BIG I The
Official Publication of the Independent Insurance Agents of Virginia
DON’T GET CAUGHT IN THE WEB
Virginia Winter 2016
BE AWARE OF AND MITIGATE E & O EXPOSURES FROM YOUR WEBSITE p.27
HOW TO BE A MORE PERSONAL BRAND FOR YOUR AUDIENCE p.34
37 >
MEET TODAY’S
INSURANCE CONSUMER
“This is our market - and this is our time.”
Prospect
Effectively
KNOW THE BEST METHODS p.12
isks. r t o h r e h t o d n a L JSA writes Sun Tanning G
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
Winter 2016 • THE BIG “I” VIRGINIA
3
WINTER 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 Message from the Chairman of the Board - Jason Angus
8
Message from the State National Director - James P. Bradner
10
Message from the President and CEO - Bob Bradshaw
12
Prospect Effectively: Know the Best Methods
20
What Would You Do If You Had A Data Breach?
27
Don’t Get Caught in the Web!
32
Producer Tips: Coverage Areas For Organic Growth Opportunities
34
How To Be A More Personal Brand For Your Audience
37
Meet Today’s Consumer
40
Young Agents’ Upcoming Events
42
Agents Insurance Markets
31
Allstar Financial
15
Amerisafe 28
6
41 InsureEXPO
Thank You Advertisers
Anderson and Murison
22
Atlantic Specialty Lines
11
Berkshire Hathaway/GUARD Insurance Cos. 46 Builders Mutual Insurance
47
Burns & Wilcox
9
FCCI Insurance Group
14
Harford Mutual
29
Hilb Group
17
Interstate Insurance Management
48
Jackson Sumner & Associates Johnson & Johnson
2 24, 25
Millers Mutual Group
7
Penn National Insurance
13
Preferred Property Program
39
Risk Placement Services
A Balanced Approach to Agency Marketing
3
SIAA 33 Southern Insurance Company of VA The Iroquois Group
IIAV Staff
4
Bevin Anderson Communications/Media Director banderson@iiav.com
Sherry Grubbs, AISM Accounting Manager sgrubbs@iiav.com
Robert N. Bradshaw, Jr., MAM President & CEO rbradshaw@iiav.com cell (804) 929-4134
Joe Hudgins, CPCU Technical Consultant jhudgins@iiav.com cell (804) 929-4138
Teri Chester Executive Secretary/ Receptionist & Membership Coordinator tchester@iiav.com
Bonnie Joyce Insurance Administrative Assistant bjoyce@iiav.com
THE BIG “I” VIRGINIA • Winter 2016
21 5
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
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 Susan E. C. Perkins Membership/Education Coordinator sperkins@iiav.com
Kristina Preisner IIAV Director of Education & VAIA Executive Director kpreisner@iiav.com Marie Toney Sales Associate mtoney@iiav.com cell (804) 929-4136 Bonnie J. Warren Insurance Account Executive bwarren@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
Winter 2016 • THE BIG “I” VIRGINIA
5
Chairman of the Board
Jason Angus jangus@hilbgroup.com
+WHY DO
Agencies Struggle with Annual disapPointing “flat-line” growth?
W
hy do some agencies struggle with disappointing, annual “flat-line” growth? It can be a perplexing question with many possible answers. The more important question might be, “Why are more agencies not growing more significantly?” The answer here might likely rest in an agency’s underperforming marketing strategy. “Underperforming” might also be another descriptive term for “no marketing strategy at all”. Here’s the million dollar question? Do you have a written, updated marketing plan? Surprisingly, many agencies do not. If you do, that’s terrific. Revisit it annually and make necessary adjustments. If you do not yet have such a plan there is no better time than now to start working on one. Let’s first recognize a few differences: “Sales” is not the same thing as “Marketing”. Yes, they are both key to your agency’s short- and long-term success. And, yes, “sales” should result from a well-designed and executed “marketing” strategy but they are not to be confused with one another.
was merely a five-mile radius of his office. He confessed that this local marketing strategy had helped develop accounts in several states as far away as Minnesota . . . . but his efforts to market remained local in nature. Does your current or proposed strategy involve the internet and social media? It certainly should. Insurance online sales have increased 9 to 12 percent per year for the last few years. Three out of every four consumers seek an online review before making a decision to purchase. If your agency is not on top of this consumer purchasing process you surely will not keep up. According to a recently published article by Nathan Labenz on insurance marketing, there are four primary strategies to help you with your online presence. They are: • • • •
For the vast majority of independent agencies the marketing strategy should be recognized as “local” in nature. A very successful agency in Chesterfield County recently acknowledged that his target marketing audience
6
THE BIG “I” VIRGINIA • Winter 2016
Be prepared for referrals from your online social networks. By “brand insurance” in the form of online reviews. Get off the social treadmill and spend time where it really counts. Make everyone in your agency an ambassador.
The most important element to any marketing plan is to actually have one.
OUR NEW
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millersinsurance.com/evenmore 800.745.4555 Rated A- (Excellent) by A.M. Best Rated A Prime (Unsurpassed) with Demotech ©2015, Millers Mutual Group, Harrisburg, PA Winter 2016 • THE BIG “I” VIRGINIA
7
State National Director
James P. Bradner jbradner@towneinsurance.com
Trusted Choice
q
- champions the benefits of being an independent agent.
G
reetings from IIABA, your National Association. IIABA’s mission is to “Provide a Sustainable Competitive Advantage“ for our members. Your membership in your State Association provides you with National Membership. Your membership allows you to use the Trusted ChoiceE program. It continues to grow and to champion the benefits of being an independent agent. By now, I’m sure you’ve seen the commercials on MSNBC, CNBC and Fox News. The number of “hits” to the Trusted ChoiceE site is growing every month. With over 85 insurance carriers being active Trusted Partners, this branding campaign continues to grow. If you represent Auto Owners Insurance Company, be sure to thank them for the additional generous financial commitment to the program and to it agencies. Auto Owners has agreed to contribute 50 percent of the participation fees of the Trusted ChoiceE Advantage Subscription program. When you sign up with Trusted ChoiceE, the traffic driven by the site will be guided to your agency. Contact
8
THE BIG “I” VIRGINIA • Winter 2016
Danny Mitchell at IIAV so he can show you the benefits of being a Trust ChoiceE member. This is an election year so please consider contributing to our National Political Action Committee, INSURPAC. Our national PAC raises $1,000,000 each year to give us access to the politically powerful. It’s done by donations of $50 to $100 by your fellow IIAV members, so please help out. Your benefits also include access to the best E & O program in our business, and to specialty programs (Docusign, Big “I” markets, etc.). And don’t forget to try out and experience our new Spring event, insurEXPO, in 2016 at the Richmond Downtown Marriott. As you’ve probably heard, we’re not having a convention in 2016, replacing it with the exciting new Spring event. IIABA did away with conventions years ago and as we try to be relevant to today’s business climate we are also heading in that direction. Thank you for your support of YOUR association.
Your gateway to contractors markets.
CONTRACTORS SOLUTIONS
Placing insurance for different contractors can be a daunting project. At Burns & Wilcox, our network of domestic and international carriers opens doors to the broadest range of markets. Since time is of the essence, we deliver quotes and binders fast. When it comes to finding solutions for every stage of construction, contact the wholesale broker with the tools to make the hard-to-place easy – 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 Winter 2016 • THE BIG “I” VIRGINIA
9
President and CEO
Robert N. Bradshaw, Jr., MAM rbradshaw@iiav.com
Question:
Do you want more business?
