Kentucky IA - March/April 2015

March/April 2015

Leadership Opportunities

Big “I� s t e k r Cyber a M Advoc acy

Staff

Liability

Money Saving Discounts

Networking Young Agent s

CRM Continuing Education

Group Health

g Marketinment e Reimbursram TrustedChoice.com Prog Virtua Cutting Unive l rsity Edge

Events

E&O

Are YOU taking advantage of your membership?

Look inside to find out

AHHH, KENTUCKY. A WONDERFUL PLACE TO LIVE AND WORK. All of us at KESA are proud to call Kentucky our home and we’re proud to call KESA our workplace home. KESA’s Kentucky roots run deep with 35 years of providing workers’ comp coverage for Kentucky’s employers. All across our beautiful Commonwealth, from the biggest cities to the smallest towns, KESA’s goal is simple - to keep Kentucky’s workforce safe and provide coverage when a workplace injury occurs. We’re proud of the work we do and we’re proud to be a long-standing part of the Commonwealth of Kentucky.

Thank you for partnering with KESA.

Contact us about our SAFETY W.O.R.K.S program at www.kesa.org.

200 Executive Park, Louisville, KY 40207 502.894.8484 | 800.367.5372 | www.kesa.org

Inside

What's

Page 12

Contents

6 Legislative Day Wrap-up

12 Top 10 Member Benefits 13 What have WE done for YOU lately?

18 Bottom-Up: Unleash the Power of Employee Ideas 21 Questions? Here’s who will have the answers.

Page 14

23 Cyber Insurance: The Last Line of Defense or Frontline Offense?

26 Beware the Top Seven Agency Myths

In Every Issue Page 26 The Kentucky IA is the official magazine of the Independent Insurance Agents of Kentucky, and is published bi-monthly.

Editorial offices are located at 13265 O’Bannon Station Way, Louisville, Kentucky 40223.

Telephone:(502) 245-5432 Email: iiak@iiak.org Fax: (502) 245-5750 The Kentucky IA welcomes all advertising and editorial submissions. Inquiries for advertising, news releases and editorial contributions can be directed to Nikki Petrowski at the editorial office address or via email at npetrowski@iiak.org

4 From the Chair

35 Advertiser Index

7 DOI News

35 Classified Ads

8 Education Calendar

35 Social Media Links

14 E&O

35 There’s an APP for that

30 New Members

Mission Statement The mission of the Independent Insurance Agents of Kentucky is to be the preeminent advocate for Kentucky Independent Agents and support their businesses and professional development needs.

www.iiak.org | March/April 2015 | 3

Officers Michelle L. Love

Chair, Owensboro 270.926.2806 David M. Houk

Chair-Elect, Horse Cave 270.286.2724 Chip Atkins Vice Chair, Louisville 502.585.3600 James D. England, AAI

Treasurer, Pikeville 606.437.7361 Stephen R. Kinkade, CPCU, AAI

National Director, Leitchf ield 270.259.5465 John Funkhouser, CIC, CWCA

Immediate Past Chair, Danville 859.236.5922

Directors Allen J. Crawford, CIC, CSRM

Somerset, 606.679.6311 Sharon B. Hill

Jamestown, 270.343.3144 Michael G. Johnson, CIC

Lexington, 859.233.1461 Aaron LaRue

Bardstown, 502.348.0050 Skip McGaw, CIC

Madisonville, 270.821.3122 Adam T. Murphy, CIC, CISR, CPIA

Cadiz, 270.522.9964 Crystal Reid, CIC

Paducah, 270.442.3533 Ray A. Robertson, CIC

Mt. Sterling, 859.498.3410

Staff Peggy P. Porter

President & CEO Crystal Brown

Administrative Assistant Katie M. Freshley

Education & Events Director Nikki S. Petrowski

Communications Director Tara T. Purvis

Marketing Director Kristie Weyer, CISR

Insurance Services Manager

4 | www.iiak.org | March/April 2015

Chair From the

Well, March Madness is upon us and even though I’m not a huge basketball fan, I do enjoy the tournament. In keeping with “Bracket Mania”, your association team came up with their very own Benefits Bracket –2015 for this year as part of our “Win By Association” contests. I hope many of you participated in this fun contest and maybe even learned a little more about what your association has to offer. Tara Purvis handles all of our Member Services and Marketing and has done a great job in bringing information to you in some new ways this year. Make sure to visit our website (www.iiak.org) and click on the IIAK Superstars icon at the top right to see a listing of our winners. I also hope you’ve heard the Trusted Choice advertisements we’ve placed on local radio stations during Kentucky basketball games leading up to and throughout the tournament. Nikki Petrowski, our Communications Director, has worked tirelessly on ways to help your association promote our Trusted Choice brand. This is just another way your association is helping spread the word of our members being Trusted Choice Independent Insurance Agents.

February was a busy month for your association with legislative issues impacting our industry. We are very fortunate that our President and CEO, Peggy Porter keeps her finger on the pulse of Frankfort and produces Legislative Bulletins on the issues affecting our industry and calls to action as needed. We had a nice turnout at our annual Legislative Day in Frankfort in February. The weather cooperated with us this year and it was a packed agenda for those in attendance. Another important way you can become involved is by supporting your State and National Pacs – KAPAC and InsurPac. Together, we can make a difference! Contact Tara Purvis or Crystal Brown for more information or to donate today.

Fifty people from across the state, including me, attended the CRM class hosted in February in Louisville. The 2 ½ day “Analysis of Risk” class not only helped those working towards a CRM designation, but also served many as their CIC update. We hope that you are planning to join us for th next installment - “Control of Risk” February 24-27, 2016 at the Louisville Marriott East. Katie Freshley handles all of our education and events planning and is a fabulous resource for us.

Finally, keep in mind all of the insurance programs IIAK offers to our members. In particular, we have a very comprehensive, competitive cyber liability policy that we offer to our members to help protect their agencies from a cyber breach. This IIAK-exclusive policy has reduced underwriting for our members and premiums are much reduced from the standard products out in the market. It’s imperative that you protect your client’s information and IIAK has put together a program to help you do just that at a reduced rate. Please contact Kristie Weyer for this important coverage, as well as your E&O and other agency benefits.

I wish you all a Happy Spring and look forward to seeing you out around the state over the next several months for regional meetings. Check our website often, www.iiak.org, for what your association is doing for you. Thank you for allowing me to serve you!

Sincerely,

WHY WALK

WHEN YOU CAN SOAR?

Swiss Re Corporate Solu ons policyholders: Don’t miss out on the invaluable risk management resources available exclusively to you. Log in to www.iiaba.net/EOHappens to access claims sta s cs, preven on tools, insigh ul ar cles and more.

THE BIG “I” PROFESSIONAL LIABILITY PROGRAM Prevent.

Our exclusive risk management resources help your agency avoid making common preventable mistakes.

Protect.

Prosper.

Our superior coverage through Swiss Re Corporate Solu ons and our experienced claims teams are in your corner in the event of a claim.

When you know you have the best agency E&O Protec on, you can focus on growing your most important asset–your business.

The Big “I” and Swiss Re Corporate Solu ons are commi ed to providing IIABA members with leading edge agency E&O products and services. IIABA and its federa on of 51 state associa ons endorse the comprehensive professional liability program offered by Swiss Re Corporate Solu ons.

