what it’s like to be the customer—to ‘get’ unspoken needs. You need to collect and share stories of customer delight. You need to touch the hearts of team members as well as their minds. When you do, they’ll genuinely want to serve the customer.

I’m the customer in the second case, there’s no reason for me to ever shop with you again; today’s need is fulfilled and the relationship is over. When customers have the luxury of abundant choices, businesses must constantly look in the mirror to see where they can improve. We all make mistakes from time to time. But if your culture isn’t built on a sincere desire to delight the customer—no, not a desire, an obsession—those mistakes are likely to be unforgiveable ones. And the real tragedy is you’ll never even realize you’re making them. ABOUT THE AUTHOR Joseph A. Michelli, PhD, CSP, is an internationally sought-after speaker, organizational consultant, and New York Times number-one best-selling author. He is a globally recognized thought leader in customer experience design. For more information, please visit www.josephmichelli.com. ​

You end transactions at the money exchange. Too many businesses close the deal and politely say goodbye. The message customers get is, “Okay, we gave you your product or service, you gave us the money, now we’re done.” There is an enormous space here for employees to invite reengagement with the customer at the end of a transaction—to really show appreciation, to show gratitude, to show an eagerness to serve them again. Godiva does a great job of reengaging the customer. Their employees will put the chocolate in a lovely bag, actually walk around the counter and hand it to a customer, and often they’ll say, “Hey, we’ve got another product coming out that you may enjoy.” If the chocolate has been purchased for a gift or special event, the associate will say, “We’re looking forward to hearing how this was received when you come back in.” They’re creating an invitation to return, and that’s incredibly powerful. They pull the customer back in for a continuation of the conversation. This is what happens when brands really get it, and where other brands follow a robotic script to say, Thanks, have a nice day. If

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BANKING, TARP, FANNIE MAE, FREDDIE MAC AND AIG BAILOUTS ARE NOT THAT BIG WHEN COMPARED TO ENTITLEMENTS THE USA HAS INCURRED By Stephen S. Santoro Believe me this impacts all of us in the insurance and reinsurance business. Just what I describe in paragraph #1 below could cause rates to rise by 100% in all insurance lines. I was perusing an article in Barron’s recently. I am so shocked by what I am about to report I can hardly believe it. Barron’s gave a quick outline of what I describe below. It is truly mind blowing. I cannot count that high! $30 billion to facilitate JP Morgan’s purchase of Bear Stearns. $123 billion to bailout AIG. $200 billion to conserve and rehabilitate Fannie Mae and Freddie Mac. $700 billion for TARP. ($250 billion to invest into banks. That is one idea I truly believed in. I believe that one worked well.) $100 billion for pork-barrel spending attached to TARP. $20 billion for FEMA relief. The Federal Reserve, in concert with the US Treasury, the FDIC, Office of the Comptroller of the Currency and all Federal Reserve Banks have expanded the money supply by $5 trillion since. Now for the bailouts that are not yet borrowed: Unlimited deposit insurance for all banks and money market funds. $50 billion for General Motors, Ford and Chrysler, LLC. $50 billion (additional) for General Motors, Ford and Chrysler, LLC pensioners covering new debts incurred by the federal Pension Benefit Guaranty Corp. (PBGC). Trillions of dollars of US Treasury backing guarantees of mortgages backed by Fannie Mae and Freddie and guarantees made by the US