I
guess the first question is: do you want more business? Seems like a dumb question but there have been several occasions where I’ve talked with agents who said either, they’re not looking for new business, or they are very selective in the new business they select. I’ve also heard the speakers who have told agents to shed the 20 percent of their business that’s not gaining traction and concentrate on the performing book of business. How to effectively market your agency is not as simple as it once was. I’d still argue that insurance is a “personal” customer support business and sometimes you have to just go one-on-one. You’ve got to meet with and sit down with the prospect to specifically find out what their needs are. I recently watched a TV show (which generally I’d be too embarrassed to admit) about some real estate professionals who decided for the first time in over 20 years that they would go door to door in a select neighborhood and ask those who came to the door if they were looking to sell their home…for the right price of course. Turned out after knocking on many doors that indeed a property owner was in fact ready to sell their house with a listing price of over $4 million. Would they have gotten that listing without going door-to-door? Probably not. Despite their success in this case, were they going to revert their marketing activities back to door-to-door sales, certainly not. But sometimes old school works. You have to make up your mind that indeed you want more business before you start to market your services. I guess
10
THE BIG “I” VIRGINIA • Winter 2016
the second question might be: Just what are you selling? Personal lines, commercial lines, Workers Comp and which niche of these market segments are you interested in? Beefing up your Internet marketing activities may not be what you need to do to increase your business. Having said that, making sure that you have an up-to-date and professional website is probably not an option these days. The old saying if you can’t be found on the website, you can’t be found period – is actually more true than you want to admit. Is there really anyone out there who does not do some searching on the web before they shop? And don’t forget about testimonials – and not from John Q. Public from Anytown, USA. Real people want to know that real people have benefited from your services. Really, wouldn’t a real customer of yours be honored if you asked to highlight their experience on your website? As a marketing person, I tend to look at marketing as intuitive; I may be preaching to the choir, but I would highly recommend to all IIAV members to at least look at www.trustedchoice.com and consider enhancing their website presence. Some members swear by the program and others are less enthusiastic. Make up your own mind on whether it’s right for you and your agency. IIAV works to give you the tools for you and your agency to be successful. But the best member benefit of all is the employees of IIAV whose sole purpose is to help you be successful. Keep IIAV on your speed dial!
Great customer service starts with teamwork.
Attitude. Assistance. Adaptability. Reach your goals when you work with the team at Atlantic Specialty Lines. Our brokers will use their knowledge and experience to find the best coverage for your customers, while delivering a competitive price.
Experience the A-way — Attitude. Assistance. Adaptability.
ATLANTIC SPECIALTY LINES 800.368.2095 | atlanticspecial.com Winter 2016 • THE BIG “I” VIRGINIA
11
PROSPECT EFFECTIVELY know the best methods
A
n independent agent can spend countless hours investigating leads and thousands of dollars in advertising in the pursuit of new business. Knowing the best methods, investigating new marketing trends, and creating a referral pipeline can make prospecting more customer-centric and more efficient for overall agency growth.
USE TRADITIONAL MARKETING METHODS In spite of the social media revolution of the 21st century, some traditional methods of marketing outreach are still crucial. • Maximize your value to potential clients. Customers value the attributes primarily held by independent agencies:
12
THE BIG “I” VIRGINIA • Winter 2016
•
Agent familiar with account
•
Agent analyzes needs and finds best coverage
•
Expert to meet with face-to-face
•
Focus advertising on strengths of independent agent:
•
Finds best policy for price
•
Available locally
•
Builds personal relationship
•
Finds tailored coverage
•
Communicate with current customers. It’s as important as publicizing to potential customers.
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.
Our agents set us apart. Business • Surety • Auto • Home
www.PennNationalInsurance.com Visit our website to find out more. Winter 2016 • THE BIG “I” VIRGINIA
13
•
•
•
•
Use emailed company newsletters and ask people to forward it at the bottom (see “Content Marketing” below). Reinforcing the choice made by current clientele through ongoing publicity reduces defections as well. Articles should highlight new and most popular services and specialty coverages as well as accomplishments. (More than one-third of small commercial customers say they don’t rely on their agent for advice on coverage. Perhaps a more consistent communication strategy to clients will demonstrate what your agency can offer.) Trade associations are important sources of information on insurance. They influence the decision-making process, particularly for businesses that may not be mainstream (e.g., day care, nail salons). Identify which current customers can be targeted for new services. Stimulate cross-buying (auto, home and umbrella). Small commercial buyers indicate an interest in packages designed for their business: key person life, investment services, personal property/casualty, credit products and personal life. Some potential clients are willing to
switch providers to get these services. •
Use integrated marketing. Work with car dealerships and realtors for joint advertising and cross referrals of services and products.
•
Get involved in community causes and participate in special events:
•
Staff a booth at your next fire station open house.
•
Donate child safety seats to your local police department for the needy.
•
Adopt a local school during fire safety week.
•
Sponsor a local youth group or sports team.
•
Use affinity merchandise to gain name recognition:
•
Offer safety “seals of approval” to school kids during safety awareness campaigns.
•
Print a small, quick-reference guide for emergency road services.
•
Provide other low-cost tools that educate and motivate.
•
Ask for customer feedback:
800-226-3224 www.fcci-group.com
INDUSTRY EXPERTISE. PERSONAL SERVICE. “I have a sincere passion for helping FCCI policyholders manage risk and prevent loss. The best phone call I’ve gotten started with the words, ‘Brad, you saved my life.’ ” Brad Ross, ARM, AIS Loss Control Manager FCCI Southeast Region Duluth, Georgia Now, let’s talk about your business. General liability • Auto • Property • Crime • Workers’ compensation Umbrella • Inland marine • Agribusiness • Surety Coverage available in 18 states. © 2015 FCCI
14
BIV15_Ross_7.675x4.9.indd THE BIG “I” VIRGINIA1
• Winter 2016
4/14/15 9:46 AM
•
Invite your customers in to an employee meeting to give feedback on their recent experience with your agency. Customer service will improve, and word will get around.
o Offer a self-service portal for customers to access their policies, download ID cards, etc., day or night. You can outsource this service to vendors like Artisan and others. For guidance on self-service portals, see Inc.’s article, “How to Provide Customer Self-Service Online”
CAPITALIZE ON INTERNET MARKETING Experts in the Big “I” Agents Council for Technology (ACT) say it’s urgent and critical that agencies participate online. Those that don’t are invisible to the majority of potential customers, who are searching for insurance information online.
AGENCY WEBSITES No marketing plan is complete without a robust Web site. • Must be professionally designed. •
•
Add content regularly to optimize search engine results. For ideas see “Ten Things Agents Should Know about SEO”
o For further guidance on Web marketing, visit Agents Council for Technology online.
SOCIAL MEDIA ACT experts say it is both urgent and critical that agencies participate in social media. • Develop a social media strategy. Make it an integral part of your marketing plan. Resources to help you plan and execute a social media strategy are posted on the ACT Web site. •
Give employees who are already good at social media responsibility for it. For reports to help you guide employees’ social media behavior
•
Monitor social media to learn what’s being said about your agency.
•
Monitor social media, because some of your customers expect to contact you that way.
