2
A NAME THAT BUILDS RELATIONSHIPS At Risk Placement Services (RPS), we are committed to building relationships one retail partner at a time. Our stewardship begins by providing you access to the finest markets and top producers in the industry and providing customized solutions to meet your needs by designing, negotiating and tailoring individual risks that help you succeed. It’s a partnership you can count on! To learn more contact Ron Smedley 866.750.2032 or email at Ron_Smedley@RPSins.com. www.RPSins.com
Summer 2015 • THE BIG “I” VIRGINIA
3
SUMMER 2015
BIG I The
Official Publication of the Independent Insurance Agents of Virginia
Virginia
Nettie Ardler, CPIW, DAE, AIAM Insurance Account Executive aardler@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 Sherry Grubbs, AISM Accounting Manager sgrubbs@iiav.com Joe Hudgins, CPCU Technical Consultant jhudgins@iiav.com cell (804) 929-4138 Bonnie Joyce Insurance Administrative Assistant bjoyce@iiav.com
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
Inside this issue
IIAV STAFF
Melanie Kjar Communications/Website Director mkjar@iiav.com Linda Loving, CIC, AISM, AIAO IIAV Chief Operating Officer & VFSC Executive Vice President loving@iiav.com cell (804) 929-4133 Danny Mitchell, AAI Vice President Business Development dmitchell@iiav.com cell (804) 929-4135
6 8 10 12
Message from the Chairman of the Board - William H. Talley, IV, CIC Message from the State National Director - James P. Bradner Message from the President and CEO - Bob Bradshaw Agents Charging Fees
16 20 26 31 34 35 37 38 40 45
Our Minds Can Play Dirty Tricks On Us How to Integrate Tech Throughout the Customer Cycle Big Data is Changing the Future of Insurance Is Your Procedures Manual E&O Safe? Adding Revenue to Your Agency’s Bottom Line You’re Selling the Wrong Thing! 2015 Young Agents Conference What Would You Do If You Had a Data Breach? Do’s and Don’t’s During Your Hiring Process IIAV Designation Class Schedule
IIAV extends our appreciation to the following sponsors of this publication: AIM / Bloss & Dillard Agency
46
Interstate Insurance Management
Allstar Financial
22
Jackson Sumner & Associates
13 2
Amerisafe 18
Johnson & Johnson
Anderson and Murison
34
MEMIC 29
Atlantic Specialty Lines
11
Millers Mutual Group
Atlas General Services
43
Nationwide 15
Builders Mutual Insurance
47
Penn National Insurance
17
Preferred Property Program
41
Burns & Wilcox
9
24, 25 7
Susan E. C. Perkins Membership/Education Coordinator sperkins@iiav.com
Coastal Agents Alliance
23
RPS Rollins
Consumers Insurance / Motorists Group
33
SIA of VA
FCCI Insurance Group
36
SIAA 30
Kristina Preisner IIAV Director of Education & VAIA Executive Director kpreisner@iiav.com
GUARD Insurance Group
41
Southern Insurance Company of VA
Harford Mutual
43
The Iroquois Group
Harleysville Insurance
48
Utica National
Marie Toney Sales Associate mtoney@iiav.com cell (804) 929-4136 Bonnie J. Warren, ACSR, CPIW, DAE, RPLU Insurance Account Executive bwarren@iiav.com
4
IIAV is an organization devoted to promoting, enhancing, serving and assisting independent insurance agents.
THE BIG “I” VIRGINIA • Summer 2015
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
The Big I Virginia is a publication of the Independent Insurance Agents of Virginia and is published quarterly by Blue Water Publishers, LLC. IIAV and Blue Water Publishers, LLC do not necessarily endorse any of the companies advertising in the publication or the views of its writers.
3 32 21 5 34
Strong Agencies Made Stronger
For over 30 years Iroquois has helped make strong, independent agencies even stronger and more independent. And it shows.
LEADERSHIP Iroquois recognizes some of its members who have recently played key leadership positions within the industry: Ryan M. Andrew
Douglas B. Megill
John W. Atkins, III
Crystal Miller-Johnson
Barry K. Carper
J. Vince Mullins
W. Montgomery Dise
Michael Partlow
Dawn Dotson
Jordan Reynolds
Michael F. Funkhouser
Robert T. Short
Frances P. Garrett
Dennis C. Winfree
Shannon H. Herring
Benjamin G. Winters
VFSC Board of Directors The Andrew Agency, Inc.
District 5 Director, IIAV McLean Insurance Agency, Inc.
President, VFSC Board of Directors Lewis Insurance Associates Immediate Past President, PIA of VA & DC Insurance Center of Winchester Second Vice Chair, IIAV Asset Protection Group, Inc.
First Vice Chairman, IIAV Associated Insurance Systems Services, Inc. Board Member, PIA of VA & DC Huffman Insurance Agency, Inc. VFSC Board of Directors Partlow Insurance Agency, Inc.
VAIA Board of Directors Robins Insurance Agency, Inc.
Independent agents with premium from $1 million to $100 million join The Iroquois Group® for market optimization and strategies to increase their revenue, profits and agency value—without giving up their independence.
Board Member, PIA of VA & DC SWVA Professional Insurance Agency, Inc.
Vice President, VFSC Haun Magruder Inc.
Immediate Past Chairman, IIAV Short Insurance
Past President, PIA of VA & DC Chas. Lunsford Sons & Associates, Inc. Young Agent Liaison, IIAV Hubbard Insurance Agency, Inc.
VAIA Board of Directors Wood Insurance Agency District 3 Director, IIAV Winters Oliver Insurance Agency
Edward C. Kellam, Jr. District 2 Director, IIAV Ware Insurance
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 and visit our website at www.iroquoisgroup.com
Summer 2015 • THE BIG “I” VIRGINIA
5
Chairman of the Board William H. Talley, IV, CIC wht4@whts.com
Additional Revenue Streams
S
how me an insurance agency not seeking additional revenue and I’ll show you the exception . . . not the rule. With an enduring soft market, commission constraints, intense and growing competition, the insurance agency business these days, even after my 35 years, is still a wonderful business; but it is one where most of us continually seek to explore new paths and avenues for additional revenue. Many of the old tried and true methods still produce terrific rewards and should not be overlooked. Account rounding, upselling and cross-selling should not only be encouraged but mandated for producers, CSR’s, account managers and, yes, even principals. For all of us who have taken for granted our P&C accounts these many years, and haven’t asked for the life, annuities and health sales . . . I will guarantee you that somebody else surely has and will! And once that agent sinks his/her teeth into YOUR account, don’t think for a moment that he/she won’t soon be asking for the opportunity to review the P&C business you now “control”. According to a program of standard and non-standard term life products available through IIAV, the average annual premium sales of these term policies are about $950. With commissions
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THE BIG “I” VIRGINIA • Summer 2015
running about 95% that equates to about $900 in average commissions per term policy. You’d have to write four $1500 homeowners policies for the same commission, and with the agency expenses incurred, your profit would not be nearly as grand. Such additional life sales are a terrific way to enable a new, young producer to reach early financial goals as well. There are other products and services that your agency may consider to bring in additional revenues. PIEGO for one is a payroll processing company. Your agency can serve several positive missions by offering this to your commercial accounts. Not only is it a commissionable service but PIEGO does NOT offer workers compensation insurance to its clients. Some agents offer Flex Spending Accounts (“FSA” programs) to their clients as a way of not only picking up a few extra dollars, but adding value that benefits the client. Interested in looking at some of these programs but not sure where to begin? Some firms offering such services can be found at IIAV’s upcoming 2015 Convention & Exhibition at the Hilton Virginia Beach in June. Best wishes in building your agency revenues.