Visit www.iiaba.net/EOContact to connect with your state associa on today.

Insurance products underwri en by Westport Insurance Corpora on, Overland Park, Kansas.

Westport is a member of Swiss Re Corporate Solu ons and is licensed in all 50 states and the District of Columbia.

.

www.iiak.org | March/April 2015 | 5

Legislative Day Wrap-Up More than 60 agents gathered in Frankfort for the annual Agents Legislative Day on Wednesday, February 11. This yearly event brings together members and fellow industry professionals throughout Kentucky to gather agents together as a united force to bring awareness and understanding of issues facing agents to our legislators, and to also thank them for the support they have provided our organization and industry.

The day opened with breakfast and remarks regarding the recent Anthem data breach from Insurance Commissioner Sharon Clark. She laid out the timeline for how the breach occurred as well as what was being done by Anthem, the FBI and the National Association of Insurance Commissioners (NAIC) in response to the breach.

She reiterated what happened to Anthem could happen to any agency and you should protect yourself.

Following Commissioner Clark was Prentice Harvey of Government Strategies, one of IIAK’s contract lobbyists. He went over the current House and Senate bills that could affect the insurance industry and their current status.

At the conclusion of breakfast, attendees were off to the capital building where some met with their legislators and sat in on the Banking and Insurance Committee meeting.

6 | www.iiak.org | March/April 2015

By: Nikki Petrowski

“Going to Legislative Day gave me an opportunity to speak with my Representative, Jeff Hoover, on bills that could affect our industry. He listened to ideas regarding pending legislation and has been a friend of both business and insurance agents over the years.”

- Sharon B. Hill, McKinney & Blair Inc.

DOI News

From the Commissioner The Anthem security breach served as a reminder that our personal data is becoming more vulnerable and the insurance community must join together to take steps to protect consumers from the devastation that can come from such data breaches.

By way of update, state regulators and Anthem officials are holding weekly conference calls regarding the Anthem data breach. Information on credit monitoring and identity repair services has been shared through various outlets. Individual members, including 2.3 million in Kentucky, will receive a letter outlining possible breaches. Since Anthem’s vendor is limited to mailing 1.5 million letters each day and the breach affected about 80 million current and past members, this will take some time. Anthem members may take action prior to the receipt of the official letter.

There appeared to be some initial confusion about the services being offered. You may want to share this information with your clients regarding the various offerings, available for two years: • Identity repair assistance is available at any time during the two years. If a member experiences fraud, he/she may call a designated toll-free number and an investigator will be assigned to handle all steps needed to restore the member’s identity and correct financial issues. No special registration is needed for this service -- all members are automatically enrolled.

• Other services including credit monitoring, child-specific identity protection, identity theft insurance, identity theft monitoring/fraud detection and phone alerts are available for two years but do require the member to register and complete a simple process. The member may sign up at any point during the two years.

By: Sharon P. Clark

Kentucky will be participating in a multi-state examination of Anthem and its affiliates. Seven states (California, Indiana, Maine, Missouri, New Hampshire, North Dakota and South Carolina) will lead the exam with all other states/territories expected to sign on.

This is seen as an effort to improve the insurance industry’s cybersecurity, as well as to ensure that the members affected by the Anthem breach receive the proper protections. This multistate examination is being organized by the National Association of Insurance Commissioners.

Insurance company databases are attractive to hackers due to the large amount of sensitive and valuable data that can be grabbed. Industry experts say Social Security numbers alone can be sold for $3-5 each through online black market sites. We all need to be vigilant for evidence of malicious software (malware), e-mail scams and phony websites set up to redirect traffic from legitimate sites.

In the past, many companies have passed on purchasing cybersecurity insurance because of the cost, confusion over what is covered, or a false belief that its databases are secure. We will be watching to see if that trend continues or if this product is suddenly much more popular.

Thank you for all you do and please contact us if we can be of assistance.

www.iiak.org | March/April 2015 | 7

Education Calendar E&O: Risk Management Louisville • April 9 & October 8

on - site classes!

____________________________________________________________________________________ ABEN Webcasts (http://iiak.aben.tv/) Annuity Basics and Where They Fit

Estate Planning Basics April 14 @ 2 pm EDT May 26 @ 2 pm EDT

April 14 @ 12 pm EDT May 26 @ 12 pm EDT

Certificates of Insurance

Home Based Business Exposures

April 14 @ 10 am EDT May 26 @ 10 am EDT

April 23 @ 10 am EDT

Commercial Lines Claims That Cause Problems

How Insurance Agents Can Become Invincible to Lawsuits and Save Thousands in Taxes April 14 @ 10 am EDT May 12 @ 10 am EDT

April 14 @ 2 pm EDT

Commercial Property Endorsements That Can Make You Money!

Make the Wholesaler you BFF!

May 19 @ 2 pm EDT

April 21 @ 10 am EDT May 19 @ 10 am EDT

Data Privacy Insurance

National Flood Insurance Program: Updated through 2014

April 2 @ 1 pm EDT May 1 @ 10 am EDT

Directors and Officers Liability Insurance April 3 @ 2 pm EDT May 4 @ 2 pm EDT

April 15 @ 10 am & 3 pm EDT May 20 @ 10 am & 3 pm EDT

The New Health Age: The Future of Health Care in America April 28 @ 10 am EDT May 26 @ 10 am EDT

Professional Ethics in the Insurance Industry April 15 @ 2 pm EDT May 14 @ 2 pm EDT

For questions on any of these courses or IIAK’s education program, contact Katie Freshley at kfreshley@iiak.org or call 502-245-5432

8 | www.iiak.org | March/April 2015

New Professional Development Classes Now Available from ABEN Independent Insurance Agents of Kentucky has heard your requests for more professional development classes. We are excited to announce a variety of new classes through ABEN to help with communication skills, time management, and even training new employees. Look below for the classes and their descriptions.

Managing Perception and the Customer Experience How do a majority of consumers perceive the insurance industry? What is the reason for this perception? This course dives into the stereotypes, why they exist and how an agency can separate itself by providing a stellar customer experience.

Relational Intelligence: The Key to Great Customer Service Today’s leaders are defined by their ability to relate to staff’s needs and manage adverse situations that- if handled poorly- could cause irreparable harm. This course will help explain the concept of relational intelligence, why it matters and its role in resolving conflict.

Mastering Time Take control of your time. We all have the same amount of hours in a day. Make the most of your most precious resource! Learn how to balance your home and work lives.

Organizational Workflow Workflow has never been more important in our agencies. Good workflows will protect against E&O claims, provide better customer service, and streamline your work.

Professional Relationships in the Insurance Agency Insurance is a relationship business. You can make a difference to your clients, underwriters, and coworkers. We will look at developing relationships and how it improves the bottom line in the agency.

Leadership is Everyone’s Job Sooner or later everyone needs to have basic leadership skills. This class uses Best Practices materials to go beyond supervision to show you how leadership can make a difference every day.

Changing Attitudes/Creating Opportunities How to keep your work fun and reduce stress while building your personal approach to account management.

Recruiting & Developing Young Producers

Business Body Language “Don’t trust the mouth. It’s the only part of the body that can tell a lie.” This video will help you better understand nonverbal cues and what they tell you about the true direction of your conversation.