Must meet customers’ expectations: o Offer quote capability. According to the comScore Online Auto Insurance Shopping Report, in 2012 69% of shoppers went online to obtain price quotes on auto insurance. Only 25% called toll-free numbers or visited a local agent.
Since 1965 Allstar has been a rock in the insurance marketplace. As a leading Managing General Agent and Wholesale Broker, we represent the strongest insurance carriers in the industry. Our underwriters have the tools to keep all your clients happy, no matter how big or small their business may be.
Small Business Solutions Specialty Brokerage Transportation
General Liability Property Automobile Liability Workers’ Compensation Inland Marine Professional Liability (877) 950-3222 www.allstarund.com Winter 2016 • THE BIG “I” VIRGINIA
15
•
Ask for customer feedback. If you’re developing a mobile app, ask customers, “What functions would you like to see on it?”
REFERRALS Referrals are a very effective way of gaining new customers. But many people have trouble asking for one.
OBSTACLES The first priority is to get over your fear. Bear in mind that most people like to help other people (if there is no negative cost to them). • Remind yourself that the worst that can happen is that the client says, “No.” That’s not so bad, is it? •
For excellent tips and scripts to use when asking for referrals from customers, see “How to Ask for Referrals and Get More Clients: Asking for Referrals Is Not as Hard As You Think” by Small Business: Canada
Have you ever sat down with someone who really listened to you? It's rare - you remember that person. He or she stands out in your mind, and you want to go back to him or her. Be that kind of person. Be a good listener and create that kind of rapport with every customer. When you listen to find out what that customer needs, you can match him readily with the best product.
REFERRAL METHODS The most effective way to gain referrals is to make it standard operating procedure to ask for one from every satisfied client. A face-to-face request is the most effective, then phone, then email. In addition: • Add a sentence in a bright color to the email signatures of yourstaff: “If you like our service, tell a friend! We love referrals!” •
Use your current customer database to identify potential customers. Ask for a face-to-face meeting in which to discuss the referral; if the prospect doesn’t agree to an in-person meeting, use the phone or email.
•
Use LinkedIn
•
Use Facebook
•
Use Twitter #clientreferral
Listening and Offering What the Prospective Customer Needs Have you ever sat down with someone who really listened to you? It’s rare—you remember that person. He or she stands out in your mind, and you want to go back to him or her. 16
THE BIG “I” VIRGINIA • Winter 2016
Be that kind of person. Be a good listener and create that kind of rapport with every customer. When you listen to find out what that customer needs, you can match him readily with the best product.
Tips for good listening: • Don’t get so wrapped up in what you can offer that you forget to find out what the prospective customer needs. •
Bear in mind the old adage: “When my mouth is moving, I’m not learning anything.”
•
If the prospect asks you about your business or background, answer, but be brief. Then take the focus off yourself and turn it back on the prospect.
•
Learn what they need: that way you’ll have a much easier time presenting them with solutions that meet their needs. When the product matches the client’s need, the sale is easy.
•
Actively listen to the customer. Show that you’re actively listening by making eye contact, nodding, saying, “Yes, I see,” or jotting a note.
•
Don’t interrupt a customer when he or she is speaking: Ask clarifying questions when the customer is finished.
COMMUNITY BUILDING AND ENGAGEMENT The word “community” is derived via Old French from the Latin communitas (com, “with/together” + munus, “gift”),
THERE’S A BIG DIFFERENCE BETWEEN
SELLING AND
SELLING OUT. Ready for the next chapter of your business? Consider Hilb Group. While other firms rely on pure acquisition to fuel growth, our strategy combines an aggressive acquisition model with a proven formula to drive growth internally. By combining the strength of your firm with the resources and expertise of ours, we’re able to help you reach not just the next chapter, but the next level. Thinking of your next step? Talk with us today and learn how joining the Hilb Group makes you more than just a seller. You become a partner in our success.
Contact Bob J. Hilb, President & CEO, at (804) 414 6505 or rhilb@hilbgroup.com
HILB GROUP is a Top 100 US insurance agency focused on providing Property & Casualty insurance and Employee Benefits to small to mid-size businesses. Learn more at HilbGroup.com
“Thanks again for the best business decision I ever made” – R. Hockman, Hockman Insurance
“I wish I had done this 10 years ago” – H. Grubbs, B&H Insurance
“Having Hilb Group behind me has helped my agency set new records” – D. Contorno, Lake Norman Benefits
Winter 2016 • THE BIG “I” VIRGINIA
17
a broad term for fellowship or organized society. Definition of Community Building It’s a range of practices that alleviates problems and helps create a sense of community among individuals who live within a region or who share a common interest. It is sometimes referred to as community development or community service. • Insurance agencies have long been aware that involvement in their community’s causes and events is good business practice. •
•
Approaching community involvement with a bigger goal, however—the health of your community-will, in the long run, benefit your agency even more.
Brand journalism: Assign someone in your agency to write down your company’s success stories: Discounts found for clients, smart deals structured, problems solved. These can be posted on your Web site; then write posts in social media that link to the stories on your site. Use the success stories in your email newsletter.
•
Target your newsletter: It’s a measurable, costeffective way to grow client accounts. Send success stories on certain topics to clients who are likely to be interested in those topics. Use an email system like Constant Contact
•
Write down the questions your customers ask. Post a snippet on social media and a link to the full answer on your blog. This makes you part of the education economy, where people want information, not a hard sell.
Communities are enhanced when causes are approached with a sense of possibility, generosity and celebration of gifts.
Places to get involved include, but are not limited to: • Public libraries. They establish a sense of place in a community. They are anchor institutions that, in times of disaster and economic struggle, are the heart of their communities. •
Houses of worship.
•
Hospitals.
•
Schools (tutoring, mentoring, coaching).
•
Chambers of Commerce, Rotary, Lions, other service organizations.
ENGAGEMENT As you meet people in these organizations, get to know them and try to connect them with others in the community who share their interests. Be of service. Content Marketing
THE BIG “I” VIRGINIA • Winter 2016
Content from Outside Your Agency • Curate Web content that would interest your clients (always giving attribution). Set up a Google Alert on a topic clients have expressed interest in. Google will troll the Web for articles on that topic and notify you automatically. Talkwalker is another source. •
Always think of what your customers need to know in order to manage their lives and businesses better. Don’t just think about what you want to say.
•
Segment your customers. Some are interested in home and auto, others are interested in business interruption insurance.
As you meet people in these organizations, get to know them and try to connect them with others in the community who share their interests. Be of service.
As you participate in the online revolution, finding content for blog posts and Tweets can be a challenge. The good news is you have lots of content right within your agency: • Post your involvement in community causes and events on your blog, Facebook, Twitter and Google+ but not in a self-promotional way (more in a celebratory way, celebrating the community). 18
•
19
+What Would Yo Do if you had a data breach by John Immordino CIC, CRM, RPLU, CIPP/US
The response is usualy along the lines of a glazed-over look, folllowed by eyes rolling into the backs of heads.
O
ne of the first questions that I ask clients is “What would you do if you had a breach?” The response is usually along the lines of a glazed over look, followed by eyes rolling into the backs of heads. I usually know at this point that I will need to educate my client. I start by informing them that 60% of businesses fail to recover from a breach. Why? Because those businesses are not familiar with state data breach notification laws, the costs associated with a breach, and the reputational harm that the business will incur. The majority of business owners consider reputation one of their most important assets. Small business owners work in the same communities that they live, shop, go to church and where their kids go to school. When clients provide their private information, they expect the business to keep it safe. If the client suffers a breach of this information, the client, and, by extension, the local community, lose faith in the business. As a matter of fact, 38% of clients will leave after a breach and 46% of them will advise friends and family to be careful sharing information with that local business.
