Big I Washington, Spring 2014 by Blue Water Publishers, LLC

SPRING 2014

Big I Washington is a publication of the Independent Insurance Agents & Brokers of Washington

IIABW Members Show 12th Man Spirit

Pages 8-12

WN-2013FallAd-(IIABWA-(WA)).pdf 1 10/25/2013 8:17:24 AM

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SPRING 2014

Advertiser Index Official publication of Independent Insurance Agents & Brokers of Washington 11911 NE 1st St., Suite B103, Bellevue, WA 98005 Ph. (425) 649-0102 Fax: (425) 649-8573 Web: www.wainsurance.org Officers of IIABW President: Pat Otter, Otter Insurance, Lynnwood President-elect: Mike Button, AIP, PayneWest, Richland Secretary: Kim Krogh, ARM, Fidelity Insurance, Spokane Treasurer: Lori Reed, Mitchell Reed & Schmitten Insurance, Inc., Wenatchee IIABA Director: Sue Knobeloch, CIC, CPIW, Lovsted Worthington, Bothell Executive VP: Daniel Holst, IIABW, Bellevue

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Board of Directors Pauline Black, ACSR (Exec Comm At Large), Rice Insurance, Bellingham Mike Button, AIP (Benton-Franklin), PayneWest, Richland Ryan Douglas (King) Craig Field (Chelan/Douglas), Mitchell Reed & Schmitten Insurance, Inc., Cashmere Nancy Frost (At Large), Propel Insurance, Tacoma Duane Henson, LUTCF (Skagit/Island), First Insurance, Mt. Vernon Kim Krogh, ARM (At Large), Fidelity Insurance, Spokane John McDonald (Snohomish), McDonald McGarry, Edmonds Dave Merrill (At Large), Merrill & Merrill Insurance, Seattle Pat Otter (At Large), Otter Insurance, Lynnwood Melissa Power, ACSR, CIC (At Large), Homestreet Insurance, Spokane Lori Reed (At Large), Mitchell Reed & Schmitten Insurance, Inc., Wenatchee Michael Rydbom, CIC (SE WA) Hub International, Pullman Nick Stay (Pierce) American Underwriters Insurance, Tacoma Dave Street (Grant), Martin-Morris Agency, Wenatchee Larry Trefry (Spokane), Andre-Romberg, Spokane Rob Tripple (Exec Comm At Large), Tripple Tripple & Tripple, Edmonds Chris White, CIC, CRIS (At Large) Bell-Anderson, Anacortes

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Staff Daniel Holst, Executive V.P. - dholst@wainsurance.org Susan Scott, AAI, Sr. V.P. of Education - sscott@wainsurance.org Ashley Kuaea, Director of Member Programs - akuaea@wainsurance.org Bill Stauffacher, Stauffacher Communications, Contract Lobbyist - gocougs@billstauffacher.com Kimberly Ostling, Member Programs Assistant - kimberly.ostling@wainsurance.org Advertising For more information on advertising, contact Jim Aitkins, Blue Water Publishers, LLC 22727 - 161st Avenue SE, Monroe, Washington 98272 360-805-6474, fax: 360-805-6475, jima@bluewaterpublishers.com Big I Washington is the official magazine of the Independent Insurance Agents & Brokers of Washington and is published quarterly. News items from IIABW members are requested. IIABW does not necessarily endorse any of the companies advertising in this publication or the views of its writers.

