South Carolina Agent & Broker, Fall 2016

FALL 2016

Agent & Broker

Karen D. Fenters, CISr 2016 SC Outstanding CSr of the Year Agency Succession Planning: Developing Your Game Plan 3 Pathways for IA Perpetuation Why Hiring Millennials is a Win-Win

2

A NAME THAT BUILDS RELATIONSHIPS At Risk Placement Services (RPS), we are committed to building relationships one retail partner at a time. Our stewardship begins by providing you access to the finest markets and top producers in the industry and providing customized solutions to meet your needs by designing, negotiating and tailoring individual risks that help you succeed. It’s a partnership you can count on!

To learn more contact 800.432.7715 or email us at RPSWheels@RPSins.com www.RPSins.com

Fall 2016 • South Carolina Agent & Broker

3

FALL 2016

Independent Insurance Agents & Brokers of South Carolina 800 Gracern Road, Columbia, SC 29210 803-731-9460 803-772-6425 (fax) e-mail: information@iiabsc.com

Contents

Message from the Chairman of the Board

6

Message from the National Director

8

Karen D. Fenters, CISR: 2016 SC Outstanding CSR of the Year Award 10

IIABSC Staff

G. Frank Sheppard, AAI, CAE President ext. 1239 or 803.760.1239 fsheppard@iiabsc.com Rebecca H. McCormack, CPCU, CIC, AAI Vice President

Why Hiring Millennials Is A Win-Win

14

The Key to Recruiting Millennials: Make Them Feel Special

19

SC Trusted Choice Big “I” National Golf Championships Recap & Photos

20

Agency Succession Planning: Developing Your Game Plan

22

2016 Big “I” SC Education Awards Luncheon New Designees

28

Palmetto Partners

30

Young Agents Photo Recap

32

Top 3 Pathways for IA Perpetuation

36

IIABSC Education & Events Calendar

42

Member News

44

2016 Board of Directors and Executive Committee

46

ext. 1238 or 803.760.1238 bmccormack@iiabsc.com Beth Chastie Vice President of Administration & Finance ext. 9462 or 803.731.9462 bchastie@iiabsc.com Laura D. Cornell, CIC Director of Insurance Programs ext. 1227 or 803.760.1227 lcornell@iiabsc.com Megan Huebner Director of Events & Membership ext. 9463 or 803.731.9463 mhuebner@iiabsc.com Anita J. Trevino Director of Communications ext. 1237 or 803.760.1237 atrevino@iiabsc.com Megan Thomas Education Coordinator ext. 1219 or 803.760.1219 mthomas@iiabsc.com

South Carolina Agent & Broker is the official magazine of the Independent Insurance Agents and Brokers of South Carolina and is published four times annually. IIABSC does not necessarily endorse any of the companies advertising in this publication or the views of its writers.

Articles and information published in this magazine may not be reproduced without written consent of the IIABSC. South Carolina Agent & Broker is not responsible for unsolicited manuscripts, art or photography. The publisher cannot assume responsibility for claims made by advertisers, content provided by the editor, or for the opinions expressed by contributing authors.

For more information on advertising, contact Jim Aitkins Blue Water Publishers, 22727 161st Avenue SE Monroe, WA 98272 360-805-6474 fax: 360-805-6475 jima@bluewaterpublishers.com

4

South Carolina Agent & Broker • Fall 2016

Advertiser Index Access Home Insurance 9 Allstar Financial Group 37, 44 Amalgamated Ins. Underwriters 11 American Strategic Insurance 33 Anderson and Murison 27 Assure Alliance 27 Berkshire Hathaway GUARD Ins 26 Berkley Southeast 43 Builders Mutual Insurance 13 Burns & Wilcox 5 Centauri Specialty Insurance 21 Contractor Connection 35 FCCI Insurance Group 12 Genesee General 40 Hilb Group 31

ISU Agency Network 48 JM Wilson 39 Jackson Sumner & Associates 2 Johnson & Johnson 24, 25 Lighthouse Property Insurance 29 M. J. Kelly of South Carolina 18 Phenix Mutual 23 Preferred Specialty 47 Risk Placement Services 3 Risk Innovations 39 SCHBSIF 7 Southern Insurance Underwriters 15 Summit 16 The National Security Group 46 UPC Insurance 33

About cover: [Photo credit: © Robin Kizzar | Dreamstime] Log cabin built in the 1800s, isolated on a knoll in the forests of South Carolina.

CHOOSE A CHAMPION Jimmy Walker

2016 PGA Champion Burns & Wilcox Brand Ambassador

Expertise, perseverance and hard work separates the contenders from the pretenders. Access industry experts that have the widest variety of commercial, professional and personal solutions.

Whatever the challenge, you can perform like a champion with Burns & Wilcox.

Burns & Wilcox, the leader in specialty insurance.

burnsandwilcox.com

Brokerage | Binding | Commercial | Professional | Personal | Risk Management Services Fall 2016 • South Carolina Agent & Broker

5

IIABSC Chairman of the Board

Scott Moseley

B

ased on the incredible feedback we received in response to the Certificates of Insurance themed edition last year, we thought we’d follow up this year with an issue focused on another important topic impacting South Carolina’s independent insurance agencies today: agency perpetuation planning.

Did you groan inwardly a tiny bit when you read that?

Unless you’ve already got your agency’s plan mapped out and in writing with a copy stored under plate glass printed with “break in case of emergency” then you probably did.

It’s a heavy issue involving a lot of unpleasant thoughts and speculation. Well, unfortunately that’s also how a significant portion of our clients feel when they see our name on their caller ID. Nearly every day we ask someone to sit for at least a few minutes with rather uncomfortable thoughts and hypotheticals. Now it’s our turn, in three parts: incoming workforce, questions to ask yourself and issues to consider before the heavy lifting and a glimpse at what most other agencies are doing.

The first article of the series (“Why Hiring Millennials is a Win-Win”) might have you scratching your head at best. Why are Millennials in an issue that should be all about Baby Boomers? Aren’t we skipping a generation here? Well yes, it’s the Gen Xrs who will mostly be taking over as Boomers retire; however, the experts say that in general Millennials actually have more traits in common with Boomers than Xrs, which means the potential for similar workplace conflicts to play out. Also don’t forget that the oldest Millennials are now in their mid-thirties and very much in the market for agency ownership, now and the near future.

Plus there are more of them than Xrs. If you want your agency to continue to grow after the Boomers retire, then you need to get used to interacting with Millennials as they will be a large portion of your customers too. Who better to sell to Millennials than other Millennials?

6

South Carolina Agent & Broker • Fall 2016

The next part of the series (“Agency Succession Planning: Developing Your Game Plan”) is by an agency consultant who specializes in agency perpetuation and is a frequent speaker at IIABSC events/education offering a brief overview of basic options with questions to consider when you’re first starting in the planning process. These issues include product knowledge of successor, agency management, accounting, human resources and clients.

The very nature of independent agencies is that they are all different, so it is worth mentioning the value of having a consultant to help you lay the plan. IIABSC endorses John Persky from Optimum Performance Solutions, who wrote the piece.

The final article (“Top 3 Pathways for IA Perpetuation”) talks about the benefits and drawbacks of the three perpetuation paths most often taken by agencies according to the 2014 Agency Universe Study: keeping it in the family, other principals buying out all or majority of retiring party’s interest or an outside party (individual or organization) buying out retiring principal’s interest.

On the next page, IIABSC National Director Jules Anderson discusses the key findings of the just-released 2016 Agency Universe Study, and among the good news is that the aging of the industry might be starting to slow.

The average age of agency principals not only didn’t increase for the first time in six years, but it actually dropped back one year. The percentage of those aged 66 and older also reduced by one point. While a significant majority of agencies have no plans for significant change in ownership in the next three years, they are worried about who will be available to succeed them and their agency’s value when the time does come. See Jules’s column for information on more about the latest AUS.

20

th

SCHB Self Insurers Fund

We’ve Got Your Back Since 1995

... and Have for Over 20 Years. tands the unique SCHB Self Insurers Fund unders Created for the building indust ry, er your agency is construction indust ry. So wheth cha llenges of the South Carolina f Insurers Fund is countr y or the upstate, SCHB Sel located in the midlands, the low needs. h all their workers’ compensat ion wit nts clie r lde bui r you and you p ready to hel nts wit h their can help you and your builder clie Visit our website to lear n how we workers compensat ion coverage.

SCHB Self Insurers Fund

rance Partnering with South Carolina insu e 1995. sinc agencies and their builder clients 800.678.8178 | schbsif.com

Fall 2016 • South Carolina Agent & Broker

7

A

National Director Jules Anderson, AAI

t the IIABA Fall Leadership Conference in Chicago, Ill. we received a preview of the 2016 Agency Universe Study and its key findings (reprinted below). This biennial study surveys agencies on a range of issues including revenue streams, marketing methods, employees, ownership, business mix, product diversification, technology use and more.

