Big I Virginia, Fall 2016 by Blue Water Publishers, LLC

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Fall 2016 • THE BIG “I” VIRGINIA

FALL 2016

BIG I The

Official Publication of the Independent Insurance Agents of Virginia

Virginia

The Big I Virginia is a publication of the Independent Insurance Agents of Virginia 8600 Mayland Drive, Richmond, VA 23294 Phone: 804.747.9300 / Toll-free: 800.288.IIAV (4428) Fax: 804.747.6557 E-mail: members@iiav.com / Website: www.iiav.com IIAV IS AN ORGANIZATION DEVOTED TO PROMOTING, ENHANCING, SERVING AND ASSISTING INDEPENDENT INSURANCE AGENTS.

The Big I Virginia is a publication of the Independent Insurance Agents of Virginia and is published quarterly by Blue Water Publishers, LLC. The Independent Insurance Agents of Virginia, Inc. reserves the right in its sole discretion to reject advertising that does not meet IIAV qualiﬁcations or which may detract from its business, professional or ethical standards. IIAV and Blue Water Publishers, LLC do not necessarily endorse any of the companies advertising in the publication or the views of its writers. The publisher cannot assume responsibility for claims made by advertisers, content provided by the editor, or for the opinions expressed by contributing authors.

Inside this issue 6

Message from the Chairman of the Board - Monty Dise

Message from the State National Director - Robert Yergey

Message from the President and CEO - Bob Bradshaw

4 Reasons Millennials See Insurance as a Lifelong Career

The Power to Fail

How to Guarantee a Bright Future For Your Independent Agency

Young Agents Annual Conference Information & Registration

Why Hiring Millennials is a Win-Win

What We’re Not Telling College Grads About Insurance

Responding to Millennial Workplace Preferences

5 Ways to Reduce Non-Production Costs at Your Agency

IIAV Staff Bevin Anderson Communications/Media Director banderson@iiav.com Robert N. Bradshaw, Jr., MAM President & CEO rbradshaw@iiav.com cell (804) 929-4134 Teri Chester Executive Secretary/ Receptionist & Membership Coordinator tchester@iiav.com

THE BIG “I” VIRGINIA • Fall 2016

Thank You Advertisers Agents Insurance Markets 35 Allstar Financial 38 Anderson and Murison 22 Atlantic Specialty Lines 11 Berkshire Hathaway/GUARD Insurance Cos. 13 Builders Mutual Insurance 17 Burns & Wilcox 9 Contractor Connection 21 FCCI Insurance Group 41 Grange Insurance 47 Harford Mutual 8 Hilb Group 26 Interstate Insurance Management 48 Jackson Sumner & Associates 2 Johnson & Johnson 24, 25 MEMIC 41 Millers Mutual Group 7 Penn National Insurance 15 Preferred Property Program 19 Risk Placement Services 3 SIAA 34 Southern Insurance Company of VA 23 The Iroquois Group 5 Universal Property & Casualty 31 For information on advertising please contact: Jim Aitkins, Blue Water Publishers, LLC 22727 161st Ave SE, Monroe, WA 98272 phone: 360.805.6474 / fax: 360.805.6475 jima@bluewaterpublishers.com

Joe Hudgins, CPCU Technical Consultant jhudgins@iiav.com cell (804) 929-4138

Danny Mitchell, AAI Vice President Business Development dmitchell@iiav.com cell (804) 929-4135

Marie Toney Sales Associate mtoney@iiav.com cell (804) 929-4136

Bonnie Joyce Insurance Administrative Assistant bjoyce@iiav.com

Susan E. C. Perkins Membership/Education Coordinator sperkins@iiav.com

Linda Loving, CIC, AISM, AIAO IIAV Chief Operating Officer & VFSC Executive Vice President loving@iiav.com cell (804) 929-4133

Carter Lyons IIAV Director of Education & Professional Development & VAIA Executive Director clyons@iiav.com

Bonnie J. Warren, ACSR, CPIW, DAE, RPLU Insurance Account Executive bwarren@iiav.com Marianna Wilson CIC, CRM, CPCU, ARM, RPLU, AIC, CPRHM Insurance Account Executive mwilson@iiav.com

EXCELLENCE Iroquois has been helping Independent Agents excel in Virginia since 1988. Proudly saluting the agency members and carrier partners who have been recognized for Excellence by the IIAV over the years:

Past IIAV Board Presidents ‘88 Charles B. Gibson, Sr. ’89 James S. Day, Jr. ’99 James P. Bradner

IIAV Annual Award Recipients

Bankers Insurance LLC DeJarnette & Beale Ins Agency Chesapeake Insurance Agency/ TowneInsurance Agency

‘93 Dennis Winfree ’93 ‘95 ’96

‘00 C. Dwight West, III

‘96

’03

’98

‘04 ’05 ‘06 ’07 ’09 ’13

Bankers Insurance LLC Charles F. "Bill" Bullington McLean Insurance Agency Inc. Richardson Harris Boatwright Ins M. Stevens Harris Welch Graham Ogden Ins Inc. Thomas L. Welch Haun Magruder Inc. Michael F. Funkhouser Ford & Thomas Ins Agency Inc. Tyler W. Hancock Hubbard Insurance Agency Inc. Cruger S. Ragland, Jr. Short Ins Assoc Ltd/Trustpoint Robert T. Short