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Table of Contents

A Message from Pat Otter, IIABW President

Mind Reading: Why You Can’t Afford to Ignore Analytics

IIABW Members Show Seahawk Spirit

Young Agents 2014 Spring Networking Event at ACME Bowl

What is the Business Income Exposure for Non-Profit Organizations

Big “I” Pac: An Industry Leader

Thank You For Your Investment in InsurPac

High-Tech Aids Insurance Commissioner’s Work to Thwart Low-Brow Scams

Industry Update: Surplus Lines Flood- 2-hour CE Workshops

Stop the Micro-Management Mess

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IIABW President

PAT OTTER

ost agency principals I know are worried about the future of the insurance workforce. Over 60% of our industry will be retiring in the next seven years so owners like me are concerned about who will eventually be purchasing our agencies. IIABW’s Young Agents is an important resource to help ensure there will be a strong, committed pool of insurance professionals for decades to come. IIABW’s Young Agents is a statewide network of insurance professionals which strives for professional growth through educational achievement, leadership development, legislative involvement, and insurance career perpetuation. Once we get good people in our industry, the Young Agents helps them find success which we all know can be challenging during the first few years. Our state’s Young Agents program provides an opportunity for our producers, CSRs, underwriters and marketing representatives to learn from industry leaders and from each other. They develop relationships that will help them thrive, thus ensuring they make insurance their career. I talked to several successful agents who were involved early in their careers in the Young Agents. Here is what they found most valuable about the experience: It was nice to spend time with colleagues that were facing the same issues, and pressures I was. The interface with the company people was also invaluable - many of the connections I made back then are still effective today! David Hargreaves CIC, CRM Argus Insurance Inc. As a producer from a smaller agency, I found it valuable connecting with producers from other parts of the state who did not compete with our agency. We shared sales techniques and market knowledge that was critical early in my career. John McDonald McDonald McGarry, Edmonds 6

As I begin my 39th year in the industry, I can easily point to my association with the Big I Young Agents as one of the most rewarding experiences of my early career. I count myself as fortunate to have participated in the Young Agents program and I believe it contributed to my success in the industry. Alan Cottle, CPCU Argus Insurance Inc Being involved in the Young Agents was arguably the best thing I did when I first was trying to break in to our business. I found mentorship that really impacted my long term success and made me feel so much more confident to grow and develop as an agent. The Young Agents group is a must for any new agent wanting to excel and prosper in our business! Dave Gregory Stonebraker McQuary Insurance The Young Agents Committee sponsors educational and fun networking events each quarter. On March 20th they will host a bowling networking event at Acme Bowl in Tukwila. On June 12-13 they will hold the 40th Annual Young Agents Conference in Leavenworth. To keep up on Young Agents activities, go to their Facebook Fan Page (facebook.com/IIABW.YoungAgents). I encourage owners to get their younger, newer employees involved in the IIABW Young Agents. It is an investment in your business’s most valuable asset: your employees.

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Business Income Coverage for NonProfits

What is the business Income exposure for a non-profit organizations? By IIABA Virtual University

e recently got this “Ask an Expert” question from a member: “What is the business Income exposure for a nonprofit organization? We understand the extra expense component but are having trouble with the business income part.” Keep reading to learn that business income is often a LOT more than just lost profit.

QUESTION:

”What is the business Income exposure for a nonprofit organization? We understand the extra expense component but are having trouble with the business income part.” Business income insurance covers profit and continuing expenses. Unless you’re Microsoft, it is very common for continuing expenses to be far more than lost profits, even with for-profit organizations. In addition, there is a need for extra expenses to expedite recovery. Below are some VU faculty observations.

ANSWER: Faculty Response HUGE. Use non-profit worksheets. Take a careful look at the impact a non-profit’s inability to function will change their ability to receive local, state or federal funding. Separately, many non-profits occupy space funded under bond issues. The insurance requirements in the bond issue financing agreements are onerous. Faculty Response They have operating expenses that continue plus payroll.

Faculty Response I think it really depends on what the source(s) of income is/ are for the non-profit. Faculty Response It depends on the source of funding for the non-profit. If they raise some of their funding themselves, then they have the same BI exposures as any “for profit” business. For example, if they have fundraisers at their site/ building, and it is damaged/destroyed, their ability to raise funds during the time of repairs (“period of suspension”) is impaired. In cases where non-profit groups have dances, dinners, concerts, etc. at their site, this is a significant exposure. Also, they may raise money based on selling things (“products”). If they have received a shipment of these items (cookies [think Girl Scouts], seeds, cookbooks, calendars, Christmas wrapping paper, etc.), and this property is destroyed, they would likely suffer a loss of income, especially for items tied to a specific time of year, like Christmas wrapping paper, since they may not be able to obtain another shipment in time to complete the sale/ delivery. Faculty Response You may wish to begin by making a distinction between a non-profit and a charity. There are many non-profits that have income, significant income. Trade associations (such as the Big I), citizen associations (like AARP) are non-profits that take in a lot of money and file reports of their “income” every year. That income is used to provide services for members or others either in the current year or the future. If a non-profit had to cease its operations because of a loss they could lose income that could be replaced by business income coverage.