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Treasury to the Federal Housing Administration (FHA). (A 20% default alone on any one will cost the US taxpayers $1 trillion, MINIMUM.) Tip O’Neill, former Democratic Speaker of the House had a famous cliché: “A billion here, a billion there, pretty soon you are talking about real money!” Well Tip, I think we have inflated the number to a trillion instead of a billion! Most American are oblivious to this insanity. But we have ignored a much bigger mess and the day of reckoning is fast closing in on us. The debts I described above are nothing to what we already have on the books now. Even Social Security’s $15 trillion-$19 trillion deficit is dwarfed. (You all know I have reported on Social Security, Medicare, Medicaid and the US deficit before.) All Americans who are working or will be working owe more than the $15 trillion-$19 trillion to support old-age and disability pensions, Social Security has incurred. But Medicare’s potential deficit is now pushing north of $145 trillion, as currently legislated for those US citizens who are or will be 65 years of age. Medicaid, which guards the health of indigents is much larger than Medicare’s deficit. No estimate of the value of Medicaid can be made as state governments administer the program for the US Dept. of Health and Human Services (HHS). However, Medicaid combined costs to the federal and state governments have been running +20%, so ratchet this one up to $175 trillion. These numbers are present values. If the US Treasury could borrow $322 trillion right now, and invest the funds at 3% above inflation rates, the big three programs (Social Security, Medicare and Medicaid) would be fully funded forever. The US Treasury cannot and will not borrow it all at once, so the costs will be greater. Consider this: By 2082 Social Security will cost 5.8% of the US gross domestic product (GDP). Medicare will cost 12% of GDP. And Medicaid will cost 14.5% of GDP. So by 2082, 33% of the US annual output will be for these 3 programs. None of these obligations are formally guaranteed by the full faith and credit of the USA. These debts I describe are not just Democrats; they are not just


Republicans. They are the result of all Congress members and Presidents for the past 60 years. I believe the banking bailouts I describe in the first paragraph went well, were successful and the US taxpayer had fabulous return on his investment. Trust me Warren Buffet would not have offered to take 1% of that $700 billion if he was not as confident as I was. When Germany paid war reparations after World War I and World War II, it “printed money” as a highly organized industrial nation, with highly trained civil and military personnel. It forced money into the system under a unified credit control system and with government control of transportation, rents, housing and food prices. German did this for considerable period of time. The USA has NEVER had this type of dictatorial discipline. But the USA has the advantage of time. It is a creditor nation, but does not owe reparations. We have the time to mend our policies and finances. Let’s hope we begin soon!

ABOUT THE AUTHOR Stephen Samuel Santoro is a former senior executive officer from 2 Fortune 200 Insurance Holding Companies. Both firms were/are traded on the NYSE. Stephen’s background focused on reinsurance in both USA and tax haven venues. He has worked in the insurance business and related businesses since 1981. Stephen also has owned controlling interests in 3 managing general agencies in CA and GA. He has also been a controlling shareholder of the parent of GA’s oldest property & casualty insurance company’s parent from 7.2004 through 4.16.2014.

You can contact him at ssantoro@stephensantoro.com, on Twitter @stephenssantoro, and on Facebook and Instagram.

You decide folks! Thank you to Jon Spaugy and the Board of BIG for allowing my viewpoints. I’ll be back next time!

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NEW CDI ONLINE COMPLAINT CENTER AVAILABLE FOR SMART DEVICES The California Department of Insurance (CDI) announced today that several portals are now available to assist consumers, insurers and health care providers in communicating and interacting with the department through the complaint process.

Consumers who become registered users can use the consumer portal to check the status of a complaint, upload additional documents and create a draft complaint which allows the user to complete and submit the complaint at their convenience.

The new portals provide simple and helpful solutions for California consumers and insurers. Users are now able to submit complaint applications while using a desktop or smart device. Additionally both the consumer and licensee portal allows users to upload supporting documents directly to their online application, saving time and money.

The licensee portal allows fluid two-way communication between the department and its licensees. Licensees are able to upload resources and supporting documentation related to their complaint.

“Since taking office I have put a concerted effort into improving our processes by increasing efficiency to better serve consumers and the insurance industry,” said Insurance Commissioner Dave Jones. “The new online portal will help consumers, insurers and health care providers navigate the complaint process with ease and in less time than ever before.”

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Thousands of consumers including healthcare providers have begun using the portal. The department is encouraging consumers and health care providers to check out the new portals and consider using the online complaint center if they need to file a complaint. From: California Department of Insurance (www.insurance.ca.gov).