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THE BIG “I” VIRGINIA • Winter 2016
This is why the number one concern is to help my clients protect sensitive information and prevent a breach from happening. Many insurance carriers will offer risk management web portals as part of their insurance policy. These are excellent resources for companies that need assistance in identifying and protecting the private information they have. These portals also provide useful tools in training the business employees on the importance of privacy. Some of these same carriers will provide the insured with a public relations firm to help them announce the breach in a way that will mitigate their reputational harm. When it comes to discussing privacy laws, the best approach is to keep it simple. There are numerous state and federal privacy laws that business must comply with, but I usually focus on one: state notification laws. There are currently 47 different state notification laws. In a general sense, these laws state that if a business collects private information on state residents, they are required to protect that information. If the business fails to protect the information and there is a breach, they must notify the affected individuals within a certain time frame. If
ost there when it matters most there when it matters
Technology
At Southern Insurance Company of Virginia we understand that “ease of doing business” is vital in determining the value of a carrier to any independent agency. That’s why Southern focuses on providing superior technology including fully automated webbased systems for Personal, Commercial and Farm Lines to give our agents optimal efficiency in quoting and issuing policies. And while we’re pleased to offer advanced technology equal to any of the national carriers, Southern constantly strives to improve and enhance that technology. Southern’s commitment to delivering superior technology to make your job easier… another way Southern is “There When It Matters Most.”
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According to recent Symantec research, 60% of small businesses will close within six months of a cyber-attack. Are you prepared to handle a breach? the residents are not notified within that time period, the business can be assessed civil money penalties. The challenge is determining when the business has to notify the affected individual and when the clock starts ticking. Most states specify that they must notify “without unreasonable delay.” Some states will actually provide a number of days that can range from five to 45 days. The new national legislation being proposed will be 30 days. So, to keep from getting fined up to several hundreds of thousands of dollars, the business must notify the residents as soon as possible. The notification will consist of three steps: forensics, legal and mailing. The first step is to find a forensic investigator to assess the breach. Forensics will determine what happened and identify the individuals whose private information has been compromised. This list will then go to a legal counsel specializing in privacy laws. Counsel will determine which laws are applicable to the situation, and suggest compliance methods, including how to structure the notification letter. All states have specific requirements on how these letters need to be written. After the draft is completed, the letters are then mailed to the affected individuals. This is a complex process that must be completed in a certain time period. Because of this, clients that do not have a formalized response plan are best served by being placed with a carrier that will provide one for them. Several carriers will offer turn-key breach responses or otherwise assist an insured through the breach response process. The costs associated with handling a breach can cripple any business. Depending on the report being reviewed, these costs can range from $1,000 to $13,700,000. The important thing to remember is that the cost of the breach is not relative to the size of a company. Instead, the cost associated with each breach has to do with the type of information compromised, the regulatory climate and how the information was compromised. According to a 2014 NetDiligence report on 111 actual cyber liability insurance claims, the average claim payout is $733,109. This amount is inclusive of forensics, notification, legal guidance, public relations, legal defense, legal settlement, regulatory defense, regulatory fines and PCI fines. Because the notification costs can vary so greatly, we usually recommend carriers that will respond 22
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to the notification obligation on the basis of a record count outside the limit of liability, instead of a set, static dollar value limit.
It has often been said that it is not a matter of if you will have a breach but when. Educating, training and insuring are the key components to helping your organization be part of the 40% survival rate. The IIAV has partnered with Arlington/Roe® to offer their members the Big “I” Agents Cyber Secure Program. This program was developed for insurance agents to provide them with the tools to reduce their exposures and the insurance to respond to a breach. For more information on this product, please contact Linda Loving – lloving@iiav.com (804) 747-9300 or 1(800) 2884428. John Immordino is a vice president of professional liability at Arlington/Roe, a wholesale Insurance broker. He is the administrator of the nationally endorsed Big “I” Agents Cyber Secure Program. This program is only available to member agencies through their IIABA state associations. He can be reached at jimmordino@arlingtonroe.com or 800-878-9891, Ext. 8732. A&M Assoc Ad VA PRINT.pdf
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THE BIG “I” VIRGINIA • Winter 2016
Don’t Get Caught in the web
by Sabrena Sally, CPCU
Be aware of and Mitigate E& O Exposures From Your Website
O
that appear on the Internet are subject to all applicable existing statutory and regulatory guidelines and restrictions applicable to advertisements in any other medium.”
Virtually all agency websites provide basic advertising for the agency, showing the agency name, logo, phone number, address and email link. Over the past eighteen months, however, applications for E&O show a clear trend toward agency websites expanding beyond standard advertising information, as might be expected from expanding consumer online behavior and the services being offered by competitors and other industries.
Websites commonly provide a button allowing a site visitor to contact the agency via email. One could certainly expect questions about what services the agency provides, hours open for business or even driving directions. Keep in mind, however, that there is no way to control what a visitor might choose to include in the content of their email. The visitor might decide to include confidential personal information (such as a name coupled with a social security, drivers license or credit card number) in the unprotected email, creating an exposure to breach of data privacy.
ver 40% of agencies insured through the IIABA-Swiss Re E&O program now have their own website, having grown from 19% in 2006. Having a good website, with robust functionality, has become a core tool for agencies with a modern marketing strategy. Agencies are moving to more complex websites to respond to consumers and clients who increasingly want to shop online and be able to handle basic service needs when convenient for them.
ADVERTISING EXPOSURE Let’s first examine what errors and omissions exposures an agency can face from the more traditional type of website. Many of the exposures on these sites are the same that exist in the ‘paper’ world. Advertising liability can arise out of the use or misuse of a trademark, or from the copyrighted material of others, and statements regarding the services available through the agency may be subject to regulatory requirements. At least one state, New York, makes this clear in Circular Letter No. 5 (2001), “Advertisements, Referrals and Solicitations on the Internet,” where it states that “Advertisements
E&O Tip: The same level of care in creating ‘paper’ advertising is appropriate for the agency advertising contained on the website. If in doubt, a quick consultation with your qualified legal counsel is well worth the cost.
