e-Insight - January 2022 by Big I Illinois

JANUARY 2022

INSIGHT PERPETUATION

for Independent Agents

Pathways to Agency Ownership Funding Agency Perpetuation

Plus

How to Guide Young Producers to Long-Term Success

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January 2022

CONTENTS 12

12 18 19 20 22 24 26 27

Funding Agency Perpetuations: It Pays to Plan

By Kelly Drouillard

Key Components of a Perpetuation Plan

By Carey Wallace

Perpetuation for Independent Agents - Big “I” Resources Succession or Perpetuation?

By Al Diamond

In With the New: How to Guide Young Producers to Long-Term Success

By Susan Toussaint

Winning the Talent War

By WAHVE

IIA of IL Hiring Resources How Marketing Can Lead to Hiring

By Daniel Smith

In This Issue

The Independent Insurance Agents of Illinois (IIA of IL) has been providing members with a sustainable competitive advantage since 1899.

7 9 11 17 28

Brett’s 2 Sense Trusted Choice Government

e-Insight Associate News

31 32 32 33 34

Board of Directors Profiles Agency Members in the News Farm Agents Council IIA of IL News Classifieds

info@iiaofil.org | www.iiaofil.org | (800) 628-6436 or (217) 793-6660 | Fax: (217) 793-6744

2009 • 2010 • 2011 • 2012 • 2013 • 2014 2015 • 2016 • 2017 • 2019 • 2020 • 2021

Insight is the official publication of the Independent Insurance Agents of Illinois (IIA of IL). The magazine is published monthly for the members of the IIA of IL, with the office located at 4360 Wabash Avenue, Springfield, Illinois 62711-7009; Consumer Website: www.ChooseIndependent.com. The IIA of IL welcomes letters discussing concerns of the insurance industry, articles, editorials, other matters of interest to the membership. The editor reserves the right to edit and select submissions for publication. Address submissions for review to Rachel Romines at rromines@iiaofil.org. For advertising information, contact Tami Hubbell at thubbell@iiaofil.org.

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IIA of Illinois Staff Director of Information and Technology Shannon Churchill - (217) 321-3004 - schurchill@iiaofil.org

Director of Government Relations Evan Manning - (217) 321-3002 - emanning@iiaofil.org

Director of Education and Agency Resources Brett Gerger, CIC - (217) 321-3006 - bgerger@iiaofil.org

Office Administrator Kristi Osmond, CISR - (217) 321-3007 - kosmond@iiaofil.org

Accounting & Admin Services Tami Hubbell, CIC - (217) 321-3016 - thubbell@iiaofil.org

Director of Communications Rachel Romines - (217) 321-3024 - rromines@iiaofil.org

Director of Human Resources, Board Admin Jennifer Jacobs, SHRM-CP Director of Membership Services Tom Ross, CRIS, CPIA - (217) 321-3013 - jjacobs@iiaofil.org - (217) 321-3003 - tross@iiaofil.org Sr. Vice President/Chief Financial Officer Mark Kuchar Products & Services Administrator Janet White, CISR - (217) 321-3015 - mkuchar@iiaofil.org - (217) 321-3010 - jwhite.indep12@insuremail.net Chief Executive Officer Phil Lackman, IOM Director of Prof. Liability & Ins. Products Carol Wilson, CPIA - (217) 321-3005 - plackman@iiaofil.org - (217) 321-3011 - cwilson.indep12@insuremail.net Central/Southern Marketing Representative Lori Mahorney, CISR Elite - (217) 415-7550 - lmahorney@iiaofil.org

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DEC

It shouldn’t take your customer’s roof disappearing in a matter of seconds to find out who you can count on.

BUT SOMETIMES IT DOES. And that’s the Silver Lining®.