‘99 ’00 ‘03 ’04 ’08

Wood Insurance Agency, Inc. McLean Insurance Agency, Inc. Doug Megill. Hubbard-Lash Insurance Agency Dick Lash. Builders Mutual Karen “Sue” Loan. DeJarnette & Beale, Inc. James Day. Richardson-Harris-Boatwright Stevens Harris. MetLife Auto & Home Tracy Blumberg. Hanover Insurance W. Morris Skeen. James R. “Judge” Parker. Donegal Insurance Group Haun-Magruder, Inc. Michael F. Funkhouser. Chesapeake Insurance Agency/ James P. Bradner. TowneInsurance Agency

‘08 Steve Franklin.

Berkshire Hathaway Guard Insurance Group

’10 Monty Dise.

Asset Protection Group, Inc. Hanover Insurance Straus, Itzkowitz & LeCompte Insurance Agency Inc.

‘10 Donald Bragg. ’12 Pettus LeCompte.

The

IROQUOIS Group

To learn more about how Iroquois could further strengthen your agency, contact Matt Ward at 804-320-6984 or mward@iroquoisgroup.com

www.iroquoisgroup.com

Fall 2016 • THE BIG “I” VIRGINIA

Chairman of the Board

MONTY DISE mdise@apgroupinc.com

young agents&IIAV’s Year In Review IIAV YOUNG AGENTS By the time each of you reads this piece, IIAV’s Young Agents’ Annual Conference, slated to be held in October at Virginia Beach, will be just weeks away. It has become a yearly practice to highlight IIAV’s growing Young Agents element for many significant and meaningful reasons. Each of us well recognized long ago the value and importance of the industry’s emerging workforce. By recognizing, nurturing and developing the youth of our industry, tomorrow’s leaders, agency principals, company partners and Association supporters will result.. Seems like a terrific investment. What is IIAV doing to this end? IIAV and its leaders are committed to providing the necessary investments and stewardship to the Young Agents in an effort to promote and strengthen their professional efforts. What are the immediate and future outcomes? Our commitment will send the right message to Young Agents and, in turn, the Young Agents will professionally represent us now and most importantly in the future.

IIAV’s YEAR IN REVIEW Your Association wrapped up its fiscal year at the end of June 2016. Let’s take a look back on that twelve-month period. Financial strength – Early looks at our year-end financial picture are extremely positive. For each of our entities – IIAV, VFSC and VAIA – overall revenues exceeded budget projections and line-by-line expenses were either held in check, were lower than anticipated, or were higher as a result of being tied to growing revenue lines.

THE BIG “I” VIRGINIA • Fall 2016

If you did not already know, IIAV owns its impressive building at 8600 Mayland Drive in western Henrico County. The notes on the low-interest balance continue to be reduced providing ever-growing equity. Approved budgets for the new year were approved anticipating another growing and profitable year. IIAV’s 12-person staff remains stable and professional. Staff leadership is experienced and filled with lasting continuity. Bob Bradshaw at the helm has served 15 years. Linda Loving has been with us for 31 years having apparently been hired at age 8. The remainder of the staff ranges in tenure from two months to 15 years. Areas of growth – Despite the aggressive nature of the merger & acquisition activity in Virginia, agency membership remained even. However, we actually lost ground with the number of member Associates. This was an unusual dip for our Associate numbers. The reasons vary with some pulling out of the Virginia market, some consolidations occurred and others wrestled with marketing budget-tightening. During the past year, we realized an uptick in the number of education class offerings. Enrollment is increasing --especially in the area of webinars and private, in-agency class offerings. New classes and education modules designed for producer and sales training were introduced providing this expanded offering for the coming year. Legislative accomplishments – IIAV remained an active and engaged element in the lobbying efforts of this past General Assembly session. Bob Bradshaw and Joe Hudgins were a daily presence downtown attending committee and sub-committee meetings, speaking to many proposed

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pieces of legislation as well as directly communicating with legislators. IIAV proudly caused to be introduced HB 1108 which successfully passed through the General Assembly and was signed into law by our Governor. Your Association’s structure and governance – Our Association is really comprised of three very important entities. First and primary is, of course, the Independent Insurance Agents of Virginia (IIAV). This is a not-for-profit association and serves as the “umbrella” organization. IIAV is governed by elected officers and directors and a board of directors. At its annual meeting in June, retiring board members, William H. Talley, IV – past chairman of the board; and William Haynie – District 7, and James Bradner – State National Director, were recognized for their service. New to the board includes: Jodie Hales to represent District 4 as Hunter Odom moved into the office of 1st Vice Chair; and Forest Wagner to represent District 7. Michael Yergey was elected as the new State National Director.

and Ben Kusterer’s term expired. Carter Hope Lyons serves as the VAIA Executive Director. As the Association deviated from its normal annual convention and exhibition traditionally held in June, our very first EXPO was held in April in Richmond. Shortened to only two days with two days of exhibition time, the agent attendance was up 10% over last year. We enjoyed, also, a 10% increase in exhibitor participation. Terrific, enjoyable and noteworthy speakers highlighted the event with such presenters as Bobby Reagan, CPCU with Reagan Consulting, John Martin with GenerationMatters and Dave Tralka, President of InsurBanc, just to name a few. To summarize, our Young Agents are on the move. Participation is growing. The level of enthusiasm is on the rise. New and innovative projects are forthcoming. We should all be very proud of this emerging group and support them at every turn. And looking back on our recently completed fiscal year, your Association enjoyed another banner year in so many areas. We are growing. We are on solid financial footing. And our efforts to continue to provide superb advocacy, information and education to members remain unparalleled.