Summer 2015 • THE BIG “I” VIRGINIA
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State National Director James P. Bradner jbradner@towneinsurance.com
B
eing part of an association representing our industry should have many benefits. Some of them are obvious. Being a respected voice for our industry to our Federal legislators is, arguably, the most important. But there are many other benefits that come with membership. Someone once asked me why I was so involved with IIAV, since it was voluntary and cost time away from my business. I remember thinking about the question before my reply. I felt one of the more important reasons to be a member of an association with your competitors was that as you work together on common goals, naturally you talk about your own business and begin to compare notes with your “competitors”. In twenty years we have evolved so that we now have formalized that benefit. It’s called “Best Practices”. Sponsored by IIABA and Reagan Consulting, it comes around every three years. This is a nomination year (2015) for the 2016 cycle. Getting nominated is the easy part. You can ask one of your companies to nominate your agency, or you can nominate yourself. Once nominated, you will receive an “invitation” to submit detailed financial and operational information to Reagan. This is the hardest part,
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THE BIG “I” VIRGINIA • Summer 2015
but also the most rewarding. More than likely you’ll have to have your accountant assist you in filling out the financial forms. You will have to dive deeply into your financial information, not just submit a statement. But you will be surprised at what you learn about your agency. The information-gathering period takes two or three days for your initial submission, but updating in subsequent years is a lot easier. Once all of the information is received, it will be analyzed by Reagan and you will receive a report with your score and whether your agency is a “Best Practices” agency. The report is the payoff for all your work. It compares your agency specifics to other agencies in your size category. It tells you the average of things like producer book size, new business expectations, workloads for CSR’s or account managers, owner compensation, and a myriad of other helpful information. It shows you your strengths and your weaknesses as compared to agencies in your size category. There are a lot of other “perks” that go along with getting the “Best Practices” designation. Danny Mitchell says it his tool for answering agents questions on performance issues. I wholeheartedly recommend the program….call Danny at IIAV to get the “down low” and to get started…if you don’t do it now you’ll have to wait 3 more years.
Even the office coffee tastes better with Burns & Wilcox. PERSONAL INSURANCE
Your traditional insurance markets can handle most of your clients’ personal insurance needs, but not all. Even wholesalers have their limits, unless your wholesaler is Burns & Wilcox. As the largest personal insurance wholesaler, our unequaled access to markets means quick solutions for all your hard-to-place risks. Don’t call just any wholesaler. Just call Burns & Wilcox. Baltimore, Maryland | 410.891.4200 toll free 800.729.1273 | fax 410.540.9140 baltimore.burnsandwilcox.com Charlotte, North Carolina | 704.525.1152 toll free 800.999.3434 | fax 704.525.7399 charlotte.burnsandwilcox.com Morehead City, North Carolina | 252.726.8992 toll free 800.498.1600 | fax 252.726.9484 moreheadcity.burnsandwilcox.com Commercial | Professional | Personal | Brokerage | Binding | Risk Management Services 9
President and CEO Bob Bradshaw rbradshaw@iiav.com
Additional Revenue Streams – the possibilities are….
O
nce worked for a small business accounting association where prospective members were required to attach a copy of their business card to their membership application. I will always remember one business card that I saw which read: Tidy Di Diaper and Tax Services. Now there are all sorts of jokes you can make about this in terms of their relationship to each other and whether one or the other revenue stream was a natural “outsource” of the other…. but I would suggest it was certainly an odd business model. I would hope that when you develop your agency business model you look for “related” revenue streams that, of course, might be business or industry related. Many of us by necessity are having to become flood specialists and/or cyber specialists and/or small business specialists and are seeking to respond to our clients’ needs for product and service information. Surely one of the most urgent additional revenue streams today is for cyber liability and data breach protection (the two may or may not be inclusive). I suspect that many businesses – especially small businesses – look at the data breach issue as being so
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THE BIG “I” VIRGINIA • Summer 2015
enormous that there is little to nothing they can do to protect themselves. Sadly, the implications of not having such insurance – and having adequate insurance at that – could simply put the business owner out of business. One of the cool things about being in the insurance industry is that you are there when your customers need you the most. That’s also true about data breach and cyber liability insurance. We encourage you to look at other products and services that put you back in the informational and expertise driver’s seat and not in the position of commodity order taking. IIAV has a wide range of products and services to help you evaluate possible additional revenue streams. Take a quick look at our website – www.iiav.com – and/ or contact our Vice President of Business Development, Danny Mitchell. And if you have an idea that you’d like our input on, please feel free to contact Danny. Look for all opportunities for additional revenue streams that make sense for your agency, but do you best to try and keep it somewhat related.
We heard you.
And we’d like to reintroduce our Personal Lines division. Atlantic Specialty Lines now has increased in-house underwriting authority for Personal Lines. Combined with our continued dedication to outstanding customer service, our team can help you meet your clients’ needs like never before.