(can be bundled with Insurance Agency Ownership Perpetuation)

Effective Training of New Employees The difference between a job and a career are decided within the first few days. This course will help those charged with training a new person and balance current workload while still giving the new hire the attention he/she needs to succeed.

Insurance Agency Ownership Perpetuation

Can agencies afford to hire young sales recruits?

How do you maximize your chances of success in developing young producers? Learn how agencies are recruiting young producers, often right out of college, and giving them the best shot at success. (can be bundled with Recruiting & Developing Young Producers)

Learn how to maximize your agency value for transfer, develop internal buyers, plan for financing and prepare for transferring ownership including both external and internal transitions.

www.iiak.org | March/April 2015 | 9

CSR Essentials

(can be bundled or take separately)

Verbal Communications Skills: Phone Etiquette & Client Interaction This webcast is designed to address the specific challenges that you face when delivering difficult messages to your customers. Through these tough situations, we know that our goal is to create a satisfying outcome and to retain a customer for your company.

Personal Time Management Upon completion of this workshop, you will be able to identify time-wasters interrupting daily productivity, deploy tips for setting priorities, set goals to improve concentration, say ‘no’ professionally and create a personal action plan.

Relationship Management This is class that will give you the skills needed to build successful relationships with your coworkers, managers and clients. Throughout the workshop, you will complete case studies and skill reinforcement activities that will ensure the learning stays with you.

10 | www.iiak.org | March/April 2015

For more information on our education opportunities Contact Katie Freshley at kfreshley@iiak.org or call 502-245-5432

www.iiak.org | March/April 2015 | 11

We’ve got your back! We advocate for you in the Kentucky Legislature, US Congress and with insurance regulators on issues which affect policies, risks and business operations for you and your clients.

E&O - We have relationships with the premier writers of agent’s E&O. We can be your trusted advisor in the placement of your coverage. We offer enhancements not available on the open market and premium discounts for claims-free experience, attending loss prevention seminars and use of our agency consultant. See page 17 Anthem Group Health – We offer a great group health plan that is risk rated vs community rated. Our program has been matched with government programs and is a better and more cost-effective option.

Cyber Liability – This program protects your agency from data breaches. You don’t have to be an expert or compliant to qualify for this insurance. IIAK has special pricing that can save you up to 50%.

We offer in-depth education by recognized experts and nationally recognizable programs.

This translates to better educated and committed staff, increased sales and superior service and expertise for your clients.

See page 8 IIAK offers you market access to 80 plus niche markets with no fees, no volume commitments and competitive commissions through Big “I” Markets. Some highlights of these markets include Flood coverage with Selective, General coverage through the Eagle Agency and RLI offers great products with a personal umbrella and at-home business coverage.

12 | www.iiak.org | March/April 2015

The Trusted Choice brand separates independent agents from your competitors through state and national advertising. Trustedchoice.com directs internet shoppers to independent agencies through price comparisons and lead generation.

Nowhere else is there a single source to inform you of marketplace, legislative and regulatory changes that impact your agency and clients.

Where else can you attend Kentucky’s largest industry trade show, learn emerging industry information from quality speakers, network with your peers and experts from all facets of the industry? See page 19 Easily pay for your membership using money-saving discounts on business products and services. Specifically, savings from E&O, our group health plan, a telecom services evaluation and the Trusted Choice Marketing Reimbursement program.

Our experienced, professional and knowledgeable staff is here to assist you with whatever business challenges or needs that may arise. Whatever the questions we will help you find the answer or solution. See page 20

The entire reason we exist is for your benefit, to serve your needs and help perpetuate your agency.

What have WE done for YOU lately?

No, this article isn’t about a Janet Jackson song from the 80s. And while we hope you appreciate the play on words, it is our sincerest hope that you do see what we as an association have done and continue to do in order to bring added value to your membership with the Independent Insurance Agents of Kentucky.

Here are a few recent and/or ongoing examples: • Invested over $30,000 into digital advertising that ran September - November 2014 that drove Kentucky consumers to TrustedChoice.com.

• Offering FREE one year of an Advantage Subscription on TrustedChoice.com in order to bring your agency to the top of search results on TrustedChoice.com.

• Revamped www.iiak.org and Kentucky IA magazine (you now have in your hands) - both in an effort to make it easier for you to put your finger on the things you really need.

• Changed the format of the convention to make it more time efficient when you are away from the office.

• Created toolkits to help you and your staff better serve your clients in the social arena (Social Media, SEO, Perpetuation, Disaster).

• Created a smart phone app to easily access up-to-the-minute information during events.

• Supported Make-A-Wish® Gala to give Trusted Choice a presence in the state while benefiting a worthy cause.

• Added professional development courses on our ABEN platform.

• Created ONE e-newsletter (IIAK Insider) per week to cut down on the amount of emails your receive.

• Cyber Liability program with special pricing for our members • Successful in Legislation: By supporting bills and by killing bills that would have negatively affected how you do business.

What you have to look forward to in 2015: • Regional Meetings including lunch and professional development that are FREE to you and your co-workers. See page 30 for locations to see which one is closest to you.

• IIAK along with Trusted Choice purchased radio spots during Kentucky basketball games.

Tune in to your local radio station during the tournament to hear Trusted Choice promoting YOU. • Tara Purvis will also be visiting various agencies around the state. Would you like to request an agency visit? Contact her at tpurvis@iiak.org.

Free Member Benefits There are many benefits that are INCLUDED in your IIAK membership - are you taking advantage of them?

• • • • • • • • • • • • •

Being a Trusted Choice Agent Advocacy Networking Leadership Opportunities Legislative Day Event Website Access Young Agents Big “I” Markets Kentucky IA Magazine IIAK Insider e-newsletter Trusted Choice.com Basic Subscription Social Media Presence Staff as a Resource

www.iiak.org | March/April 2015 | 13

E&O

E&O Audits: They aren’t too scary By: Eric J. Moberg The word “audit” tends to make people cringe. For some the thoughts of mean IRS bean counters scrutinizing your finances come to mind. Over the years we have referred to audits as “E&O Risk Management Reviews” or “Agency Operational Reviews”, but that is really just semantics. Bottom line however is that the word audit can have a very positive meaning.

After performing hundreds of audits, I can assure you that the vast majority of agencies that have audits performed become repeat clients. I’m sure most other auditors would tell you the same thing. The reason?

There must be some significant benefit to the agency or this wouldn’t be the case. Let’s start with who the auditors are: • Most agency auditors have extensive agency backgrounds, some as managers, some as agency owners. The average auditor has over 20 years in the business. Some that are more “seasoned” (old) like myself have over 40 years in the insurance business and have owned their own agency.

• Most of us have performed audits in hundreds of agencies over the years and visit new agencies every month. These agencies vary in size from just a few people to the largest agencies in the country. My smallest client has 2 employees including the agency principal, my largest has over 1,200.

Geographically this includes agencies in the most rural areas to those in the largest cities.

Agencies that are generalists to those that are extremely specialized. We have probably seen almost every variation there is in agency operations and markets, including wholesalers, MGAs and MGUs. • Auditors gather a tremendous amount of agency operational knowledge from their exposure to so many different organizations.

We see and learn new things from innovative agencies all the time, giving us a good perspective of what’s going on in the industry.