Available in October, members can purchase either the Management Summary or the significantly more in-depth Full Study. Find details and purchase links at independentagent.com/agencyuniverse.

1. 2016, the estimated total number of independent property/ casualty agents and brokers in the United States stands at 38,000. This represents a small decrease that presumably reflects the current mergers and acquisitions (M&A) environment as well as the relatively stable rates of exclusive agency conversions and new agency formation.

2. Small agencies make up 21 percent of the population and jumbo agencies almost two percent with findings suggesting that small agencies are gravitating to large metro areas and away from small towns and rural areas. After a decrease in the proportion of small agencies last wave (15 percent in 2014 from 28 percent in 2012), this year sees a reversal of that pattern to small agency representation approaching that seen in 2012. Small agencies have also become more concentrated in large metro areas (7 percent increase). The increase in jumbo agencies reflects mainly M&A activity.

3. Business conditions remain favorable, as they have for past several AUS waves. 74 percent of agencies that saw increases in revenues between 2014 and 2015 also report higher percentage increases (averaging 23 percent vs. 19 percent in 2014).

4. A majority of agencies continue to use market access providers (72 percent) although use has declined from 80 percent in 2014.

The slightly lower use of market access providers may be due to a higher number of direct appointments with carriers reported.

Agencies also seem to be spreading commercial lines business across a larger number of carriers, as evidenced by a decrease in the percent placed with their top three carriers.

5. Aging of the independent insurance agency universe may be slowing. At the same time, more than 75 percent of agencies have no plans for a significant change in agency ownership within the next three years. This wave is the first since 2010 in which the average age of agency principals has not increased. The average age with 20 percent or more ownership is 55 years old (56 in 2014), with 17 percent (18 percent in 2014) aged 66 and older. In both 2014 and 2016, however, few agencies anticipate an imminent change in agency ownership.

8

South Carolina Agent & Broker • Fall 2016

6. Although perceived challenges associated with retention of experienced producers and staff members has declined this wave, lack of available talent for succession is considered a key impediment to future agency ownership plans. In most size categories, nearly two in ten agencies are concerned they don’t have the necessary talent pool to draw from for future agency ownership. Questions around the net worth of agencies are also a key impediment for smaller agencies. Relatedly, roughly two in ten agencies want more information and tools/support in buying out principals’ interest and/or having a family member take over.

7. Agencies, particularly smaller agencies, are more immediately concerned about emerging purchase channels than technological advancements or the sharing economy. One-third think direct purchase through insurance companies will significantly impact their agency, a concern highest among small agencies (43 percent), although two in ten jumbo agencies are also concerned. One-fourth of small agencies also think noninsurance websites (like Google compare) and retail stores (such as Costco) will significantly impact their agency within the next two years. In contrast, less than two in ten agencies of any size are immediately concerned about the sharing economy, driverless cars or drones.

8. Non-white agency principals continue to be underrepresented in the independent agency universe. In a comparison of agencies with minority principals to those with only non-Hispanic white principals, agencies with minority principals are younger but not necessarily smaller than agencies with only majority principals. Notably, they indicate lower membership in insurance/financial organizations and awareness of IIABA programs.

9. Social media use is on the rise, with less reliance on print marketing strategies such as yellow pages advertising or direct mail. 56 percent of agencies included social media/ digital marketing in their 2015 marketing activities, up from 48 percent in 2013. Facebook and LinkedIn are by far the social media channels used most frequently. Digital strategies (social media outreach, paperless communication efforts and texting with clients) seem prominent among newer agencies.

10. However agencies continue to face challenges in marketing themselves effectively on the internet. 57 percent of agencies say marketing effectively on the internet is among their top three technological challenges, a significant increase (46 percent in 2014).

“ACCESS HOME IMMEDIATELY CAME TO OUR RESCUE.” —Rhonda Rabensteiner, Homeowner

For the Rabensteiner family of nine, life changed in an instant on November 2, 2013. They were away from home when a neighbor called to tell them their house was on fire. The fire leveled their home and tragically took the lives of their cat, puppy and six chickens. They lost everything.

“The next morning, Access Home was here. The president of the company, who doesn’t live in our state, flew in and was very helpful. He was concerned for our family and our well being. They immediately came to our rescue with money and a place to live. We were able to immediately start rebuilding our home. I can’t tell you how grateful I was to Access Home.”

“I would’ve never expected the president of the company to be here the day after the fire. It was a godsend.”

Discover what makes us different. Experience. Knowledge. Performance.

1-888-671-AHIC(2442) www.accesshomeinsurance.com

Karen D. Fenters, CISR

2016 SC Outstanding CSR of the Year Award

Karen D. Fenters, CISR of Strovis Insurance Agency, LLC in Georgetown has been named the 2016 Outstanding Customer Service Representative of the Year. This award is the highest honor in our state for insurance customer service reps who have distinguished themselves through contributions to their industry.​This award is sponsored by the National Alliance for Insurance Education & Research, the same organization that brings you the CISR, CISR Elite and CIC designation programs.

Nominees were required to show a commitment to the industry through education, involvement and achievement as well as write an essay on the following prompt:

Many in our industry came into insurance by chance, but have built a career by choice. How did you come into the industry, and what are four reasons you stayed and built a career?

(Winning Essay) “I’m going to be an insurance agent when I grow up,” is not a statement I made as a child. Insurance was never an area that I thought I would like to work in, because it was not an area that I ever thought about at all. I had my real estate license when I lived in Florida, so I do know a little something about real estate. The insurance side of real estate just didn’t appeal to me. After moving back home to my parents in South Carolina, I got a job in the small town in which I live. I worked there for 18 months until they

had a huge layoff. It took three months to find a job as a receptionist at an insurance agency 35 miles from home. I have had office jobs my entire life and most of them included receptionist duties, so I was very comfortable in this position. At 49 years old, I was just happy to have a job. The agency was small with only six employees. There was one personal lines producer who handled the new business and another producer who handled the renewals and customer service.

Continued on page 12

10

South Carolina Agent & Broker • Fall 2016

Introducing our national meeti-femeey eesereeee program.

It's like eeeeeeeeeeeeeeeee, one taste* and you'll be back for more! an eeseeee qeeee that’s 15% - 20% beeew merkee with coverage led by Leeye's ef Leeeee.

*Get

(800) 613-2600 www.AIU-USA.com Fall 2016 • South Carolina Agent & Broker

11

Nine months later, the customer service producer left on maternity leave and decided not to return. Then came that question that would change my life, “Karen, how would you like to get your insurance license?” My immediate response was, “NO!” I am not a sales person. It didn’t work for me when I had my real estate license, and I had no desire to do it now. But when they explained that I would be more involved in customer service and less involved in sales, my mind changed. “Customer service!

I can do this!” So I did. I was licensed and started this journey. I told my producer that if he gets them here, I’ll make sure I keep them here. That was six years ago. I have my CISR designation, and I’m working on the Elite. We are no longer that small agency with a just a personal lines producer and myself. We now have three offices. I still take care of about 1,300 customers. They know me, and they know they will hear from me by email or phone when their renewal comes up. They know they can call me with any question, no matter how insignificant it may seem to them. I have some customers who come in the office and hug me before they leave. Some that I have never laid eyes on in six years will tell me they love me.

So, why have I stayed and built a career? First, the customers that I service are more often a blessing than not. When they have a claim, they need to hear compassion. When they’re upset about

a rate increase, they need to hear understanding and know that their complaints are not falling on a deaf ear. The greatest three words I can hear from a customer are “I trust you.” That makes me feel like I’m doing something worthwhile. Second, I work for the best people in the industry. I have a strong loyalty to them and to this agency. They are the ones who believed in me enough to put me in this position and give me the resources that I need to keep going. Third, there is always something new to learn.

The insurance industry is constantly changing. Any day that you learn something new is a good day, and there is always something new. Whether it’s a new company appointment or changes in guidelines, it always keeps us on our toes. And then there’s that customer that will call and ask a question that I’ve never heard before. I will research and make phone calls to make sure I give the correct answer and learn in the process. Lastly, customer service is rewarding to me, but it takes effort. I know that not everyone can do this job. Not everyone has the personality to take care of others. Some days are quite challenging and some customers are VERY challenging. But at the end of the day, I know I’ve done my best to take care of the issues that have been presented ... until tomorrow, and it starts all over again with new challenges and new opportunities to learn and grow.

800-226-3224 www.fcci-group.com

INDUSTRY EXPERTISE. PERSONAL SERVICE.