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• Multi-location risks now written together in one policy • Increased in-house authority for personal lines underwriters • New and broader appetite for in-house and brokerage business • Fewer general restrictions, allowing for quicker turnaround
MORE FLEXIBILITY Ensure quality for your clients with our improved, simplified processes. • Loss assessment form is now automatically $5K and can be increased up to $10K—now includes coverage for master policy deductibles • We have changed our Seasonal/Secondary form to be less restrictive regarding water shut-off • Access to multiple carriers for vacant and renovations—from $50K to $5M
CALL 800-368-2095
or contact a Personal Lines team member today. ATLANTIC SPECIALTY LINES Charity Downs, charityd@atlanticspecial.com Garry Floyd, garryf@atlanticspecial.com Tina Freeman, tinaf@atlanticspecial.com
The “A” Way - Attitude, Assistance, Adaptability
www.AtlanticSpecial.com Summer 2015 • THE BIG “I” VIRGINIA
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By Linda Loving, CIC, AISM, AIAO
Agents Charging Fees
A
s a primary resource for IIAV member agents, I am often asked by member agents if they can charge fees. Since this month’s magazine “theme” is on additional revenue streams, I thought I would take this opportunity to answer this question for our readers and also remind them that this is an opportunity to capture some additional revenue. Agents can charge fees (without having a consultant’s license) for rendering services associated with a contract of insurance, but they must comply with Virginia statute 38.2-1812.2 (as shown below). Examples of fees are: bank fees for returned checks due to insufficient funds, reinstating a policy, issuing certificates, obtaining motor vehicle records, special delivery or postal charges, printing and reproduction costs, etc. Per Virginia statute 38.2-310 (as shown below) regarding agents charging fees, the statute states that the policyholder has to consent in writing on a form that provides the duration of services and amount of fees. The signature would be good for the duration of the service. If the fee is paid annually, then the signature is needed annually. If the fee is paid each time, then the signature is needed each time. Duration of services is explaining to the customer what the fee is for (i.e. is it a one-time fee for all certificates that the customer wants throughout the policy term or is it a per certificate fee and paid each time?). If a policy is in the name of both a husband and wife, we suggest the prudent thing to do would be to get both signatures. Also, the agency should keep a copy of the signed authorization (either paper or electronic) in the insured’s file. 12
THE BIG “I” VIRGINIA • Summer 2015
The agency needs to have the fees in writing and available if a customer or insured asks if the agency charges any fees. They do not need to be posted, just available in writing if requested. You must be consistent and charge the fee to everyone asking for the same service. The Virginia Bureau of Insurance has maintained that any fees for services charged must be “reasonable”. Inasmuch as “reasonable” is not defined by the Bureau of Insurance, we would strongly suggest contacting them before setting up any agency fees, just to be on the safe side. It is our understanding that any amount up to $25 is considered reasonable. A sample fee disclosure statement template follows this article. This is to serve as a guideline only and should be reviewed and modified as needed by your agency and approved by your agency owner. Please note that under Virginia law (subject to exceptions 38.2-1837), a consultant’s license is still required for anyone who, for a fee, advises or offers or purports to advise in the area of life & health or property & casualty insurance. This fee is separate and distinct from commissions. Information on how to apply for a Virginia insurance consultant’s license can be found on the Virginia Bureau of Insurance website. § 38.2-310 - All fees, charges, etc., to be stated in policy. A. All fees, charges, premiums or other consideration charged for the insurance or for the procurement of insurance shall be stated in the policy except in the case of fidelity, surety, title, and group insurance, and except for
Got Coastal Property? We’ve got you covered... Condos Apartments Hotels/Motels Restaurants Retail
Donna Rigley
Director of NC Operations donna@interstate-insurance.com
704-661-7381 Summer 2015 • THE BIG “I” VIRGINIA
13
consulting services as provided in Article 4 (§ 38.2-1837 et seq.) of Chapter 18 of this title. Except as provided in this subsection, no person shall charge or receive any fee, compensation, or consideration for insurance or for the procurement of insurance that is not included in the premium or stated in the policy. B. Service charges for installment payments of insurance premiums do not need to be stated in the policy if the charges are provided to the insured in writing. (Code 1950, § 38-508; 1952, c. 317, § 38.1-337; 1986, c. 562; 1990, c. 281.) § 38.2-1812.2 - Administrative charges in excess of premium prohibited; exceptions. A. Notwithstanding the provisions of § 38.2-310 and Article 4 (§ 38.2-1837 et seq.) of this chapter, no agent shall charge, or demand or receive from, an applicant for insurance or a policyholder any consideration in return for rendering services associated with a contract of
insurance, when the consideration is in addition to the premium for such contract, unless: 1. The applicant or policyholder consents in writing before any services are rendered. Consent shall be provided on a form that includes the applicant’s or policyholder’s signature, the duration of services and amount of fees to be charged, the services for which the fees are charged, and a statement that the agent is entitled to receive a commission from the insurer for selling, soliciting, or negotiating the insurance; and 2. A schedule of fees and documentation for services rendered is maintained in the agent’s office and is made available to applicants or policyholders upon request. B. This section shall not apply to charges for services described in subsection C of § 38.2-4608 when provided by title insurance agents. C. This section shall apply to new and renewal policies issued or renewed on or after July 1, 1999. (1999, c. 2; 2001, c. 706.) Linda Loving is the Chief Operating Officer of the Independent Insurance Agents of Virginia (IIAV) and Executive Vice President of Virginia Financial Services Corporation (VFSC). She has been with IIAV/VFSC since 1985. Linda is licensed in P&C and L&H. She obtained her CIC in 1987 and earned her AISM and AIAO designations while working at IIAV. Linda is responsible for assisting with the internal operations of IIAV with a primary focus on the growth and success of the for-profit division of the association. This information is not intended as legal advice, but is provided for general agency information.
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“ I trust NatIoNwIde ®
with my employees’ benefits.” – Dale Earnhardt Jr., NASCAR® driver and owner, JR Motorsports
Dale Earnhardt Jr. and his family joined the Nation more than 30 years ago. That’s why, as a longtime Nationwide member, he trusts us with his employees’ benefits. Nationwide Employee Benefits offers: • Life/AD&D
• Limited Benefit Medical
• Disability
• Accident and Hospital Ca$hBackSM
• Dental
Call Paul Taylor at 734-788-6463 or go to nationwide.com/neb to learn more.
