JEFF ALBRIGHT
Chief Executive Officer
jalbright@iiabl.com (225) 236 1366
BENJAMIN ALBRIGHT
Vice President of Strategic Initiatives balbright@iiabl.com (225) 236 1357
KAREN KUYLEN
Director of Accounting & Finance kkuylen@iiabl com (225) 236 1353
JAMIE NEWCHURCH
Director of Insurance Programs jnewchurch@iiabl.com (225) 236 1350
KATHLEEN O'REGAN
Director of Communications & Events koregan@iiabl.com (225) 236 1360
BRANDI VAN PELT
Insurance Programs Administrator bvanpelt@iiabl.com (225) 236 1358
DUSTIN WAMBSGANS
Agency Consultant dwambsgans@iiabl.com (225) 236-1361
LISA YOUNG-CROOKS
Director of Member Relations lyoung@iiabl.com (225) 236 1351
The Joint Senate & House Insurance Committees of the Louisiana Legislature met on October 18th to hear testimony on the property insurance crisis in Louisiana. The hearing lasted over 10 hours.
Insurance Commissioner Jim Donelon led off the testimony with a recap of the 2020 2021 hurricane seasons which cost insurers over $25 billion in paid losses. Over 800,000 claims were filed arising out of Hurricanes Laura, Delta, Zeta, and Ida. One third of claims were closed without payment because they were below the wind deductible.
Nine insurers have become insolvent in the last couple of years, some insurers have withdrawn from the market and others stopped writing new business. As a result, Louisiana Citizens has grown to over 120,000 policies and are still growing by 300+ policies a day.
Commissioner Donelon reported that the cost of property insurance has increased due to inflationary increases in building costs, increased coverage limits to correct underinsurance, and dramatic increases in the cost of reinsurance.
Commissioner Donelon suggested that the short term solution to the insurance crisis is to fund the Insure Louisiana Incentive Program to encourage insurers to write Homeowners insurance in the state and take policies out of LA Citizens. The Commissioner urged legislators to find funding in the state budget to fund the incentive program.
The long term solution he suggested was the implementation of the new building code effective January 1, 2023, and encouraging people to build beyond the building code to the Fortified Home standard. Legislation was passed this year to create a Fortified Home grant program starting in 2024. Commissioner Donelon urged legislators to implement the program as soon as possible and fund it generously.
Paul Martin representing the Reinsurance Association of America, and Kevin Cunningham representing the American Property Casualty Insurance Association presented the Insurance Committees with their report, It’s Not Just the Weather.
Continued from page 6
The report highlights that Florida, California and Louisiana are creating man made insurance crises. Louisiana has significant long term tort liability problems that now includes litigation over catastrophe property claims settlements. Government interference including negative insurance legislation passed by the Louisiana Legislature and Directive 218 issued by the Louisiana Department of Insurance in the wake of Hurricane Ida are cited as creating problems for insurers. The report concludes that these legal and regulatory problems in combination with catastrophic hurricane losses has caused significant property insurance market problems for Louisiana.
IIABL CEO Jeff Albright testified that the Louisiana Homeowners market is a $2 billion market, and that A.M. Best data from 2005 2021 shows that the cumulative underwriting profit for Homeowners insurance in Louisiana is almost $14 billion LOSS! Albright asked the Joint Insurance Committee, “Why would any insurance company want to write Homeowners insurance in Louisiana?”
The point Albright made is that Louisiana has an insurance crisis of availability and affordability. We desperately need more insurance companies to write insurance in our state, but the loss experience does not encourage insurers to do business here, so we need to make Louisiana more attractive to insurers.
Albright suggested that legislators need to find ways to:
Address problems with our tort liability system including litigation of property insurance claims
Reform insurance laws to create a more favorable legal climate for insurers.
Relax insurance regulations to allow insurers to manage risks and allow them to provide more property market capacity in Louisiana.
Watch Jeff Albright's testimony at the Joint Insurance Committee Meeting on October 18, 2022 in this video!
The ultimate technology resource designed specifically for independent insurance agents
A tool that is now available to every employee in your agency for free (as part of your IIABL membership)
A guide to help you future-proof your agency
A path to a more efficient agency. Save your staff time, freeing them up for more valuable customer service work rather than low-value keystrokes
Experts to help you build the ideal customer experience for your clients to compete with agents, direct writers, and new market disruptors of any size (even if Amazon thinks they’re going to come after your book)
Many agents know, on some level, that they will eventually need to invest in more technology, make their staff more efficient, and provide a more modern customer experience for their clients. But where do you get started? What technology spend
will actually bring an ROI to your agency? Catalyit can help! The Catalyit Success Journey can walk you step by step down the path to compete with the big guys. From baseline technology that every agency needs all the way to the cutting edge, experimental technology that is only just emerging: this guide meets you where you are to show you what your next step is.