“I have a sincere passion for helping FCCI policyholders manage risk and prevent loss.

The best phone call I’ve gotten started with the words, ‘Brad, you saved my life.’ ” Brad Ross, ARM, AIS Loss Control Manager FCCI Southeast Region Duluth, Georgia Now, let’s talk about your business.

General liability • Auto • Property • Crime Workers’ compensation • Umbrella Inland marine • Agribusiness • Surety Coverage available in 18 states. © 2016 FCCI

12

IASC16_Ross_7.675x4.9.indd South Carolina Agent 1&

Broker • Fall 2016

2/16/16 10:39 AM

Meeting my customers where they work.

Crafting each policy to meet different needs.

Partnering with Builders Mutual insurance.

That’s how I get the job done right.

BuildersMutual.com

Fall 2016 • South Carolina Agent & Broker

13

AGENCY PERPETUATION

Why Hiring Millennials is a

Win-Win

W

“Hiring Millennials is a Win-Win” by Jacquelyn Connelly originally appeared on the Independent Agent magazine website (iamagazine.com) on May 28, 2015 and is reprinted here with permission.

hen Bruce Winterburn, vice president of industry relations at Vertafore, bought a small-town independent agency a few years ago, he installed his 24-year-old son, Cam, as the principal.

The agency, which was 80 years old and had attritted down to a quarter of its original size, has since enjoyed incredible success—even though the team “didn’t do anything tricky other than bring in fresh insight,” Winterburn says. “This is where millennials can really have a positive impact—their ability to be a trusted advisor and consultant and build relationships in established communities.”

Gen Y staffers have a lot to offer your agency. But attracting them to the insurance industry is no easy feat—and retaining this job-hopping demographic requires a sharp shift in agency culture.

WHAT MILLENNIALS CAN DO FOR YOU Millennials often bear the blame for the demise of the local relationship due to the perception that they prefer online communication and instant access to a personal touch. But ironically, community building is actually a skill most millennials are born with.

“People point to the past a lot of times, saying ‘you can’t do that in this modern age,’” Winterburn says. “I call BS completely on that. It’s exactly the opposite. The youth are involved in communities that reach farther out than anything their parents could do.”

Thanks to social media, millennial communities are digital communities—but that doesn’t make them inferior. “Millennials build relationships in a way that is much more efficient,” Winterburn says. “They still need to be able to shake someone’s hand and look at them in the eye and come to work on time and do all of those things, but if you cover those basics, they also bring in this ability to establish relationships digitally—and they’re earnest, true relationships.”

14

South Carolina Agent & Broker • Fall 2016

SOUTHERN INSURANCE UNDERWRITERS, INC. IS

TRULY COMMITTED T O T HE SOUT HER N

INDEPENDENT AGENT

Delivering Insurance Innovation…Southern Style!

SIU has been underwriting insurance independently as a family owned business for over 50 successful years. Recognized as one of the most innovative MGA’s in America, SIU is the leader in service and new technologies. Call or visit us online today and give SIU the opportunity to treat you like part of the family!

SIU COMMERCIAL LINES MARKETS

SIU PERSONAL PROPERTY

• 85 different “A” rated carriers • Contractors: Artisans and General • Professional Liability • Roofers • Habitational Dwellings and Associations • Vacant Land and Dwellings • Restaurants (including Liquor) • Environmental Pollution

• Dwelling Fire (Vacant/Occupied) • DP1 & DP3 • HO3 & HO5 • Umbrella Stand Alone Liability • And much, much more

THE SOUTHEAST PROUDLY PROVIDING

WITH GREAT SERVICE

SIU COMMERCIAL TRANSPORTATION • Contractors • Towing • Day Care Buses • Church Buses • Garage: Dealers & Non-Dealers • Used Cars • Repair Shops • Brake Shops • Dumps • Trucking • Intermodal • Dump Operators • Artisans

WWW.SIURATE.COM • Over 200 Classes of Business • Single Point of Entry, Quote with Multiple Carriers • Online Statement Retrieval • SIU web Login/Password Questions: 678.498.4619 • Direct Bill • Pay with Credit Card

WRITE REWARDS PROGRAM • $5 for every new/renewed Personal Property policy • $10 for every new/renewed Commercial P&C policy • Visit WriteRewards.com for more information

PERSONAL PROPERTY BROKERAGE COMMERCIAL PROPERTY & CASUALTY COMMERCIAL TRANSPORTATION

CONTACT SIU TODAY AT: 678-498-4500 / 800-568-1700 WWW.SIUINS.COM CM GA

Fall 2016 • South Carolina Agent & Broker

15

It’s because the digital economy is constantly evolving— “We hear the common set—they don’t have work ethic or and millennials are right at the heart of it, Winterburn says. “They things of that nature, and it’s comparatively not true,” Harper reinvigorate what has made independent agents important in the agrees. “You just need to know what drives them, what motivates past: the ability to establish a relationship within a community,” them, in order to get the job done.” he points out. “They greatly expand the definition of both community and relationship.”

WHAT YOU CAN DO FOR MILLENNIALS “I think what they’re doing is they’re dragging us to think The secret for how independent agencies can not only attract, differently,” agrees Lynn Harper, service manager at SilverStone but retain millennial staff members lies in a simple question: Is Group, an independent insurance agency in Omaha, Nebraska, your agency culture going to retain the talent it wants and needs? who participated in a panel called Generation XYZ during “We’ve really changed the culture of our agency to really fit the Vertafore’s NetVU conference in April.

“Obviously they’re more prone to use technology. They dig in.”

Millennials often bear the blame for the demise of the Considering the wealth of progress local relationship due to the perception that they prefer millennial employees can bring to an online communication and instant access to a personal agency, buying into stereotypes about touch. But ironically, community building is actually a this demographic of potential hires can skill most millennials are born with. therefore be a big mistake.

“When you hear these negative statements, usually it’s someone in my demographic who’s making them because they really just don’t talent that we’re trying to attract and retain,” Harper explains, appreciate how culture has changed,” Winterburn says. “I’m vice noting her agency now enjoys an employee retention rate in the president of industry relationships for a billion-dollar insurance 90s. software firm and I will argue that my 21-year-old college For SilverStone Group, the cultural shift required developing daughter can influence more people instantly than I can.” an internship program to attract local college students—“we’ve

®

There can be no doubt that all our knowledge begins with experience. – Immanuel Kant

www.summitholdings.com

Policies are underwritten by Bridgefield Casualty Insurance Company and Bridgefield Employers Insurance Company, authorized insurers in AL, AR, FL, IN, KY, GA, MS, LA, NC, SC, TN and TX; BusinessFirst Insurance Company, authorized in FL, GA, KY, NC, SC and TN. ©2016 Summit Consulting LLC | 2310 Commerce Point Drive, Lakeland, FL 33801

16

South Carolina Agent & Broker • Fall 2016

Fall 2016 • South Carolina Agent & Broker

17

been able to retain a couple of them after they graduate,” Harper says—and defining a clear career path for new millennial hires.

“We have an outline of what is expected of them to learn in the first few years within our agency,” she explains. “As a millennial myself when I started in the industry, I wanted to know where my career was going to be 20 years from now.”

The first year at SilverStone focuses on software training in order to teach young talent about processes and procedures, while the second year digs into insurance knowledge by sending them to classes and enrolling them in an in-house coverage training course.

“We really set the expectation for them of what to strive for in their first two years with us,” Harper says. “One thing people say about millennials is that they all want to be president tomorrow, but the agency’s not setting the expectation as to where their career could lead them. Especially with baby boomers retiring, there’s going to be a lot of promotional opportunities here in the next 10-15 years.”

SilverStone Group also utilizes flexible scheduling that allows millennial employees to work from home one day a week and encourages a team-oriented work environment. “We have an excellent collaborative work environment so no decision is made without the end user being a part of that decision, and that helps give them the big picture of where our agency is heading,” Harper explains. “They feel like they’re a part of something, and

18

South Carolina Agent & Broker • Fall 2016

that’s really important to this millennial generation.”

A flexible, inclusive work environment should also apply to in-office activities. “You hear so many agencies talk about the fact that they shut down social media and they don’t want people on Twitter because they’re not productive, but we went just the opposite,” Winterburn says. “We added a separate monitor just so they could keep their social stuff up and have their interactions all day while they were working. Agents have to kind of come to grips with allowing and empowering that.”

Ultimately, the tactics work because keeping millennial employees happy and satisfied on the job requires focusing on framing the conversation around something other than insurance itself.

“Where my son made the connection is it’s an opportunity to open a small business or be an active part in a growing small enterprise and make a good solid living,” Winterburn says. “The thing is getting them to understand that it isn’t selling steak knives door to door. It’s not a used car lot. These are business professionals that have great careers and great businesses and live in nice houses. It’s a very livable career.”