Our for-profit entity is the Virginia Financial Services Corporation (VFSC). As a functioning, licensed insurance agency, VFSC serves the membership offering many insurance products and services. Nearly 80% of IIAV agency members permit VFSC to write their E&O coverage. Also widely used are RLI personal umbrellas and BOPs; agency umbrellas; data breach policies; and agency medical and group life coverages. VFSC is governed by officers and directors elected by the Board of IIAV. At its meeting in June, the long-time services of outgoing President John Atkins and board member David Priest were recognized. Mike Funkhouser was elected to serve as the new President and board members, Brittany Totty as YA Liaison (replaced Jill Roth) and Ryan Kuester were appointed as well. Additionally, Doug Megill now serves as the IIAV Board Liaison. Linda Loving serves as VFSC’s Executive Vice President. You and your clients. You and Harford Mutual. We’re committed to

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Rounding out this trifecta is the Virginia Association of Insurance Agents (VAIA). This was the original name of the Association when established over 117 years ago. The name was resurrected as the new name of the education foundation. Eric Young was added to the board 8

THE BIG “I” VIRGINIA • Fall 2016

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State National Director

Robert Yergey ryergey@towneinsurance.com

kay, let’s finally face the fact: As an industry, we are getting older and older. You’ve heard it before . . . . the average age of today’s independent insurance agency principal is about 58 or 59.

To change this we certainly need to see more young agents entering into the business, new promotions within the agency ranks, and new, emerging agencies in the field. What is IIABA doing to foster, encourage, to promote Young Agents? For starters, just recognizing the identifying the problem in not enough. Perhaps the most important element towards a solution is centered at the state level. Your state association has proudly, enthusiastically and earnestly been promoting Young Agents for many years now. Young Agents have a “seat at the table” with a voting position of the IIAV Board of Directors. Some state associations do a very good job of addressing the Young Agents’ needs. Virginia is one of these states. By the time you read this I will have had the honor of representing IIAV at the IIABA Young Agents Leadership Institute Conference in Chicago to accept along with IIAV’s Director of Education and VAIA Executive Director, Carter Lyons, a national award for Virginia’s efforts to promote Young Agents. If you are not already familiar with the Young Agents Leadership Institute, perhaps you should look at it more closely. To encourage Young Agents to attend meetings and participate annual scholarships are available. From the IIABA website, these are objectives of the Young Agents Leadership Conference: • • • • •

Build relationships with the industry’s decision makers; Network with national carrier executives; Connect with other young insurance executives; Learn new strategies and content to take back to your YAC; and Discover new industry products, niches and techniques.

THE BIG “I” VIRGINIA • Fall 2016

The national association for years have not only been aware of the need to introduce the careers of the independent insurance agency system to the youth of today, but have also produced positive, productive programs and services to address this need. InVEST was created to serve as a schoolto-work insurance program. InVEST teams work with high school and college educators to provide a useful insurance curriculum for students. With the help of InVEST liaisons (insurance professionals), students may have the opportunity for job shadow days, internships or even careers after graduating from InVEST. Guest speakers during an InVEST class provide firsthand knowledge of what it’s like to work in the insurance field, and students have a new appreciation for the industry after a hearing a professional speak. Before you’ve even entered the room they already are excited to have someone other than their teacher speaking to them!

FROM THE IIABA WEBSITE WE CAN LEARN MORE: InVEST provides all the materials needed to speak in a classroom for you. PowerPoint presentations, quizzes, discussion questions and more! InVEST makes it easy and seamless to enter a classroom and impact the next generation of insurance professionals. Topics can include rating, claims, what to look for in a policy, how you have succeeded in the industry or even explaining specific insurance roles, like investigations and fraud. With over 60% of our industry retiring in the next seven years, we need to act fast to recruit those voted “Most Likely to Succeed” in the senior superlatives. We can only attract the brightest by intriguing them to enter the industry before they’ve even considered their career path. InVEST can help. What are you doing to help to encourage our next generation of insurance professionals to enter the business? There are some exciting new developments on the drawing board in this area. Stay tuned and hire a Young Agent today.

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President and CEO

Robert N. Bradshaw, Jr., MAM rbradshaw@iiav.com

IIAV

Getting stronger to meet your needs: A status report for members

n a recent issue of Inc Magazine it states; The biggest challenge that your business faces is finding and keeping the best people. We had our challenges last year with Annette Ardler going to Swiss RE and Kristina Preisner going to the Association of Independent Colleges and Universities. Having said that, I believe we have recruited two exceptionally and well qualified professionals with Marianne Wilson in VFSC and Carter Lyons as our new director of education. Marianne has the following designations: CPCU, RPLU, CPHRM, CIC, CRM, ARM and AIC. Carter is working on her CAE. Clearly both are dedicated to continuing professional education. The rest of the IIAV/VFSC staff has remained stable and each of whom are dedicated to the success of our IIAV agency members. In short, I can’t praise the dedication of your IIAV staff any higher and they are all anxious to help you, your agency and your profession.