14 | www.iiak.org | March/April 2015

• On occasion we also see some of the worst of agency operations with little structure and little or no management. We learn from those agencies as well. Sometimes it can be scary for the auditor too!

Now that you are more comfortable with who will perform your audit, let’s look at some of the benefits the agency will derive from completing an agency audit.

I’m sure you want to know what’s in it for your agency. The answers are many, but let’s start with the benefit that catches most agency owner’s eye. For those agencies insured through the SwissRe/ Westport program the agency may receive a five year, 10% premium credit for completion and compliance with the audit. This credit is in addition to any E&O education credits you may earn on an annual basis through your association.

In most cases the credit will pay for most, all, or in some cases more than the cost of the audit, in the first year!

Even if your agency is not in the SwissRe/ Westport program, the most obvious benefit is the reduction of E&O exposure for your agency.

Going through an E&O claim is not a pleasant experience. Besides the financial impact, including the deductible, potential additional legal expenses, the cost of management and staff being tied up in depositions or court, it can be an emotional event for the employees involved. Completing an audit cannot guarantee that

E&O you will not be sued, but if you have followed the audit recommendations, it should put you in a more defensible position.

Another benefit that I have heard many times from my clients is that we bring industry knowledge that they do not have the opportunity to be exposed to them. I am asked quite often “how does my agency stack up to others you see?” Of course things we see that are proprietary within an agency are never shared with another agency. However, general things we see including industry trends, interesting communication methods used with agency clients, and innovative marketing ideas, can sometimes be shared as they are not specific to one agency.

A benefit we have developed over the past 23 years of performing audits is providing agencies with many of the solutions to the common recommendations we make as a result of the audit.

This includes over 80 documents, checklists, disclaimers, and examples of wording for letters that can used for communication and documenting contacts with the agency’s clients. This also includes samples of compensation plans, nonpiracy agreements, renewal questionnaires, and catastrophe and data security plans. We also provide our clients with a copy of our widely used Agency Operations & Procedures Manual.

An objection I sometimes hear, usually from an agency that has not had an audit, is the fear that it will take too much time away from their work.

I can assure you that an audit is not disruptive to the agency.

We are well aware that your work with clients comes first. We normally have just one staff

member away from their desk at a time for no more than 20-30 minutes. The discussions with the staff are workflow and communications oriented. How do they interact with your clients, with each other, and with your carriers. How is that communication documented, and is the process both communication and documentation consistent with procedures.

The “Trinity” of E&O Risk Management is: Communication, Documentation, and Consistency.

Every agency can benefit from developing consistent workflow and documentation. Audits help to identify areas that can be improved, and provide the path to achieve consistency in the agency. It’s not always whether you did a good job, but rather, can you prove you did. Documentation is the key.

The good news is that most agency audits are done voluntarily. They are not punitive in nature, and it is a “win-win” for the agency, state association program, and the E&O carrier. Great ideas can be exchanged, new methods learned and developed, and E&O exposure reduced. The feedback from the staff is usually very positive as they feel they have been included in the opportunity to provide their input, and hopefully influence positive change within the agency.

So, let your fears subside. The word audit does not have to invoke fear. Talk to your association about having an audit performed in your agency before your next renewal.

Eric Moberg is President/CEO of The Moberg Group, Inc. (TMG), an insurance consulting firm working with Independent Insurance Agents and Wholesale Brokers. TMG is the leading provider of Insurance Agency Errors & Omissions loss control programs and has performed over 1,000 E&O Audits over the past 23 years. As the preferred E&O Audit provider for several state associations and E&O carriers, TMG has developed a standard audit process and reporting format preferred by many E&O underwriters.

Contact Kristie Weyer for more information on E&O via email at kweyer@iiak.org or call 502-245-5432

www.iiak.org | March/April 2015 | 15

People who run a business know. The most valuable things

are also the hardest to get.

Your customer’s business didn’t grow overnight. It came from years of hard work, confidence in what they could do, and making smart decisions.

That’s why an insurance policy from West Bend makes sense. It protects these valuable and hard-earned businesses so your customers can focus on doing what they do best: making sure their clients look and feel their best.

And as an Official Supplier of The Silver Lining, it’s backed by your knowledge and experience.

West Bend. Insurance your customers buy when they can’t afford anything less.

16 | www.iiak.org | March/April 2015

Professional Liability Insurance Swiss Re Corporate Solutions & Independent Insurance Agents & Brokers of America

Agents’ E&O Insurance & RIsk Management Program For more than 50 years, insurance agents and brokers across America have trusted Swiss Re Corporate Solutions to protect their business, reputation and assets. Swiss Re Corporate Solutions is proud to be endorsed by the IIABA and all Big “I” state associations nationwide. Based on our experience and strong commitment to the Agency E&O market, the IIABA-Swiss Re Corporate Solutions Agency E&O program is considered a benchmark in the industry.

Experience - Stability - Expertise Compare the IIABA-Swiss Re Corporate Solutions Agents E&O Program and policy and see why our track record of experience, stability and expertise is second to none.

Swiss Re Your Corporate E&O Solutions Carrier

a a a a a a a a a a a a a a a a a a a a a a a

Program Features

Continuously provided Agents’ E&O coverage since the 1960s Solid financial strength: “A+” by A.M. Best State & National Association endorsed program for over 25 years Dedicated underwriting team totaling over 300 years of Agents’ E&O experience Claims Service - prompt and thorough claims staff, primarily licensed attorneys, that are a resource to assist with any claim or potential incident Local defense counsel experienced in Agents’ E&O claim in your state Program offered countrywide with no prior market withdraws Reimbursement for loss of earnings or use of temporary staff due to attending depositions or trials provided at $500/day up to $10,000 per policy period Premium credit up to 20% annually with loss free experience Agency operations improvement review credit of 10% available On-line renewal applications available for ease of completion Automatic renewals available - no application required!

Flexible underwriting for independent insurance agencies of all sizes, including both P&C and L&H only agencies E&O committee of member agents providing program oversight Experienced E&O program administrators with underwriting authority in your state Prompt underwriting turn-around time and policy delivery Leader in policy innovation and solutions for unique and emerging agency exposures Complimentary access to “E&O Happens” risk management website (www.iiaba.net/eohappens) and the E&O claims Advisor Newsletter Agency Umbrella and EPL policies available Various payment plans available to meet your needs Competitive & stable premiums for all agency sizes Personal injury definition includes false arrest, detention, humiliation, libel, slander and wrongful entry of a premise or dwelling No contractual liability exclusion

Swiss Re Your Corporate E&O Solutions Carrier

a a a a a a a a a a a a a a a a a a a a a a a

Program Features

Broad definition of “Professional Services”

Defense costs in addition to the limit of liability Claims-made policy form with broad claim reporting provision Broad duty to defend even if claim or potential claim is groundless, false or fraudulent Other related services coverage includes the agency’s advertising, notary public and carrier draft authority activities Ability to provide full prior acts coverage for acquired entities Protection for innocent insureds Insolvency coverage included in policy for placement with carriers rated B+ or better by A.M. Best or carriers covered by a state guaranty fund Aggregate or Each Occurence deductible options available First & third party breach of data coverage included in policy form $20 million limit capacity available Subpoena coverage limit options to $50,000 Catastrophe extra expense coverage limit options up to $100,000/$250,000 Regulatory defense coverage limit of $25,000 Deductible reduction feature - ability to reduce your deductible by 50% on each claim Multiple extended reporting period options are available Expansive definition of insured includes current & former employees, independent contractors and leased or temporary employees Premium credit of 10% for E&O loss control/risk management class completion Punitive and exemplary damages included where permitted by law Liberalization clause for broadened policy provisions Insured’s consent required to settle any claim Optional coverage available for EPL, Real Estate E&O and agency’s ancillary services Worldwide coverage

For more information on the E&O program and the features and benefits of the Swiss Re Corporate Solutions policy please contact your state administrator.