Faculty Response Its income is the donations. If the donations stop because of a loss there is coverage under BI. Faculty Response If a non-profit organization lost revenue at a two week fundraising event because a fire damaged the building that housed the event, would the organization not want to receive payment for more than just its expenses associated with the event – i.e., the loss of income from that event? Faculty Response “Profits” for a non-profit, such as a charitable organization, can be measured as the collected dollars the organization can distribute to the recipients of the charitable gifts. If an event causes direct reductions in the amount of dollars collected for redistribution, and that event is a covered loss under the appropriate Property forms, then you have a Business Income loss. Faculty Response While a nonprofit may not have an profits, they certainly would have continuing expenses. That is covered by the Business Income form. Both the Business Income and Extra expense are crucial for any nonprofit that is dependent on their location (i.e., daycare, residence for developmentally disabled, etc.). Just because they do not have a profit does not exclude all of the coverage from both of these coverages. In addition, they may have an accumulated surplus that is for all practical purposes (except hopefully in the eyes of the IRS) a “profit.” Faculty Response The business income calculation is net profit plus continuing expenses. There is no net profit but there are continuing expenses during the recovery period. Additionally, any kind of “store” sales will be interrupted. Also, memberships, fundraisers, and income generating activities may be interrupted. A good starting point for a combined business income and extra expense limit is 15% - 20% of revenues. It is imperative they have a contingency plan for their disaster recovery or they may not survive. Faculty Response “Profit” is revenue minus expenses. You can be a nonprofit and still have “profit” depending on what you do with the revenue. It’s possible that revenue can be substantial and expenses, via donations and volunteering, can be minimal. That creates insurable “profits” though legally these funds are diverted to other uses. Reprinted with permission from IIABA’s Virtual University. 15

High-tech Aids Insurance Commissioner’s Work to Thwart Low-brow Scams

he woman’s insurance claim seemed typical. Someone stole her car, took it for a joyride, then left it by the side of the road about 2 a.m. in a secluded part of northern Thurston County. Then the car went up in flames. The Pierce County woman called Traveler’s Insurance Co. after police conducted an initial investigation and filed a claim for about $17,000 for the theft and total loss of her Chrysler 300C. She told investigators she had not seen her vehicle the previous night or used her cell phone between 10:30 p.m. and 3 a.m. when the cops arrived to talk to her. But the talk about her cell phone use made investigators at Traveler’s and Insurance Commissioner Mike Kreidler’s office suspicious of the claim. And for good reason. A check of her phone use showed she made repeated calls the night she reported her car stolen – and a number of these were from a location near where her Chrysler got lit up. The result: The woman now faces felony charges of insurance fraud and first-degree theft. The case is pending in Pierce County Superior Court. This case from late 2013 is typical of how investigators in Kreidler’s Special Investigations Unit (SIU) are employing high-tech to thwart low-brow insurance scams. “More and more, technology allows us to find out what really happened with a suspicious claim,” says Mark Couey, director of the SIU. “Computers, cameras, cell phones, touch-screen tablets and other electronic devices all provide great evidence for a criminal case.” With enough initial evidence, the SIU is able to convince judges to grant a search warrant for cell phone records. Tracking of calls can reveal the time and location of calls, helping to establish whether an individual’s story checks out. The same cell phones that many delight in using to take high-quality photos and share them with friends and relatives, or on a social media site like Facebook, can also backfire on the unsophisticated would-be scammer. Take the Spokane man last year who filed a claim for several thousand dollars in losses he said resulted from a burglary. He even had the photos of the goods to show what thieves swiped. But again, investigators were suspicious. They eventually were able to check the suspect’s cell phone. The device showed the man snapped the photos after reporting the theft. He’s facing charges now. “Our staff takes combating fraud very seriously, and whenever possible we seek to use technology to our advantage,” Couey said. Other 2013 fraud facts: • Kreidler’s SIU served 35 warrants for bank records, cell phone logs, and other investigation-related documents. • SIU handled 78 criminal cases that resulted in 32 felony charges. • The unit helped prevent $250,000 in insurance fraud. • Most fraud referrals continue to originate in the state’s most populous counties – King, Snohomish, Pierce and Spokane. For details about reporting insurance fraud and the SIU, visit the Insurance Commissioner’s website at www.insurance.wa.gov 16

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Stop the Micro-management Mess Successful agencies are trading in