FINANCIAL: IIAV continues to be on sound financial footing. While member M&A activity has remained constant to say the least, we continue to bring in new members. We are also looking for ways to help start up agencies get the lift they need and the consolidated strength of IIAV, VFSC and VAIA will allow us to help our profession and industry grow. A weak financial association doesn’t do you any good. We have the strong financial foundation that allows IIAV to provide for the needs of our agency members and professional associates as well as to plan for the future. This is due in large part to your IIAV, VFSC and VAIA Boards of Directors who take their oversight responsibilities very seriously.

THE BIG “I” VIRGINIA • Fall 2016

LEGISLATIVE: This past session was a “long” session of the General Assembly and we again had markedly good success – and even a photo signing ceremony with the Governor. IIAV introduced two initiatives and both were successful. The first dropped a “sunset” clause on agent safe harbor language related to clients who communicate electronically with their company. The second was two years in development and related to prohibiting the use of Work Comp MOD’s for construction procurement purposes. IIAV also worked very hard on the CE Board education proposal as well as working in a coalition effort on changing the definition of small businesses for health insurance purposes – probably the fastest emergency legislation I’ve ever seen in the legislative process. IIAV was very successful in killing a fair number of legislative initiatives that would not have been friendly to agents or consumers but that’s generally easier than getting a bill passed. Having said that, we have also laid the foundation for a proactive 2017 session. Speaking of which – while the General Assembly is out of session, that doesn’t mean that the legislative process is dormant. We are actively attending commissions and committee hearings on behalf of our members and even serve on the Virginia Housing Commission Task Force reviewing short term rentals.

EDUCATION: Our members are still overwhelmingly responding to IIAV’s education offerings. As per normal for an end

biennial year, attendance at education programs and participation in webinars has picked up dramatically. IIAV has a great complement of education programs in any format the agent wants from on-site – in house – to webinars. Programs are high quality with an exceptional degree of expert instructor knowledge. IIAV’s award winning education programs are now administered by Carty Hope-Lyons – an experienced association professional with considerable background in education programs. Please make a point to get to know Carter and let her know what subjects/topics you would like to see IIAV provide. Also, if you’ve thought about teaching classes in the past…now’s the time to let us know your interest. Don’t hesitate to reach out to Carter at clyons@iiav.com.

YOUNG AGENTS: What an outstanding program and indicator of the future of our profession and industry. 600 agents and growing. They have their own education programs, networking activities and even annual conference. They’re self-directed even to the extent of supporting

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the public interest groups of their choosing. Much in this magazine is about the IIAV Young Agents program and I encourage every agency principal to make sure their young agents are active and involved in this program. And by any measure they should be supported in attending the Young Agents Conference in October – details at www.iiav.com. A lot is going on at IIAV and we hope you will seek to become involved from helping to plan the 2017 insurEXPO, education programs, Young Agents program, and even the legislative initiatives. Above all else, please remember these two things: IIAV’s staff is an extension of your office so please don’t hesitate to contact us if you have any questions or need any assistance or research. And secondly, we/I work for you and your agency. If there’s anything I can do for you, please don’t hesitate to contact me directly at Rbradshaw@iiav.com.

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Fall 2016 • THE BIG “I” VIRGINIA

AS A LIFELONG CAREER

NIALS SE E L L I E M

by Morgan Smith

ore than three-quarters of millennials view insurance as a lifelong career and 82% are optimistic or very optimistic that the industry will evolve to attract the next generation, according to Vertafore’s Millennial Revolution survey.

have a lot of those things that people are looking for that are going to be attractive to them: freedom, responsibility, work-life balance.”

After surveying 3,000 young professionals—10 times last year’s respondent pool—the second annual report found work-life balance and technology to be top traits of overall job satisfaction for millennials in insurance.

Work-life balance. The survey found that work-life balance and compensation (both 98%) are the most important factors keeping millennials around, with enjoyment of work (96%) as a close follower.

And whatever the industry is doing seems to be working: 77% of millennials plan to stay in the industry as long as possible. “Without having a silver bullet, a few key things [for agencies] to recognize is the types of environments and opportunities that are attractive to millennials in the first place,” says Guy Weismantel, vice president of marketing at Vertafore. “Our industry is well set up to

“The flexibility in our industry allows for different working models,” Weismantel says. “At a very basic model, it’s the ability to work from anywhere and be connected to your customers and understand what’s happening with claims, policy renewals and prospecting for new business. There’s a lot of flexibility that millennials we know in general really regard very highly in career choices.”

THE BIG “I” VIRGINIA • Fall 2016

What’s contributing to the long-term outlook? Here are four things independent agencies are doing right:

We look for the best independent agents and build relationships that last the duration. We are committed to the independent agency system as the only means to deliver our products. Because of that, we work hand-in-hand to help our agencies grow profitably.