For more information about Millennials as consumers and in the workplace, visit the Millennial Resources page under “Market Resource Groups” section of the IIABA Diversity Resource pages (www.iiaba.net/diversity).

AGENCY PERPETUATION

The Key to Recruiting Millennials?

D

Make Them Feel Special “The Key to Recruiting Millennials” by Jacquelyn Connelly originally appeared on the Independent Agent magazine website (iamagazine.com) on July 18, 2014 and is reprinted here with permission.

uring a recent webinar, Applied Systems asked an audience of insurance agents whether they have a plan in place to attract and hire young talent. An overwhelming majority—83%— said no.

It’s a disappointing statistic given that in 15 years, as much as 50% of the current insurance workforce will retire.

“If you’re not paying attention to millennials, you should be,” said Christen Kelly, product marketing manager for Applied Systems, who moderated the webinar. “Each industry has to pass the baton from one generation to the next—ours is no different.”

Independent agents have been hearing for a long time that their industry has a great story to tell—they just need to tell it better. But industry leaders say laying out the status quo for Generation Y is not enough to even get their attention, let alone convince them to join the insurance industry.

“The perception among young professionals is that insurance is suited for the older workforce,” Kelly said.

“Historically speaking, when you mention the word ‘insurance,’ it turns people off,” agreed panelist Brooks Zeigler, a producer at Morris and Templeton Insurance Agency in Savannah, Ga. “Millennials have been conditioned by their parents and grandparents to roll their eyes.”

So what does a winning perpetuation strategy involve?

According to Michael Howe, senior vice president of product management at Applied Systems, insurance agencies shouldn’t try to prove they’re a great place to work. Instead, they should focus on what needs to improve—and tell millennials their unique skill set will be crucial to future success.

“The agencies that adjust and alter the way they do business, the technology they bring, how they do marketing, how they do

selling—they’re actually adjusting the way the agency works to fit the millennial, not vice-versa,” Howe explains.

For example, a millennial producer might rely heavily on social media and mobile technology to generate leads. “Those are the tools that come naturally to them to find customers,” Howe says. “Back 10-15 years ago, there was no agency in the world that was finding new customers via social media. Today, you see it all the time— agencies bring in millennials and engage them with what they’re good at, and they leverage that as a strength.”

And that’s the key to attracting young talent: telling them they have something to offer that nobody else can bring to the table.

Millennials don’t want to hear about what your business can do for them—they want to hear about what they can do for your business.

“You have to better communicate why the industry needs the unique skills and DNA of this generation,” Howe says. “If you’re trying to pitch someone coming out of college to go work at the agency stuck in 1983, good luck with that. But if you can communicate to the person coming out of college, ‘Look, you’re the future and we’re changing our business to better suit your unique skills’—you’ve got their attention now.”

That’s because knowing they’ll be on the vanguard of where an industry needs to go—and that they’ll play a big role in making a difference for the business—is much more appealing than simply joining one they perceive as stodgy or boring.

“Put yourself in the shoes of someone coming right out of college,” Howe says. “You’re considering two pitches: ‘Come work in an industry where we’ve been doing it the same way for 25 years,’ or ‘We know we need to change, the business is really evolving and we need people like you to help us evolve into that new world.’

Which company would you join?”

Fall 2016 • South Carolina Agent & Broker

19

SC Trusted Choice® Big “I” National Championship

June 27–28, 2016 Orangeburg Country Club Orangeburg, SC

Jacob Bridgeman, 16, of Inman, S.C., and Anna Eddy, 17, of Hilton Head Island, S.C. each topped their respective divisions in the SC qualifier of the Trusted Choice Big “I” National Championship junior golf tournament held June 27 – 28 at the Orangeburg Country Club in Orangeburg, S.C. Both players had to battle it out in tie-breaker rounds to claim the tournament championships.

Bridgeman and two others finished two under and played hole 10 for the championship. Second place went to Nick Willis, 16, of Cowpens, S.C. Third-place went to George Eubank, Jr. , 17, of Spartanburg, S.C. Eddy played her tie-breaker round against Emily Cox, 16, of Lancaster. Both had finished with a two-day score of 156.

Bridgeman, Eddy, Willis and Eubank earned the chance to advance to the Trusted Choice Big “I” National Championship held Aug. 1-4 at the Del Paso Country Club in Sacramento, Calif. They joined Christian Salzer, 18, of Sumter, S.C. and Victoria Huskey, 18, of Greenville, S.C., who both had previously qualified to play in the national tournament.

After the second round of the national tournament all five players had made the cuts, and Jacob Bridgeman finished in the top 10 of his division, qualifying him for play in the 2017 tournament.

View photos and final results at www.iiabsc.com/jrgolf 20

South Carolina Agent & Broker • Fall 2016

, x a l Re th Carolina. u o S

We’ve got you covered.

When unpredictable weather strikes, residents of South Carolina need more than the usual kind of insurance products. Count on Centauri Insurance to provide peace of mind when your customers need it the most.

Homeowners I Dwelling Fire I Condominium I Tenants I Flood

centauriinsurance.com

Fall 2016 • South Carolina Agent & Broker

21

AGENCY PERPETUATION

Agency Succession Planning:

By Jon Persky, CIC, CPA, PHR President, Optimum Performance Solutions, LLC

A

DEVELOPING

Your Game Plan

while ago I was speaking to an agent about his agency perpetuation plan.

Agent: “My son is my perpetuation plan.”

Consultant: “Really? How old is he?”

Agent: “Twelve.”

Consultant: “Oh. And is he licensed?”

The son can be the perpetuation plan in about 20 years, assuming he wants to join the agency and is competent. But this doesn’t address what happens if the agent dies, becomes disabled or wants to retire before then.

But let’s assume the son is 32 instead of 12 and has been working in the agency for the past few years. Is he ready to take over the reigns of the agency? Maybe yes, maybe no. Assuming you don’t want to sell the agency to an outside party, there are numerous issues that must be addressed with the internal heir apparent. (Note: There are no “right” or “wrong” answers to most of the questions posed in this article. The best solution is for the current owner and the successor to have an honest and frank discussion about each of the following points.)

General Succession Issues Can the successor personally afford to purchase the agency from you? If not, how will this person pay you for the agency? Most agencies are acquired through a leveraged buy-out, meaning that the cash flow of the agency is used to pay the seller.

Are you willing to hold a note from this person? What happens if he walks away from the agency after running it into

22

South Carolina Agent & Broker • Fall 2016

the ground? Did he provide you with sufficient collateral to protect you or are you going to have to go back into the agency and try to rebuild it?

Is the successor the beneficiary of an insurance policy on you? What about disability insurance? Have you outlined a detailed process to transfer your managerial responsibilities to your successor?

Ownership Transfer Issues Will the transfer of ownership be a stock transfer or an asset transfer? This issue can have serious tax ramifications to both the buyer and the seller. Besides the agency, are there any assets owned by the seller personally, such as the building, automobiles, etc., that will be included in the deal with the successor? If the space is leased, can the successor replace the current agency owner on the lease?

Fall 2016 • South Carolina Agent & Broker

23

24

South Carolina Agent & Broker • Fall 2016

Fall 2016 • South Carolina Agent & Broker

25

Product Knowledge Issues What level of knowledge does the successor have in the various personal lines, commercial lines and life and health products the agency sells? In any area where the level of knowledge is less than “high,” what training or process is being used to raise the successor to a “high” ranking?

Agency Operations Management Issues Does the successor have a high level of knowledge regarding the agency’s work-flow and procedures? Is he familiar with the way the automation system works and what information/reports can be generated from it?

Agency Accounting Issues When was the last time you discussed the agency’s accounting, financial systems and financial condition with your successor?

You don’t want to wait until he is ready to take over before sharing the information with him. To some, accounting is like a foreign language. Make sure you begin to indoctrinate your successor early regarding the financial statements, budget, payroll, payroll taxes and cash flow of the agency.

You also need to make sure the successor understands the fiduciary relationship between the agency and its carriers and clients. He can’t use the trust account to pay agency operating expenses or to give himself a loan.

One-Stop Shopping

Human Resources Issues How familiar is the successor with the human resources laws that apply to your agency? Does he know how to interview candidates, do performance reviews on existing employees and terminate problem employees? Lack of knowledge in this area can be devastating. Just defending yourself against an HR-related lawsuit can cost $100,000. A mistake in this area can cost the successor (as well as you) the agency.

Marketing and Client Issues How familiar is the successor with the agency’s current geographic market area as well as potential new marketing opportunities? How will your key clients and centers of influence be transitioned to the successor in the event of your death, disability or retirement?