SALES ‘MANAGEMENT’ for

SALES ‘LEADERSHIP’ By Russ Banham, IA Senior Contributing Editor

very independent agency wants to sell more and is constantly on the prowl for new ways to do so. But sales tactics are less important than an overall strategy. Establishing a consistent sales methodology can be a powerful revenue generator. This is one of several eye-opening findings of an in-depth study by Reagan Consulting, which identified specific agency business practices that correlate closely with superior organic growth. Based on a survey of more than 100 top-performing agencies of all sizes, the study’s purpose was to turn these insightful findings into ways to increase sales revenue. The study posits a stark difference between what the firm calls sales “management” - the traditional hierarchical process run by an internal sales manager - and sales “leadership.” In place of a full-time employee outside the top ranks of the agency who is recruited to oversee sales, sales leadership requires someone from the executive team to assume responsibility for developing the agency’s sales culture and holding every producer accountable for their performance. The most successful agencies from a sales growth perspective are doing just that: increasingly entrusting an executive team member - on some cases the agency’s owner with riding herd on the sales process. “Most top-performing agencies told us they don’t manage sales, which they see as a remedial exercise for underperforming 18

producers who lack the skills to succeed,” says Kevin Stipe, president of the Atlanta-based consulting firm. “They prefer the concept of sales leadership, where one or more executive team leaders take on sales as a part-time responsibility.” The distinction is subtle but significant, Stipe says. “The best agencies think sales management is for wimps,” he explains. “They basically told us, ‘If we hire salespeople that have to be managed, then we’ve hired the wrong people.’ Some of this is semantics, but the point they’re making is that sales as a management exercise is perceived as something negative, whereas sales leadership is a positive insofar as driving organic growth.” The study distills sales leadership into three essential elements. Top performances tend to give producers the tools they need to be successful; create a culture of accountability for producers; and constantly nurture the next generation of sales talent. These responsibilities fall to the sales leader, executive team member, practice group or division head who takes on the task of guiding and monitoring the overall sales effort. “Many people erroneously assume that the best agencies from a sales standpoint have a fulltime sales manager, yet only 17% of the study respondents had one,” Stipe says. “The fulltime sales manager actually is a relative rarity. Sales leadership is not a person per se’ it is more a set of responsibilities and imperatives.”

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Equipping Producers Obviously, winning the sales war requires having the right ammunition. As one agency principal commented in the study, “We want to give our producers an unfair advantage in the marketplace.” But how are top agencies achieving this advantage? For one thing, they give their producers quality, value-added resources to sell both property-casualty insurance and employee benefits: four out of five agencies in the study offered at least one in-house P&C resource, and their 2.6% growth rate is twice the 1.3% of those that did not offer such resources. Another advantage for producers is specialization. According to the study, agencies that develop a singular specialty - such as managing risk in a certain industry or developing a deep understanding of a particular insurance coverage - and then train producers accordingly are winning the sales war. At York International Agency LLC in Harrison, N.Y., CEO Robert Kestenbaum provides his producers with a highly specialized staff, offering services like risk assessments and actuarial skills. “We think the best way to win an account is to replace the broker that already has this account, and not winning on price,” Kestenbaum explains. “Depending on the account, our various value-added services help us accomplish this. If it is an employee benefits opportunity, the producer works with the actuarial staff. If commercial, we have risk analysts to work with them. There is no push and pull here between the staff and the producers.” Similarly, MHBT Inc. in Dallas utilizes a support staff of specialists in workers compensation. Services provided to producers include claims analysis, resolution and risk modeling, and workplace safety and loss control resources. On the benefits side, the staff proves bill reconciliation, wellness programs, a call center and a self-service technology tool that client employees can use to review their 401(k) plans or check their tax payments. “We want our producers to be specialists at what they do, not merely focused on sales for the sake of sales,” says Robbie Smith, chief operating officer. To equip its producers to sell more, Assurance Agency in Schaumburg, Ill. has invested in a CRM (customer relationship management) technology tool. According to the agency’s president Dan Klaras, producers use the CRM as a “prospect pipeline” to send clients information that differentiates their “thought leadership” in a particular area. The best example has been the Affordable Care Act, Klaras adds. “We’ve done a tremendous amount of work helping prospects and current clients prepare for the registration, leveraging the CRM system to push information out on a 20