Year in Review WOW, what a year this has been. Where do we start? I cannot remember a busier year for our industry or our association. From passing legislation to fighting off bad policy, we were busier than Santa on Christmas. This year may have been the largest game of whack-a-mole that we have ever played. The last analogy would be that we were playing “Press Your Luck” and kept getting the “Whammy.” Overall, as an industry and association, I think we weathered the various storms very well. Rebuttable presumption ran out for essential employers on the workers’ compensation front, which was a huge exposure for our clients. The association worked with various stakeholders to ensure that the onerous Illinois Workers’ Compensation Commission rule was never put in place and that the resulting law was palatable for all parties, including your clients. We participated in the Business Income/Interruption Task Force created by the legislature to ensure that their final report would not include coverage where there was no coverage and ultimately would require a Federal fix. While we were fighting on various fronts, Evan Manning was busy having one of our most productive legislative sessions that I can recall in recent history. Evan was able to work with numerous legislators to pass: • Virtual pre-licensing; • Third-party tax, title, and license payments for automobile total losses (I tried to do this for 20 years while at the Department); • Surplus Lines law clean-up that has been needed for years; • and Secondary addressee notification for life insurance policyholders. (This will help ensure that life policies don’t lapse) Passing one or two of these would be a phenomenal year, but all four elevates to the level of a Christmas Miracle. These all happened in the first part of the year, which would have been a full year, but we weren’t satisfied. We attempted to go back to in-person classes on several occasions with mixed results. We were one of two states to be allowed to hold Alliance classes on a hybrid basis which is huge as it allowed us to have an in-person component while having virtual attendees. If we had not been able to do this, we would have had to stay completely virtual, eliminating people clamoring for in-person classes that just don’t like virtual classes.

our association had the foresight to go forward and take a chance. I think that decision turned out to be a great call as CONVO is all about networking as well as education, and we were able to get back to a true networking and educational experience.

Brett’s 2Sense

We have so many exciting things that were introduced this year, and we continue to provide members great benefits and tools that will give you distinct advantages such as Catalyit, CONNECT, CareerPlug, and WAHVE, just to name a few. You are selling your agency and yourself short if you don’t fully take advantage and participate in all of the tools that the association affords you access to as a member. With today’s electronic/data-driven world, you cannot merely do business as usual and expect to survive. Your association is here to help. Take some time to explore our website at www.iiaofil.org and see all the resources and services we provide (you will be amazed). The last thing that I have taken away from this year is that anything is possible (after all, my freshman daughter was a second-team all-conference kicker). Now, you are better positioned as an independent agent more than ever before to provide first-class service to your clients. People value personal relationships and personal interaction. I would read the articles this month intently and suggest you consider perpetuation and use all the tools provided by the association to develop and identify someone within your agency or surrounding area to carry on your agency when you are ready to retire. That truly is the way to carry on that unique relationship that only an independent agent can provide. Should you have any questions regarding this issue, do not hesitate to reach out to me directly. As always, this is just Brett’s 2 Sense, and I hope it was helpful. If you need any clarification or have any suggestions for future articles, please email me at bgerger@iiaofil.org.

Then, we made the call as an association to hold our annual convention in person. If you read my postconvention article, you know I think that it was a home run. While most associations canceled or pivoted to virtual,

Brett Gerger | IIA of IL Director of Education & Agency Resources bgerger@iiaofil.org | (217) 321-3006 january 2022

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government | INSIGHT

Illinois’ Auto Insurance Verification Program Aims to Reduce Uninsured Motorists By Evan Manning Illinois’ mandatory insurance law is one of the most significant consumer protection measures in the state. Illinois state law requires you to carry a minimum amount of car insurance. Failure to do so can result in severe penalties that may include monetary fines and jail time. Under Illinois’ tort system, you may also be liable for actual damages (expenses associated with property damage and medical costs), economic damages (lost wages and earning capacity) and emotional and physical pain and suffering. The minimum requirements of insurance in Illinois state that owners and drivers must maintain liability insurance with limits for bodily injury and death of any one person of not less than $25,000 per person, and not less than $50,000 per occurrence. Illinois also requires liability coverage of not less than $20,000 for damage or destruction of personal property, such as a motor vehicle. In 2020, the Illinois Secretary of State began a program for electronic liability insurance verification for individual drivers. However, since July 1st Illinois has been ramping their efforts to get Illinois drivers in compliance. Illinois drivers will continue to verify proof of insurance electronically, however, the new program requires insurance companies who write auto insurance in the State of Illinois to work with the Secretary of State’s office to confirm electronically that drivers and owners do in fact have automobile insurance. A $100 reinstatement fee will be charged to vehicle owners who fail to prove insurance under Illinois’ electronic verification program.