Help making that tough purchase decision If you’re at the point where you’ve decided to make a technology purchase, Catalyit can help you find the best vendor for your agency. On everything from your agency management system, through phone systems and registered email, to choosing a cybersecurity or IT support firm, Catalyit has guides and reviews for the major players. The guides are created by our neutral, 3rd party experts to help you decide which features are important to your agency and identify the vendors that support those features best. In addition, your fellow agents can leave reviews so that you see the boots-on-the-ground feedback has it really made life in their agency better?
Maybe you have an extremely specific technology questions that you just can’t find the exact right answer for. Or maybe you just feel lost, and you need to talk it through with an expert. Either way, Catalyit can help you there, too. There is a monthly Q&A where our experts field questions from agents on any insurance technology issue that is important to you. Or, if you prefer a more one on one approach, Catalyit’s Help Line is available to you. Simply call in, and one of our tech experts will be ready to help you with your specific concern.
Maybe you don’t have the time, energy, or interest to implement a new technology or optimize your staff’s usage of the ones you already have. Catalyit has a whole team of consultants that can help. With specializations from Customer Journey Mapping and Workflow Development all the way down to Marketing Automation, AMS Utilization, and software implementation, Catalyit’s consulting
Continued from page 11
team can help you out. Consulting IS on a fee basis, depending on the details of the engagement, but our Catalyit consultants prices are intentionally below market price because our mission is ultimately to help agents!
Finally, if you just want to stay up to date on what’s new in Insurtech, Catalyit has a variety of options for you:
The Tech Tips newsletter is a quick look into what’s been on Insurtech Guru (and Catalyit CEO) Steve Anderson’s mind recently. The monthly “Hot Topic” webinar will dive into the burning questions in agency technology: from using technology to care for clients after a Hurricane to complying with the ever changing technology requirements for Cyber coverage on your agency and more.
The Demo Lounge is an opportunity to see a demo of some of Insurtech’s hot new vendors in a low stress environment. Because they’re done in a group setting, you don’t have to worry about pushy salespeople harassing you after the demo to push for the sale, and you get the benefit of participation from other agents and Catalyit’s experts to make sure that that important question that you might have forgotten gets addressed.
Finally, Catalyit’s knowledge hub includes a library of past articles, videos, webinars, demos and other content on all things insurtech, so a quick search can often surface a wealth of material on whatever your latest technology interest may be.
It only takes a few minutes to get started
Go to Catalyit.com
Click “Get Access”
Fill in a few basic information fields Your free subscription (as an IIABL member benefit) will be activated!
I’d recommend you check out a few easy resources on Catalyit.com
Catalyit Tech Assessment – tells you how your agency compares with other independent agents in terms of technology, and where you might consider spending your money if you want to take it to the next level Check out a Catalyit Live session our experts are here to help. Use their expertise!
Browse the Catalyit Success Journey this is an extremely powerful tool to help you see a path forward to a future for your agency where your technology spend is a profit center, not just a line item on your expense sheet.
November 2 at 9am
Join Ben Albright on November 2, 2022, at 9am as he explains how to get the most out of Catalyit! Click HERE to RSVP!
Biennial study reveals gains and challenges in independent agency channel
IIABA October 13, 2022
The number of independent insurance agencies has increased and business conditions for agencies remain favorable, according to the 2022 Agency Universe Study. While the majority of agencies experienced increased revenue, that percentage was lower than in the previous study in 2020.
Future One, a collaboration of the Big “I” and leading independent agency companies, has released key findings from the recently completed Agency Universe Study, hailed as the most comprehensive look at the independent agency system.
“The 2022 Agency Universe Study shows the resiliency of the independent agency system as it continues to grow and adapt through the challenges of the last couple years,” says Bob Rusbuldt, Big “I” president & CEO. “It is amazing that during the
pandemic the independent agency system added nearly 4,000 new agencies. The study also offers insights on how agencies can better prepare themselves for the future. Staffing and marketing are issues for agencies, and the Big ‘I’ continues its support of independent agencies through resources, programs and guidance to face these challenges head on.”
The study looks at many statistics about independent agencies operating in the U.S., including their numbers, revenue base and sources, number of employees, ownership, mix of business, diversification of products, technology uses, non insurance income sources and marketing methods.
“As the independent agency channel recovers from the coronavirus pandemic and weathers economic uncertainties, technology adoption continues to prove itself critical to continued success,” says Chris Boggs, Big “I” vice president of agent development, education and research. “Agencies are demonstrating flexibility and progress in digitalization as the insurance industry works together to incorporate tech solutions that support agents’ roles as trusted advisors.”