The name and likeness of Dale Earnhardt Jr. and other related trademarks and copyrights are used with permission of Hendrick Motorsports, LLC and JR Motorsports, LLC. Paid endorsement. © 2012 JR Motorsports, LLC. NASCAR® is a registered trademark of the National Association for Stock Car Auto Racing, Inc. The NASCAR Nationwide SeriesTM logo and word mark are used under license by the National Association for Stock Car Auto Racing, Inc., and Nationwide Mutual Insurance Company. Nationwide, the framemark and On Your Side are service marks of Nationwide Mutual Insurance Company. © 2014 Nationwide Mutual Insurance Company. All rights reserved. Underwritten by Nationwide Life Insurance Company. EBO-0156VA (01/14)
Summer 2015 • THE BIG “I” VIRGINIA
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Our Minds Can Play
s k c i r t y t r di On Us By John Graham
“
Digital disruption makes a nice headline,” said an insurance executive, responding to a news report that insurance agents are being “squeezed” by the Internet. “The realities of the insurance business are a bit more complex than that,” he said, assuring insurance agents that digital is no threat to their business. We like to think that what we do is impervious to disruptive forces. But the tipping points come and the longstanding pillars begin to crumble. Some try to hold on for dear life. Somehow or other, we believe we can beat the odds, that the storm will miss us, it’s others who will be affected, but we’ll be safe. Here are seven dirty tricks our minds play on us, and what we can do about them: 1. Customers for life. This is one of most seductive ideas in business — and for good reason: we want to believe it. But no matter what we do, how hard we try, or how much we focus on meeting customer expectations, customers aren’t forever; they have a life expectancy. For one reason or another, they leave and there’s no way to avoid it, no matter what we do. With changing needs and situations, it’s unrealistic to think that we can keep customers indefinitely. But what’s even worse, the idea of “customers for life” dulls us to the task of prospecting, or more properly, an active replacement program. 2. Some things just aren’t that important. At least that’s what we think. It’s easy to remember all the good things we do for customers, helping them out when they’re in a jam, extending credit, taking more time with them than necessary. And we expect them to appreciate our efforts. Not necessarily. 16
THE BIG “I” VIRGINIA • Summer 2015
Customers never forget small things. When a sign for a drycleaner was going up on a store, a woman rushed up to the company president. “I’ll never go there,” she yelled. “Ten years ago, you people lost my favorite blouse.” It’s a story she has undoubtedly repeated many times. Negative experiences are indelibly imprinted on customers’ minds, unless we’re sensitive enough to stop and address the complaint quickly to their satisfaction. 3. Falling in love with what we do. Aren’t we supposed to love what we do? At least that’s what the gurus tell us. “Be passionate,” they say. Perhaps, but former IBM and Apple head, Louis V. Gerstner, offers caution. “Organizations tend to fall in love with their existing products and processes,” he says. “People get caught up in the status quo. When someone says ‘we may have to change’, there is real resistance.” We want to keep on doing things our way. Because it seems safer, we reject anything and anyone who challenges it. We never seem to learn that it’s the curious who thrive. 4. Understanding customers. “We know what our customers want. Many of them have been around for years.” Such responses are often rather smug and off-putting, as if you’ve crossed the line, going where you’re not welcome. It’s an attitude in businesses that
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www.PennNationalInsurance.com Visit our website to find out more. Summer 2015 • THE BIG “I” VIRGINIA
17
have been around for years and view themselves as welloiled machines. Joseph Jaffe of OnlineSpin notes that these companies and brands have stopped asking questions, including questioning themselves. He suggests that start-ups have the advantage because they’re more curious and test new ideas, which keeps the focus on the customer. When we think we know our customers, this may be a sign that our minds are playing a dirty trick on us. 5. Thinking positively. Optimism is the quality that gets universal applause in business. A “we can do anything” attitude is revered and rewarded. It rouses us to action and drives away doubts. Some researchers say that a positive attitude helps reduce stress, enhances coping skills, and lengthens lifespan. So, what’s not to like about positive thinking? Just this. “Positive thinking fools our minds into perceiving that we’ve already attained our goal, slackening our readiness to pursue it,” says Gabriele Oettingen, Ph.D., a New York University psychology professor. When it comes to reaching a goal, a better approach combines a positive attitude with recognizing the obstacles that stand in the way of getting there. Too often, those in marketing and sales fail because they see only the upside. 6. Doing enough for customers. Our minds seem well-trained to put the brakes on us. “That’s far enough,” they tell us, which is often evident when it comes to customer care. “How much more can we do? They’re pushing us now,” say owners and managers. While the mind may say, “Slow down,” the customers want faster. Overnight delivery doesn’t cut it; free shipping is nearly the norm. The commercial says the quirky duck pays claims in four days. That wasn’t good enough for the AFLAC CEO, who announced oneday payment for qualifying claims. “Coffee runs” are over, at least at Starbucks. There’s a better way for the business mind to work. “Recognition of the status quo in the past and the success we’ve had in the past, is not an entitlement,” says Starbucks’ CEO Howard Schultz. 18
THE BIG “I” VIRGINIA • Summer 2015
7. Missed opportunities. Missing the target can be fatal in business. Yet it happens far too often. It happened to Burger King with its ill-fated “Satisfries”. Amazon dialed the wrong number with Fire Phone. And, evidently, there was no target for Google Glass, least when it came to market. It happens all the time. A recent study by Epsilon and The Luxury Institutes found that luxury brands lose 50% of their top customers each year by failing to identify correctly their demographic and economic profile and neglecting to create a personalized experience for them. Hard to believe? Our minds tell us we’re on the right track, that we’ve got a winner, and that we’ve hit a home run. Unfortunately, we don’t even know we’ve been tricked. And it all results in costly and embarrassing missed opportunities. To avoid the dangers of our minds playing dirty tricks on us, it’s better to ask one question before leaping into action: “What could possibly go wrong and what don’t I know for sure?” John Graham of GrahamComm is a marketing and sales strategist-consultant and business writer. He publishes a free monthly eBulletin, “No Nonsense Marketing & Sales.” Contact him at jgraham@grahamcomm.com, 617-774-9759 or johnrgraham.com.
Summer 2015 • THE BIG “I” VIRGINIA
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How to Integrate Tech Throughout the Customer Life Cycle
By Ron Berg
O
nline marketing. Social media prospecting. Comparative rating. Is that where your agency’s technology touch points with customers end? The independent agency distribution channel has a huge opportunity to provide what all consumers are looking for: an “omni-channel” experience that integrates the digital interaction consumers expect while leveraging the “trusted advisor” role only an independent agent can truly deliver. In order to succeed, agents and brokers must implement technology solutions across all phases of the consumer’s insurance journey: discovery, evaluation, purchase, experience, renewal and advocacy. But many agents either do not have a strategic plan that encompasses the right steps in each phase, or aren’t aware of all the solutions available to them. The Big “I” Agents Council for Technology (ACT) has created a customer experience work group comprised of volunteers from agencies, carriers, vendors and other associations and user groups with the objective of creating a roadmap for independent agents and their carriers to deliver an outstanding customer experience at each stage of the customer’s journey—one that stands out from what the competing distribution systems are able to offer. The ACT work group has completed extensive research and discussion to document the critical agent technology touch points prospects and clients experience across each phase of the insurance journey. The group is now working to create a Best Practices recommendations document for agent and broker use and has also engaged a volunteer group of pilot agents who are currently using some specific 20
THE BIG “I” VIRGINIA • Summer 2015
recommendations and reporting their experiences, before creating a final recommendation document. Of course, agents must keep in mind that these steps are not independent of one another—they must consider each one as a potential piece of an overall ongoing strategy. All independent agencies now operate inside a digital world of connected consumers that is constantly evolving, and how they do business must reflect that. This does not mean agents should discard some of the existing contact and service avenues that provide value to their customers— rather that they should supplement those with new digital support experiences that meet the customer how, when and where they want to be.
DISCOVERY In this first phase, a consumer is just becoming aware they have a need for insurance. It could be a young adult just moving out on his or her own, or someone who has just started or taken over a business. These people share a need for clear, easy direction and education on available insurance options and often rely heavily on Internet resources, such as Google and insurance websites. If agencies and brokerages are not immediately visible, consumers will not consider them. Recommendations Agencies must maintain a strong online presence and ongoing engagement in order to rank as high as possible in search engine results through the following avenues: • Website • Social media
ost there when it matters most there when it matters m
Responsive
Southern Insurance Company of Virginia understands being responsive to our agents and customers is vital.