Developing a Game Plan Once you have identified your likely successor, you need to evaluate this person by applying the preceding questions to him or her. You also need to determine how long it will take to bring him up to speed in all the areas he needs to be knowledgeable in.

How does this fit into your personal retirement plans?

If you want to retire at the end of the year and it is going to take your successor two years to reach an adequate level to run the agency, you have two choices: delay your retirement or sell

GUARD Plus

Comp • Businessowner’s • Auto • Umbrella

We’re the quote you could come up against, so why not join us?

Workers’ Compensation insurance nationwide for a company’s employees.

Businessowner’s Policy for Total Insured Property Values up to $12.5 million (up to $25 million upon request) – now available in over half the U.S. Commercial Umbrella for added protection.

A newly enhanced Commercial Auto product (gradually being introduced in our BizGUARD states).

Competitive Pricing • Coverage Extensions • Excellent Commission • Easy Submission Process • Superior Customer Service • New Complementary Lines in Select Jurisdictions!

Visit www.guard.com for product availability in specific states.

Berkshire Hathaway

GUARD

Insurance Companies

Go to www.guard.com/apply

26

South Carolina Agent & Broker • Fall 2016

A&M Assoc Ad SC PRINT.pdf

1

10/20/15

12:38 PM

to someone else. But retirement is an easier issue to deal with than your unforeseen death or disability. In those cases, you may not have the luxury of time to get the successor up to speed in all these areas.

This may necessitate a change in your perpetuation plan from selling to the successor to selling to a third party. But a third party may look upon your death or disability as a fire sale since there will not be a transition period. The result could be a lower sales price.

Your best bet is to plan early and constantly review your plan. You may also want to bring in an outside consultant to help facilitate an agency perpetuation planning meeting and help develop your game plan.

About the Author: Jon Persky, CIC, CPA, PHR is the president of Optimum Performance Solutions, LLC, an IIABSC-endorsed management consulting company for independent agencies, and has held positions as controller, chief financial officer, and personnel director. Agency perpetuation planning as well as agency valuation and the buying/selling process are among their expertise. IIABSC members receive a 10 percent or more discount from OPS services as well as industry-specific advice they are unlikely to receive elsewhere. Find them at www.optperform.com.

Fall 2016 • South Carolina Agent & Broker

27

2016 Big “I” SC Congratulations to our newest designees!

August 16, Hilton Garden Inn, Columbia, SC

AIAM

Michael Barwick, AIAM Susan Best, AIAM Melissa Coleman, AIAM Kristy Dennis, AIAM, PLCS Kellie Feathers, AIAM Patricia Gilliland, CISR Elite, AIAM Cherlyn Holmes, AIAM Judith Kowalik, CISR, AIAM Frieda Mackey, CIC, AAI, AIAM Diane Peeples, CISR, AIAM Joan Shealy, CISR, AIAM Karen Staley, AIAM Rhonda Wainright, CISR, AIAM Robbin Walters, AIAM Peggy Wardlaw, CISR, AIAM

CIC

Ian Anderson, CIC, CISR Cynthia Michelle Carey, CIC, CISR Kristeena Creel, CIC, CISR Caroline Deevey, CIC, CISR, AAI, CRIS, Laura Graham, CPCU, CIC Kerri Lyman, CIC Shane Lynn, CIC, AIC Eva Alicia Manall, CIC, CISR Melyssa Mappus, CIC, CISR Brennan Martin, CIC Melissa Mason, CIC, CISR Lawrence Rhett Orr, CIC Suzanne Reid, CIC James Roemer, CPCU, CIC Olivia Roylston, CIC Melissa Shull, CIC Palmer Steadman, CIC Wendy Sullivan, CIC, CISR, API

CISR

Elizabeth Artz, CISR Amy Ballano, CISR Emily Bartos, CISR Angela Berry, CISR Hope Brokaw, CISR Janise Brown, CISR Kymberley Brown, CISR Candy Campbell, CISR Thomas Sandford Chandler, Jr., CISR, API David Christopher, CISR Jennifer Crawford, CISR Maggie Dell, CISR 28

South Carolina Agent & Broker • Fall 2016

Kristin DeVol, CISR Christian Michelle Dubuque, CISR Robin Easterlin, CISR, AIAM Heather Farish, CISR William Mark Frye, CISR Blakely Genoble, CISR Jennifer Goldman, CISR Cheryl McGee Harrelson, CISR Virginia Hosley, CISR, ACSR Nancy Johnson, CISR, APIR Phyllis Kathleen Lewis, CISR Lauren Mackie, CISR Gabrielle Mattison, CISR Patricia McGuinness, CISR Ashley McMullan, CISR Katherine Meibers, CISR Julie Michem, CISR, CLCS Michael Olsen, CISR Jamie Page, CISR Kathryn Plaistowe, CISR Nicole Pruitt, CISR Ethan Rutland, CISR Nicole Seaford, CISR

Leesa Simmons, CISR Melissa Simonsen, CISR Shelley Smith, CISR Jamie Stone, CISR Annette Stuck, CISR Lantye Terrill, CISR John Thomason, CISR Mary Ann Watson, CISR Becki Weiland, CISR Justin Wetzel, CISR

CISR Elite

Pamela Day, CISR Elite, CPIW Ann George, CISR Elite Kelly Hall, CISR Elite Elizabeth Hinen, CISR Elite Ashley Kendrick, CISR Elite, AIAM Jennifer Scarberry, CISR Elite, AAI, ACSR, CPIW Tammie Smith, CISR Elite

CRM

Tyler Macolly, CIC, CRM

Some carriers shine brighter than others

Are you interested in shining with us?

We provide our agents with: - A solid, competitve lineup of products they are proud to offer their customers - Superior claims and underwriting service - Knowledgeable personnel

Contact Brian Crisp today!

Brian Crisp South Carolina Marketing Rep P: 843.494.3872 E: bcrisp@lhmgt.com

Homeowners | Flood - Competitive commissions - User-friendly processes - Prompt, clear communication of the market and our products

Now accepting 2017 pledges – visit www.iiabsc.com

Bankers Insurance Group Jackson Sumner & Associates Phenix Mutual Fire Ins. Co. St. John’s Ins. Company UPC Insurance

Access Accident Fund Allstate Insurance Company Auto-Owners Ins. Company Berkley Southeast Ins. Group Berkshire Hathaway GUARD Ins. Capitol Preferred Ins. Co. & Southern Fidelity 30

South Carolina Agent & Broker • Fall 2016

AFCO/Prime Rate Premium Finance Amerisafe ASI Assure Alliance Inc. Builders Insurance Group Centauri Specialty Ins. Co. Coastal Select Ins. & Geovera Specialty Ins. Cos. Frontline Insurance Imperial PFS

Central Insurance Companies Frankenmuth Insurance Genesee General Hanover Excess & Surplus Inc. The Hartford Hull & Co. Inc. Insurance House J.M. Wilson

The Main Street America Group Markel Specialty The National Security Group Preferred Specialty LLC Prime Insurance Company Risk Placement Services SCU Southern Ins. Underwriters Travelers Wright Flood

Mid-Continent Group Penn National Insurance Risk Innovations State Auto Insurance Company Stonewood Insurance Company Tapco Underwriters, Inc. Universal North America

there’s a big difference between

selling and

selling out. ready for the next chapter of your business? Consider Hilb Group. While other firms rely on pure acquisition to fuel growth, our strategy combines an aggressive acquisition model with a proven formula to drive growth internally. By combining the strength of your firm with the resources and expertise of ours, we’re able to help you reach not just the next chapter, but the next level.

Thinking of your next step? Talk with us today and learn how joining the Hilb Group makes you more than just a seller. You become a partner in our success.

contact bob hilb, President & ceo, at (804) 414 6505 or rhilb@hilbgroup.com

Hilb Group is a Top 100 US insurance agency focused on providing Property & Casualty insurance and Employee Benefits to small to mid-size businesses. Learn more at HilbGroup.com

“Thanks again for the best business decision I ever made” – R. Hockman, Hockman Insurance

“I wish I had done this 10 years ago” – H. Grubbs, B&H Insurance

“Having Hilb Group behind me has helped my agency set new records” – D. Contorno, Lake Norman Benefits

Fall 2016 • South Carolina Agent & Broker

31

Sponsors Diamond

CONFERENCE

Cornerstone National Ins. IIABSC Agency Johnson & Johnson Progressive Safeco Insurance

Platinum

Heritage Insurance Company Liberty Mutual Insurance Lighthouse Property Ins. Cos.

32

nd ra G C at ort h, S s e R Marriott eac

e

g.

Au

4–

Du ne s

Gold

7, 2

016

South Carolina Agent & Broker • Fall 2016

Myrtle

B

Bankers Insurance Group Jackson Sumner & Associates Phenix Mutual St. John’s Insurance Company UPC Insurance Co.