Key findings from the 2022 Agency Universe Study include:
The number of independent agencies has increased.
In 2022, the estimated total number of independent property casualty agents and brokers in the U.S. stands at 40,000, an increase from 36,000 in 2020. While mergers & acquisitions activity continues to impact the agency channel, the increase in the number of agencies is driven by small agencies, as agents continue to establish their own agencies or move from the captive to independent space.
Business conditions continue to be generally favorable. The majority of agencies 62% report increases in total revenue between 2020 and 2021, but this proportion is lower than the 70% in 2020. Twenty
Continued from page 15
five percent report a decline in revenue, with an average decrease of 22%. In particular, fewer agencies report personal lines increases in 2022, 60% compared to 2020’s 67%. More than 1 in 5 say the pandemic has impacted their operations and revenue.
Technology has become a crucial part of operations and customer service. Nearly half (47%) say they have offered more digital solutions to clients due to the pandemic. Usage of mobile apps from carriers has increased to 40%, up from 32% in 2020, and apps for clients has increased to 20%, up from 10%. Most agencies would be comfortable allowing clients to self serve for policy documents and identification cards, at 77%. Two in 3 are open to self service for billing inquiries and claims filings. Nearly half are planning to offer online purchase and quoting to customers in the next two years.
Challenges with technology continue, with 41% of agencies citing dealing with multiple carrier interfaces as a challenge. While only 7% currently use a commercial lines rater, 23% are planning to do so. One third see the need for more carrier application programming interface (API) integration with agency management systems (AMS). And 51% are looking for more operating efficiencies to help service customers.
Principal aging remains stable. The average age of agency principals is 54 years old, with 17% age 66 or older. More than 8 in 10 agencies have a perpetuation plan, on par with 2020, but it often centers around children and family. Similar to 2020, 4 in 10 agencies anticipate some ownership change in the next five years.
Finding qualified staff and marketing continue to be key agency challenges. Forty one percent find it challenging to find and screen job candidates with strong potential, the No. 1 challenge of 2022, which gained slightly from
Continued from page 16
39% in 2020. The second most challenging issue is having a significant marketing or advertising budget at 36%, up from 30% in 2020. Other key concerns include obtaining enough leads (35%); growing commercial (35%) and personal lines (32%); making the personnel, tech and other expenditures necessary to grow significantly (33%); investing in a strong online presence (32%); and remaining competitive with InsurTech direct carriers (31%).
Emerging purchase channels’ impact on personal lines remains a concern. Agencies continue to express concern about emerging purchase channels’ impact on their business, with 35% of agencies believing personal lines direct purchase through the insurance company will significantly impact their agency over the next two years, the same percentage as in 2020. Thirty three percent of agencies are also concerned about direct purchase through non insurance websites, and 32% are concerned about direct purchase through car manufacturers. One in
4 express similar concerns about small commercial direct purchase or purchase through emerging online providers.
In 2022, 47% of agency principals are women, a gain from 42% in 2020, and 83% are white, compared to 88% in 2020. Medium-sized and larger agencies are especially likely to have male principals or senior managers. One in 4 agencies have added staff this year, and 19% are leveraging independent contractors, primarily producers.
The 2022 Agency Universe Study was first conducted in 1983. Since 2002, the study has been completed biennially. Since 2004, the Agency Universe Study has relied on internet data collection. In total, 1,452 respondents were included in the 2022 study, conducted by Zeldis Research in cooperation with Future One.
To order a copy of the 2022 Agency Universe Study Management Summary, which provides an overview of the highlights from the complete
Continued from page 17
study, visit the Big “I” Agency Universe Study webpage.
In addition to the Big “I,” the Future One coalition includes the following company partners: National General, an Allstate company; Amerisure; Central Insurance Companies; Chubb; CNA; Foremost, a Farmers Insurance company; Grange Insurance; Hartford Steam Boiler (HSB); Liberty Mutual Insurance/Safeco; Nationwide; Progressive Insurance; Selective Insurance; The Hanover Insurance Group; The Hartford; Travelers; and Westfield Group.
Founded in 1896, the Independent Insurance Agents & Brokers of America (the Big “I”) is the nation’s oldest and largest national association of independent insurance agents and brokers, representing more than 25,000 agency locations united under the Trusted Choice® brand. Trusted Choice independent agents offer consumers all types of insurance property, casualty, life, health, employee benefit plans and retirement products from a variety of insurance companies.