A written request will be sent to the vehicle owner if electronic verifications are unsuccessful, and the Secretary of State will suspend the registration of the vehicle if the owner does not show proof of insurance. Vehicle owners must contact their insurance company or notify their insurance agent that they received the Secretary of State’s letter and the specific reference number on it. The reference number is an important piece of information for the agent or broker to obtain from the vehicle owner. It allows the broker to automatically populate the vehicle in question and able to quickly resolve the issue. A vehicle owner’s auto insurance is verified electronically by the insurance agent or company through www.ILIVS. com with the Secretary of State. The IIA of IL recommend that every insurance agent and broker who sells auto insurance in Illinois register on the site and register their top two or three insurance companies. It is important to note that the agent of record must be the one to certify the coverage of the vehicle in question. While the new electronic verification program will help in reducing the number of uninsured motorists on the road, it will not eliminate it all together. There will always be drivers who take a chance on not getting covered or letting their policy lapse or expire. Should you have any questions or concerns regarding this new law please reach out to Evan Manning. Evan Manning is the Director of Government Relations for the IIA of IL. He can be reached at emanning@iiaofil.org or (217) 321-3002.

In most instances, vehicle owners will not have to do anything, since the electronic verification of automobile insurance will be handled automatically. With the Illinois Insurance Verification System (ILIVS), automobile insurance will be electronically verified at least twice a year at random intervals by vehicle owners to comply with state automobile liability insurance laws. If the initial verification attempt does not verify that a vehicle is covered by a statutorily required minimum liability insurance policy, that vehicle will be checked a 2nd time after 30 days. This process allows the Secretary of State’s office to determine whether the vehicle was sold, placed into storage, or otherwise not being driven on the roadways. If the 2nd verification attempt does not confirm a liability insurance policy for the vehicle, the registered owner of the vehicle will be sent a registration suspension letter. The vehicle owner and insurance company will be required to prove that the vehicle was covered by a liability insurance policy on the date of the initial verification attempt within 30 days of the date of the letter through their insurance agent.

january 2022

insight

Funding Agen Agency perpetuation is a critical element of the independent agency distribution channel. Although many agencies state they have a perpetuation plan, frequently those plans are conceptual, lack deliberate action items and specific milestones. Once perpetuation is imminent, the conceptual plan may fail due to lack of details that could have been addressed over time. Perpetuation internally is a financially attractive and viable option, even in today’s pricey acquisition market. Owners truly can cash out from within with a competitive valuation when it is time to sell their agency. At the highest level, conversations with agency owners considering perpetuation pivot around these three items: Funding? When? How?

FUNDING How will the seller be paid upon perpetuation? Are proceeds from the agency sale enough to fund a reasonable retirement? What is the potential deal structure? Will a bank be willing to finance the transaction? Is the agency and the buyer qualified to get a commercial loan? Many, many agencies are sold internally. Despite the daily headline news of external acquisitions, the independently owned agency channel is enduring and thriving. With planning, an internal agency deal can be equally attractive as an external sale. Deal Structure Typical internal perpetuation deal structure is 70% to 80% of the purchase price in cash at closing to the Seller. The remaining 20-30% of the purchase price is structured in seller finance via a “Seller Note”. The Seller Note can be paid over many different timelines, depending on specific terms and agency cash flow.