regular basis, regarding what they need to do now to get ready,” Klaras explains. “We also invite them to seminars and webinars that we host on the subject. This deservedly sets us up as experts.” And these successful agencies are not alone. As the Reagan Consulting study points out, the majority of top-performing agencies have built one or more industry vertical specialties, and/or one or more product-focused specialty teams. “In both cases, the overall growth rates of the agencies doing this are more than double the ones that haven’t,” Stipe says. Agencies that have developed resources for producers to build and retain new business are growing faster. “There’s another benefit that often goes overlooked,” Stipe says. “The development of such resources from an agency brand perspective can help agencies attract and retain higher caliber producers, which then serves to increase organic growth.” Setting the Sales Policy In agencies that demonstrate sales leadership, the sales leader and producers review and discuss on a weekly or bi-weekly basis what is working and what isn’t. Then they come up with ides on how to improve the situation. Many top performers hold contests or use other fun means of motivating the workforce to improve their sales figures. Most, like Assurance Agency, have developed a specific sales policy: an over arching statement of what sales leadership means and requires. “We train all our producers on a single sales methodology, which we have developed internally and consider proprietary to the agency,” Klaras says. “We have one sales model and we train all our producers to it. Everything we do, every meeting, aligns with this methodology. We have found that if our producers follow it and stick to the methodology, our numbers are consistently higher than the marketplace.” At Assurance, this policy entails frank conversations about sales successes and failures. “We try to figure out where sales may be broken, and then we offer training to fix the problem,” Klaras explains. Assurance holds its producers to a minimum production of $150,000 in revenue each. To achieve this figure, the agency hosts a contest offering a paid-for vacation to the top third of producers. But the “real key” is still a “consistent sales methodology, which gets everyone going in the same direction,” Klaras says. Recruitment and Development The last essential element in sales leadership is perhaps the most important - finding individuals with the alchemic mix of skill sets required to not only close a sale, but also maintain

the business long-term. The best tools, resources and training won’t drive greater sales without smart people at the front lines. As the study concludes, “Building the next generation of sales talent [is] front and center for the insurance distribution system.” This generation consists of recent college graduates coupled with the ranks of individuals seeking second careers. Through its “Producerin-Training” (PiT) program, Bouchard Insurance, Inc. in Clearwater, Fla. has brought in many talented producers who were formerly in the mortgage business. The agency employs a full-time recruiting coordinator whose sole occupation is searching for new talent. Ray Bouchard, president of Bouchard Insurance, Inc., says the best producers are often those who have no experience in the insurance industry. “They’ve got some finance and accounting background, but other than that are completely raw.” he says. “We’ve learned that stealing someone else’s producers simply means you’re inheriting someone else’s problems. Successful producers with successful agencies aren’t going to leave easily.” PiT seasons raw talent, a process that may take longer for those without an insurance background. But Bouchard says it’s worth it. The full-time recruiting coordinator provides much of the instruction, although local colleges also teach classes to narrow the newbies’ learning curve. The agency further touts it mentorship program by aligning new producers with senior ones. “From day one, we’re indoctrinating our producers in the Bouchard culture, the way we do thing,” Bouchard says. “We provide much more than an insurance product here. This is not about going out, quoting and bidding. We sell solutions for business owners, whether it is claims management or loss control or HR support.” These training efforts coincide with the findings of the study, which identifies producer recruitment as “a primary role of the sales leader.” Boucard couldn’t agree more. “We have a guy here who’s been with us maybe a year, and he came into my office last week excited that he got the ‘agent of record’ letter without even quoting,” he says. “Now that’s a success story.”

ACCOUNTABILITY EQUATION DOESN’T ADD UP Once sales-leading agencies equip their producers with the tools to generate organic growth, they hold the field accountable to produce measurable results. Typically this means establishing specific goals for new business or book size, and setting incentives based on producers’ accomplishments. The Reagan Consulting Study found that 37% of responding firms have implemented a renewal rate clawback. For example, if a producer consistently fails to produce a minimum volume of new business, he or she is hit with a reduction in their renewal rate of compensation, typically in 5-point increments. Do traditional accountability measures result in increased sales? Interestingly, no one compensation program designed to drive accountability differentiates top performing agencies from all others. So what are the real differentiators? The study returns to the importance of sales leadership - a high-level agency executive empowered with leading the sales effort. This person is there to provide needed advice and assistance, including training and education or a change in sales focus.