E&O Tip: To help mitigate the liability exposure from this common website feature, posting an appropriate disclaimer is a best practice. A sample disclaimer is provided at the end of this article for agents to use as a starting point and to customize to their agency’s situation. POSTING WEBSITE CONTENT As a simplified case study, let’s view the stages a hypothetical agency might follow in expanding its website over time, and how these changes can affect Winter 2016 • THE BIG “I” VIRGINIA
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the agency’s E&O exposure. After constructing a basic website, the next step an agency often takes is to add articles that will be of interest to site visitors. Articles of interest can range widely in subject matter and may be available for viewing only or also as a download. “What is an umbrella policy,” “How to implement an employee wellness plan,” and “Where to find information on OSHA requirements” are examples of topics seen on agency websites. Content can be general in nature or become more technical and specific to certain types of exposures. The options are practically endless. Posting informative articles on the agency website can draw visitors, generate stickiness with existing customers, and lead people to contact the agency for additional information. In addition to these positive benefits, there are risks that accompany posting information. E&O Tip: If the content is original material created by the agency, practicing due diligence to ensure accuracy of the information is a key preventative measure. The more specific the information provided, the higher the risk of generating allegations against the agency for misrepresentation or providing inaccurate advice. There is one significant difference between content posted on a website and content published in more traditional forms. Posting content online makes the information available to anyone regardless of their physical location. This instantaneous world-wide availability raises the issue of jurisdiction. It is not yet clear how legal jurisdiction might be applied to content published on a website. Including an appropriate legal disclaimer as part of posted information is for now one’s most effective tool in mitigating the jurisdictional risk. E&O Tips: If the content is obtained from another source, the first step in risk management is to verify the expertise of the information’s source. This step helps minimize the exposure to allegations of misrepresentation or inaccurate advice. The information is also most likely copyrighted, creating 28
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exposure to allegations of copyright infringement. Obtaining written permission from the owner or licensor of the material prior to posting and giving appropriate credit of authorship can help mitigate the copyright exposure. If the content is obtained under a licensing agreement, explore what options may exist to protect the agency via contractual indemnification. As with information authored by the agency, it is recommended that appropriate legal disclaimers be clearly posted with information obtained from other sources. WEBSITE REFERRALS As agencies often receive requests from customers for referrals to other service vendors, it is a natural next step for the agency website to include links to these types of service vendors. Windshield repair services, CPAs for tax preparation, and disaster recovery solutions firms, are just a few examples of service vendor links seen on agency websites. Linking to vendors on the agency website can create the same exposure to negligent referral that exists when the referral takes place verbally, through email or snail mail. Regardless of how a referral is provided, the best practice recommendation is to provide at least two referrals, leaving it to your customer to choose which vendor to use. If the agency site links
directly to a vendor, there also may be exposure to allegations of trademark infringement or unfair use of cyber marks from the vendor. E&O Tips: The best practices to follow to mitigate allegations of negligent referral for vendor referrals, including linking, are to:
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obtain written permission from the vendor or site to which the link leads provide always more than one selection for each type of service ensure there are appropriate disclaimers regarding the services being provided by these vendors.
INTERACTIVE AND WEB-BASED TRANSACTIONS Agencies are increasingly adding interactive website features to increase the effectiveness and efficiency of the agency. When interactive features are included on an agency website, more unique E&O exposures can quickly develop. The most rapidly growing exposure we have seen is the number of agency websites that are
Partners.
accepting application information. As part of the underwriting process on a recent renewal, we reviewed an agency website. The site opened to a very professionally designed home page. The site had clearly written text, eye-pleasing graphics, was well-organized, and quick-loading. At the bottom of the first page, a link to the agency privacy statement was prominently posted. Following the various tabs, one could easily find informative articles which clearly showed authorship and contained appropriate disclaimer language. So far, so good. We then clicked on a button titled Personal Lines, on through the Auto Insurance button, to “Submit Application.” The Submit Application button led to a page where a full spectrum of personally identifiable information can be submitted, including: name, address, date of birth, social security number, drivers license number – basically all the information one needs to carry out identity theft. There was no indication of security being enabled by an ‘https’ displayed before the URL (evidence of creation of an SSL connection), and nothing contained within the web page itself referred to secure transmission of this data.
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An agency has the duty to protect personally identifiable information and a myriad of both state and federal laws apply. Violations of these laws carry significant financial penalties, not to mention the extreme damage that can be done to the agency’s reputation. One state, for example, specifically requires “encryption of all transmitted records and files containing personal information that will travel across public networks, and encryption of all data containing personal information transmitted wirelessly.” At the most recent count, forty-six states have some type of law or regulation addressing the protection of personal information. E&O Tips: Agencies that collect personally identifiable information (whether on their websites or not) should take the necessary steps to be knowledgeable about state and federal laws and regulations that Winter 2016 • THE BIG “I” VIRGINIA
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protect such personal information and provide the level of data security required by them. A best practice is that the agency website create an SSL connection with the visitor’s browser before the visitor is asked to enter an id or password or any personal information, such as that included on insurance applications, so that this information cannot be read by unintended parties over the Internet. Many agencies are now expanding their online presence to include social media as a part of their advertising and customer interaction. ACT has articles, for example this article and a webinar on the E&O exposures arising from the use of social media which can be found at www. independentagent.com at the “Sales and Marketing” / “Website & Social Media” link. KEY ACTIVITIES FOR MITIGATING E&O EXPOSURES GENERATED BY A WEB PRESENCE It’s an exciting time as agencies become more creative in using the opportunities that websites can provide. Be creative, but not naive. Keep in mind that with every opportunity, there is risk. Consider the following quick tips to help mitigate your agency’s exposure to errors and omissions that may arise from your agency’s website:
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Review website advertising with the same level of legal scrutiny toward copyright and trademark issues as the agency’s more traditional advertising
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Post an appropriate Privacy Statement prominently on the website
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Review original content posted on the website for accuracy and post appropriate disclaimers
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Obtain written permission for content obtained from other parties, be confident they are a knowledgeable source, credit their authorship, obtain the author’s indemnification (if feasible) and post appropriate disclaimers
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If you decide to refer to other service providers, provide more than one provider name, obtain 30
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written permission to link to them and post appropriate disclaimers regarding the services provided by the vendors
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If the website has interactive features that collect personally identifiable information, comply with all state and federal privacy and data breach notification laws and regulations and create an SSL connection with the visitor’s browser before the visitor is asked to enter an id or password or any personal information. SAMPLE WEBSITE DISCLAIMERS Agents should consult with their local counsel to customize these sample disclaimers so that they fit their website, are positioned at the appropriate places on the site and comply with all of the federal and state laws and regulations that apply to them. These disclaimers are in addition to the Privacy Statement that the agency should include at the bottom of its website setting out its privacy policies. WEBSITE DISCLAIMERS Please review carefully! “This information is not an offer to sell insurance. Insurance coverage cannot be bound or changed via
submission of this online form/application, e-mail, voice mail or facsimile. No binder, insurance policy, change, addition, and/or deletion to insurance coverage goes into effect unless and until confirmed directly with a licensed agent. Note any proposal of insurance we may present to you will be based upon the values developed and exposures to loss disclosed to us on this online form/application and/or in communications with us. All coverages are subject to the terms, conditions and exclusions of the actual policy issued. Not all policies or coverages are available in every state.” “Please contact our office at 555.555.5555 to discuss specific coverage details and your insurance needs. In order to protect your privacy, please do not send us your confidential personal information by unprotected email. Instead, discuss that personal information with us by phone or send by fax.” “Statements on this website as to policies and coverages and other content provide general information only and we provide no warranty as to their accuracy. Clients should consult with their licensed agent as to how these coverages pertain to their individual situation. Any hypertext links to other sites or vendors are provided as a convenience only. We have no control over those
sites or vendors and cannot, therefore, endorse nor guarantee the accuracy of any information provided by those sites or the services provided by those vendors.” “Information provided on this website does not constitute professional advice. If you have legal, tax or financial planning questions, you need to contact a qualified professional.” This article is intended only for educational or illustrative purposes and should not be construed to communicate legal or professional advice. You should consult legal or other professionals with respect to any specific questions you may have. Further, the statements and/or opinions contained are those only of the author and do not constitute and should not be construed to constitute any statement, opinion or position of Swiss Re, IIABA or ACT. Sabrena Sally, CPCU is Senior Vice President of Westport Insurance Corporation, a Swiss Re company, and manages the Big “I” Agency Professional Liability Program, which is endorsed by IIABA and 51 Big “I” state associations. Sabrena can be reached at sabrena_sally@swissre.com. Sabrena produced this article for the Agents Council for Technology (ACT), a part of the Independent Insurance Agents & Brokers of America.