I still have a couple of two hour online CE courses on the Agents & Brokers Education Network (ABEN). These courses are offered by almost all of the Big “I” state associations. One is a program on my book “When Words Collide: Resolving Insurance Coverage and Claims Disputes” and the other is called “The Additional Insured Illusion and Other Feats of Contractual Risk Transfer Even David Copperfield Couldn’t Pull Off” (these links go to the Florida Big “I” page.
One of the nice things about these courses is that someone taking a course can ask questions of the course author. Recently, I received the following question from someone taking the Additional Insured course:
Contract Requirement: “Additional Insured endorsements maintained for 2 years following the completion of work.”
How does the agent respond to this? What is our obligation to the insured?
Typically, we issue the AI endorsement during the term that it is requested and the job is usually over by the time renewal comes along.
Are we supposed to renew the policy for the next two years including the Additional Insured status?
This is a requirement of the insured, not the agent. The insured has entered into a contract that requires them to continue AI status beyond the completion of the work. The agent’s responsibility is usually to provide AI coverage on both an ongoing and completed operations basis. This may require the issuance of two endorsements.
What the agent needs to be particularly careful about is not providing any kind of confirmation of compliance beyond the existence of coverage at the time a certificate of insurance is issued. The agent can’t promise that the AI status will be maintained for two years after completion of the work because the insured can always cancel or move the account or the insurer may nonrenew… only the insured can promise to maintain coverage with its business partner being an AI.
So, if the agent is asked to provide some sort of compliance letter or other confirmation that the insurance will continue to comply with the contract, he or she should decline.
One of the premier insurance educators in America on form, coverage, and technical issues; Founder and director of the Big “I” Virtual University; Retired Assoc. VP of Education and Research from Independent Insurance Agents & Brokers of America. Reprint Request Information
The Big “I" Office of General Counsel (OGC) has published a general guide to agency company appointment contracts that is available at no cost to Big “I" members. The guide covers a wide range of the most important provisions commonly found in appointment contracts and provides key considerations and sample language developed by the OGC over many years. A few of the most notable provisions addressed in the guide include ownership of expirations, data security and post termination rights.
The OGC encourages agents and brokers, state associations and carriers to use the guide as a resource when reviewing, negotiating and updating these agreements. The OGC will also continue to provide complimentary reviews of specific agency company agreements based on requests from member agencies and state associations, and in connection with requests for assistance by carriers.
As a reminder, the guide and these contract reviews are provided for general informational purposes and are not a substitute for independent evaluation and specific legal, business or other expert advice on these important agreements.
Log in with your Big “I" credentials to access a complimentary copy of the new guide and the company specific reviews that are currently available on the Big “I" Legal Advocacy webpage.
If you have any further questions about this or related topics, please contact Scott Kneeland or Eric Lipton.
Scott Kneeland Legal Advocacy
Our team from Reagan participated in the InsureTech Connect meeting in Las Vegas. InsureTech Connect (ITC) bills itself as “the world’s largest and most comprehensive gathering of InsureTechs;” with everyone from startups to brokers and carriers to venture capital investors present for this three day event.
From the perspective of the investors, Insuretech valuations are down and venture capital firms are exercising diligence and pulling back in certain segments. New entrants are experiencing difficulty fundraising. For the insuretechs in attendance, two dynamics are at play. 1. Relief, if they actually completed a fundraising round prior to the interest rate increases or inflationary period. 2. Acknowledgment that these new economic headwinds limit fundraising to only those situations where capital is absolutely necessary in the near-term.
This dynamic forces insuretechs to carefully analyze their capital needs and determine how long they can stretch their current funds which in turn creates space for brokers to invest in insuretechs, potentially replacing some of the venture capital funding.
Going forward, we can imagine a world where brokers control more of the capital behind the technology. Who owns it matters. Oftentimes a broker adopts an insuretech solution, integrates it across the operation, and just when it’s beginning to deliver value, the insuretech sells to a larger industry player. This transaction changes the operations, frequently resulting in lost momentum and functionality inside the brokerage firm.
Furthermore, if traditional investors hesitate while talk of disintermediation wanes and a focus on broker enablement rises, brokers now have the opportunity to make strategic investments and influence the overall flow of funds in the insuretech space.
And today, many high performing brokerage firms are getting in on the action by committing a significant amount of time, energy, and investment in technology or tech enablement. At the center of this effort is BrokerTech Ventures (BTV). BTV is a leading organization comprised of 15 top brokerage firms committed to bringing technology enablement to the distribution channel. On the first day of the conference, BTV hosted a program entitled “Fueling the TechEnabled Broker.”