THE BOTTOM LINES The Reagan Consulting Sales Study’s key findings about top-performing agencies seem to counter accepted wisdom. Chief among those surprises is that a fulltime sales manager who is not an owner or senior partner won’t necessarily increase sales revenue - and in fact might be an unwise investment. The top six conclusions drawn from the study include: • • • • •

•

Don’t assume the answer to your growth woes is hiring a full-time sales manager. Top performers focus on building a core competency in producer recruiting and development. Producer compensation may be a problem, but it is definitely not the answer. Specialization is one of the clearest drivers of sustained organic growth. Quality and professionalism of a firm’s producers may be the most important sustainable competitive advantage in the marketplace. Top performers elevate sales to the point that it becomes the centerpiece of their culture.

Mind Reading:

Why You Can’t Afford to Ignore Analytics

By Jacquelyn Connelly, IA Assistant Editor

racking agency metrics can reveal the secrets behind what motivates consumers. Giving clients what they want will now require more than simply perfecting a digital strategy. According to a recent report from Ernst & Young, analyzing those digital efforts is “critical” to insurance business success. Based on responses from 100 insurance companies around the globe earlier this year, the study determined that while most insurance organizations fail to deliver analytics capabilities early in the process of digital adoption, tracking metrics is a “prerequisite” for extracting maximum value from digital investment. “If you think about customers’ engagement with digital channels, what digital has allowed is a massive increase in information about their behaviors and about their interests,” says Kaenan Hertz, executive director of financial services and customer practice at Ernst & Young. “So in the insurance space, analytics provides all this new wealth of information that ultimately helps companies better meet the expectations of the customer.” That means as consumer habits continue to evolve rapidly, it’s no longer enough to simply keep up with the latest technological trends. Agencies must also track consumer 22

behavior in order to determine which practices are most successful at increasing loyalty, retention and returns. “If you’re not tracking, you can spend a lot of time going digital in the wrong ways,” explains Claudia McClain, principal of McClain Insurance Services in Everett, Wash., which employs a slew of analytics measures to enhance digital efforts. “So just like anything we do—just like you would keep track of your underwriting loss ratios and you’d make an adjustment if you weren’t writing profitable business—same thing with analytics when it comes to marketing.” Chuck Blondino, marketing director for the northwest region at Safeco Insurance in Seattle, cites two examples of digital marketing where analytics prove invaluable: search engine optimization and email marketing. “A lot of agents spend money to get their search engine status improved, and after two or three months, maybe they’ve gotten into the top three if they’re lucky,” he says. “But what they’re also noticing sometimes is that they may not be getting many leads from it. Or they may see more traffic, but visitors aren’t spending any additional time on the pages.” Information like that is priceless for agents looking to mold their current lackluster digital marketing platform into something more effective. Blondino says the same applies for

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email newsletters: after a strong initial rollout, many agencies watch their open rates decline rapidly—misleading many to develop the false mindset that digital efforts simply don’t work. “What’s really been happening is they’ve been putting into those emails stuff that bores people to tears,” explains Blondino, who believes agents can boost their digital success by personalizing their content in all communications with clients. “So I say, use the tracking—the tracking is telling you something. It’s telling you now that they wanted to hear from you, but once they opened, they weren’t attracted to what you were sharing. If your open rates are dropping, change your content.” By tracking analytics, agents can adapt their digital strategy to better meet customer expectations. “Those metrics help you identify where you’re weak or where you’re strong,” Blondino says. “You should be able to see, if you pay attention, what’s working and what’s not.” Regardless of what an agency’s digital strategy involves, tracking analytics is the only way to make sense of consumer behavior. “If you’re not growing 1% per year, you’re not even keeping up with the population growth,” Blondino says. “So the issue of tracking is really critical for agents to understand what’s working.” For details on incorporating analytics into a digital strategy and framing the argument for digital investment, don’t miss next week’s edition of Insurance News & Views™. How it Works Ernst & Young identifies analytics capabilities like segmentation, customer data and predictive modeling as the skill sets most valuable in today’s market—all of which Hertz says allow businesses to “meet that desired customer experience in the channel of their choice” in a more effective way. Segmentation involves classifying customers into meaningful collections in order to engage them more effectively. As a simple example, “a high-value customer you might be willing to invest more in terms of the touch, while in a lower-value customer you might prefer that they do more in the self-service channels,” Hertz explains. “Segmentation allows you to market differently, it allows you to service potentially differently and ultimately it allows you to help drive some of your investments.” Customer data and predictive modeling focus more on synthesizing information and putting it to future use. That might mean preventing desertion by “predicting who is about to leave, and then rolling out retention activities targeting those customers,” Hertz says. “The flip side is predicting who’s likely to join you—who you are most likely to resonate with in the marketplace, so you target your acquisition dollars differently.”