Please refer to the policy form SP 4 584 for complete policy language.

The above is for general informational purposes only. Please refer to the policy form for complete policy language. All policies are individually underwritten. If you have any questions, feel free to contact a Swiss Re Corporate Solutions Representative.

Insurance products underwritten by Westport Insurance Corporation, Overland Park, KS, a member of Swiss Re. Swiss Re Corporate Solutions offers innovative, high-quality insurance capacity to mid-sized and large multinational corporations across the globe. Our offerings range from standard risk transfer covers and multiple-line programs, to highly customized solutions tailored to the needs of our clients. Swiss Re Corporate Solutions serves customers from over 40 offices worldwide and is backed by the financial strength of the Swiss Re Group. For more information about Swiss Re Corporate Solutions, please visit: www.swissre.com/corporatesolutions.

www.swissre.com/corporatesolutions

www.iiak.org | March/April 2015 | 17

Bottom-Up: Unleash the Power of By: Alan G. Robinson & Dean M. Schroeder Employee Ideas Every day, front-line employees see a slew of problems and opportunities that their managers do not.

These employees have plenty of good ideas to save time and money, make their jobs easier and improve productivity, quality and the customer experience. In fact, our research shows that some 80% of an organization’s improvement potential lies in bottom-up ideas.

But most organizations are far better at suppressing these ideas than promoting them.

As a result, they are using only one-fifth of their available improvement horsepower.

More and more organizations around the world are getting serious about tapping front-line ideas—and have reached extraordinary levels of performance as a result. For example: Brasilata, which is routinely named one of the most innovative companies in Brazil, gets 150 ideas per person per year and implements more than 90% of them.

The Clarion Hotel Stockholm, which was fully booked for most of the next nine months when we visited during the global recession, implements 67 ideas per person per year.

Ayudhya Allianz CEO Wilf Blackburn credits much of his success in moving the company from 24th in revenue among Thai insurance companies to second in less than four years to the idea system he set up as one of his first actions as CEO. Here’s how idea-driven organizations are different from traditional ones—and what you could achieve if you transformed into one.

Idea-driven organizations use high-performance idea processes to capture and manage employee ideas. Today, most organizations still use a suggestion system approach. Systems are generally 18 | www.iiak.org | March/April 2015

online, but almost all of them are based on suggestion-box thinking, handling employee ideas in exactly the same way as a 19th-century suggestion box process. The physical boxes never worked well, and neither do their online manifestations.

Leaders of idea-driven organizations take the time to learn about high-performance idea processes and how they work—then carefully integrate these processes into the daily work of both managers and employees.

Idea-driven organizations also understand that building a high-performing idea system is a long-term initiative to create significant strategic capabilities. To this end, they make sure that every team and department has meaningful and actionable goals that front-line employees can affect with their ideas. These leaders recognize that while they are in the best positions to identify important high-level goals, their people are in the best positions to come up with the ideas to attain them. In short, idea-driven organizations are topdirected, but driven by ideas from the bottom.

Finally, idea-driven organizations train their people in how to come up with more and better ideas. In its most basic form, creativity can be divided into two parts: problemfinding and problemsolving. Historically, most organizations have focused on problem-solving—it’s only natural, because most organizations struggle to keep up with the onslaught of obvious problems that pop up in the normal course of daily work. Why

Welcome to Our Backyard!

(Now writing

WORKERS’ COMP coverage across the country!)

Limited NEW appointments available:

www.guard.com/apply

Specialist in small- to mid-sized risks Nationwide Workers’ Comp operations Complementary lines in select states A+ (”Superior”) A.M. Best rating Financially secure

would they go looking for more? But a good idea system significantly multiplies an organization’s problem-solving capacity—meaning it burns through the obvious problems faster than they come in.

That means to keep improving, idea-driven organizations work on getting better at problemfinding. The way they do this is to provide ongoing training to help their front-line people see new kinds of problems that they couldn’t see before. No need to reinvent the wheel here—there are plenty of good programs and topics already available.

After all, people have been studying and writing about creativity for more than 2,000 years.

Don’t underestimate the power of your front-line people—they can help you and your company perform at a significantly higher level. But first, you have to learn how to build an organization and management team that is able to listen to and act on bottom-up ideas.

Alan G. Robinson and Dean M. Schroeder are co-authors of the 2006 bestseller “Ideas Are Free” and “The Idea-Driven Organization: Unlocking the Power in Bottom-up Ideas.” Robinson is a professor at the Isenberg School of Management at the University of Massachusetts, Amherst, and Schroeder is the Herbert and Agnes Schulz Professor of Management at the College of Business at Valparaiso University.

Easy submission process Competitive pricing Fast, fair claims handling Flexible payment terms Superior customer service

Upcoming Events June 17 - 18 (Owensboro) Big “I” Sales & Leadership Conference October - TBD (Lexington) Young Agents Day at Keeneland November 11-13 (Louisville) 119th Annual Convention & Trade Show

www.iiak.org | March/April 2015 | 19

Your IIAK Staff

Peggy P. Porter

Crystal Brown

Katie M. Freshley

President & CEO pporter@iiak.org

Administrative Assistant cbrown@iiak.org

Education & Events Director kfreshley@iiak.org

Nikki S. Petrowski

Tara Purvis

Kristie Weyer, CISR

Communications Director npetrowski@iiak.org 20 | www.iiak.org | March/April 2015

Marketing Director tpurvis@iiak.org

Insurance Services Manager kweyer@iiak.org

Do you have questions?

Here’s who will have the answers.

Accounting

Tara Purvis

Insurance Laws

Peggy Porter

Agency Visits

Tara Purvis

Kentucky DOI

Peggy Porter

Anthem Group Health

Kristie Weyer

Association Governance

Peggy Porter

Kentucky Premium Finance Leadership Opportunities

Kristie Weyer Peggy Porter

Big “I” Markets

Kristie Weyer

Marketing Reimbursement Program

Nikki Petrowski

Big “I” Sales & Leadership Conference

Katie Freshley

Board Functions

Peggy Porter

Convention & Trade Show Exhibitors Registration/Cancellation

Katie Freshley Crystal Brown Crystal Brown

CRM Designation Cyber Liability

Katie Freshley Kristie Weyer

E&O Insurance Program Education Compliance Registration/Cancellation

Membership Address Change Benefits Payments Personnel Change

Crystal Brown Tara Purvis Crystal Brown Crystal Brown

Political Action Committees (KAPAC & InsurPAC)

Tara Purvis

Public Relations

Nikki Petrowski

Kristie Weyer

Publications IIAK Insider newsletter Kentucky IA magazine

Nikki Petrowski Nikki Petrowski

Katie Freshley Crystal Brown

Trusted Chioce & TrustedChoice.com

Government Affairs Legislative Issues Lobbying

Peggy Porter Peggy Porter

Website Content ID & passwords

Nikki Petrowski Crystal Brown

Industry Partner Program

Tara Purvis

Young Agents

Katie Freshley

Insurance Technical Questions

Kristie Weyer

Nikki Petrowski

www.iiak.org | March/April 2015 | 21

22 | www.iiak.org | March/April 2015

Cyber Insurance: The Last Line of Defense or Frontline Offense? By: Natalie Lehr & Tom Quy It’s a common saying in the cybersecurity industry that if you haven’t yet suffered a cyberattack, you soon will. According to the Identity Theft Resource Center, this year alone has seen more than 600 data breaches and more than 78 million personal records have been exposed. This is a 25 percent increase in the number of breaches from January to November 2013, which shows that hackers are becoming increasingly more competent and cyberattacks are becoming more frequent and difficult to stop.