That’s why Southern assigns underwriters to specific agencies to help agents deliver the best value to customers. Southern also makes claims reporting easy and we make sure claims are handled fairly, efficiently, and timely. Being responsive in underwriting and claims service… another way Southern is “There When It Matters Most.”
To learn more visit www.donegalgroup.com or call Judge Parker at 800-468-1127 ext. 2112.
Summer 2015 • THE BIG “I” VIRGINIA
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• • • • •
Search engine optimization (SEO) TrustedChoice.com Local search best practices Keyword ranking Blog content
product, location and other information. Agencies should also utilize social media integration to ensure the agency’s presence is visible to consumers using those channels. The agency can also utilize consumer quoting functionality on their website to gather consumer data necessary for a quote, taking advantage of alerts that enable agency staff to contact consumers immediately.
EVALUATION This phase finds the consumer refining their research, looking for a match that suits his or her specific needs—an important opportunity for agents and brokers to stand out from direct writers and captive agents. During this phase, consumers are looking closely at the specific agency websites they have found: evaluating website content, reading online reviews and blogs and seeking education about product offerings. According to comScore’s U.S. Smartphone Subscriber Market Share Report, more than 50% of consumers now begin their research from a mobile platform—primarily a smartphone. If the website a consumer attempts to view does not feature responsive design—meaning the website adjusts its size and design to accommodate different devices—66% of consumers depart immediately. Recommendations Agencies must ensure their websites are mobile-enabled, with a responsive design that clearly displays critical contact,
PURCHASE In this phase that converts a consumer to a customer, speed and ease of doing business are crucial. This is where an agency can truly enact a partnership by not only providing the experience the customer has come to expect from their other business interactions, but also exceeding consumer expectations. A variety of technology tools can enable this immediate access and response. Recommendations The agency should take advantage of front-end tools to engage the customer, such as online chat platforms and 24/7 availability. During the quoting phase, agents can utilize either comparative rating or management system quoting software to offer instant rates, provided they use these tools as part of a larger conversation about the value of various product features beyond simply price. Using e-signature capability and electronic policy delivery enables customers to
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sign documents when and where they are available, further enhancing the independent agent’s role as trusted advisor.
EXPERIENCE Once a consumer becomes a customer, agencies have the opportunity to truly shine. Today’s digital world has significantly increased and streamlined opportunities for making agent/customer touch points and providing useful information. Recommendations In addition to building on subject matter expertise through agency videos, blogs and podcasts, agencies can offer a full-access customer portal for customers to obtain necessary policy documents, providing access to carrier documents while keeping the customer engaged with the agency. Offering a mobile application can help by adding a one-stop shop for customers who need contact information, claims functions and other policy documents. Finally, implementing “push” notifications via text could involve notifying customers of an impending storm or sharing post-storm claim information. Effectively addressing the needs of the connected consumer requires a highly responsive and proactive approach. Agencies can and should use technology to enable a conversation between the agency and their client, building on the
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relationship to differentiate the independent agent experience. Using digital and technology platforms and keeping track of frequent touch points and important life events can be a huge differentiator.
RENEWAL OR DEPARTURE We all know how easy it is for an existing customer to shop around—we’re constantly bombarded by direct writer advertising encouraging consumers to save 10–15% in as little as seven minutes. Agents must seize this phase’s opportunity to proactively reach out to clients before their renewal and provide value-added services that set them apart. Recommendations Agencies should use the website quoting software discussed in the Evaluation phase, set notifications to recognize existing customers who are re-quoting and contact them in real time to discuss their needs in more detail. They should also use management system download and reporting functionality to proactively reach out to clients to explain a renewal increase before they receive notification—a strategy agencies could accomplish using a virtual review via platforms like Skype or FaceTime.
ADVOCACY In this phase, the client has all the experience they need to make a choice to become an advocate for the agency—or not. Client advocacy can be a powerful tool to highlight an agency’s value and attract additional customers. Recommendations Agencies should consistently post customer reviews on their website and encourage clients to write a review for social platforms like Facebook, LinkedIn, Google+, Twitter, Yelp and others. Agencies can also utilize video testimonials from willing customers. This is an even more powerful tool for integration in websites, emails and social media. Taking advantage of platforms like blogs can further highlight what agents and brokers are doing in their communities, demonstrating their philosophy, value system and local presence. It’s about being social, instead of just doing social. These recommendations are just a small sample of the forthcoming Best Practices from ACT’s customer experience work group. But it should provide agents and brokers with a solid sense of the opportunities available to help them stand out among the competition by providing the “omni-channel” experience that direct writers and captive carriers cannot. Ron Berg is executive director of the Big “I” Agents Council for Technology.
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Big D 26
THE BIG “I” VIRGINIA • Summer 2015
Changing the Future of Insurance
Data By Garry Floyd
WHAT IS BIG DATA? Big data can be defined as extremely large sets of data that may be analyzed to reveal patterns, trends, and associations. It can be used to benefit numerous industries and sectors, but I’m going to focus on its influence on the Insurance industry at this time. Big data can provide an enormous amount of information to help insurers achieve many of their long term goals. The objective is to utilize the data collected to make the industry more efficient, lower risks and costs, and provide better access to information while creating innovation. When analyzing the insurance sector, Big Data can play a major part in Auto, Life & Health, and Property insurance. Using data properly can help companies use predictive analytics as a means to extend their product lines, reduce claim expenses, set better loss reserves, and cut operation costs. Let’s take a look at a few ways that Big Data can help change the insurance industry, analyze some of its issues, and discuss ways to implement its use to help benefit insurers.