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Big I Pac: An Industry Leader IIABW would like to thank its members for their support of the BIG I PAC, our state political action committee. 155 agencies have contributed over $28,500 to the PAC in 2013. Support from our membership has helped the Big I be effective advancing agent issues in Olympia, including low B & O tax rates, agents’ involvement in the health care exchange, less regulations, etc. Simply put, a PAC contribution is the equivalent of purchasing political insurance. Your contributions are used to support elected officials and candidates who advance IIABW core principles on agent-specific, insurance industry and general business issues. We pool your hard-earned dollars to send a powerful message: IIABW agents care about the political make-up of Olympia, we care about our industry’s future, and we care about our customers. We back up our talk by actively participating in the political process with a proactive lobbying presence, a major PAC presence and broad-based

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grassroots relationships in every legislative district. The BIG I PAC is one of the largest business trade association contributors to legislative campaigns. As contribution limits increase and legislative campaigns become even more competitive, the pressure is on politically-engaged organizations like IIABW to increase our level of giving. IIABW is a strong voice for independent insurance agents in Olympia. We’re trusted and respected in both Republican and Democratic camps because legislators know you at home, hear from you when they’re in Olympia, and count on our support when it really matters. Personal AND corporate contributions can be made to the Big I Pac and sent to: Big I Pac, 11911 NE 1st St., Suite B103, Bellevue, WA 98105. Thank you to the following agencies who have contributed to BIG I PAC. Arthur Strand Ins. Blue Horizon Ins & Financial Svcs Blue Lion Brokers, LLC Brookey Insurance Services Cactus Callis & Associates Castell Insurance Central WA Ins. Agency, Inc. Century Ins Services LLC Choice Insurance, LLC City Insurance Center D.W. Ferguson & Assoc. Dave Johnson Insurance, Inc. Doty & Giles Insurance Duane Weber Ins. Inc. Elliott Ins. Svc., Inc. Ellis & Ellis Insurance Brokers Fairfield-Waverly Ins. Agency, Inc. Freed Insurance Group Greg Gustafson Insurance Greiert Insurance, Inc. Guide Insurance Services, Inc Gus Paine Insurance GVI Corp. Harbor Insurance Services Hartley & Hartley Ins Inc Harvey Insurance Associates Haynes, Donna Insurance Connections Northwest Insurance Solutions of Washington Insurance Svcs Network, Inc. Ireland Ins. Assoc. Island Ins. Assoc. ISU Insurance Solutions Group Jenny Tan Insurance Johansson Insurance LLC John F. Throne & Co. Johnson Marshall Agency Kelley Insurance Agency, Inc. Kraft Insurance Agency, Inc. Kuresman Insurance Laurus Insurance Services, LLC Linde Insurance

Longview Ins. Inc. Lower Valley Brokers Mechelsen Agency Melbourn Insurance Agency, Inc. Michelman Insurance Group Inc. MTC Insurance Agency Group Nelson Insurance Agency North Shore Insurance North Town Insurance Northern Marine Insurance Northwest Ins. Brokers Noyd & Noyd Insurance Agency Obenland & Low Agency Inc. Ogishima Ins. Agency Pang & Associates Ins Svcs Prostar Insurance Petershagen Insurance Premier Group Insurance ProShield Insurance Agency Quaife’s Agency/High Cascades Robert D. Gregg & Sons Robinson-Maurer-Welts Inc. Rollo VanSlyke Insurance Agency Rudolf Birkenkopf Sakahara & Hashimoto, L.L.C. Sears & Associates Simcoe Insurance Skyway Security Ins. Snyer Insurance Services, Inc. Soleyon Insurance Partners, Inc. Standen Insurance Stintzi Insurance Inc. Tamara Sperry Insurance Ted Moran Ins. Thornburgh Ins. Agency Tim Quigley Ins Services, Inc Thomason, Steve Tomas Miranda Insurance Agency Valley Ins. Agency Villa Insurance Group, Inc. Vino Svcs NW & Bridge Ins Svcs Virgil McLagan Company William F. Davis Ins. Agy, Inc. Wingert Insurance Agency

teamwork Imperial PFS, the leader in premium financing, continues to focus on the success of our agency partners. The relationships we have developed with our agency partners are a critical element in the way we do business. These relationships have enabled Imperial PFS to continually develop and improve programs and services. Customer focus is why we operate a nationwide network of local offices, each shaped by the region it serves. We look forward to your continued partnership with Imperial PFS and providing you the most comprehensive benefits in the industry.