Not only are breaches growing in quantity, but hackers are constantly changing their attack methods. A 2013 PandaLabs report found that 30 million new malware threats were created in 2013 – an average of 82,000 new threats every day. When a security team doesn’t know what is coming, there is simply no way to defend against it.

Based on this and other statistics, it’s clear these attacks are going to occur with increasing frequency and success. Insurance professionals can’t stop attacks from happening, but they can find ways to minimize the effect of breaches to avoid irreparable harm to victimized clients. It starts with a cyber liability insurance policy, an evolving practice for both the underwriter drafting the policy and the company receiving it.

New Age of Pre-Binding Assessments The process behind developing a cyber liability insurance policy has remained the same for years; however, the ways in which companies are suffering from cyberattacks is rapidly changing.

When looking at recent data breaches, it’s clear that there are multiple factors and parties involved in a cyberattack. In the case of Home Depot’s massive data breach, the hackers gained access to 53 million email addresses and 56 million credit card accounts through a third-party vendor with legitimate access to the retailer’s network.

Traditionally, cyber insurance policies are crafted based on a simple checklist that summarizes potential risks and protective security measures that an enterprise either has or has not put into place. Clearly, cyberthreat has evolved well beyond the limited, static examples included in these standardized lists. For instance, no checklist can assess the likelihood that a trusted insider is committing corporate espionage or that a thirdparty heating, ventilation and air conditioning (HVAC) partner has a network vulnerability that could lead to a data breach. Similarly, reliance on this checklist approach to accurately define enterprise risk can no longer be an accepted practice because it doesn’t adequately serve policyholders.

To combat the challenges and limitations of traditional cyber risk assessment, insurers and enterprises are placing more emphasis on holistic assessment performed by independent third-party security firms. Instead of checking off a list of requirements, these assessments look at everything including the maturity of the company’s security practices and the security of their third-party vendors, the sensitivity of their data, and their ability to recover and return to regular operations following a cyberattack. All of this information is taken into account to help an underwriter determine an entity’s insurability and craft a fair and accurate policy. www.iiak.org | March/April 2015 | 23

The Power of Proactive Risk Mitigation Consider the examples of Home Depot, Target, Dairy Queen, JP Morgan Chase, Goodwill and Staples. These enterprises were all victims of major data breaches in the past year. In addition to the financial liability incurred, each breach has cost these businesses hundreds of millions in lost sales, not to mention customer trust. While each of these enterprises had strict cybersecurity policies in place, they were still unable to stop hackers from manipulating their way into their networks through unsuspecting third-party vendors and stolen credentials.

In most cases, these entities had some form of cyber liability insurance in place.

But insurance has traditionally been a method for offsetting risk, not mitigating it. However, a third-party conducted, pre-binding risk assessment not only supplements the traditional checklist security review most underwriters use, it also provides the pre-insured with critical insights about their security preparedness and maturity. This data belongs to the assessed company and can be used to improve security maturity whether or not a policy is offered or purchased.

By requiring a thorough risk assessment at the outset, insurers are communicating their commitment to deliver fair and accurate policies. Additionally, there are new cyberinsurance policies that incorporate the findings of the prebinding assessment and provide incentives and funds for risk mitigation. In this way, insurers are eliminating the usversus-them mentality that’s historically prevalent between insurers and insured.

cybersecurity maturity and resilience, and help organizations mitigate the impact of a cyberattack and get back to business faster.

Quy is a specialist producer and broker of cyber risks, cyber insurance at Miller Insurance Services LLP. Lehr is co-founder and vice president of analytics for TSC Avantage. Previously, Lehr held roles at the U.S. Department of Defense. This article first appeared in the Feb. 9, 2015 issue of Insurance Journal magazine and has been reprinted with permission. 2015© Wells Media Group

800-226-3224 www.fcci-group.com

LOCAL KNOWLEDGE. PERSONAL SERVICE. “I’m a safety nerd and my license plate proves it – it says “R U SAFE.” I love to find trends policyholders aren’t aware of, then give them a variety of ways we can work together to reduce the losses. It’s fun to see the lightbulbs go on!”

Cyber insurance is often viewed as the last line of defense, but when approached as an offensive measure, it can be a significant part of a proactive risk management strategy.

By implementing comprehensive risk assessment as part of the prebinding process, insurers can create a collaboration with both prospective clients and policyholders to improve

Linda Hudson, CSP Loss Control Consultant Midwest Region Kalamazoo, Michigan 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

KYIA15_Hudson_4.875x7.5.indd 1

24 | www.iiak.org | March/April 2015

1/20/15 10:09 AM

MARKETING

REIMBURSEMENT

PROGRAM

There has never been a better time to co-brand and promote your agency with Trusted Choice.

Our three tiers of reimbursement can help offset your advertising costs. You have the freedom to apply for any or all of the reimbursement options.

TIER

UP TO Receive up to $750 for advertising

$750

locally online.

Receive up to $750 for using the

TIER

UP TO Freedom Campaign advertising materials.

$750

Receive 50% of the invoice amount, up to $750 total.

Receive up to $100 for co-branding your

TIER

UP TO promotional items and/or your website

$100 POTENTIAL OF

$1,600

using the Trusted Choice logo.

Receive 50% of the invoice amount, up to $100 total.

An agency that takes advantage of all 3 tiers can be reimbursed a maximum of $1,600 in 2015 per agency location.

For Tiers 1 & 2 contact:

For Tier 3 contact:

Jo Buckley

Kiescha Cherry

(703)706-5412 joanne.buckley@iiaba.net

(703)706-5443 kiescha.cherry@iiaba.net

www.iiak.org | March/April 2015 | 25

If you hear the same things often enough, repetition becomes reality. And through the years in our industry, certain ideas have been repeated so often that they’ve become widely accepted as the truth when, in fact, they’re nothing more than myths. As a result, many people in the agency business have made some very serious mistakes caused by believing in these myths.

Here’s my list of the top seven myths to avoid.

Most think that every account is a great account, which simply is not true. This is especially true with newer producers, who tend to confuse activity with results. In their minds, anyone who can fog a mirror and pay in U.S. dollars is a great account. These are normally order-taking accounts. Typically, the prospect will call for an insurance quote after seeing an ad or will click to receive a “Free Quote” through the agency’s website.