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A good deal structure will: • Meet seller priorities • Key employees • Real estate/lease • Cash at close/seller note/combo • Transition period and/or ongoing role • Address unique elements (if any) of the deal • Seller note adjustments based on key issues such as large accounts, contingency fluctuation, renewal retention, carrier status or other items identified as an agency vulnerability • Cash flow viability. The deal structure must provide for cash flow that ensures sustained operations (including owners compensation) of the agency and the ability to service the debt that finances the deal. Bank Financing With proper preparation, commercial bank loans are available for agency perpetuation. This provides a cash exit which is desired for financial diversification. Affordable bank terms and reasonable conditions are available for buyers to ensure financial success. Loans that are guaranteed by the U.S. Small Business administration (SBA loans) are often the most attractive financial solution for agency perpetuation. SBA loans provide several advantages. The most critical are usually a low-down payment, attractive interest rates, and generous repayment terms. In general, the buyer needs to have a clean credit score, a reasonable personal lifestyle, and the ability to provide a down payment. The down payment is often the most important part of the buyer component. With planning, the agency can be position for the buyer to be in an excellent position regarding the down payment. Agencies are encouraged to plan for this down payment by the successor gaining legal entity ownership in the agency over time. This ownership should be at a minimum of 5%, and ideally 10%. The ownership must be in place two years prior to the transaction. Ownership in a book of business is not sufficient, it must be equity in the legal entity evidenced on the agency tax returns for two years prior to the deal. january 2022

ncy Perpetuation:

It Pays to Plan By Kelly Drouillard

For an SBA loan, the technical equity requirement is 10%. This 10% is of the purchase price plus expenses. For planning purposes, a 3% estimate for all expenses is reasonable. Potential Sources for Equity Injection: 1. Cash 2. Existing agency ownership (2 years on agency tax returns) a. Can be ownership in the agency being acquired (as described above) b. Unrelated agency ownership 3. Borrowed Funds: Must have outside income for repayment (i.e., spouse income, investment income). Sources of borrowing may include home equity line of credit or borrowing from private sources. 4. ROBS – Self Directed IRA. Essentially this method is using 401k or similar retirement funds to invest in the deal. Using a ROBS has significant complexities and there are firms that specialize in structuring these deals. While not used often, it is a possible source of the equity injection. 5. 5% cash / 5% seller equity note on full stand-by until SBA loan is paid off (no payments made until bank loan is paid off). In situations where the buyer cannot provide the full 10% equity injection, a seller may assist by providing up to 5% (or half) of the deal in a Seller Note. This Seller note must be on full standby (no payments) until the bank loan is fully paid. An additional seller note is permitted as a part of the deal structure, that may have immediate payment terms. We work with perpetuation and first-time agency buyers every day. Act now to move the agency along the perpetuation spectrum.

WHEN? When is it time to sell? For nearly all owners, this is the most significant financial event ever. Selling an agency that has been their life’s work is also a personal milestone. Most independent agencies have a culture with employee and client relationships that are far deeper than typical colleagues of a large corporation. Of course, it can be hard to sell the business ! It’s far more than “just business”. january 2022

Working with agency buyers and sellers over the years, (and those that should be selling), I tend to see the following signs it’s time to perpetuate the agency. These reasons do not include obvious health or family life change situations. These are not financial, tax, or estate planning reasons. These reasons are intangible and subtle, but just a real. Here are some signs, in an honest moment, an owner may see it’s time to sell. 1. No longer hungry. There isn’t the desire to make the extra phone call, take the extra meeting, get stoked about the next account or opportunities for a new product. It’s just not the same buzz that it used to be. While certainly a responsible owner, there’s no longer the fire in the belly. 2. You realize the agency may be better served with a new owner. As you network with your peers, you can’t muster the same enthusiasm. You may begin to understand that a new owner is going to be more effective than you. Are you doing the business justice if it’s standing still rather than moving forward? 3. Lack of internal action. There are employee issues or sub-optimal processes that you don’t want to address. Many times, owners subconsciously don’t acknowledge a weakness because admitting knowledge obligates action. And the owner simply doesn’t want to deal with it. 4. Your lieutenant is ready. If you have been a good planner, succession is in place. Perhaps it’s family perpetuation or a high potential employee you hired years back. If your lieutenant is ready, they probably see things they will change….for the better. It’s hard to implement those changes with the current owner in place. Your good lieutenant is now ready for ownership. 5. Something else is more exciting. Being a successful agency owner has built your entrepreneurial skills. Perhaps you began to dabble in another industry or business venture and find it’s naturally grabbing most of your attention. And you enjoy a change of business challenge. continued...