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PRODUCER TIPS:
Coverage Areas For Organic Growth Opportunities Are you talking to customers about these coverages?
Producers are continuously looking for opportunities to write more business. Offering some of the coverages below may provide prominent opportunities for growth on existing and new business accounts. The list is not designed to be exhaustive but instead to provide ideas that could lead to potential revenue.
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•
Flood and Earthquake Coverage – Natural catastrophes are the great exposers of coverage deficiencies in the insurance programs of customers. Offering flood and earthquake coverage to both personal and commercial lines customers is low hanging fruit. Document those files if coverage is rejected.
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Business Income/Off-premises power failure/Dependent Property – It starts with offering flood and earthquake coverage to be sure it is an insured cause of loss but these time-element coverages can round out customer coverage and provide premium growth opportunities. And these coverages become even more important as businesses grow.
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Umbrella – Whether it is a personal or commercial account it never hurts to offer customers an umbrella. The additional limits offered along with the possibility of expanded coverage terms are very E&O friendly to the agency. It may be the more established businesses or the family with teenagers that are the agency’s biggest opportunity. Be sure to verify underlying coverage limit requirements are met and claims are reported on a timely basis though.
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Defense Inside or Outside the Limits Matters – For those customers that have coverage with defense inside the limits, talk with them about what this really means when they take into account the average cost of defense. When it comes to some professional liability lines, defense costs can make up about 33 cents of every $1 of ultimate loss. For comparison, $3M in coverage with defense inside the limits may equal $2M with defense outside the limits. If defense is inside the limits – make a case for increased limits with customers. Cyber Liability Coverage – If customers don’t understand the importance of the need for this coverage, they’ve probably been living under a rock. First party damages from data breach notification requirements alone make this critical coverage. Just because a customer doesn’t think they need it shouldn’t stop your agency from offering it. (And if you are feeling uncomfortable right about now because your agency hasn’t purchased a stand-alone policy, call your Big ‘I’ state association and they can help you out. It’s really affordable and worth purchasing.)
coverage for a customer’s most prominent exposure if not carefully reviewed. In addition, the expanding definition of pollutants, may open up the need and the opportunity to sell environmental impairment coverage. From the agency perspective this coverage may be technically challenging to understand so work closely with your underwriter or broker. Understanding customer operations and having a deep knowledge of the products available will allow producers to increase revenue while better serving their customers. The above list coverages can often be overlooked and provide growth opportunities. Depending on your state, you may only have a legal duty to procure the coverage requested by the customer, but doing a deeper assessment of their needs can ultimately close gaps in coverage. And remember, just because a customer doesn’t ask for a specific coverage doesn’t mean you shouldn’t offer it. Let the customer make the ultimate buying decision and document the file accordingly. Reprinted with permission of Big “I” Advantage, Inc. and Swiss Re Americas. All rights reserved.
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How to Be a More Personal Brand
For your Audience By Wade Harman Sally, CPCU
A
re you committed to the cause of your marketing?
Do you look around and watch as other brands magically pull in clients and customers from social and search and wonder what you’re doing wrong? You can understand social and content marketing strategies to their fullest extent, but if you’re not doing this one thing, then your brand will suffer. It’s called being personal. Today I would like to point out some techniques that you should be using to keep your brand top of mind with your target audience and how to keep them coming back for more.
THE SECRET SAUCE So you’ve just logged onto your favorite social platform only to find yet another brand has successfully managed to clinch their spot in marketing stardom.
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What are they doing different that you’re not?
But that’s okay!
You know all of the tricks to content marketing and you understand how to present a great article to social, so why do people pass you by?
Rockwell Automation study says that 9 out of 10 business owners say that when someone is ready to purchase, they will find you. You just need to make sure that when they do find you, you’re being as transparent as you can be with them.
The secret sauce to all of this are three things rolled into one. Here they are:
Guess what?
> Transparency > Authenticity > Personal Touch For some reason, people are responding more to other brands because they understand what it means to do all three of these things with their audience. If you are not getting great results, after seemingly knowing all that you know about marketing, you may want to back pedal and spit shine one, or all, of these three things in your strategy. Would you like to know more?
Your transparency has now bridged the gap into the dominion of the personal, emotional state and now, even though your business looks a little less shiny to you, it looks a lot like the experiences the audience have been going through in business recently. So there is always the way you want to be seen, and then
You can understand social and content marketing strategies to their fullest extent, but if you’re not doing this one thing, then your brand will suffer. It’s called being personal.
TRANSPARENCY While it is sometimes difficult to present yourself to a virtual audience, a successful brand is on that is transparent to its target market. Now, there are some sideways approaches when it comes to this technique because we all have heard and read about the essentials of being transparent and how it can affect your business. Everyone has an opinion on it, but not every brand truly does this to the full effect. I was in a business meeting with a fairly large local brand around my home town and while discussing the importance of transparency, they wanted me to wrap all this up in a great story. Sounded good to me. However, they wanted me to leave out certain parts. They wanted the story to magnify how great they were, how they made that marketing goal the first time out. They wanted to appear spotless. But there’s always three sides to every great story. Your side, my side, and then there’s the truth. This is what I explained to this company I sat in front of as they grimaced in pain about the thought of their brand being exposed for their many mistakes to get their product and business to where it is today.
there is the way the customer sees your brand without really knowing who you are. But when you finally become truly transparent with people, you start to get on the same page with everything and that’s when the ball begins to roll the right direction down the hill.
AUTHENTICITY One person recently asked me, how do I know when someone isn’t being authentic? It’s a valid question and one that I wish could be revealed to all of us immediately when we meet people and try to build great relationships with them. However, authenticity starts showing through with the consistency of the brand. If you want to be an authentic you, without anyone knowing anything about you, you will have to simply start showing up and be you while everyone watches. No, they’re not going to be able to determine whether or not this is really you the first time out, but after doing it a while, they will begin to see that, yes, they are who they appear to be. Your brand is successful because it’s consistent. You can ride the consistency train right into authenticity and trust because when you do something over and over again, you start becoming known for that thing. Winter 2016 • THE BIG “I” VIRGINIA
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What do you want to be known for? Authenticity is a frame of mind that the audience has about your brand, and it’s up to you to be totally transparent and consistent to allow them to be able to see your true business and what it can do for them.
PERSONAL TOUCH Let’s face it. We’ve all got to be more personal in this online industry these days. With the means of connectivity that consumers have with brands and individuals all over the world, this empowers us to have a voice about different things online. We have, at our fingertips, a way to reach the CEO of Apple, the best dang truck company in the world, and even The Donald! Brands that haven’t recognized this yet will probably start to see a decline in consumer business because people want personal. They want to be needed, to be liked, and to be seen. And you have that opportunity to do that for them on various social media platforms. With the high demand of response time on social media channels your brand has to be aware that people are watching you, and waiting on you to notice them and how they affect your business. Where do people go when they want to complain? Social media. Where do people go when they want to praise? Social media. In fact, 42% of consumers expect to be replied back to on Twitter within 60 minutes! How do small and large businesses alike need to fulfill the personal touch on social media? By responding. The Australian Psychological Society revealed that when a brand simply replied back to an individual, there was a 43% chance that this individual would stay engaged with that brand in the future. And this was even polling the one’s that had complaints! Great brands all over the internet are successful because they listen to the customer, the follower, etc. Give your audience a voice and allow them to feel heard and they will start returning the favor to your business later.