Silver

AFCO/Prime Rate Premium Finance Amerisafe ASI Assure Alliance, Inc Builders Insurance Group Centauri Insurance Coastal Select Ins & Geovera Specialty Frontline Insurance Imperial PFS Markel Specialty The Main Street America Group The National Security Group

Preferred Specialty, LLC Prime Insurance Company Risk Placement Services SCU Southern Ins. Underwriters Travelers Wright Flood

Bronze

Access Accident Fund Allstate Insurance Company Auto-Owners Insurance Berkley Southeast Ins. Group Berkshire Hathaway GUARD Ins. Capitol Preferred Ins. Co. & Southern Fidelity Central Insurance Companies Frankenmuth Insurance Genesee General Hanover Excess & Surplus Inc. Hull & Co. Inc. Insurance House J.M. Wilson Mid-Continent Group Penn National Insurance Risk Innovations State Auto Insurance Co. Stonewood Insurance Company Tapco Underwriters, Inc. The Hartford Universal North America

General Sponsors

Assure Alliance, Inc. Insurbanc Allstar Financial Group

Chris Dunlap Local Sales Representative 440-910-3422

Christina Glass Local Sales Representative 864-293-0939

Fall 2016 • South Carolina Agent & Broker

33

Young Agents Conference photos - continued

34

South Carolina Agent & Broker • Fall 2016

BE THERE WHEN IT COUNTS When disaster strikes, everyone needs a hero.

Restoring a way of life for your policyholder makes you a hero in their eyes. Provide a complete property solution to your policyholders – when they need you the most.

Contractor Connection – The claims solution for residential and commercial damaged property, whether during a disaster or day-to-day property claims.

GENERAL CONTRACTOR AND EMERGENCY SERVICES A leading provider of policyholder satisfaction | Servicing U.S. & Canada | 5,000 Contractors 24/7/365 | contractorconnection.com | 800.690.0174 Fall 2016 • South Carolina Agent & Broker

35

AGENCY PERPETUATION

3 PATHWAYS Top

for IA Perpetuation “Top 3 Pathways for IA Perpetuation” by Jacquelyn Connelly originally appeared in the June 1, 2015 of Independent Agent magazine and is reprinted here with permission.

[Editors Note: This article quotes statistics from the 2014 Agency Universe Study, which at deadline was the latest version of the study. However, we anticipate that the 2016 study should be available at the time this edition is published. See National Chairman’s column (p. 8) for a preview of key findings as well as where to get more information.]

A

ccording to the 2014 Future One Agency Universe Study, 14 percent of independent agencies do not have a perpetuation plan in place.

But industry experts estimate the number is much higher.

“It’s more like 40 percent,” says Al Diamond, president of Agency Consulting Group, Inc. “A lot of people have an expectation, but they never put it on paper and they don’t tell their people. Everyone thinks all they’ve got to do is come to work every morning and sell insurance when the phone rings. Well, you can’t plan your business that way—especially if you’re over 50 or 60 or 70.”

36

South Carolina Agent & Broker • Fall 2016

“I would suggest even those that say they have a plan in place really don’t have a plan in place,” agrees Tim Cunningham, partner at OPTIS Partners, LLC. “Or they say something like ‘I’ve got a buy/sell agreement.’ That’s not a perpetuation plan. A perpetuation and succession plan is a long-term process, not an event.”

Feeling like a deer in headlights? Here are the top three perpetuation plans among independent agencies surveyed by the Agency Universe Study—and how you might go about implementing them at yours.

CHILDREN OR OTHER FAMILY MEMBERS TAKE OVER (38%) “The good part about family perpetuation is that it’s normally the easiest to finance because it’s self-financed,” Diamond says.

“We see a lot more of these family perpetuation issues being lifetime annuities to the parents to the older generation. Basically the children buy the agency, they keep paying their parents until the parents die and then they inherit it. There’s virtually no tax implication.”

So what’s the catch? “The biggest challenge is making sure the next generation is equipped to run the business,” says Mike Mensch, certified business intermediary and merger & acquisition master

37

intermediary at Agency Brokerage Consultants. “Not everybody has the skills and the work ethic involved. If the agents are about 60 then their kids are in their 20s—that’s a young age to take over a business.”

ROADS LESS TRAVELED Of eight potential perpetuation tools evaluated by the 2014 Future One Agency Universe Study, only the three outlined in this article are currently in place at more than 20% of independent agencies. The remaining paths include:

happen through an equal partnership or grooming a younger employee from a minority partner to a perpetuator. “It won’t involve any drastic changes, they won’t lose a lot of clients—it’s a good method of internal perpetuation,” Diamond explains.

At Northern Insuring, a former Best Practices agency in Plattsburgh, New • 11%: non-principal employees buy current York, perpetuation planning principal’s interest is deeply embedded in The major drawback? family commitment. Third“Partners who are in • 6%: producers become partial owners when books generation Deena Giltz business with each other reach a certain size McCullough, president & for five, 10, 20 years— CEO, and her brother Randy they don’t see eye to eye • 3%: arrangements for a loan to buy out current Giltz, senior vice president, as much as in the initial principal’s interest acquired the agency from their stages of a partnership,” father, Rod Giltz. “My dad Diamond points out.

• 3%: plans to issue stock to buy out retiring principal’s was very clear when I came “It’s difficult to do that interest into the business in 1986 and transition unless you my brother in 1990 that he have a good relationship • 3%: other felt that I would be the next with both partners president,” Giltz McCullough respecting each other.” says of the transition, which became reality in 2008 after After several rounds planned gifts of stock throughout the 1990s and 2000s. applying various models, AHT Insurance in Washington, D.C., an independent agency founded in 1921, settled on a non-traditional “When you talk about succession planning, it’s a matter of whether perpetuation solution: an employee stock ownership plan (ESOP). the person who’s sitting in that top spot is willing to relinquish “We’ve been able to work with the ESOP model and tweak it in control,” Giltz McCullough says. “My father would say, ‘If I’m such a way that we’re confident we have a sustainable model that getting in the way, let me know.’ And he never has—we’ve always is highly resistant to acquisition offers, because of the way it’s been had a good dialogue around it.” designed,” explains David Schaefer, president & CEO. As chairman and CFO, Rod continues to hold an active role in the agency, managing his own book and the agency’s 401(k) plan as well as other financials. But Giltz McCullough now owns 51% of the stock and her brother 49%. “We’ve moved it forward,” she says. “It’s now our business, and yet really nothing’s changed.”

What’s next? Northern Insuring is strongly considering filing for Women Owned Business status and recently completed a conversion from a C to S Corporation. “That was really about positioning the agency for options in the future,” Giltz McCullough says. “From a taxation standpoint, it just expands the number of options we have.”

OTHER PRINCIPALS BUY ALL OR PART OF THE CURRENT PRINCIPAL’S INTEREST (29%) This perpetuation plan is often the easiest transition for employees and customers—as well as for sponsoring loans—and could 38

South Carolina Agent & Broker • Fall 2016

Senior leadership is heavily involved because the majority of ownership is divided among the principal group, Schaefer explains.

On the heels of AHT’s former president and a senior vice president retiring at the end of 2014, an agency valuation—performed each year as part of the rules associated with the ESOP—will provide for a payout for both parties based on the value of the shares that they owned. The payout will come from the ESOP. “The ESOP is our primary perpetuation funding mechanism,” Schaefer says. “It’s what we invest in heavily over the years and it has the ability to provide the funding we need to buy out retiring principals and to continue to perpetuate the firm.”

As the largest minority owner in the company, AHT’s ESOP trust is a significant shareholder but doesn’t own a controlling interest.

Every employee who meets qualification rules established by the Department of Labor participates in the plan, and when employees retire, they have the right and opportunity to cash out ESOP trust

1 in 4

3

underwriters at J.M. Wilson previously worked for a retail agency

GENERATIONS OF LEADERSHIP

RELATIONSHIPS IT’S ALL ABOUT WHO YOU KNOW

1947 the year our longest-standing carrier relationship began

55% OF OUR AGENTS HAVE WRITTEN BUSINESS WITH US FOR 10 YEARS OR MORE

BROKERAGE / PROFESSIONAL PERSONAL LINES PROPERTY & CASUALTY TRANSPORTATION SURETY MGA and E&S Broker since 1920

(800) 666-5692 | JMWILSON.COM Fall 2016 • South Carolina Agent & Broker

39

shares for what turns out to be their retirement account.

“The employees all act and think like owners, because they are,” Schaefer explains. “One of the great sales pitches we have is ‘Would you rather have a paid staff member managing your insurance for you, or would you rather have an owner?’”