Webb Milward, Reagan View
September 29, 2022
Continued from page 26
What does “tech enabled” mean exactly? To be tech enabled means to leverage technology to better utilize data, reduce costs, increase efficiencies, and provide a better customer experience.
And why is it important to engage technology?
There is value in getting your reps in and forcing your agency to deal with inefficiencies, cost redundancies, and at times a painful customer experience. Long lasting benefits come from streamlined operations, impact on revenue per employee, and a more positive (and enjoyable) customer experience. These underlying business processes are linked to profitability. Simply put, this work will lead to future value creation at your firm. If nothing else, that should validate and promote the need to focus on technology.
Finally, how can we work together to continue to improve the level of focus and investment in technology from the broader industry?
We encourage your firm to mobilize your efforts around technology. This starts with hiring the right people to lead these efforts. Someone must own it every day. Push your firm to adopt new models that are scalable and commit to investing more time and focus on technology.
The future is closer than you think.
ReaganView is Reagan Consulting's forum for providing an occasional perspective on issues and opportunities relevant to the insurance distribution system.
*This document includes only general information and should not be relied upon as legal, tax or compliance issues.
This has become an all too familiar story.
An agency owner reached out several weeks ago and asked me to meet with him and the owner of an agency in his town that he was looking to purchase. They had been talking for several years. They had a handshake agreement that someday he will buy the agency when the time is right. Those conversations were consistent over time, but had never turned into any action. The selling agency owner was now in his early 80s, but the time didn’t seem right just yet. Until it was.
Some serious health issues caused the conversation between the two owners to change from someday into a reality. I was introduced to the selling agency owner and together with the buyer we went through what to expect in the valuation process. He was charming, funny and full of stories. It was obvious that the last thing he wanted to talk about was his career in insurance coming to an end. Instead, he preferred to reminisce about his favorite clients, brag about his amazing staff and tell me the story of how he started in this incredible industry of ours. Our 30 minute call tripled in length, but I didn’t mind at
all. I loved getting to know him and honestly, I loved listening to his stories.
As our call came to an end, we agreed that the completing the valuation was the next logical step. The seller expressed concern about letting his staff know he was contemplating selling, so he asked that I mail him the proposal and confidentiality agreement and send the data sheets that were required for the valuation in an email that does not mention the purpose. He planned on confiding in his office manager as she would need to help him completed the information. The proposal was sent, agreement was signed, and the data sheets were emailed. We were on our way.
Two weeks later first thing Monday morning I received a call from the buyer. I answered with a chipper Good Morning and was met with an unexpected somber voice. He fumbled his words and struggled to share the news that the seller’s health had taken a turn for the worse, he was hospitalized a few days ago and passed away the previous evening. Then there was silence.
I cannot even begin to tell you how much I dread this kind of call. My heart sank and you could tell his heart was breaking as well We both were quiet for what seemed like forever I broke the silence with a question, “Tell me what I can do to help?”He then shared his thoughts and plan to help the sellers widow navigate the next days, weeks and months. She is now faced with taking care of the affairs for an agency she has never been a part of and had no idea where to begin.
When something like this happens, the focus goes from planning to “rescue”. Worse than that, someone who is mourning the loss of the greatest love of their life is forced to make decisions that they have no experience handling They are forced to think about details and logistics that are in many cases completely foreign.
We started discussing things like:
Who has the logins and ability to access the carrier portals? How do we ensure that we keep the appointments in place and take care of the customers? Who has the logins to the accounting system, bank accounts? Is there any life insurance? Does someone know how to run payroll? What do we tell the staff? Clients? Carriers? How do we reassure the staff?
It is completely overwhelming. The business that was a lifetime of work and the main source of income in their retirement is now in jeopardy
The reality is for many agency owners the time will never be right and sadly they will put planning for the transition of their agency off until there is no time left.
This can happen to anyone at any age. You do not have to exit your agency to have a plan.
The time is always right to make a plan
For more information about planning for your agency please visit www.agency focus.com or contact Carey Wallace at Carey@agency focus.com.
Over the past 14 years, Carey Wallace has worked with hundreds of agencies helping them understand their agency ’ s value and turn that knowledge into an actionable plan for their agency ’ s future Carey is a Certified Exit Planning Advisor, CEPA and provides a variety of consulting services through the company she founded, Agency Focus, LLC.
A concept as common as the application of a “property deductible" is rarely taught or even considered, it is simply “understood." The problem is we tend towards the belief that everyone “understands" the application of a property deductible the same way. They don't.
Occasionally, the question is asked, “Is the deductible subtracted from the loss or the limit?" If everyone “understood" deductibles the same way, this question would never be asked.
Now that it has been asked, let's make sure everyone “understands" the correct application of a property deductible.
do this requires the unthinkable, using policy language.