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Personal relationships. It’s hard to imagine someone jumping into the independent agency business if they aren’t a people-person, and millennials are no different. Developing close personal relationships with clients is a tried and true characteristic of the business, and it’s a trait Gen Y seems to value. “[Millennials] really value the personal relationships they develop and find that the insurance industry is a place that allows them to have those types of interactions and flourish in that,” Weismantel says. “Because it’s a very relationshiporiented business, oftentimes they have the opportunity to get out on the front line a lot sooner. If they’re on the producer side, they can really start to develop a client list and start to run their own business.” Embedded technology. Weismantel says last year’s survey revealed that the industry was “on the threshold of a tipping point” when it came to technology and improving millennial’s work experience. Looks like the industry paid attention to the generation’s expectations: This year’s results reveal positive results from the investment. “What’s happened in the succeeding 12 months is that that technology is now becoming embedded in business process and now it’s a way for people to do business,” Weismantel says. “It’s gone from ‘I want my agency to be investing in technology to help me do business’ to ‘Technology is now how we do business.’” Social engagement. Millennials are reaping the benefits when using tech and social media to engage with potential customers and foster potential relationships: 34% of millennials use social media for lead generation and new business. It’s another segment that has seen a surge in involvement when compared to last year’s results as agencies are taking note of the benefits. Because the young generation is already so digitally involved—71% use their smartphones for work and 82% feel technology increases efficiency and the competitive edge—agencies who want to recruit the generation for fresh perspectives, engagement style and succession planning should stay digitally savvy. But 18% of older survey respondents still view technology as a detriment to 16

THE BIG “I” VIRGINIA • Fall 2016

productivity. “I think we see some inhibitors to widespread adoption, but I don’t know if it’s conflict as much as it is just generational resistance,” Weismantel notes. “We do see a generational dividing line in terms of how the technology is being used, but less about a conflict and more of a different kind of channel that I think agencies are starting to adopt to attract these younger people to buy insurance in the first place when more and more of that’s a challenge for many agencies.” If the industry is to successfully compete against directs or outside industries for a boost in millennial employment and satisfaction, agencies need to take note. Weismantel says Vertafore has seen more and more agencies really start to tout their technology as a recruitment differentiator. “With digital sophistication being so high amongst millennials, there is an open, green field for younger people to chart a course,” Weismantel points out. “And that’s really appealing to a younger person because there’s not an inherent plan in place that they just have to follow and go do paint by numbers. They’re having a lot of ability with creativity to go after finding new customers. The use of technology not only arms them with great devices, for instance, but how technology is being used to attract and retain new customers—that’s a really strong message to get people involved.” Morgan Smith served as IA assistant editor.

“With digital sophistication being so high amongst millennials, there is an open, green field for younger people to chart a course,”

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Fall 2016 • THE BIG “I” VIRGINIA

The Power to Fail They say it took Thomas Edison hundreds or thousands of different types of filaments to finally find the right carbon combination for the first patented light bulb. If he was a young insurance professional in your agency, would you have let him try and fail that many times?

By Jason Cass

hy is it that in a lot of agencies across America, the younger generation of producers, brokers, and CSRs are frustrated? Nationwide, agencies do a good job of attracting talent. It’s the challenge of retaining that talent that keeps most principals scratching their heads.

He had the power to fail, and it allowed him to succeed.

In the last few years, we have seen an increase in new agencies opening their doors. There are a whole range of factors creating this, but one that many principals overlook is the power to fail. Think about it in another way. They say it took Thomas Edison hundreds or thousands of different types of filaments to finally find the right carbon combination for the first patented light bulb. If he was a young insurance professional in your agency, would you have let him try and fail that many times? He had the power to fail, and it allowed him to succeed. Young insurance professionals all across America are not allowed to have the power to fail so they flee the industry or the agencies they work at to begin their own. This is totally avoidable. 18

THE BIG “I” VIRGINIA • Fall 2016

For today’s young insurance professionals, it is not in our generational genes to want to flee and be independent. We are a generation built on teamwork, and we crave mentoring and guidance. We want to know where we are going before we get there. We don’t mind doing the work, but we want a say in how that work is done. We do not mind trial and error. We want the security of knowing that if we fail, that’s OK. This is where the communication breakdown between veteran insurance professionals and young insurance professionals occurs. Veteran insurance professionals became successful by using their reputations in the community and providing great service over many years; they know very little outside of these ways. They have worked and should not go unnoticed or disrespected.

Are you giving your young insurance professionals the power to fail or the power to succeed? Trust in them, let them go and get out of their way; in doing so, you will let them help the organization. And if they fail, be understanding and mentor them with your wisdom. Giving your young employees the power to fail will show you to be supportive and reassuring. Young people in the industry today are yearning to be included in managerial issues and agency marketing efforts. When principals and senior staff are setting retention and growth goals, young people want to be able to have input in the conversation. We are a generation of problem solvers and thrive on creating ideas in team environments.

like, so long as they do their part. They want to know what their future entails. Employer loyalty is just as uncommon as employee loyalty in the world we live in today. Young insurance professionals like to have flexible hours. Traditional 9 a.m. to 5 p.m. hours can be inflexible and difficult for the schedules of today’s parents and families. One of my mentors once told me, “Blessed are the flexible for they don’t get bent out of shape.” This great saying means so much when applied to working hours. Give your employees the power to fail. Trust in their ideas, and insert their voice into the agency direction. Let them help in the development of new and different procedures and workflows within the agency.