So the producer follows up and provides a quotation and winds up taking an order on about 2 out of 10 opportunities. They sell just one policy that the prospect had requested, with the plan to round them out someday. The problem is, that day never comes. If it did, we’d certainly have a smaller percentage of singlepolicy accounts. But the reality is that more than 50% of personal lines and small commercial lines are single-policy accounts. You wind up with low revenue per customer and lower retention. No wonder the average agency loses money on 80% of its customers.

I’m a firm believer that you have to know your numbers. You may recall my comments in past articles about “Knowing versus Guessing.” It’s important to complete a profit-center analysis on your various types of clients. For example, if all you had were personal lines, what would be your income and expenses? Most agencies—not all, but most—will lose money on the vast majority of their customers because they don’t even take a look at it; they don’t “know.”

26 | www.iiak.org | March/April 2015

By: Roger Sitkins

When most agencies have an opening, because they say they don’t have time to train or any New Employee On-Boarding process, they look to hire people from inside our industry. Typically, they want service people who are already licensed and producers with experience at another agency. But when you go that route, in most cases, all you’re really doing is hiring a bunch of baggage.

If someone is going to move to your agency, you should be questioning why. Assuming they’re not working for a terrible agency, you have to wonder why they’re leaving their current employer if they’re really that good.

I remember one of the early interviews I conducted as an agency owner in Michigan.

The prospective employee was working for a reputable competitor in town and had applied for a personal lines CSR position with us. Naturally, I asked her why she wanted to change jobs. Her reply: “If I can make a few bucks more per hour, that would be great. I’ll move.” Wrong answer!

What happens next year when someone else offers her a few dollars an hour more?

I mentioned above the importance of knowing versus guessing your numbers. It’s equally important to know your people, both existing and future employees.

Hire Attitude and Aptitude. I believe in hiring attitude and aptitude first. I also believe in hiring to match your overall agency culture. If we can hire great people and train them, we’re better off. Okay, I realize that it’s not that easy, but you can always teach insurance.

With producers, look for sales talent first. Again, you can always teach them insurance. In fact, at one point, everyone reading this article knew nothing about www.iiak.org | March/April 2015 | 27

insurance. You’re not born with innate knowledge of the insurance business—you have to learn it! My two grandsons will attest to that—once they learn how to talk (right now they’re only two weeks old). And right now they know nothing about insurance. And at some point in their life, even the most successful producers in the industry didn’t either.

Similarly, seek out service people with the qualities that can’t be taught. Look for customer service people with empathy, those who truly enjoy helping people and have a “customer-first” attitude. Don’t hire someone who’s rude just because he or she knows insurance.

Get Profiling Assistance. Work with a profiling firm such as Omnia. Profiles can help you take a closer look at people so that you’ll know what you’re getting.

What’s interesting about this service is that they ask nothing about insurance, yet they can tell you very clearly what it takes to be successful in this business.

Their profiles tell you how the candidates’ characteristics match up against the traits needed to be successful at a specific job. It’s really remarkable how accurate profiles can be, so if you are working with a reputable profiler, listen to them. If they advise you not to hire a certain candidate, believe them. No matter how much you like a prospective employee, it’s never a good idea to hire against the profiler’s recommendation.

Are you proud that your agency represents so many companies? If so, you’re not alone. I’m amazed at the number of carriers the average agency has. But what’s even more amazing is when they figure out how many they have. In reviewing their “insurance company accounts payable,” most agencies are shocked to see how many carriers are listed. Sometimes, when looking at all companies and E&S brokers, it’s in excess of 75.

Often, agencies will take a contract with one company or one E&S lines broker for one piece of business.

We always talk about the 80/20 Rule, but were you aware that it applies to your carriers also? Basically, 80% of your premium volume is written with 20% of the carriers that you represent. Take a look at your own book if you don’t believe me.

Today, more than ever, you need relationships and clout with your carriers. That way, you’re more likely to 28 | www.iiak.org | March/April 2015

get their cooperation when you need help with a client who is high-risk or hard to place. Chances are you won’t enjoy that benefit if you’re trying to “spread the wealth.”

First, you’ve got to know your numbers. You may not agree with the 80/20 Rule, but find out if it applies to you. Just look at all the carriers that make up the bottom 80% and ask yourself: “Why do we have this carrier? Who else could take this premium volume?

Who could we take this premium volume to, continue to do a great job for the client but, more important, be negotiating better deals because we have the clout to do so,” etc. Currently, there are a few major companies that allow the business that you place with E&S facilities to count towards your premium volume requirements on your contingency income contract because they own the E&S facilities also.

Everyone thinks this is such a great business because

90% of your customers stay with you. As wonderful as that sounds, here’s another area where you have to know your numbers. For example, let’s say that you have 1,000 customers and a 90% retention. Here’s how that would play out over a five-year period.

Year 1: 1,000 Clients Year 2: 900 Clients Year 3: 810 Clients Year 4: 730 Clients Year 5: 660 Clients

Basically, in four renewal cycles, you’ve lost one-third of your business! And when you look at it that way, if you’re not growing by 33% every four years, you’re going backwards. So the fact is, 90% retention is terrible.

There are several keys to retaining clients, starting with taking a hard look at writing full-time clients only (for the 10 millionth time). Also, you should have formal relationship management programs in place for your A and B customers and do stewardship reports for them, as well.

GEICO and Progressive each spend $1 billion a year on advertising. When was the last time you watched TV and didn’t see a gecko or Flo? GEICO’s gimmick has been that customers who spend 15 minutes can save 15% on their insurance.

Now Esurance is saying that 15 minutes is too long.

They claim they can save you just as much on your insurance in half the time—just 7.5 minutes. You really can’t compete with that (and I hope that you don’t want to) because it’s strictly a commodity-based business. However, you can compete—and you will

ENTHUSIASM IT’S CONTAGIOUS “I am passionate about underwriting Personal Lines. That enthusiasm gives me the ability to brighten a customer’s

win—if you decide that you want a relationship-based business and everybody is a VIP. A couple of questions to ponder: Have you ever been the lowest price and not won the account? Have you ever been a higher price on a renewal but you still kept the account? That should tell you that relationships are important, and it’s not always about price.

Granted, some buyers care only about price. But again, those are the commodity buyers that will leave you for $100 a year. Since you can’t build a career or an agency around them, let them go—you’re not making money on them anyway.

People are constantly refuting the idea that it’s possible to earn a 25% operating profit, but the truth is, yes you can. How? (And here comes the big trick.) You simply can’t spend more than 75%!

Seriously, I could earn a 25% operating profit if I truly managed to a financial model designed with that in mind. In that case, the bottom line would become the top line and you would live by the 25-50-25 Financial Model (a 25% operating profit; 50% service and administrative expenses, and 25% on sales expenses).

What’s your financial model? At some point, you have to draw a line in the sand and commit to earning a 25% profit. Make it a defining moment.

day and let the agent know that I really do care about the account they are sending me. They know I will get the job done for them.”

Calvin McNamara Personal Lines Manager

Call me for a quote today!