In any one occurrence of loss or damage (hereinafter referred to as loss), we will first reduce the amount of loss if required by the Coinsurance Condition or the Agreed Value Optional Coverage. If the adjusted amount of loss is less than or equal to the Deductible, we will not pay for that loss. If the adjusted amount of loss exceeds the Deductible, we will then subtract the Deductible from the adjusted amount of loss and will pay the resulting amount or the Limit of Insurance, whichever is less.
When the occurrence involves loss to more than one item of Covered Property and separate Limits of Insurance apply, the losses will not be combined in determining application of the Deductible. But the Deductible will be applied only once per occurrence.
1We will not pay for loss or damage in any one occurrence until the amount of loss or damage exceeds the Deductible shown in the Declarations We will then pay the amount of loss or damage in excess of the Deductible up to the applicable Limit of Insurance of Section I Property
Although stated slightly different in each form, all three apply the deductible the same way. The deductible is subtracted from the amount of the loss; the deductible is never subtracted from the limit purchased. But remember, the insured never gets paid more than the limit purchased, so the maximum payout is the coverage limit.
Consider a commercial building insured on a replacement cost basis at $200,000 (assume all coinsurance guidelines are met) with a $5,000
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deductible. Assume a fire loss destroys the building and the cost to rebuild is $220,000. How much does the insured get paid? Let's do the calculation.
Amountof Loss Deductible = Maximum Payout
$220,000 $5,000 = $215,000
But there is a limits issue, the insured purchased only $200,000. According to policy provisions, the maximum the insured can expect is $200,000. So, in this example, the insured is paid the policy limit because the amount of loss minus the deductible was greater than the amount of coverage purchased. The same is true of homeowners', commercial property and BOP property claims.
If deductibles were subtracted from the limit, the limit listed on the declarations page would be a misrepresentation of policy terms. Courts have a real problem with carriers misrepresenting coverage terms.
In property coverage, the deductible is subtracted from the amount of loss with ultimate payout subject to specific conditions (coinsurance for example) and the limits purchased. No insured ever gets paid more than the amount of coverage purchased (excluding the additional coverages found in the policy).
If the amount of loss minus the deductible exceeds the coverage limits, the insured gets the coverage limit.
Continued from page 31
Realizing I've said the same thing four different times, I simply want to make sure no one ever forgets the actual application of a property deductible. No one should “understand" the application of a property deductible differently moving forward.
For new or smaller agencies, having access to markets right away means more new business opportunities and growth potential for your agency. But building those carrier relationships needed to secure quality appointments can be time consuming and challenging.
As an IIABL member, you can get a jump start on building those key relationships through Independent Market Solutions (IMS). The IMS program provides access to a broad mix of state specific standard and niche markets at no additional cost to you. Instead of relying on traditional appointments, IMS creates marketplace leverage through its negotiated contracts and facilitates direct relationships between independent agencies and carriers.
Agents who gain appointments through IMS maintain a direct working relationship with carriers, all while taking advantage of competitive commissions, 100 percent ownership of expirations, low to no volume commitments, and participation in any earned program contingencies. Every IMS agency ALWAYS owns its book of business and, if minimum premium threshold and performance standards are met, direct appointments are available.
Getting started with IMS is easy and doesn’t involve any hidden fees or fine print. All you need to do is sign up online to start connecting with carriers.
It took months to land that important account. You followed up with responsive service and valued insurance products. Now, this key customer just requested a surety bond. And...they need the bond by tomorrow.
Why take the risk of referring this hard won client to a competing agent?
You now have access to a surety provider with capacity, experience and the right tools to meet your client's surety and fidelity bond needs. CNA Surety is known for its expert underwriting, solid financial strength, market leadership and creative solutions to all bonding requirements. The CNA Surety group of companies ranks as one of the largest writers of bonds in the United States.
CNA Surety understands and can provide custom tailored surety solutions to virtually
all segments of the market, regardless of size or circumstance.
The commercial surety market includes numerous types of bonds categorized as license and permit, notary, public official, fiduciary, court, miscellaneous and federal, along with corporate commercial bonds.
CNA Surety Companies also write fidelity bonds, which cover losses arising from employee dishonesty and errors & omissions liability insurance.
Contract bonds guarantee the performance of obligations covered by a written agreement between two parties. The most common types include bid, performance and payment bonds.
CNA Surety’s FAST-Track Bond Program for small contractors is highly competitive and emphasizes service with common sense, streamlined underwriting.
Backed by the financial strength of the CNA Insurance Group, we have one of the highest US Treasury Underwriting Limitations in the surety industry.