Most important, the model “enables folks that are highly entrepreneurial and creative to be a part of something that is going to last,” Schaefer says. “We can offer a permanent home to people who are refugees from the consolidation waves going on in the industry.”

OUTSIDE PARTY OR ORGANIZATION BUYS OUT CURRENT PRINCIPAL’S INTEREST (24%) According to Cunningham, an external transaction usually carries a tax advantage an internal one might lack. “What frequently happens is the principal realizes there’s a pretty significant delta between third-party valuation street value and what the agency can support internally,” Cunningham says. “Even with good intentions and some other factors in place, the principal may say, ‘Wait, I can get a 50% or greater premium by selling this to a third party? Do I want to take that kind of a haircut?’”

Seven years after the recession, Diamond says that “for every seller, there’s probably 15 or 20 buyers.” But for employees and clients, this plan can cause a huge shakeup.

“Your employees are scared to death and should be, because there’ll be a vast change in the way they do business with a larger agency or someone else than it is with the person they’ve been used to for 10, 20, 30 years,” Diamond says. “There’s also a shock to the system for clients. If a client is used to dealing with someone and has a trust relationship for 20–30 years, there’s a bigger question mark when you sell to someone outside that they don’t know than when you sell to someone inside that they do.”

When BancorpSouth Insurance Services Inc. acquired Knox Insurance Group in April 2014, Knox kept all its staff. “I wouldn’t have done it otherwise,” says Randall Bonaventure, CEO and partner/ owner. “I wanted to make sure they didn’t get treated like new employees—that was very important to me.”

Lofty expectations weren’t an issue for Knox, either. “Our timing was probably 40

South Carolina Agent & Broker • Fall 2016

pretty close to perfect,” Bonaventure says. “Our consultant [Tom Doran of Reagan Consulting] asked potential buyers the tough questions so my partner and I could keep our eye on the ball of selling insurance. Tom also played psychologist—he helped us with the emotions.”

For Bonaventure, that was the most difficult piece: letting go. “I know they said we’re going to leave you autonomous, you can keep your name, you’ll have a lot of freedom to do what you want to do,” he explains. “There’s no guarantee. It’s about the emotions of letting something go that you did every day for lots of years. The biggest challenge for me was accepting that.”

BancorpSouth has made good on its promise. “All the players we chose to take looks and sees all agreed to leave us alone and not try to make us part of a corporate culture,” Bonaventure says. “They left the entrepreneurial spirit in place.”

What’s next? The acquisition was structured as an earn-out, and Bonaventure, 58, and his partner Dwayne David don’t plan on quitting the business anytime soon. “I want to stay after it,” Bonaventure says. “We did the right thing, and I’m feeling good about it every day.”

41

Calendar

View up-to-date calendar, course descriptions and register using our online Education & Event Calendar at www.iiabsc.com/education CLASSROOM COURSES WEBCAST/WEBINAR - no test required for CE Credit