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6. You don’t want to compromise your personal energy – at any level. Mental energy is more precious and finite. Staff is in place and the agency “runs itself”. But not really, not 100%. The business, which is generally the largest personal asset, is still on your mind – perhaps the back of your mind – every day. The agency still requires some level of energy. Sometimes “it’s just time”. It’s not money, it’s not health, it’s not family. It’s just time to pass the baton to the next generation of owner.

HOW

Vision for the Next Owner. For perpetuation, agency owners must first consider what kind of owner will be best for the agency. • Customer Experience: Give some thought to the customer experience upon sale, and what type of owner will be best. • Employees: Think about how employees will be treated by the new owner. • Brand: Is it important for the brand of the agency continue? • Transition: Upon selling, what is and isn’t desired for the seller transition role of ownership? Longer term involvement or a few months of support. All these things are important in considering the type of perpetuation for the agency. A simple word document capturing these items is helpful to build out the action plan. Communication: The next step is Communication of the perpetuation vision. A sit-down session with these parties to discuss the perpetuation vision is vital. A discussion of the perpetuation vision does not commit the agency to a specific plan. Plans change. Discussion of the vision and plan helps with identify changes and fine tuning if needed. • The Successor must be on board. Conversations with the successor should be at the very least an annual basis, and hopefully on a quarterly basis. These conversations can start with a light “what if” scenario and then gain depth and details over time. • Family communication is always obvious, yet often overlooked. It can be awkward to start the conversation of perpetuation, even if ample opportunity. Schedule a specific time and place with family to discuss agency perpetuation. Many times, this collaboration can be revealing about what truly is realistic.

• Employees are key stakeholders in the perpetuation process. The worst situation is where the need for perpetuation is obvious (could be a myriad of reasons) and the employees are anxious because they have no idea what the owner is planning. Transparency is encouraged. Employees can also provide insight into what is and isn’t realistic. • Carriers are deeply vested in perpetuation. Confidential conversations are extremely appreciated by carriers, and again, they may have input to consider. • Personal Advisors: Financial, CPA, Legal. Do no leave these conversations to the last few months before perpetuating the agency. Financial advisors give the retirement plan a crucial gut check. The CPA will provide important tax implications that must be understood. An attorney will provide essential guidance on any legal moves that should be made to prepare and eventually pull the trigger on the sale. Operations Prepare for Perpetuation Opportunity – Transition from Employee to Owner If there is an employee (family or non-family) in line to buy the agency, they should be involved with all aspects of running the agency. It’s imperative to prepare them for ownership. Positioning the next owner of the agency takes deliberate plan and action. Agency ownership is more than just selling. Get the future owner involved in everything. The future owner should shadow the current owner in all facets of the business. Address weaknesses. The future owner may be a great producer, embrace technology, but not a fan of accounting and administration. The owner to be must address those areas that are not a natural skillset. Be honest and identify those fewer natural skills now. Take action to improve in those areas. Many carriers offer leadership training for the next generation agency owner (family or non-family). Here’s what the next owner of the agency should know: Basic Agency Operations: The quality and sustainability of the agency book is the lifeblood of the agency future. No excuses here – the future owner needs to be immersed in agency production and carrier performance.