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InsurPac Giving

ashington state agents and brokers collectively contributed over $14,000 in individual contributions to our national political action committee, InsurPac. Nationally, over $1 million was raised in 2013. Washington State again reached our fundraising goal. Thank you to Sue Knobeloch of Lovsted Worthington who serves on our national association’s Board of Directors and is our state’s InsurPac Chair. Also thanks to the agencies who raised the most from their employees and owners: Propel, Argus, Stonebraker McQuary, Unity Group/HUB, and Lovsted-Worthington.

InsurPac is the largest P & C agent insurance industry PAC and is one of the reasons why the Big I is routinely rated in Fortune magazine’s top-25 list of most successful lobbying groups in Washington D.C. By pooling individual contributions, InsurPac helps elect candidates and re-elect members of the U.S. Congress who share the Big I’s business philosophy. While contributions do not buy solutions to legislative debates, they do allow the Big I significant ‘face time’ with very busy elected officials to give us an opportunity to educated them. Thank you to the 45 agents and brokers who have contributed to InsurPac in 2013.

Centennial Club

Pioneer Club

General Contributor

Kurt Carlson, Propel Insurance

Richard Elliott, Elliott Insurance Service, Inc.

Pauline Black, Rice Insurance, LLC

Peter Hendrick, Propel Insurance

Ryan Fournier, Fournier Insurance Solutions

Michael Button, Payne West Insurance

Don McQuary, Stonebraker McQuary Agency

Jim Gibbons, Mitchell, Reed & Schmitten Ins Inc

Ryan Douglas, Wells Fargo Ins Services USA, Inc.

Daniel Holst , IIABW

Gwendolyn Edmond, Propel Insurance

Gold Club

Barbara Johnson, Propel Insurance - Olympia

Don Emerick, Conover Insurance, Inc.

Alan Cottle, Argus Insurance, Inc.

Duncan Kirk, Unity Group Insurance

Bob Keller, Stonebraker McQuary Agency

Bill Gellor, Gellor Insurance, Inc.

Dave Merrill, DeFranco-Merrill Insurance, Inc.

Kimberly Krogh, Fidelity Associates Insurance

Robb Dale, The Unity Group

Patrick Otter, Otter Insurance Agency

Phil Latendresse, The Unity Group

David Hargreaves, Argus Insurance, Inc.

Lori Reed, Mitchell Reed & Schmitten Ins, Inc

Fred Loffer, Wycoff Insurance Agency, Inc.

Duane Henson, First Insurance Agency

William Stauffacher, Stauffacher Communications

Kenneth Martin, First Rate Insurance Plus, Inc.

Susan Knobeloch, Lovsted-Worthington LLC

Nick Stay, American Underwriters Ins Agencies

Cindy Phillips, The Unity Group

Darren McEuin, Conover Insurance, Inc.

David Street, Martin-Morris Agency, Inc.

Melissa Power, Homestreet Insurance

Michael Rydbom, HUB International NW

Barry Sarles, Ark Insurance Agency Inc.

Mary Stien, Parker Smith & Feek, Inc.

Founders Club

Tom Taylor Jr., Taylor-Thomason Insurance Brokers

Rob Bush, Valley Insurance Agency

Robert Trask Jr, Robert M. Trask Agency, Inc.

Craig Field, Mitchell, Reed & Schmitten Ins Inc

Dean Young, Lovsted-Worthington LLC

Suzanne Lewis, Propel Insurance

Eric Zimmerman, Propel Insurance

John McDonald, McDonald McGarry Ins Brokers

We’ve been creating insurance solutions and providing superior services for businesses in the Northwest since 1923. We know how important it is for our agents to have the right resources to support the needs of their clients, which is why we pride ourselves on strong agent relationships and local expertise. Your success is our success – we are proud to support the Independent Insurance Agents & Brokers of Oregon and Washington.