A.M. Best Rating of A (Excellent) Standard and Poor’s Rating of A+ (Stable)
2.2 million bonds in force with 550,000 new bonds annually Combined Treasury List capacity in excess of $1 billion Consistently excellent industry ratings
39 branch offices nationwide Surety bonds provided in all 50 states, Canada and Puerto Rico
Direct access to CNA Surety portal for issuing, servicing, selling, information and more Live Support and extensive marketing materials are available Broad appetite Quick enrollment
There will always be consequences for a waiter suffering an injury at work, which could hurt a business over the long run. When most of your book of business is commercial clients, recognize when and how to promote workers compensation. Some business owners don’t identify their employees’ significant safety concerns and potential hazards. The restaurant industry is particularly at risk with high temperatures in the kitchen and potential hazards throughout the workspace. That’s why restaurant owners should invest in workers’ compensation coverage.
Many business owners don’t realize that workers’ compensation policies should provide coverage in the event of a waiter suffering an injury at work. Ensure that they understand these policies will pay for medical care related to the injury and also cover some lost wages while the employee is out of work recovering.
Your customers may think having a commercial policy, like restaurant insurance, is sufficient. Unfortunately, they may not realize that these policies typically cover the building, equipment, supplies, and any liability associated with customer injuries or illnesses. It rarely includes coverage for injuries sustained by employees. That is why you should also recommend a workers’ compensation policy. Certain businesses require workers’ compensation, so it’s worth recommending while you write other coverage.
It’s easiest to understand and appreciate the benefits of workers’ compensation coverage benefits when you know what risks your employees might encounter.
Slip and fall injuries Spills on a restaurant floor can create slippery conditions, especially with drinks and sauces. Slip and fall injuries are severe concerns for waitstaff.
Burn injuries Hot plates, warming trays, and spilled hot food can cause severe burns in some cases. These typically need medical treatment.
Repetitive motion injuries Carrying plates and drinks, rolling silverware, and serving drinks at the bar can require repetitive movements. It puts waitstaff at risk of repetitive motion injuries that can interfere with work.
Once you get your restaurant owners the workers’ compensation coverage that they need, explain the claims process. Make sure to include incident reports, photographic evidence, and more. Detailed, step-by-step claims processes are essential for ensuring your clients’ protection. The more proactive you are about covering all of your client’s potential risks, the better protected they will be. That’s why you should always ensure that any restaurant clients understand the importance of workers’ compensation insurance and risk mitigation.
At RMS Hospitality Group, our expertly crafted policies are written specifically for the hospitality industry. We offer custom tailored solutions to meet any venue ’ s specific needs. For more information, contact our knowledgeable experts today at (888) 359 8390.
Straining injuries
Whether waitstaff is moving trays of glassware to fill racks, carrying heavy food trays, or getting food cases from the walk in freezer, straining under that weight can cause severe muscle injuries.
As long as baby boomers have owned independent insurance agencies, they've heard a drumbeat on succession planning from merger & acquisition consultants, financial advisories and bankers: “Do not wait. Get an agency valuation. Create a written perpetuation strategy. Give yourself a five- to seven-year runway to stage an orderly exit. You'll thank us later."
Do principals listen? Some do. But most wait.
Waiting can bring uncertainty and chaos. And Exhibit A is Avery Moore, now president & CEO of ECI Insurance in Piedmont, Oklahoma. After an emotional ride, at age 32, Moore took ownership of the agency last year.
The agency is a family legacy for Moore. Her grandfather, Earnie Cornelius, returned from the Korean War and founded ECI in 1964. Back then, Piedmont was a town of 5,000. He said he wanted to be a big fish in a small pond, Moore says. Today, it's a bedroom community for Oklahoma City and the county is growing fast.
Cornelius' son, Scott Cornelius, later took over the firm along with his sister Denise Johnson, Moore's mother. Decades later, there was the next generation to consider: Moore and her cousin were in line for ownership.
Moore was skeptical about insurance as a career at first but fell in love with it while working at another independent agency. In 2014, she bought her mom's book Johnson is now CEO of Big I Oklahoma and started producing.
“Being family owned has been an incredible source of pride for our family," Moore says. “It was always understood that I would take over the agency with my cousin. But there was nothing in writing. My uncle [Scott Cornelius] said, 'Nothing is going to happen to me, and I'll retire when I'm 67 and you guys can take it over.'"
Moore joined a local women's executive group. When she presented what she thought were her major business issues, the group pushed back with a bigger problem.
How an industry bank saved a family-owned agency from the worst-case scenario.
“They said, 'The problem you're presenting is not the problem. There is nothing actually tying you to the agency. There is no buy/sell agreement,'" Moore recounts.