888.916.7158

Managing General Agency Since 1920

800.666.5692

jmwilson.com

Brokerage/Professional Liability Property & Casualty • Personal Lines • Surety Commercial Transportation • Premium Finance

I can’t believe how many agencies will spend $50,000 on a website and expect the public to knock their doors down. Apparently, their theory is “Build it and they will come.” But after seeing some of these sites, I wonder how much time (if any) the agency owners actually spend on them. Some of the sites are atrocious. What’s worse is the owners are often oblivious to what’s on them. They don’t visit them and don’t realize that their website is their brand, that they need to protect. Instead, they’re using their website for automated practice quoting: “Click Here for a No-Obligation, Free Quote.” www.iiak.org | March/April 2015 | 29

While that may seem like a great way to get leads, those leads are only as good as the follow-up. Usually, agencies respond to automated inquiries either with an automated online reply or a phone call or, in rare cases, both. But more often than not, they do none of the above, which understandably doesn’t sit well with most prospective customers. After all, if they can’t follow up there, I’d hate to see how they service their accounts.

Social media is another arena to approach with caution. Be especially careful about what you and your employees post on Facebook. If you don’t want your customers to see it, don’t post it. For instance, if you’re asking customers to “like” your page, don’t be posting wild and crazy party pictures on it. And speaking of pictures, if you’re part of an online professional networking group such as LinkedIn, make sure that your profile photo looks professional. I’m often invited to connect with other professionals and am frequently surprised by the poor quality and casual, “after-hours” look of some of the photos. Do you really think that a photo of you partying on a boat projects the appropriate professional image?

The Bottom Line Obviously, myths abound in our business and these are just a handful of the most prevalent. It’s your job to avoid them. Don’t make them the future of your agency. Prove them wrong. Or you can ignore what you’ve just read, continue buying into them and watch what happens. It’s your choice.

Roger Sitkins is founder and chairman of Sitkins International, a private client group and membership program for some of the top independent insurance agencies and brokerages in the United States, Canada, and Latin America. Members participate in training, advising and networking opportunities focused around innovation, sales, growth, profitability and value. Sitkins International is inventing the future of the independent insurance system by providing intellectual property that empowers agents and brokers to become the innovators. Reprinted with permission from the February 2015 issue of Rough Notes magazine

IIAK would like to welcome our newest members: Agency Member Maverick Insurance Group - Louisville Straightline Solutions, LLC - Frankfort Troy Brooks Management Co. - Bowling Green

Associate Member

Iroquois Midwest, Inc. Hallmark Insurance Company Markel Specialty For information regarding IIAK membership, contact Tara Purvis, Marketing Director 502-245-5432 • tpurvis@iiak.org

30 | www.iiak.org | March/April 2015

EMC can get you the reports you need to close more sales.

As a leader in real-time/ download technology, EMC provides you with timeand money-saving agency connectivity services. It’s just one of the many reasons policyholders Count on EMC.® SARA RICHARDS Business Technology Analyst

REAL-TIME ANSWERS FOR

REAL-TIME RESULTS. YOUR NEAREST BRANCH OFFICE:

www.emcins.com

Cincinnati Branch: 800.732.5595 | Home Office: Des Moines, IA

© Copyright Employers Mutual Casualty Company 2015. All rights reserved.

www.iiak.org | March/April 2015 | 31

32 | www.iiak.org | March/April 2015

Relax...

You’ve offered each of your clients a personal umbrella policy.

Right?

It might not be quite as relaxing as a day at the beach, but knowing you’ve done everything in your power to protect the customers who trust you to help them will go a long way towards easing your mind.

Offering each and every client an umbrella not only protects those who choose to purchase the coverage. It protects your agency from liability. And it protects your book of business, since studies show that customers who have multiple policies are less likely to move their business elsewhere.

As a Big “I” member, you have access to a stand alone personal umbrella program from A+ rated carrier RLI, featuring: Limits up to $5 million available Excess UM/UIM available in all states You can keep your current homeowner/auto insurer New drivers accepted - no age limit on drivers Up to one DWI/DUI per household allowed Auto limits as low as 100/300/50 in certain cases

Competitive, low premiums for increased limits of liability Simple, self-underwriting application that lets you know immediately if the insured is accepted E-signature and credit card payment options Immediate coverage available in all 50 states plus D.C.

So cover your clients... protect your agency... and profit from umbrella sales!

Contact Jennifer Hopper, your RLI Administrator at: Email: jhopper@arlingtonroe.com Tollf Free: (800) 878-9891, ext. 8639 Local Fax: (317) 554-8551 Toll Free Fax: (888) 552-9891

www.iiak.org | March/April 2015 | 33

© 2013 SECURA Insurance

Let’s make sure they’re safe at home.

Covering all the bases since 1900 Commercial • Personal • Farm-Ag • Specialty

34 | www.iiak.org | March/April 2015

Classifieds Acquisitions

Established Louisville agency interested in acquiring insurance agencies in Jefferson and surrounding counties. If you are interested in selling, merging, or need assistance with perpetuation, we would like to talk with you in confidence. Call R. Alex Rankin, CPCU or Steve B. Thompson, CPCU, at Sterling G. Thompson, Co. at 502-585-3277

DO YOU FOLLOW IIAK ON

SOCIAL MEDIA

NO? THEN YOU ’ RE MISSING OUT ON IMPORTANT NEWS &

EVENTS!

Find all our links at our homepage: www.iiak.org Or, use your smartphone to scan the QR codes below:

Looking for Producers

Independent with top best markets looking to expand presence in Jefferson, Oldham or Shelby counties. Wanting Personal lines, Producer or book of business to move or purchase. All arrangements possible, in strict confidence. Please send inquiries to Turner Insurance Agency, 2460 Shelbyville Road, Shelbyville, KY 40065 or call Kurt Turner, CPCU at 502-633-6060.

IIAK

Young Agents

Commercial Property/ Casualty Producer/Partner

Louisville Insurance LLC has producer opportunities with flexible compensation plans while offering ownership in book of business produced. Confidentiality provided to all interested parties. Contact Glenn Pike at 502-473-5454 or glenn@louisvilleins.com.

Ad Index Bolton & Company EMC Insurance FCCI Guard Insurance J.M. Wilson Kentucky Retail Federation KESA Motorists Mutual RLI Personal Umbrella Secura Summit Consulting Swiss Re Professional Liability West Bend Mutual Insurance

OBC 31 24 19 29 22 IFC 11 33 34 10 5 16

For classified ads or to advertise in the Kentucky IA, contact: Nikki Petrowski, Communications Director, 502-245-5432 • npetrowski@iiak.org

Cost: Free Learn more: www.hootsuite.com Manage and schedule posts to multiple social media profiles on Twitter, Facebook, LinkedIn, Foursquare and more, all from one app !

You can also post to LinkedIn, Foursquare, and more from virtually anywhere. Plus, you can easily manage campaigns & analytics, schedule updates, and even translate and publish messages to/from over 50 languages.

Get the top app to build your audience, manage Twitter, Facebook, LinkedIn and Foursquare from anywhere and tie analytics back to yourwww.iiak.org goals.. | March/April 2015 | 35

Before your clients hit the road, call us!

We have the fastest quotes on two wheels!

Quotes are available on-line at www.boltonmga.com (click on-line rating) and are quoted in real-time. Compare our new competitive rates and remember, we have no minimum volume requirements.

Give us a test drive today!

2400 Waterfront Plaza • 325 West Main Street • Louisville, Kentucky 40202 Telephone 502 583.8361 • 800 292.6597 • Fax 502 584.6131 • www.boltonmga.com