Once perpetuation is imminent, the conceptual plan may fail due to lack of details that could have been addressed over time.

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january 2022

• Production: What is the source of new business? Are producer agreements in place? Are there marketing activities, community involvement, and deliberate referral source efforts? • Carriers: Who are the key carriers? Is the book managed with a handful of carriers or fragmented? Do you know the carrier reps? Understand those carriers who are true partners and others that are just another market. • Underwriting: How is the agency book performing? You should know the approximate loss ratios of the key carriers. Line of business analysis and account concentration are knowledge areas you should be strong. • Contingency: What has been the historic contingency income? What are the factors behind the contingency and does the agency monitor the results? • Renewal Retention: What is the renewal retention of the agency? What proactive processes / pre-renewal calls to the clients?

Kelly Drouillard CPA, CPCU is with Live Oak Bank, a leading provider of insurance industry loans. She has more than 35 years insurance industry experience funding more than $500,000,000 in insurance industry loans and has completed financing for hundreds of agency, carrier, and specialty distribution transactions. Kelly can be reached at kelly.drouillard@liveoak.bank. Visit www.liveoakbank.com for additional information on Live Oak Bank.

Administration: This can be a steep learning curve for new owners. Be patient, the buyer will be able to handle it all, but it may take some time and effort to develop these skills. Do not dismiss these elements of ownership. • Financial: Is the agency profitable? Are expenses in line with best practices? How is the accounting of the agency performed? Who does the tax returns? The future owner should know the accountant, meet them, and get an understanding of the financial results, processes, functions, and taxes. Payroll, banking, cash procedures are also things that as an owner, need to thoroughly understand. • Contracts / Legal / Corporate documents: Is there an attorney for the agency? Where are legal documents stored? HINT: If paper, scan everything now. Name and store the pdf in an organized manner. • Technology: What agency management system is being used? Is it ideal in terms of functionality and cost? Is it up to date? Who is the IT service provider? • Office Facility: Will you buy the building? Or do you know the terms of the lease and landlord? Perpetuation planning is worthwhile. Moving beyond concept to action is well worth the owners effort.

january 2022

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e INSIGHT -

online journal at www.iiaofil.org/Resources/Insight

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Key Tips for Young Agents

Successful Perpetuation Plan

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By Andrew Muller In this month’s e-Insight.

january 2022

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It is no secret that over half of the agency owners today are at or nearing retirement age. Current agency owners are facing a transition in their agency within the next 5-10 years. Their agency transition is not a question of if - it is a question of when.

details have been decided and there is nothing in writing. While that is a good step in the right direction, that is not a plan...that’s just an idea. To have a strong plan for your agency you need a written document that addresses what will happen to the ownership of your agency if the you are no longer able or willing to run the agency. This can occur due to a planned event or an unplanned event, and the agreement needs to address both types of situations. In short, you need to define the who, what, when and how for your agency.

Many carriers and agency staff want to know that the agencies they are partnered with or a part of have a solid perpetuation plan in place, but what exactly does that mean? To some agency owners it means that they have a rough idea of what they plan to do when they decide to retire. In many cases they have a handshake agreement with another agency owner, or member of their team and have talked about what they will do someday, but no

Here is an overview of the basic areas that need to be addressed in your agency’s perpetuation plan:

? Define who is eligible to become an owner of the agency. Outline of how the agreement can be amended, changed, or terminated.

The way in which the purchase will be funded and the related tax implications.

Key Components of a Perpetuation Plan

Definition of triggering events that will cause a change in ownership.

Define how the price of the agency will be determined.

As you can imagine, agencies that have a single owner are at the most risk when they do not have a perpetuation plan in place. By an agency owner taking the time to think through and document their wishes in advance, they take the pressure off their loved ones at a time that is in many cases the most difficult situation they may ever face. Having a document that addresses all these factors in advance provides all the people involved in that agency with a roadmap and peace of mind that the agency will continue to operate seamlessly if something unfortunate 18

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The order that will be followed if there are multiple people eligible to purchase shares.