BIG’S SAN DIEGO CHAPTER WELCOMES MATT SPEED TO THE HELM Always a hotbed of insurance activity, the San Diego area is a microcosm of the industry as a whole. A diverse population straddling an international border equals unique business challenges. In such an environment, a trade association like BIG needs to be able to rise to the occasion. Fortunately, BIG has discovered an insurance professional to do the job as its San Diego Chapter president, agency owner Matt Speed. Matt has had quite a career so far. He is a former Vice President of Sales with Greenpath Insurance Company. He has been in the California insurance market for 17 years. Prior to joining Greenpath, Mr. Speed worked for North Pointe Insurance, Superior Insurance Co., ADR, Bristol West Insurance Co., and Legacy Insurance Company and Stonewood Insurance Company. Asked why he decided to take on the main leadership role for BIG in San Diego he had this to say: “ (BIG CEO) Jon (Spaugy) forced me to. LOL!” Seriously, Matt felt that there hasn’t been a consistent meeting in the San Diego for years and local producers and company reps needed someone to share industry news as well as have a forum for sharing and networking. “BIG brings a great speakers and messages to help independent agency owners grow their business,” Matt points out. “Also, BIG can also give insurance producers access to products they can’t get on their own.” Matt has already made plans for expanding BIG’s membership base, using his extensive producer contact list to recruit new members. “I will email updates on trends, conditions, changes, and opportunities in the California insurance market and host quarterly meetings to bring them all together,” he announced. “I see the chapter growing from a small attended chapter, to one of the largest attended chapter for the BIG.”

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BIG LATINO GETS

A LEADERSHIP BOOST For the past couple of years, a new association of Latino insurance professionals has been quietly growing in California. Filling a void that has existed in California for quite some time, BIG Latino is a conduit through which issues unique to Latino insurance consumers, producers, and company management can be addressed. Naturally, the success of any trade association starts at the top. BIG believes it has found the right person for that challenge. Rita Marquez brings a combination of industry experience, business savvy, and common sense to her new position as president of BIG Latino. "It has always been my dream to do more for my community in some way. Being part of BIG Latino, helps me accomplish that in a major way. It gives me the opportunity to reach out to my fellow insurance producers, and provide them with information that will be highly effective in their growth," Rita explained. "Our Latino community needs to be better informed on our product and what it offers. Most times we assume the customer already knows what they are purchasing, but it is not so. It's our duty as insurance producers to continuously be learning, so that we can better inform our customers. They depend on us and we need to give them the best service possible."

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Just as with other insurance producers, Rita sees a lack of resources and information out in the field. When new insurance information becomes available, the agency owners who should be supporting one another tend not to share any thing that could help the insurance community as a whole. As Rita says: "this has to change!! We all work for a highly demanding industry, and we need to help each other out so that we can succeed as a whole."


BIG Latino is the vehicle Rita believes can accomplish this, by enhancing the way members are informed about new coverages and what their specific needs are as far placing them in the best insurance programs. She sees BIG Latino providing informational workshops that will bring a new perspective on insurance. Scheduling meetings based on the inquiries of the attendees is another avenue for growth, as is providing information in Spanish as requested, and working together to bring BIG Latino to a new level of success by working together as one. Rita believes this

will help the insurance community be more informed as to what insurance they will be purchasing while not forgetting to provide great customer service in the process. When asked what about the mission of BIG Latino, Rita explained it is "to create a chain of partners that will help provide vital and important insurance information, while growing in the industry as a successful team!! Also, helping our community in getting the best insurance out there, fitting their particular needs; while answering all their questions in the process."​

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SATISFACTION WITH PROPERTY INSURANCE CLAIMS SLIPS FOR FIRST TIME IN 5 YEARS AS SOFT MARKET TAKES HOLD, J.D. POWER STUDY FINDS For the first time in five years, customer satisfaction among homeowners filing a property claim has slipped, largely driven by declines in satisfaction with the total settlement and service interactions, according to the J.D. Power 2016 U.S. Property Claims Satisfaction Study. The study measures satisfaction with the property claims experience among insurance customers who have filed a claim for damages by examining five factors (listed in order of importance): settlement; first notice of loss; estimation process; service interaction; and repair process. Satisfaction is calculated on a 1,000-point scale. The $502.6 billion U.S. property and casualty insurance industry is entering a cycle of reduced profitability due to declining premium rates. Data from the 2016 U.S. Property Claims Satisfaction Study suggests that many insurers may already be shifting their focus away from customer satisfaction and toward areas of cost reduction. According to the study, satisfaction has declined by 5 points to 846 from 2015. The largest changes are in the service interaction factor (- 8 points), driven by declines in both the local agent (-8) and claims professional (-28) sub factors. Weather events are also a significant driver of declines in customer satisfaction this year. Survey results are significantly impacted by the way insurers handled a few major events, such as the winter storms that hit the Northeast in early 2015 and the severe weather/hail claims that hit Colorado and some surrounding states in late 2014. However, weather alone does not