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Jason D. Cass is group owner of JDC Insurance and chairman of the Big “I” national Young Agents.

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Fall 2016 • THE BIG “I” VIRGINIA

HOW TO GUARANTEE A BRIGHT FUTURE

FOR YOUR INDEPENDENT AGENCY

by Matt Warye, CPCU

ver the past several years, we have all heard and read dire predictions about the future of the independent agent. Most of those predictions were based on assumptions about the fearsome technological and financial power of huge, highly competitive companies who use their might to target consumers directly. But the IA is still here, still relevant, and still a force to be reckoned with.

And yet they gained virtually no ground from the independent agent — not even enough to register outside the margin of error. At the same time, Google — one of the largest and most powerful companies on the planet — entered and then quickly withdrew from the market, having made little to no progress toward its early ambitions.

In a recent internal research study, Safeco Insurance found that the distribution of auto insurance, by channel, was virtually unchanged from 2010 to 2015. That’s a huge accomplishment when you consider what we were up against during each of those five years. As widely reported, the big-brand captives and direct-to-consumer carriers spent a combined total of about $6 billion on consumer advertising. This massive spend, particularly from directs, is designed to commoditize the product and compete on the strength of web sites and mobile apps.

Not so fast. There is still plenty of risk for the independent agent to be disrupted by increasing competition. Our study also indicates that 60% of customers would consider leaving their independent or exclusive agent and going direct the next time they shop for auto insurance. Meanwhile, 40% of direct customers would consider an IA the next time they decide to change insurance plans. That’s a lot of potential movement, enough to change the complexion of the market if it ever becomes a reality.

THE BIG “I” VIRGINIA • Fall 2016

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So what’s the upshot? How do independent agents remain competitive and thrive in a market where the landscape is fluid and threats seem to grow and multiply? By doing what we do best, and learning a few new tricks. Where did the IA channel get the strength to resist a $30 billion attack for five years? From decades of building relationships, providing value beyond price and running smart, disciplined businesses. In order to weather tomorrow’s storm, we must start preparing today. Only this time, we don’t have decades to do it.

LOCAL IS A STRENGTH

In our study, the number of consumers who selected “company is local” as an important factor when shopping for auto insurance grew a whopping 72% from 2010 to 2015. So we know that “local” is a selling point of growing importance. We also know that taking advantage of that fact remains a huge, upside opportunity for most of us. Showing your face regularly at community events will remind people that you’re a living, breathing member of the local business community. Getting involved in local causes will show them that you’re a caring one. “Local people like working with local professionals. They don’t want someone who just answers questions, they want a relationship with an advisor,” says Bruce Davidson, president of Davidson & Associates Insurance, based in Vancouver, Washington. Giving back to the community is integrated with the agency’s referral program. Each month the agency partners with a local nonprofit and donates $25 for each referral. “When someone sends us a referral we send them a handwritten note thanking them and letting them know we made a donation. We even include a miniature version of a check made out to the nonprofit. The response has been tremendous,” says Bruce.

“LEAN IN” ON DIGITAL

The new rules and tools of engagement no longer apply exclusively to millennials. The rest of us have caught up — social media, email drip campaigns, mobile apps and 24x7 access to digital tools are markers of the “new normal” in business, even small business. “I was skeptical whether digital marketing would generate much business,” says Bruce. “What we’ve found is people read reviews, see something on our website or social media, or notice our work in the community. Collectively, this causes them to reach out. I’m amazed! We’ve landed some clients I never would have imagined through webbased inquiries.” 22

THE BIG “I” VIRGINIA • Fall 2016

INDEPENDENT BUT NOT ALONE

Even though IAs are “independent” by definition — and there are many strengths that come with independence — the truth is, we’re all part of a community with shared interests and shared risks. If a customer has a bad experience with one IA, the reputation of every IA suffers a tiny bit. Likewise, every time an independent agent delivers ease, choice and advice (a combination that no other distribution channel can match) to a customer, it’s a small victory for all of us. Sharing ideas that work and stories that inspire is to everyone’s advantage. There are so many opportunities to teach and learn from each other — from the Independent Insurance Agents & Brokers of Washington to online communities like the Independent Agent Community by Safeco on Facebook. If everyone contributed just a fraction of the ideas they consume, the entire community would grow stronger. By playing to the unique strengths of an IA, developing our digital muscles and creating a shared sense of “brand” we can guarantee a bright future for the independent agent… no matter what challenges lie ahead. A&M Assoc Ad VA PRINT.pdf

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why hiring millennials is a win-win by Jacquelyn Connelly

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.” 32

THE BIG “I” VIRGINIA • Fall 2016

It’s because the digital economy is constantly evolving— and millennials are right at the heart of it, Winterburn says. “They reinvigorate what has made independent agents important in the past: the ability to establish a relationship within a community,” he points out. “They greatly expand the definition of both community and relationship.” “I think what they’re doing is they’re dragging us to think differently,” agrees Lynn Harper, service manager at SilverStone Group, an independent insurance agency in Omaha, Nebraska, who participated in a panel called Generation XYZ during Vertafore’s NetVU conference in April. “Obviously they’re more prone to use technology. They dig in.” Considering the wealth of progress millennial employees can bring to an agency, buying into stereotypes about this demographic of potential hires can 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 appreciate how culture has changed,” Winterburn says. “I’m vice president of industry relationships for a billion-dollar insurance software firm and I will argue that my 21-year-old college daughter can influence more people instantly than I can.”