APPLYING BIG DATA Fraud Protection Nearly 10% of insurance claims are fraudulent, causing over $25 billion a year to be lost due to fraud claims in just the P & C industry alone. Utilizing data from your company’s claim history, preventive analytics can assist in prioritizing claims. This is accomplished by recognizing when a submitted claim type has previously resulted in a higher payout amount. With the proper data, insurers can decrease their chances of fraud
claims. They can mark their submitted claims by the estimated settlement size to determine which claims are higher priorities and which should be investigated further. By managing Big Data, predictive analysis can properly notice fraud sooner and more effectively at each step in the claim cycle. Information such as demographics and examples of the more frequent types of fraud cases reported can be used to help recognize fraud during the claim process. Claims Currently, most claim adjusters believe that their companies do not utilize the information they collect from the claims department. The more insurers use preventive analytics, the more breakthroughs will be achieved. Using Big Data as part of the claims process can be a resource that differentiates your company from others. It can also create a cost savings to the company’s bottom line. Just a 1% improvement in loss ratio for a billion dollar company can save 10’s of millions of dollars. Insurance companies utilizing this data means that insurers would be combing data they already have access to, such as MVRs, clue reports, and the company’s database. They will also access new resources for data, such as security cameras, tracking sensors, utility records, and even social media. In addition, adding sources such as traffic and crime reports can give a company a great assessment of a claim risk. Analytics can also shorten the claim cycle and save on payout and operation costs. Loss reserves can be calculated more appropriately by comparing the reported loss with similarly filed claims. Summer 2015 • THE BIG “I” VIRGINIA
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A system can be set up to re-evaluate the reserves as the claim information is updated. Analytics can also provide a chance for certain claim submissions to be marked for closer inspection and priority handling. This would allow more senior adjusters to handle certain files more efficiently from the start. This information can also help the insureds with risk management. Analytics can predict the chances of a loss such as wind or theft, and help the insured take steps to avoid or decrease the chances of a loss. Litigation A claim that has to go to litigation can cause a company to use a lot of their expenses. Insurers can utilize Big Data to calculate which claims are more likely to result in litigation. When recognized, these claims can then be assigned quickly to more experienced claim adjusters, who could potentially settle the claims faster and for a lower settlement amount. Subrogation Utilizing data collected can assist in finding subrogation opportunities. Using processes such as text analytics can help find subrogation opportunities earlier in the claims process. This will help to minimize loss expenses and maximize subrogation collections. By recognizing these opportunities sooner, you can organize the information needed and start the subrogation process in a timelier manner. Underwriting Data used for predictive analytics can allow the underwriter to sort out the normal submissions, and have the exceptions handled manually by more senior underwriters. This would allow the underwriters to spend less time screening lower risk applicants, and focus on the more unusual cases with higher risk factors. In areas such as homeowners insurance, carriers are utilizing data to make better predictions about vandalism, theft, and flood risks. The carriers that implement these practices in their process will be the competitive companies in the near future. Underwriters will also be able to properly locate potential problem risks upfront and decline to quote, or surcharge appropriately with exclusions or special deductibles. Marketing Analyzing data correctly can lower your marketing expenses and improve your organization’s success. Helping to define your target audience and monitoring your current marketing plan for efficiency are 28
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just 2 examples of the benefits of data to your marketing needs. Information can also assist with your social media use, website, and mobile marketing strategies. Operations Big Data can also improve your company’s process to create better services, lower premiums, increase your sales, lower operation costs, improve loss ratios, increase customer retention, and return higher profits. CHALLENGES OF USING BIG DATA There are currently a few challenges for implementing techniques of gathering and using Big Data. One of the main challenges is sorting out the irrelevant information to find the appropriate information that will provide the most benefits and competitive advantage. Once the information is gathered, you must then determine how to utilize it to save costs and increase revenues for your business. To properly gather and analyze Big Data, insurers will have to provide more funding to their IT Departments and make sure they have adequate cloud storage space for this data. The availability of data and the ability to combine data from various sources into a meaningful format is the biggest area where companies fail in their effort to create predictive models. This can result in inaccurate data, which can harm a company if applied incorrectly. Also, most insurers lack the ability to collect and analyze data, which can affect their decisionmaking, business growth, and delivery of great customer service. Collecting and analyzing lots of information can be complex and expensive. There is also the fact that most consumers do not like their personal information being obtained and used. But research has also shown that most individuals do not mind giving up some personal information if it will give them a savings on their premiums. IMPLEMENTATION With the amount of technology available today, every industry has the potential to change the way companies do business. Big Data is helping companies that are striving to be on the leading edge in their industry. The volume of information that is becoming available is growing exponentially, and we are now creating the tools to be able to organize and manage this data. Unlike other sectors, the insurance industry has gotten off to a late start utilizing Big Data, but they are now using it for methods of predictive sales models, marketing, customer service, as well as claims and underwriting. In order to remain competitive in the future, insurance companies will need to take advantage of Big Data. There will
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be a few companies that will emerge and change the industry. These trendsetters will be the companies who embrace change and adjust their processes around this abundance of available information. You may be thinking, “Where do we start?” Currently your company may have access to large amounts of information from claims databases, company notes, and publications. Start by determining how analytics can bring value to your company. Become aware of the numerous resources available and how to integrate them into your operations, and improve the automation of your workflows and predictive models. Many insurance companies need to reinvent their information management process to get the most value from the enormous amount of information they’ve been collecting for years. Companies’ constant interaction with insureds, agents, and brokers mean they accumulate lots of information with few utilizing that data for external and internal gain. John Anderson, senior managing consultant in IBM’s North American Strategy and Analytics Practice says, “Insurers are sitting on a virtual gold mine of information. Claims activity, underwriting activity, sales and distribution activity. All of that information should be collected and compiled,
and that’s beginning to happen as insurers go through transformational changes to their claim systems, underwriting platforms, and even to their distribution capabilities” There are no limits to the ways information can be captured for analysis. Information can be gathered from satellites, fitness wearables, social media, construction plans, weather data, energy resources, traffic cameras, drain systems, Nest home thermostats, and more. Within your organization, you can gather data from your company reports from sales, marketing, distribution, and operations. You can then develop analytic tools to improve these areas. Once the data is obtained, there are many ways to organize and analyze it. Information can be sorted by coverage lines, geography, industry, claim type, age of insured, amount of loss payouts, or premium amounts. Look for areas of growth, opportunity, and help evaluate performance and workload of individuals. Expand your company’s ability to implement new products, new markets, and new coverages.
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Is Your Agency Procedures Manual “E&O Safe”? By Morgan Smith, Assistant Editor Independent Agent Magazine
H
ow many staff members at your agency could paraphrase guidelines from the agency procedures manual or employee handbook? It may seem tedious, but if the answer to that question isn’t “all of them,” an E&O disaster could be in your future. Agency procedures manuals and employee handbooks are two separate, yet compatible aspects of an agency’s operational foundation. Employee manuals have a staff organizational focus—what the agency expects from employees, and what the staff can expect from the agency. By contrast, an agency procedures manual strays away from the HR realm to address the business practices of the agency, including operational standards and methodology for differentiating business practices. “The No. 1 inside hassle of agencies is that everybody has their own preference on how to do something, but no one is telling them the agency way,” explains Big “I” Virtual University faculty member Virginia Bates, president of VMB Associates, Inc., a consulting firm that specializes in education, agency management and automation issues. “The E&O issues become understandable but dangerous mistakes. We have to stop that so everyone is using the same information base in an agency—it’s the only way an agency can focus on making every single call an opportunity to look at the account and suggest coverages.” Bates, who has more than 20 years of consulting experience in the industry, says agencies that don’t pay attention to these materials face E&O exposures galore. Here’s why.