THE FINAL THOUGHT While understanding how marketing works for your 36
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business, how to correctly post that social media update, and how to construct the greatest article ever read is a great feat to discover indeed! But none of this works unless you start including the audience in what you do. Include them into the story of your brand, and while that shows every stupid thing you’ve ever done, you will pave the road for consistency, authenticity, and trust to build with the consumer that wants to be connected to you. While your business may be great, and you may be the smartest person to ever bang a marketing post out on a keyboard, it won’t work unless you understand the most important aspect of your online business…
Meet Today’s “This is Our Market - and This is Our Time”
By Thomas Minkler, IIABA Chairman 2013 -14 President, Clark-Mortenson Agency
by Thomas Minkler, IIABA Chairman 2013-14 President, Clark-Mortenson Agency
C
onsumers are connected. How do you reach them and interact with them? The American economy is driven by consumers who want and expect to help and serve themselves. Social networking sites such as Facebook, consumer review portals such as Yelp, e-commerce sites such as eBay and Amazon, and community sites such as CraigsList and Wikipedia are the go-to tools for finding information and answers, shopping and buying, and getting things done. Researchers have dubbed this trend “the groundswell.”
Today’s empowered consumers are taking different routes to get where they want to go. Researchers at Forrester have segmented U.S. adult consumers by social technographic: Winter 2016 • THE BIG “I” VIRGINIA
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“The groundswell is: A social trend in which people use technologies to get what they need from each other, rather than from traditional institutions like corporations.”
>
Groundswell: Winning In A World Transformed by Social Technologies, by Charlene Li & Josh Bernoff Today, most personal insurance consumers begin their search for new coverage online. In fact, nearly 80 percent of auto insurance shoppers use some form of online research. Only 20 percent depend on an agent alone to do their research, according to the 2012 McKinsey Auto Insurance Consumer Insights Research. “Today’s consumers have more power and information than ever before. Consumers today expect that their questions are resolved quickly and that those answers are trustworthy. Consumers no longer need information, they desire advice and direction from a seller who is courteous, prompt, and knowledgeable.” Professional Service Remains Vital. Yet, at the same time, consumers want to interact with product and service providers in insurance and financial services. For example, research and consumer behavior shows they still need and want what independent insurance agents provide: The overwhelming majority turns to a live person – in person or on the phone – to make an auto insurance purchase.
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“Almost nobody buys online. Consumers don’t like to buy it online. They want to talk to a trusted advisor.”
>
Bob Rusbuldt President & Independent Insurance Agents Brokers of America (IIABA)
CEO and
For a generation, marketers followed a mass-market, megaphone approach. That’s shifted: Today’s marketing environment is interactive and consumer-driven. Now that you’ve recognized these changes in the environment, it’s time to adapt and work proactively and interactively with today’s connected consumers.
“‘Connected Generation’ consumers care about our story more than we realize. There is one business lesson that we independent insurance agents need to come to grips with: ‘Tell your story. Be useful.’ Success is that simple.”
> Ryan Hanley, Hanley Media Labs Creating customer connections means gathering what you know about your existing customer base and using that insight to create long lasting customer engagement. Find out how to create a process that starts with the first contact and continues throughout the customer lifecycle.
There some simple steps that you can take to learn more about the customers you already have, and then find ways to leverage that knowledge to attract more just like them. •
them to let you know what made them buy from you, why they continue renewing their business and what you offer than others didn’t. Take to social media and solicit feedback, get customer to provide feedback on sites that gather customer reviews.
Determine your ideal customer, melding together a grouping and finding what makes them all similar. Use things like their age, gender, income, along with their personality traits and buying preferences, then consider their hobbies, their community affiliations, their families, their employment, and other traits that could help define their buying behaviors.
Next, determine where you most often find your customers. Word of mouth, community involvement, online, via printed marketing materials or ads in the newspaper? Take time to analyze how you acquired the majority of your 7.5X4.625 customers and use that information to start General locating JGS Umbrella Program ad more of them!
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Work with your ideal customers to gain insight into why they chose your agency over others. Pick up the phone or send a personal e-mail and ask
Survey your new customers to learn why they choose you, what you offered that was attractive to them, even ask what you could improve upon to help hone your customer image. Remember, the right metrics will help you analyze every interaction and begin to learn more about your customer base, especially as their needs change or their methods of communication evolve.
Finally, it is important to know that consumers today will come to you from a number of acquisition points, come more prepared than in the past, come with many questions and with reams of research that they have gathered online. They will have collected information about you and your agency and will have likely formed an expectation of the advice and service they will receive. Be up to the challenge.
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THE BIG “I” VIRGINIA • Winter 2016
insurEXPO16
BEST PRACTICES FOR AGENCY ACHIEVEMENT
Save the Date: APRIL 25-26, 2016
Trends of Top Performing Agencies Continuing Education Special Guest, Bobby Reagan, CPCU Reagan Consulting Inspiring Industry Speakers Exhibit Hall Networking Opportunities Details and the latest news about speakers and sessions at
www.iiav.com
KEYNOTE SPEAKER
Bobby Reagan, CPCU
Reagan Consulting, Atlanta GA Bobby Reagan brings more than three decades of insurance industry experience to the company that bears his name. Bobby's expertise and integrity have ensured his reputation as a true authority within the insurance industry.
ognition as the creators and authors of the annual Best Practices Study. The study, developed in conjunction with the Independent Insurance Agents & Brokers of America, established the firm as the foremost authority on the business practices of the country’s leading independent insurance agencies and brokers.
Sponsored by
Launched in 1995, Reagan Consulting’s team of financial and insurance professionals gained immediate rec-
APRIL 25-26, 2016 · Downtown Marriott · Richmond, VA Winter 2016 • THE BIG “I” VIRGINIA
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Generating a profitable, highmargin book of business requires a balanced approach to marketing and sales – built on processes that are sustained over the long haul. Steve lays out how an agency can achieve such a successful marketing and sales process that is both high-touch and high-tech.
+A Balanced approach to agency Marketing
O
By Steve Anderson
nsurance agency marketing and sales are being transformed right before our eyes. Daniel Burrus, a technology forecaster, said in his January 2009 Technotrends newsletter:
We are now at the dawn of a profound technology-driven transformation that will make the changes we have experienced over the past 25 years seems small and slow. We are about to transform how we sell, market, communicate, collaborate, innovate, watch TV, learn and, as you might guess, much more. The implications of this “technology driven transformation” for insurance agencies are significant. The marketing activities that agencies have relied on for many years to retain existing clients and generate new business are not going to continue working as well as they have in the past. The new consumer is using the Internet for researching all types of purchases, including insurance policies. New mobile computing platforms, including iPads, iPhones, and other mobile devices are redefining what it means to “stay in touch.” 42
THE BIG “I” VIRGINIA • Winter 2016
Yet, even with all the new “stuff” that people are using in their daily lives, people still want to buy from people. And this is why independent agencies should not be afraid of this transformation. Agencies can take advantage of this transformation and grow their agencies, if they are willing to think differently about marketing and sales.