By Carey Wallace

happens to the owner. Both the experience and financial impact will be significantly different for an agency, their family, staff, customers, and carrier partners when a clear plan has been pre-defined than it is for an agency that is put in the position to decide on the spot because there is no plan in place. Carey Wallace is a business consultant for independent insurance agencies and the owner of AgencyFocus. She can be reached at carey@agency-focus.com. january 2022

Perpetuation for Independent Agents Pathways to Agency Ownership

Whether you are ready to retire and want to pass your agency down to the next owner, or you want to own an agency in the future, it takes proper planning to ensure a profitable and operationally sound transition. Most importantly, this transition takes time - time for the incoming owner to build relationships, grow their leadership skills and operational knowledge but also time

for the retiring insurance professional to share a legacy and growth strategies for many years to come. The Big “I” has curated a plethora of resources for members including articles, webinars and videos, and access to consultants to assist with whichever path you take on your road to perpetuation.

Current Agency Owners: Succession Planning When you are swept up into day-to-day agency ownership, it may be hard to find time to plan for a profitable exit from your agency. And, while retirement may seem far away, a good sound plan takes years of preparation. From finding and opening the door for the new candidate to valuation and succession planning—passing on your agency is hard, but so rewarding when done right.

Future Agency Owners: A Pathway to Ownership Whether starting a scratch agency or buying into an established local agency, the pathway to ownership is yours to make. But, with the Big “I”, you may be independent, but you are never alone. We’ve got resources to help you master operations, find financing, lead intentionally and gain carrier appointments. What’s more, is our community has stories to tell and will share them with you!

Articles, Webinars and Videos On Demand From topics helping you to decide if the time is right to sell your agency, to time, training and technology, the Big “I” has several resouces to help. Here is a small sample: • Not Your Father’s Agency • Cultivate Your Agency’s Next Leaders with ‘Perpeducation’ • Four Questions to Help You Decide If It’s Time to Sell Your Agency

• Time, Training, and Tech: Perpetuation Planning in a Pandemic • Perpetuation Lessons for a Head Start Today • The Handoff: Setting Gen Y Up for Succession • Who’s Going to Fill Your Shoes • Death in an Agency • Growth Potential and Benchmarks • Valuation • Future Talent • Personnel Management • And so much more!

www.independentagent.com/resources/Pages/Perpetuation/default.aspx january 2022

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SUCCESSION or PERPETUATION? By Al Diamond

It would seem to be easy to create a succession plan if an agency has a sibling or siblings in the business or even if the agent has younger partners who know the insurance business and expect to be the next generation to own the agency once you retire. But a HUGE number of agents don’t have children in the business and are “Lone Rangers,” having managed their business on their own since starting the insurance business or became owners. What do they do? Many agents with successors in place are not so sure that their successors can manage the business as well as the older agents or sufficiently enough to assure the older agent a secure retirement payout. What do THEY do in this very sensitive situation? Until now the “Lone Rangers” simply sought the highest price from a buyer and sold out. That has been the simplest way out and the agent didn’t have to do what they have never done before – bring someone else into their business, train and spend time with people who may have different ideas about running the agency. Most ‘Lone Rangers’ are comfortable enough with their clients and can even spend time with employees and company folks. But the idea of mentoring someone who will eventually own their businesses is foreign to them. Many of them are so averse to this concept that they will sell their agencies at a value below what they deserve to avoid this “unknown universe.” What the ‘Lone Rangers’ don’t consider is the ramifications of a sale if they intend to remain in their communities. Over the long years spent in a business, we find that our best and long-term clients either are or become our 20