“We hear the common set—they don’t have work ethic or things of that nature, and it’s comparatively not true,” Harper agrees. “You just need to know what drives them, what motivates them, in order to get the job done.”

WHAT YOU CAN DO FOR MILLENNIALS The secret for how independent agencies can not only attract, but retain millennial staff members lies in a simple question: Is your agency culture going to retain the talent it wants and needs? “We’ve really changed the culture of our agency to really fit the talent that we’re trying to attract and retain,” Harper explains, noting her agency now enjoys an employee retention rate in the 90s. For SilverStone Group, the cultural shift required developing an internship program to attract local college students—“we’ve 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

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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 ofwhere our agency is heading,” Harper explains. “They feel like they’re a part of something, and that’s really important to this millennial generation.”

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.”

Jacquelyn Connelly is IA senior editor.

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

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What We’re Not Telling College Grads ABOUT INSURANCE by Christie Alderman

oogle “college commencement speeches” and you’ll find more than 300,000 results outlining how to write a compelling graduation speech, complete with all the life advice graduates need. But while most commencement speakers recite lines from Dr. Seuss’ “Oh, The Places You’ll Go” and tell students to dream big, we’re failing to impart one critically important lesson: Some types of risk can get in the way of those dreams. Neglecting to teach the next generation how to properly manage their property-casualty risk exposure does our children a significant disservice. In the summer months post-graduation, here’s the advice every independent agent and broker should share with their clients’ young adult children. It could happen to you. Despite feeling invincible, sooner or later, all graduates will have to think about insurance as they “age off” their parents’ policies and face their first losses on their own. For graduates moving to new cities, that could be anything from a 36

THE BIG “I” VIRGINIA • Fall 2016

burst pipe in their new apartment to an auto accident while driving to work. Helping graduates understand the “when, not if” mindset will ensure they are prepared in their moments of need. This is particularly important when it comes to liabilityrelated exposures. Graduates may be dismissive about the need to insure the discount-store furniture and hand-me-down contents of their apartments, but they may not realize they need personal liability coverage, which often comes with a renters policy. If a guest sustains an injury at their apartment, they could face significant out-of-pocket costs. You have a lot to lose. The millennial generation, which includes many new graduates, tends to be highly motivated by social responsibility. This mindset can be a useful way to help you explain the value of liability insurance. If a friend is injured in their apartment, sufficient liability coverage can help ensure graduates have the financial resources to care for them and take financial responsibility for their actions even when they make an honest mistake.

Fall 2016 • THE BIG “I” VIRGINIA

Agents and brokers can give valuable advice by taking the time to clarify the concept of liability and related coverages to new graduates. Because most of them have little to no savings, recent grads often assume they’d have nothing to lose if someone sued them. Most don’t know projected future wages can be taken into account if they’re on the losing side of a lawsuit. Additionally, an M.D. or a J.D. in your signature, or even a well-known last name can make you more of a target of opportunistic lawsuits. Connect with graduates by taking the time to discuss how liability coverage can help pay for medical expenses and lost wages. Showing them their vulnerabilities helps ground an elusive concept like liability. One size does not fit all. Most graduates understand insurance as a simple four-step process: You take out a policy, something happens, you submit a claim, you get paid. While they have the theory right, agents and brokers must stress that not all insurance is created equal. Insurance is not a commodity, and if you can educate your clients when they are just beginning to need insurance, you are more likely to keep them in the independent agent channel throughout their lives.

the hard work is over once they select a policy. Advise young adults to reevaluate their insurance needs after every major life change: buying a house, getting married, starting a family, acquiring valuable items, hiring household employees or setting up complex financial arrangements like trusts. As graduates chase their dreams and gain more professional experience—subsequently increasing their net worth—their changing risk profile will warrant enhanced protection. While some of those changes might seem far away for new graduates, it’s critical that agents and brokers stress the concept that insurance is fluid as early as possible. The first few months post-graduation can be stressful for new graduates. It often means big jobs, big moves and other major life changes. Sharing your unique perspective on risk management with your clients’ young adult children as they make this transition can help bring a sense of calm to the proverbial storm. With your guidance today, they might even become your clients tomorrow. Christie Alderman is vice president of Chubb Personal Risk Services.

New graduate policyholders also often incorrectly assume

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Responding to Millennial Workplace Preferences by William Harwood

s of April 2016, the number of millennials living on the planet exceeded all other generations.