IA: What is the biggest issue with agency procedures manuals and employee handbooks? Bates: Many agencies literally do not have anything and they’re very seat of the pants. Whenever they hire someone, there’s nothing to give them to say this is how we do things. There are a lot of assumptions that end up being well intentioned but inconsistent that eventually tie in to E&O problems. Others have a manual, but it’s from 1982 or 1967 and it doesn’t address the business practices of today from the carriers or agency management systems. One of the predominant problems I find in my practices is what I call the “bright and shiny syndrome”—they’re happy to have a manual—they understand the value of it intellectually—but from an implementation standpoint, nobody is passionate about it. So they don’t follow through, introduce it properly, stress the importance of it or do management reporting to see if people are complying. There are the precious few agencies that not only get it, but they also know how to make it happen. They can reinforce it—new people read the manual and they understand it before they’re put to work even if they’re experienced. They’re almost quizzed by management to see if they’re using the same methodology that the rest of the agency uses. They’re the people who really follow through and they tend to get a lot more done in sales and have higher retention, because they don’t spend a lot of time on processing errors. Summer 2015 • THE BIG “I” VIRGINIA
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What are some of the evolving E&O exposures agencies face when it comes to these materials? The biggest reason I think a procedures manual makes an agency far more E&O safe is that it not only clarifies but enforces consistency among all staff people so they’re handling the work the same way at every relevant desk. No matter what customer calls or who that customer talks to in the agency, the customer is going to get predictable, sensible and consistent answers without hesitation. This way, the consumer is never left between two different ways of working, lost in the “I can’t figure this out” shuffle. An example of that is indicating what activity codes or activity names everyone’s going to use for the same thing. If a customer calls about a certificate that has been in process and they need that certificate to get a project bided, the way to find that activity by filtering or refining can be located very easily. But if one person uses the correct code and someone else uses a totally different code, then being able to find the information for that client on where the certificate is located will not only be less quick and convenient but risks the chance of not seeing everything. Good use of a computer system means that everybody is doing things the same way, using the same code and documenting to the same level so that anyone can help that customer at any time with speedy and accurate information. The No. 1 E&O claim is that a client doesn’t have the right coverage at the right time when they have a loss and finds a way to blame the agency. If our procedures are smooth enough that when we talk to the customer we know exactly what coverages they have and do not have, we can use that precious moment when we have the insured on the phone or in an email conversation to work with them on making the account as strong as it needs to be for the client’s protection.
understand agency operations. They force too many unnecessary steps, creating more work for a staff that already has too much work. And the more steps you have, the greater the opportunity to mess something up. Very often, procedures are written by people who don’t actually do the work. The procedures are therefore too cumbersome. Now we’ve documented and put in writing the wrong way to do things, and that actually takes you a step backward. When the smarter people in the agency realize it doesn’t make sense, they find their own way to do things and create even more inconsistency. When you write a manual but you don’t know all the things your system will do for you, you can’t possibly write a good manual. You think manual effort is necessary to do things that the computer is perfectly able to do for you. The procedures come out clunky and cumbersome—it has to be a professional, stateof-the-art set of workflows that you’re aiming for. Most agencies start their procedures without writing out what their service standards are. If we don’t even agree on what we’re trying to achieve, then we can’t possibly come up with a road map to get there. It’s the service standards that have to come first. Reprinted with permission from IIABA’s Virtual University.
www.SIAofVA.com
What constitutes a “safe” manual from an E&O perspective? The Big “I” Best Practices Study gave us an indication of the best way to get work done in the fewest steps. The problem with most manuals I see is they weren’t written by people who 32
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Scott McKee Vice President (540) 280-1119
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Many companies exploring alternative distribution channels believe that some people don’t want the advice and counsel of an agent. Know what? They’re right! Know something else? You’re better off letting them have those customers! In fact, the best way to “compete” with direct sales (e.g., via company internet sites) is to stop selling “insurance.”
You’re Selling the By Chris Burand
I
Wrong Thing!
ndependent insurance agencies are a means to an end for insurance companies. They are one means for companies to distribute their insurance products. Independent insurance agencies have long been a very efficient method for distributing, or selling, insurance because this method eliminates the need for insurance companies to invest huge sums in their own distribution force, buildings, computers, and most of all, people. However, insurance companies have alternate options for distributing their products and many alternatives are becoming more prevalent and economically feasible. As technology improves, low-cost insurance is more easily delivered directly to the consumer and the quality added by independent agents becomes less valued by certain classes of customers. These customers do not believe the difference in the quality provided by personal service versus direct methods, such as the Internet or an 800 number, is big enough to justify paying a higher price. Therefore, agencies need to identify those clients who do value their service and only solicit prospects likely to buy from an agency. Consider Allstate’s approach. In the October 1998 Best’s Review, Allstate President Robert Gary noted that as important, or even more important, than socioeconomic status, family size, cars, and homes in determining what to sell is the buyer’s attitude. When comparing two otherwise similar prospects he states, “One might be...a minimalist, who just doesn’t believe in insurance” and only buys auto or homeowner insurance because laws compel him to do so. His demographic twin though could be “a strong believer in insurance.” Obviously, the latter is more likely to value the personal attention and customized coverage an independent insurance agency can provide while the former would be happy to buy insurance without ever talking to an agent or any other insurance person. These people want minimal interaction with an agent, low cost insurance, and they believe they know enough to obviate the agent. The Internet may therefore be the best distribution method for the minimalists with some computer savvy. As a result, independent agents must begin focusing more and more on the “strong believers in insurance” and tailoring services to meet their needs. The most obvious way to accomplish this is to offer all the coverages a client needs. While agents also need to offer the best coverage to all clients for E&O purposes, this approach also makes each sale much more profitable. Currently, most producers do not even ask what coverages the client wants, much less analyze their true needs. Instead, many simply get a copy of the current coverages and try to Summer 2015 • THE BIG “I” VIRGINIA
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duplicate those coverages at a lower price. For the minimalist customer, this approach may work. Your best customers will not be minimalists though! The best way to compete with direct sales through the Internet is to stop selling insurance. Instead, sell advice with a product thrown in for free. After all, anyone with a license, and probably a few without, can sell insurance. Selling insurance requires no creativity because companies provide the product. Selling insurance is the easy way -- not the smart way -- to sell. Few people can sell good advice regarding the best way to protect assets. Few people are creative enough or willing to work hard enough. Therefore, those who can and do will have a terrific competitive advantage. Additionally, most consumers who believe they can successfully bypass the agent are kidding themselves. Insurance is complex, with homeowners insurance alone having at least 30,000,000 possible combinations of coverage. Most consumers do not understand enough about insurance and protecting their assets to eliminate the agent.... In a letter to the editor in Countryside (Jan/Feb 1999), an insured whose house burned down wrote, “We had a newly built home that we moved into in December 1997. Our insurance agent suggested we insure for more than the amount I was looking at, and I’m glad we did...we had $67,000 insurance on our possessions. This may sound like a lot, but it’s not. We lost everything to a fire but the clothes we
were wearing. Everything we had accumulated in 57 years of life was gone...I’m so glad we spent the $232 a year for insurance. It’s a bargain.” These people were saved from their own lack of knowledge by an insurance agent! Unfortunately, many producers act as though insurance is a simple product. They only offer what the client already has, they do not offer the best coverages and they focus on price. As a result, consumers will never know they are ignorant and they will eliminate the agent out of ignorance. If that happens, both consumers and agents will lose and we only have ourselves to blame. Rather than selling insurance, sell knowledge, advice, experience, and information, and provide more alternatives in less time. By doing so, we can beat the Internet sales, we can beat 800 number sales, and we can beat all competition! Agents are a means to an end for distributing insurance. Distinguish yourself from the competition...provide an added value to become the preferred means for distributing insurance! Chris Burand, Burand & Associates, LLC PMB 345, 1829 S. Pueblo Blvd., Pueblo, CO 81005 Phone: 719/485-3868 Fax: 719/485-3895 E-mail: chris@burand-associates.com Web Site: www.burand-associates.com
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Do’s and Don’t’s During Your Hiring Process By Claudia St. John, SPHR
F
rom a legal compliance standpoint, interviewing and screening applicants is a time of high risk for your company. Most employers know that it is illegal to discriminate against a candidate in the hiring process based on nationality, religion, age, marital or family status, gender, health and physical ability, military status and, in some locations, sexual identity and criminal background. What they don’t realize is that many seemingly benign questions, either on the employment application or in the interview, can lead a candidate (or court of law) to conclude that you are doing just that – discriminating against a protected class. Employment Application We recommend that you require candidates to fill out a formal, written employment application because you can use that to have the applicant attest that all information he or she provides is correct – whereas simply collecting a resume does not afford you that opportunity. On the application, it’s best to keep it simple and ask only those questions that are absolutely necessary. For example, yes, you’ll need to know how to contact the employee, but you don’t need to know whether the applicant rents or own his own house. And, indeed, that type of question can be construed to show you discriminating against a protected class. 40
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First, let’s review what should be on your employment application. It should: • Include an EEO statement up front stating that your company conforms to local, state and federal laws and does not discriminate. •
Ask for name, address and contact information.