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fully explain the dip in overall satisfaction. For instance, simple service practices such as returning promised callbacks are down 1 percentage point from last year, and only 42% of customers indicate that when contacting their insurer someone was “always available immediately” to assist them. Responsiveness, a primary driver of service interaction satisfaction, is down significantly year over year among claimants interacting with local insurance agents or claims professionals (-0.09 points and -0.43 points, respectively, on a 10-point scale). “During times of catastrophic events, insurance companies typically ramp up and have teams of claims professionals poised and ready to process claims locally in the affected region,” said Greg Hoeg, vice president of U.S. insurance operations at J.D. Power. “However, maintaining a high level of support is not cost effective when there is a lull in large events and especially when rates begin to fall. Belt tightening to a leaner team can sometimes mean less support and longer response times to process claims. Insurers need to be aware when cost cutting impacts response times. The less satisfied customers are with the claim process, the less likely they are to renew their policy.” Following are some of the key findings of the 2016 study: Providing an Outstanding Claims Experience Can Generate Advocacy and Retention: The study finds that 81% of highly satisfied claimants (overall satisfaction scores of 900 or higher) say they


“definitely will” renew their policy and 81% say they “definitely will” recommend their current insurer, while only 14% of displeased claimants (scores of 549 or less) say they “definitely will” renew and 7% say they “definitely will” recommend. Strikingly, 13% of displeased claimants indicate they have switched insurers due to their claims experience and 40% indicate an intention to shop within the next 12 months. Younger Property Claimants Looking for More Assistance with the Process: The desire for more help is strongest among the youngest groups such as Gen Y,[2] where 31% indicate they want additional help selecting a contractor. This suggests that younger customers, who presumably have not had the same tenure of home ownership and also have less experience in having property work done, are looking toward their insurer to help coordinate the repairs.

Non-Weather Water Claims Not Weathering Satisfaction: Non-weather water claims are the most frequently reported claims in 2016. Satisfaction with the handling of non-weather-related water damage dropped 19-points to 835, while satisfaction with the handling of hail damage claims is highest at 858. Additionally, satisfaction with theft claims is 840 (+20 points from 2015), while satisfaction with fire claims is 839 and with mold 834 (-27 points and –38 points, respectively). The 2016 Property Claims Satisfaction Study is based on more than 5,700 responses from homeowners insurance customers who filed a property claim between January 2014 and December 2015.​

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IMMIGRATION AND INSURANCE HAVE ONE THING IN COMMON, BOTH INDUSTRIES WILL NEVER STOP

immigration consultant. We teach you how to set up your new service and 80% of the seminar is attorney taught. We have graduated over 300 individuals last year from all over the country last year. Immigration is a hot topic in these political elections for a reason. No matter who becomes our next president, millions of undocumented people in this country are not going to be sent back to their country of origin. They are going to need somebody to help them.

by Andre Urena, Latin American Immigration Association​

We have scheduled Seminars in Los Angeles (April 22-23) and Atlanta (April 29-30), we hope to see you at our booth at the BIG Convention in May as well.

In an insurance transaction, the customer is entrusting you with most intimate personal information. And if they really are happy with your service, they will refer you their friends and family.

Should you have any questions or comments please call us at 213 290-8930 or go to our website at:www.latinimmigration.org to register and find out more about us.

Did you know that a lot of these customers need immigration services help? And did you know that the State of California has an accreditation program that allows you to charge a fee for helping customers with their immigration paperwork? You can aid in filling out immigration paperwork, however, you can't not give legal advice, only immigration attorney can. Our group, the Latin American Immigration Association, helps community trusted advisors, such as insurance agents and income tax preparers learn the process and connect with experienced immigration attorneys that can help when needed. We developed a Two Day Seminar designed to teach you how to get accredited and by state, what forms are used and other vital information to make sure you succeed as an

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We can help you earn more while helping your customers with a new service that your clients are looking for.


presented by

May 5th - May 8th RIVERSIDE CONVENTION CENTER Riverside, CA

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