Meanwhile, the exit of the employed boomer generation is receding quickly in the rearview mirror. That means most independent agencies’ 2017 workforce will contain a very different mix of skills, work preferences and career expectations compared to just four years ago. Millennials bring a new sense of constant connectivity to their professional pursuits thanks to the “always on” mentality of extremely active networks and constant interaction with peers, associates, newsfeeds, blogs and information. As this new connectivity has become more normal and not limited to those under 30, our way of working, interacting and generating productivity has fundamentally shifted. How should organizations respond? As younger employees seek greater involvement in their workplaces, managers must recognize the need to engage more deeply in their staffs’ perspectives. As one agency principal said recently, “We’d agreed to a plan on Monday, but so much new information emerged that the original plan was totally out of date by Wednesday.” Another agency executive recently commented that her team created new, streamlined workflows as a result of closer, hands-on involvement from supervisors. Since many employee surveys note problems like “being overwhelmed” and inefficient workflows, staff members often welcome any simplification and register it as collaborative engagement. 40

THE BIG “I” VIRGINIA • Fall 2016

Successful organizations also deploy self-directed learning and career development resources to feed their millennial employees’ desire for constant job-related creativity and purpose. Employee-centric training is the answer to the 24/7-connected employee’s appetite for frequent, shortburst, on-demand learning. For Generation Y, effective learning and development tools are critical elements of engagement and can lead to increased workplace productivity, as well as better, faster responses to clients and higher retention of professional talent. William Harwood is co-founder and managing partner of New Level Partners, LLC, a Princeton, New Jersey-based learning solutions provider focused on the insurance industry.

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5 Ways to Reduce Non-Production Costs at Your Agency by Matt Keener

top and think about all the “stuff” your agency purchases each year: pens, folders, paper, ink, computers, bathroom supplies, chairs, coffee filters— the list goes on. What if you could instantly reduce the costs associated with selling, general and administrative (S, G & A) expenses and simultaneously streamline the purchasing process? Amazon and other websites have begun offering unique programs, tailored to the needs of small businesses. Here’s a closer look at those programs and how to review best practices for gaining the most value.

Amazon ‘Subscribe & Save.’ Amazon has more than 244 million active customers. Chances are, you’re already one of them. Sure, Amazon is great for purchasing gifts, gadgets and books, but have you ever considered using it to save money at your agency?

One of Amazon’s lesser-known yet highly valuable programs, “Subscribe & Save,” enables you to identify items for automatic reorder on Amazon. In addition to receiving free shipping and up to a 15% price discount, Subscribe & Save members also benefit greatly from the automation. Instead of assigning an administrative assistant to re-order items each month, Amazon does the work for you. You’ll even receive an email confirmation before your re-order 42

THE BIG “I” VIRGINIA • Fall 2016

ships, allowing you to adjust or cancel the subscription for any reason. What does your organization regularly purchase? Perhaps it makes sense to consider automating the process via Subscribe & Save. Examples may include: •

Pens, pencils, markers and other writing utensils

•

Batteries

•

Coffee and break room supplies

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Restroom supplies

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Fall 2016 • THE BIG “I” VIRGINIA

In an industry that goes through a lot of paper and ink, your company could save hundreds of dollars each year by participating. To qualify, you must first sign up for Staples Rewards (which is free) and then purchase at least $30 in ink or toner. Staples allows you to recycle up to 20 cartridges per month, depending on your Reward level status. By the way, your Rewards membership also earns you a 5% in-store credit on most purchases.

Luckily, many online price comparison websites help you do exactly that. For example, eBay owns shopping.com, which millions of consumers allegedly use each month. Meanwhile, privately owned sites like pricegrabber.com, bizrate.com and shoppingnexus.com (with which I’m especially familiar) tend to serve specific niches. These websites can help alleviate the shopping burden and find the best price every time.

Staples Rewards ink recycling. For several years, Staples has offered an “ink recycling” program for its Rewards members. By participating, members can earn $2 for each empty cartridge they return to Staples.

eBay auctions and classifieds. Sometimes, it makes good business sense to consider less conventional options for finding the best prices. eBay, known for its auction-style format and eclectic selection, can be a great resource for your agency.

Office supplies and fixtures may not be the largest expense on your income statement. But as your agency grows, your need for these items increases accordingly. By leveraging the tech tools at your disposal, you can streamline your acquisition costs and save money.

For example, imagine you just hired a new intern, but all your workstations are occupied by other employees. You could buy a new desk, chair and monitor from an office store. Or, you could run an advanced search on eBay— filtering for auctions ending in your area and including free local pickup. If you’re lucky, you might be able to buy an entire workstation for the cost of a single desk at your local retail store.

Matt Keener is president of Keener Marketing Solutions, LLC and author of “Executive in Sweatpants: A Handbook for Launching Your Work from Home Career.”

If that doesn’t work, you can also check out eBay classifieds. Enter your ZIP Code and sort by “Business & Industrial” to see what’s available in your area.

Local auctioneer e-newsletters. In today’s difficult business environment, each week brings new companies closing up shop. But there’s a thin silver lining: To liquidate assets, owners of bad debt often commission auctioneers. Auctions can be an excellent way for your agency to acquire electronics, office equipment, furniture and other assets for pennies on the dollar.

Most cities have a handful of well-known auctioneers. The most tech-savvy auction companies produce an e-newsletter that announces upcoming lots. While many auctions are likely to be consumer-focused, the number of corporate listings might surprise you. Browse a list of auctioneers in your area.

Price comparison websites. When shopping for an item online, is your instinct to check Amazon first? Multiple studies reveal that other online retailers routinely beat the ecommerce giant’s prices. How can you be certain that you’re getting the best price?

THE BIG “I” VIRGINIA • Fall 2016

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