m m

October

42

04

The E-world for Insurance Professionals, 3 hrs. P&C

27

Long Term Care Insurance, 2 hrs. L&H

05

CISR Elements of Risk Management, Hilton Head, 7 hrs. P&C

27

Home-based Business Exposures, 2 hrs. P&C

06

Professional Ethics in the Insurance Industry, 3 hrs. Ethics

28

Insuring Condominiums, 2 hrs. P&C

06

Shake, Rattle & Roll with it: Earthquake Basics, 1 hr. P&C

31

Annual Convention Opening Session, Asheville, NC, 3 hrs. P&C or L&H

06

Workers Compensation Beyond the Basics, 3 hrs. P&C

06

Business Income Beyond the Basics, 3 hrs. P&C

November

11

Graduate Executive Leadership Seminar Day 1, Columbia

1

Annual Convention Closing Session, Asheville, NC, 2 hrs. P&C or L&H

11

E&O Risk Management, Meeting the Challenge of Change Part I,

2-4

CIC Commercial Property Institute, Hilton Head, 20 hrs. P&C

3 hrs. P&C

03

The E-world for Insurance Professionals, 3 hrs. P&C

11

E&O Risk Management, Meeting the Challenge of Change Part II,

03

Agency Management Based E&O and Ethics, 3 hrs. Ethics

3 hrs. Ethics

04

Professional Ethics in the Insurance Industry, 3 hrs. Ethics

11

E&O Mock Trial, 2 hrs. P&C

07

Estate Planning Techniques, Options & Opportunities, 2 hrs. L&H

11

Liability Issues to Worry About: Indemnity Agreements, Addl Insureds,

08

Affordable Care Act, Update 2015 and Beyond, 3 hrs. L&H

2 hrs. P&C

08

Certificates of Insurance Emerging Issues, 3 hrs. P&C

12

CISR Personal Lines Miscellaneous, Greenville, 7 hrs. P&C

08

E&O Risk Management, Meeting the Challenge of Change Part I,

12

E&O Risk Management, Meeting the Challenge of Change, Columbia,

3 hrs. P&C

3 hrs. P&C/ 3 hrs. Ethics

08

E&O Risk Management, Meeting the Challenge of Change Part II,

12

Ethical Issues Personal & Organizational, 3 hrs. Ethics

3 hrs. Ethics

13

Insurance and the Property Lease, 2 hrs. P&C

08

Personal Lines Claims that Cause Problems, 2 hrs. P&C

13

NFIP Basic Course w/ 2016 Update, 3 hrs. P&C

08

Commercial Property Endorsements that Can Make You Money,

18

Agency Management Based E&O and Ethics, 3 hrs. Ethics

2 hrs. P&C

18

Insurance & BBQ, the Hidden Connection, 3 hrs. P&C

09

CISR Dynamics of Service, Columbia, 7 hrs. P&C or L&H

19

AIAM Day 3, Charleston, 6 hrs. P&C

10

CISR Commercial Casualty II, Myrtle Beach, 7 hrs. P&C

20

E&O Risk Management, Meeting the Challenge of Change Part I,

10

Graduate Executive Leadership Seminar Day 2, Columbia

3 hrs. P&C

10

Shake, Rattle & Roll with it: Earthquake Basics, 1 hr. P&C

20

E&O Risk Management, Meeting the Challenge of Change Part II,

10

Insuring Condominiums, 2 hrs. P&C

3 hrs. Ethics

10

Business Auto Claims that Cause Problems, 2 hrs. P&C

20

Hot Topics in Personal Lines, 2 hrs. P&C

10

NFIP Basic Course w/ 2016 Updates, 3 hrs. P&C

20

Commercial Lines Claims that Cause Problems, 2 hrs. P&C

14

Dueling Additional Insured Endorsements, 1 hr. P&C

20

Rental Cars: More than Meets the Eye, 2 hrs. P&C

15

CISR William T Hold Seminar, Charleston, 3 hrs. P&C, 4 hrs. Ethics

21

Certificates of Insurance Emerging Issues, 3 hrs. P&C

15

Insurance & BBQ, the Hidden Connection, 3 hrs. P&C

21

Dueling Additional Insured Endorsements, 1 hr. P&C

16

D&O Liability Insurance, 2 hrs. P&C

24

Those Kids and their Cars, 2 hrs. P&C

16

Hot Topics in Personal Lines, 2 hrs. P&C

25

Data Privacy Insurance, 2 hrs. P&C

16

Building Codes are Bad for Your Insureds, 2 hrs. P&C

26

D&O Liability Insurance, 2 hrs. P&C

16

COPE: Property Underwriting & Effective Loss Control, 2 hrs. P&C

27

Retirement Planning & Annuities Update, 2 hrs. L&H

17

Top 5 Life Insurance Uses, 2 hrs. L&H

South Carolina Agent & Broker • Fall 2016

17

E&O Risk Management, Meeting the Challenge of Change Part I,

3 hrs. P&C

17

E&O Risk Management, Meeting the Challenge of Change Part II,

3 hrs. Ethics

18

Data Privacy Insurance, 2 hrs. P&C

21

Rental Cars: More than Meets the Eye, 2 hrs. P&C

22

Ethical Issues Personal & Organizational, 3 hrs. Ethics

December 01

AIAM Day 6, Columbia, 2 hrs. P&C/ 3 hrs. Ethics

06

Professional Ethics in the Insurance Industry, 3 hrs. Ethics

06

E&O Mock Trial, 2 hrs. P&C

06

Liability Issues to Worry About: Indemnity Agreements, Addl Insureds,

2 hrs. P&C

06

The E-world for Insurance Professionals, 3 hrs. P&C

07

CISR Dynamics of Service, Greenville, 7 hrs. P&C or L&H

07

Shake, Rattle & Roll with it: Earthquake Basics, 1 hr. P&C

08

Insurance and the Property Lease, 2 hrs. P&C

08

Workers Compensation Beyond the Basics, 3 hrs. P&C

08

Business Income Beyond the Basics, 3 hrs. P&C

12

Long Term Care Insurance, 2 hrs. L&H

13

Graduate Executive Leadership Seminar Day 3, Columbia

13

E&O Risk Management, Meeting the Challenge of Change Part I,

3 hrs. P&C

13

E&O Risk Management, Meeting the Challenge of Change Part II,

3 hrs. Ethics

13

D&O Liability Insurance, 2 hrs. P&C

13

Those Kids and their Cars, 2 hrs. P&C

13

Home-based Business Exposures, 2 hrs. P&C

13

NFIP Basic Course w/ 2016 Updates, 3 hrs. P&C

14

CISR Residential Property, Charleston, 7 hrs. P&C

14

Data Privacy Insurance, 2 hrs. P&C

14

Commercial Lines Claims that Cause Problems, 2 hrs. P&C

15

Hot Topics in Personal Lines, 2 hrs. P&C

15

Retirement Planning & Annuities Update, 2 hrs. L&H

15

Insuring Condominiums, 2 hrs. P&C

16

Agency Management Based E&O and Ethics, 3 hrs. Ethics

19

Certificates of Insurance Emerging Issues, 3 hrs. P&C

20

Ethical Issues Personal & Organizational, 3 hrs. Ethics

21

Dueling Additional Insured Endorsements, 1 hr. P&C

22

E&O Risk Management, Meeting the Challenge of Change Part I,

3 hrs. P&C

22

E&O Risk Management, Meeting the Challenge of Change Part II,

3 hrs. Ethics

22

Insurance & BBQ, the Hidden Connection, 3 hrs. P&C

22

Rental Cars: More than Meets the Eye, 2 hrs. P&C

have you heard

the news? we have a new

regional vice president!

We are pleased to announce our new Regional Vice President of the Carolinas Region, John Zulueta, effective August 15th!

John is an experienced leader in the industry, and is well known in the Carolina territory. John is committed to continuing to provide our Independent Agents and Policyholders with an exceptional level of products and services, as our Charlotte based staff remains unchanged.

Have you heard of BSIG Advantage?

Are your small business customers in need of superior service and comprehensive coverage? Our Advantage product offers simplified creative solutions for writing your small business customers.

The Advantage Includes

• Over 400+ eligible classes & 8 market segments • Expedited processing for eligible classes • Authority to apply up to 25% credit on qualified accounts • 24/7 online claim reporting and emergency response • and so much more!

Our Claims Commitment We are committed to providing superior claim service-and getting our customers back-in-business when a claim does occur, earning us a 97% customer satisfaction score through July of this year.

Want to Know More?

Please contact Edwina Hedrick, Territory Manager at 704.230.9818 or John Zulueta, RVP at 704.759.7008.

Your Back-in-Business Insurance Company™

berkleysig.com Berkley Southeast Insurance Group is a member company of W. R. Berkley Corporation, whose insurance company subsidiaries are rated A+ (Superior) by A.M.Best.

Products and services are provided by one or more insurance company subsidiaries of W. R. Berkley Corporation. Not all products and services are available in every jurisdiction, and the precise coverage afforded by any insurer is subject to the actual terms and conditions of the policies as issued. ©2016 Berkley Southeast Insurance Group. All rights reserved.

Fall 2016 • South Carolina Agent & Broker

43

Member News

WELCOME NEW AGENCY MEMBERS Bates Insurance Group, Goose Creek BlueLake Insurance, Lexington MSH Insurance Services, LLC, Columbia Palmetto Group Insurance, Charleston Ragland Insurance Agency, LLC, Summerville

WELCOME NEW ASSOCIATE MEMBERS SeaCoast Underwriters, Inc., Cora Gables, Fl.

44

South Carolina Agent & Broker • Fall 2016

IIABSC Vice President Becky McCormack accepts IIABSC’s fifth consecutive Excellence in Insurance Education Diamond award Sept. 8 at the IIABA Fall Leadership Conference in Chicago, Ill. IIABSC strives to provide members with quality professional development rather than basic CE hours, and receiving top-tier recognition reinforces our mission.

I will not accept policy changes from a third party.

I will not accept policy changes from a third party.

I will not accept policy changes from a third party.

AT THE BIG “I” PROFESSIONAL LIABILITY PROGRAM,

WE TAKE CLAIMS PREVENTION VERY SERIOUSLY .

You carry professional liability insurance to protect you in the event of a claim. But is your carrier helping you to prevent a claim in the first place?

The Big I has dedicated significant resources to bringing the best claims prevention information and strategies to your agency.

And while we won't really make you write it out on a chalkboard, we believe that the best way to protect your business is to help you protect yourself.

VISIT INDEPENDENTAGENT.COM/EOCONTACT TODAY.

45

2016 Board of Directors Executive Committee

Directors

Chairman R. Scott Moseley Irmo Insurance Agency Irmo, SC scott@irmoins.com

National Director Jules Anderson, AAI Anderson Insurance Associates Charleston, SC janderson@aiasc.com

Angus M. Brabham, IV, CIC (Gus) Regions Insurance Columbia, SC gus.brabham@regions.com

Chairman Elect/ Treasurer Tom Bates, Jr. Herlong Bates Burnett Greenville, SC tom@hbbins.com

Immediate Past Chairman Kenneth A. “Ken” Finch, CPCU, CIC, CRM, AAI Adams Eaddy & Associates kfinch@adamseaddy.com

Secretary James G. Taylor, Jr., CIC (Jay) Kinghorn Ins Agency of Beaufort Beaufort, SC jtaylor@insurancebeaufort.com

Andrew E. Muller, CIC, AAI, CWCC, PRIS Mappus Insurance Agency Inc. Charleston, SC andrew@mappusinsurance.com

William C. Carter, CIC (Cooper) Pinckney-Carter Company Charleston, SC cooper@pinckneycarter.com James B. Galloway (Ben) Peoples First Insurance Rock Hill, SC bengalloway@peoplesfirstinsurance.com Robert W. Hammett, AIP (Rob) CWS Insurance Agency Inc. Spartanburg, SC rob@cwsinsurance.com

Robert E. Nalley (Robbie) Creech Roddey Watson Ins Sumter, SC rnalley@crwins.com Tonya S. Thomason, CIC David A. Crotts & Associates Greenwood, SC tonya.thomason@dcrotts.com Teresa C. Yount, CPCU, CIC, CRM, AINS, CPIW Correll Insurance Group Spartanburg, SC tyount@correllinsurance.com

Carrie Johnson, ChFC, CLU, AAI Carrie Johnson Insurance Murrells Inlet, SC cj_ins@sccoast.net

For Comprehensive Mobile Homeowners Insurance, put your trust in a company that has been insuring homes for over 50 years.

National Security Can Provide You With: • • • • • • • •

$100,000 Maximum Policy Limits AAIS Special Form 3 Policy 15% New & Renewal Commission Partnership Profit Sharing Fast Online Policy Issuance Direct Contract with National Security Replacement Cost Option Discounts for New Home and 50+ Age of Insured • Easy Payment Options National Security has provided competitive, affordable insurance to policyholders for over 50 years, but we also provide a lot for our agents, with competitive commissions, excellent customer service and experienced company adjusters. As an admitted Southeastern based regional company, National Security prides itself on fast, efficient service from a friendly small town company, and online access for all agents, providing fast quotes, online policy issuance, online dec page printing, and real-time policy information.

Find out more by calling Sharon at 1-800-239-2358 x213 or visit nationalsecuritygroup.com.

46

South Carolina Agent & Broker • Fall 2016

Elba, Alabama

47

In the movies, it’s thrilling when the little guy finds a way to win big.

In the ISU Network…it happens every day.

Okay, as a member of the ISU Insurance Agency Network, you aren’t exactly a little guy. You don’t have a downtown skyscraper, but you can compete with those that do. 

You maintain complete independence, yet are part of an organization of 160 established and successful independent agencies with combined premiums over $2 billion.



You have access to over 350 carriers, meaning broader coverages for existing clients and multiple avenues for new business development.



You are part of a coast-to-coast community that shares proven ideas and provides solutions to difficult challenges.

And to make victory even sweeter, you receive performance incentive income that averaged $57,400 last year and is trending upward by about 25% annually.

INSURANCE AGENCY NETWORK Helping Independent Agents Stay Independent for Over 35 Years

Let’s talk about ISU member victories, competing locally, regionally and nationally. www.JoinISU.com

In 2016, ISU will add new carriers and new qualified agents in the Carolinas. For an exploratory discussion of the ISU model...

Call Jack O’Connell Regional Vice President (704) 771-9597