•
Ask specifically if applicant is a citizen or legally authorized to work in the US and notify the applicant that documentation will be required if hired.
•
Ask if the applicant is able to perform essential functions of the job.
•
Ask for a list of past employers and provide a check box if employer can be contacted.
•
Ask the applicant to list education with degrees earned a yes/no to graduation. Do not ask for dates.
•
Not ask any criminal background questions. These you can ask later in the process or once the applicant is offered a position.
•
Ask for references, preferably professional.
•
Have an employment-at-will statement.
•
Require all applicants to sign that all information is true and accurate so that you can hold them accountable for any false information provided.
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Before you go beyond these categories, look critically at whether the information truly belongs on the application or could instead be obtained at a later stage in the hiring process. Deferring whatever information you can to that later stage can help you avoid charges of discrimination by unsuccessful applicants. Employment Interview Next comes the interview. There are many questions that are illegal to ask in an interview. That said, there are some reasonable alternatives recommended in this chart. Beyond these tricky areas of inquiry, there are many creative, insightful questions you should consider during an interview. And, whenever possible, we encourage you to ask them in a “behavioral interview” format, which is simply posing the question in the following format: “Tell me about a time when (question).” This will reveal the most detail about the candidate’s past experiences, which are always the best indication of future behavior. Criminal Background Check You will want to run a criminal background check on your candidate, but given the myriad of “ban the box” laws out there on the state and local level, it’s best to run the check – which will require a social security number, date of birth, maiden name and other personal information – once you have decided to hire the individual, and not before. We recommend that you extend an employment offer that is contingent upon a clean criminal background check. And if you are thinking about running a credit check, think again – federal law prohibits employers from running a credit check except in certain instances. Of course, you will need to collect birth date, social security number, marital status and dependent information for payroll and benefit selections and you will need to review documentation verifying the candidate’s right to work in the United States. But you should collect this information only after the candidate has been hired. Yes, it’s a challenge – you are trying to learn as much about the candidate as possible, but you don’t want to go wading into areas of inquiry that could be interpreted as discriminatory. Our best advice – plan your process, clean up your application and prepare your questions in advance. 42
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Claudia St. John is president of Affinity HR Group, LLC, IIAV’s affiliated human resources partner. Affinity HR Group specializes in providing human resources assistance to associations such as IIAV and their member companies. To learn more, visit www. affinityhrgroup.com.
Looking for Markets? We Are Your Solution The Atlas General Difference Atlas General is a National Full Service Program Manager offering a wide range of insurance solutions including:
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IIAV DESIGNATION CLASS SCHEDULE June - September 2015 CHESAPEAKE • June 11 (9:00-4:00): ACSR Mod 7 - Commercial Liability - Course #208292 (6 P&C) $105/$135 • Sept. 24 (9:00-4:00): ACSR Mod 3 - Personal Lines Related Cvgs. - Course #208287 (6 P&C) $105/$135 MANASSAS • June 11 (9:00-4:00): ACSR Mod 7 -Commercial Liability - Course #208292 (6 P&C) $105/$135 • Sept. 24 (9:00-4:00): ACSR Mod 3 - Personal Lines Related Cvgs. - Course #208287 (6 P&C) $105/$135 RICHMOND • June 3 (8:30-5:00): AAI 81 B - Personal Insurance - Course #208297 (6 P&C, 2 L&H) $165/$215 • June 8 (9:00-4:00): Personal Lines Week: ACSR Mod 1 - Homeowners - Course #208285 (6 P&C) $105 • June 10 (9:00-4:00): PL Week: ACSR Mod 2 - Personal Auto Course #208286 (6 P&C) $105 • June 11 (9:00-4:00): PL Week: ACSR Mod 3 - Personal Lines Related Cvgs. - Course #208287 (6 P&C) $105 • June 12 (9:00-4:00): PL Week: ACSR Mod 4 - E&O - Course #208289 (6 OGI) $105 • June 18 (9:00-4:00): ACSR Mod 7 - Commercial Liability - Course #208292 (6 P&C) $105/$135 • August 20 (8:30-5:00): AAI 82 B - Commercial Lines - Course #208361 (8 P&C) $165/$215 • September 16 (9:00-4:00): ACSR Mod 3 - Personal Lines Related Cvgs. - Course #208287 (6 P&C) $105/$135 • September 17 (8:30-5:00): AAI 82 C - Specialized Insurance & Bonds - Course #208362 (8 P&C) $165/$215 • September 22 (8:30-5:00): CRIS - Auto, Surety, & CIPS - Course #208213 (8 P&C) $150/$195 ROANOKE • June 10 (9:00-4:00): ACSR Mod 7 - Commercial Liability - Course #208292 (6 P&C) $105/$135 • August 20 (9:00-4:00): ACSR Mod 3 - Personal Lines Related Coverages - Course #208287 (6 P&C) $105/$135 WEBINAR • June 3 & 4 (9:00-12:00): ACSR Mod 3 - Personal Lines Related Coverages - Course #208287 (6 P&C) $105/$135 • September 15 & 16 (9:00-12:00): ACSR Mod 8 - Commercial Auto - Course #208293 (6 P&C)
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