The issue wasn't on Moore's radar. “It was the first time I heard the terms 'buy/sell' and 'first right of refusal,'" she says. “With our family, everything had just sort of worked out. Nothing bad had ever happened in the past. When I heard that from the group, I had to have a conversation with my uncle."
Moore asked her uncle for a written agreement, but he was reluctant. “He felt like I was trying to push him out but I was trying to protect my work," she says.
The conversation continued for four years. They finally signed in May 2020. The plan called for Cornelius to retire at age 67. Moore and her cousin had first right of refusal on the agency's book. They would be 50 50 owners. The purchase price would be 1.5 times the commission value perhaps half of what ECI Insurance might fetch in the open market. In addition, Cornelius would fund a 15 year note at a 4% interest rate.
Why an owner-financed loan? Cornelius was uninsurable, Moore explains. He had been treated for skin cancer in years past, so his retirement plan was the value in the agency's book.
In sum, Cornelius offered Moore the same deal his dad offered him. “He wanted to give us the same opportunity," Moore says. “He was an incredibly generous person."
Indeed, such a low sale price and attractive financing terms are typical in family succession plans. Owners seek to continue the local brand, customer loyalty and family agency legacy, which in the case of ECI Insurance is a legacy spanning seven decades.
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Moore's uncle's generous terms never came to pass. There would be no 15 year loan window. In early 2021, he suddenly passed away from cancer. The family was forced into finding another way to keep the agency in the family.
Two days after the funeral, Moore and her family sat down with lawyers. “It was the worst-case scenario," she relates. “My aunt was grieving the loss of the love of her life. Attentions on business got lost along the way. I was negotiating the best benefit for myself … but to do that in the middle of grief … I wouldn't want anyone to have to go through that."
Moore said the succession plan wasn't clear on a transition in the event of a sudden death or how to treat contingency income, profit sharing or customer fees in agency revenue.
Meanwhile, the agency team needed attention. “It took five months of me trying to hold on to my employees," Moore says. “It felt like 'Top Gun' trying to hold on and pull out of a nosedive just to keep the team and business going." Cornelius had hired two staffers a few weeks before he died.
In April 2021, Moore began to seek financing to buy out her cousin's first right of refusal and assume ownership of the entire firm. Her agency friends gave her names of bankers for loans. “Our financial health was incredibly good," she says. “I was so confident walking into that first bank."
For collateral, the banker asked about ECI's hard assets. He wasn't as interested in commission revenue or customer lists. After the fourth failed meeting, Moore sat on the curb outside the bank and cried.
“I said, 'I don't know how I'm going to do this,'" she says. “For a female entrepreneur like me, there was so much head trash going on at the beginning: Can I do this? Can I lead my team? Will they follow me? Can I make it successful? All the doubts were going on in my head that I can't do it. But I told myself I am taking this opportunity."
Moore approached a total of eight banks. It was a “no" from all. Finally, taking her mom's advice, Moore called InsurBanc.
Scott Freiday, division director at InsurBanc, told Moore he had helped other agencies transition through an unexpected death of a principal. And he thought he could help ECI Insurance.
In fact, Freiday relates, “All of the agency's credit metrics were solid. It was a third generation owner, a strong, well established agency, a great market, and an excellent book of business. We could do all the financing they were looking for, including buying out the cousin and establishing a line of credit "
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“[Moore] was well experienced and clearly capable of running the agency," Freiday says. “Avery spent a significant amount of time working at the agency. It was clear she was the one to take over. She had the experience and the mentorship there."
The InsurBanc deal closed in 30 days, and the agency was now wholly owned by Moore. Looking back, she is still amazed. “I had just turned 32 and I'm borrowing millions of dollars," Moore says. “I don't know many 32 year olds who can borrow millions of dollars."
“InsurBanc is like the Oprah Winfrey of lending they've got lots of wisdom," she says. “They do all our banking. They're literally almost an extension of our agency because now we have a banking relationship. We didn't have that with our local bank."
A year after the sale, the firm is doing well, with 15 employees. Last year the firm grew commission revenue by 11.5% and year-to-date gross revenue 2022 is up 18%. Moore says she's joining an agency cluster to generate more growth. The book is more diversified as well, including life and health products.
“I have an incredible team," Moore says. “We didn't lose a single employee during all of that. That was one of my biggest fears. Those are the people I show up for every day."
“I miss Scott every day," Moore continues. “We talk about him all the time. My uncle and I were incredibly close. He was my mentor. At least once a week I stil try to text him."
“Sales is so easy compared with agency ownership and management," she adds. Peter van Aartrijk is principal at insurance branding firm Aartrijk