SIX KEY ELEMENTS OF A SUCCESSFUL STRATEGY The keys to building a profitable book of business are: •
A balanced approach to marketing and sales
•
Fixing an agency’s follow-up failure
•
Create high-touch activities using high-tech tools
•
Creating processes and systems
•
Commit to the long haul
•
Constant attention
Ross Dik owns Knight Dik Insurance located in Worchester, MA. This independent agency focuses on personal lines and small commercial accounts. They have 12 employees and are located on the ninth floor of a downtown office building (with a security guard), which means they don’t get a lot of walk-in traffic. Dik realized five years ago that in order to continue to grow the agency he needed to create processes that would generate profitable business. He started working on creating processes five years ago.
have heard for years that it is easier and more profitable to retain an existing client than it is to generate a new one. Yet many agencies don’t have processes in place to actively retain these important clients. The renewal process should start immediately after the first policy is sold. This is very different from the renewal event, which takes place six or twelve months later. A renewal process actively builds an ongoing relationship with that new client from the very beginning of the relationship. UpGrade: Every agency has additional revenue sitting in their existing book of business that is just waiting to be extracted. A simple example of upgrades would be identifying those individuals who have automobile liability limits below the agency’s recommended level. Dik created a process where individuals with lower limits would receive in the mail prior to their renewal a copy of their auto Dec Page with a big red stamp on it stating: “Your policy has coverage limits less than we suggest.” Every endorsement to raise limits represents additional profit for the agency with very little effort. It also significantly enhances the agency’s E&O protection. There are many opportunities to upgrade existing business.
Understanding that technology was a key component of creating these processes, we began working together four years ago and combined our skills to “crack the code” of creating a high-margin, profitable book of personal lines and small commercial business.
A BALANCED APPROACH Most agencies focus their time and resources on obtaining new business. As we began to work, we realized that a balanced approach is the key to creating a profitable book of business. A balanced approach includes these four pillars of profitability: Keep: This is simply retention. Being able to “keep” the accounts you already have. Agents Winter 2016 • THE BIG “I” VIRGINIA
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Round Out: It’s common knowledge that the more policies written per account, the longer that account will stay with you. By creating a process that identifies opportunities for additional business, this important marketing activity is not left to the whim of a CSR remembering to ask to quote a policy the agency does not yet write.
can grow your retention rate by half a percent per year, you are doing well.
Get More: Generating new business is important in order to have a healthy agency. Yet, new business is specifically listed last on purpose. While most agencies focus on generating new business, it is actually more profitable to focus on the three other pillars of profitability first – Keep, UpGrade and Round Out. Creating a “get more” process helps generate a constant flow of new business into the agency. Once that new business is put on the books, the other processes will help make that new business as profitable as possible.
Overrides and bonuses: Finally, you should have at least 5% of your revenue being generated from overrides and bonuses received from your insurance companies.
BENEFITS There are many benefits to building a balanced approach like the one described above. It creates more revenue for the agency and builds a highermargin book of business. Actively pursuing upgrades and rounding out accounts helps build a much better book profile, which generally translates into better loss ratios for that book that help increase agency contingency payments. All of this makes for happier insurance companies who are then more willing to invest in and provide additional resources to the agency so that they can continue to grow.
THE LONG HAUL We said above that one of the keys to profitability is being willing to commit to the long haul. This is not a quick fix process. It takes time and discipline to implement and make sure it continues running. Those agencies, however, that are willing to commit to the process will see results – over time.
5 BY 5 PROCESS We believe a reasonable goal is what we call the “5 by 5 process.” When you grow the following five areas by 5% over five years, you will then experience balanced growth. The five areas are: Average policy premium: An active UpGrade process will help you increase your average policy premium. Average policies per account: An active Round Out process can’t help but increase your average policy per account. Retention (.5 each year): We understand that it is really hard to affect retention, so we cheated here little bit. If you
New clients: An active marketing program will help you generate new business so that you can create 5% new clients each year.
AN EXAMPLE To illustrate these points, let’s turn to Knight-Dik Insurance again. The agency began experimenting with generating new business by purchasing Internet leads. They started by purchasing 100 leads per month. They determined that they needed an 8% close ratio to break even. Ross was
While most agencies focus on generating new business, it is actually more profitable to focus on the three other pillars of profitability first – Keep, UpGrade and Round Out. skeptical at first about the quality of these leads: “They are just looking for a cheap price; they won’t convert; they won’t stay.” But even with these reservations, Dik committed to working on creating a system for several months. The marketing process Dik created was managed by individual CSRs within the agency. When a lead was received, it was immediately entered into the marketing system and an e-mail was generated automatically to tell the prospect that the agency was working on a quote. When the quote was completed, they sent an e-mail with the quote to the prospect. They then created several follow-up steps to contact that prospect by e-mail and phone. One of those follow-up steps included an e-mail with a video of the producer talking to the prospect. They continued to track results and refine the initial contact and follow-up process. After some experimentation, they added an additional step to the follow-up process which ended up doubling the response. They printed out a form letter and mailed it with an agency brochure to the prospect. This simple step increased the number of people who responded to their follow-up requests. This is an example of how to combine high-tech and high-touch into the process. We mentioned above that the renewal Winter 2016 • THE BIG “I” VIRGINIA
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process should start immediately after the policy is sold. Every new client to the agency is started immediately on a “New Client Welcome” process. The first E-mail (or letter) goes out welcoming the new client to the agency. Eight other touches then are automatically sent to the new client over the next ninety days. That client should feel very welcomed to the agency and will hopefully not bother to shop when the policy comes up for renewal. Knight-Dik continues to purchase Internet generated leads. Today their close ratio on this business has been as high as 20% with an average of 11-15%. They started purchasing personal auto leads but now focus primarily on homeowner leads. They have found the homeowners leads are generally better quality and they avoid direct competition with GEICO and Progressive Direct. Because they have an active round out process, they work on picking up the automobile later.
CONCLUSION Generating a profitable, high-margin book of business requires a balanced approach to marketing and sales – built on processes that are sustained over the long haul. Creating a solid foundation for your agency requires that you “Keep” the business you have (retention), “UpGrade”
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coverages so that you can extract the money sitting in that book (and provide better E&O protection), “Round Out” each account with as many policies as you can, and “Get More” business by taking advantage of the transformation that is occurring in agency marketing.
Editor’s Note: You can subscribe to Steve Anderson’s free weekly emailed newsletter, “TechTips”, by going to www.steveanderson.com/act and subscribing. Tech Tips is a quick read and highlights one new “thing” that will help your organization increase its productivity and effectiveness. Steve Anderson has been involved with the insurance industry for over 30 years and is an active participant in ACT. He is a frequent speaker before agent and industry groups, consults with insurance agencies and publishes numerous reports, as well as the monthly “The Anderson Agency Report.” Steve can be reached at steve@steveanderson.com. Steve prepared article (Copyright 2010 by Steve Anderson. Used with this permission.) for ACT. For more information about ACT, contact Jeff Yates, ACT Executive Director at jeff.yates@iiaba.net. This article reflects the views of the author and should not be construed as an official statement by ACT.
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