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friends, especially in rural areas. Selling out to the highest bidder (often banks, regional agencies, nationals or foreign competitors seeking a foothold) puts your “friends” into the hands of folks you (and they) might not find as friendly and service-oriented as you have been. No one thinks about how they will face their friends in the future having “sold” them with the agency. So, selling to the highest bidder works well if you’re going to leave the area (and have the time to set up your agency for maximum value). Otherwise you may not get the full value for your agency in the sale. And, you have to deal with your client/friends after the sale if the service levels are not up to yours. Meanwhile the ‘Lone Rangers’ are envious of their friends who have children, partners or employees who are capable of taking over the business someday. What the “Rangers” don’t realize is the panic faced by many of these owners with default succession plans. They have watched their children and/or partners/employees grow into their roles in the agency and they well-know the weaknesses of each of them. They wonder whether or not their successors can fill their shoes once the older owner departs. Many times, there is truly no cause for this concern. Every parent and elder has periods during which he thinks of his successors as the “idiot children.” Their mistakes have been magnified to the point that the owner is concerned over the well-being of the firm and the security of his retirement payout. That’s why so many agents have required third party loans to fully pay them with the debt carried by a financial institution for the payments he could have engineered for him or herself. But the agents have january 2022

convenient memories, remembering the faults of others and forgetting their own mistakes as they grew from their 20’s and 30’s into ownership positions. No, most are not ‘Idiot Kids,’ they are the same kind of people as their elders, learning more from their own mistakes than from the teachings of their elders. But it is hard for the older owner to distinguish between youngsters growing up and those real Idiot Kids who have been spoiled and will take over the agency long enough to realize that they don’t like it even without the older owner (who they always thought was holding them back). Within a few years to a decade, these new owners will have secured their future by merging or selling their predecessors’ businesses at a tidy profit. This is only a shame and a problem if the older generation gave the younger generation a break on the price to allow them value benefit in the ownership transfer. In that case, the old owner discounted the value of the agency in favor of the new generation of owners only to have it sold at a tidy profit shortly thereafter. However, if the ownership transfer was at a fair value, then the new owners have every right and privilege to merge or sell if they are not up to growing the agency’s value as an independent entity. The problem is not the eventual sale or merger of agencies. Sales and mergers are actually a part of agency life-cycles that is healthy for the industry. The problem is that the original owners knew that the new generation of owners were not capable of managing the growth and value of the agency and still sold it to them BECAUSE MOST OWNERS DON’T FEEL THEY HAVE ANY CHOICE. So, the ‘Lone Rangers’ sell their agencies because they feel they don’t have the option of internally succession and the multi-generational owners are concerned because they feel obligated to their children (or other successors) and feel they have no choice. Do you see the commonality? All of these agents, small, medium sized or large, urban, suburban or rural¸ ‘Lone Rangers’ and agencies with successors – all of them feel trapped with no options besides selling and hoping for the best. BUT IT DOESN’T HAVE TO BE THAT WAY. No, we can’t rule from the grave (or from retirement), but tools are in place to secure the future of your agency (and the future of the payments to you) whether you are alone in ownership or have generations behind you. If you have time (several years before you either retire or want to cash out), there’s a plan of action you can take to make your retirement or withdrawal from ownership more secure. If you waited too long (you’re in the process of selling down or need to do something within the next year), there are still tools that can be implemented that can secure your payout to maximize the value of your asset. In a nutshell, whether or not you have time before you turn over the reins to your next generation or if you still haven’t identified that next generation, a management reporting process can be established that will require the next owners of the business to operate it in a manner that will assure you of its ability to make payments to you in a buy-out. This reporting requires the new owners to retain sufficient business and to grow the agency sufficiently to sponsor the payments to the retiring owner. If it doesn’t happen, they january 2022

have previously agreed in the purchase agreement that the agency will have to be sold once again to satisfy the old owners (or they must secure full payment of the remaining balance due to the retired owner). The reporting system mandates both retention and growth to minimum levels AND the prudent spending habits that keep the agency’s balance sheet liquidity ratios at levels that will assure any financial auditor of the agency’s continued ability to support it debt. The difference between having the luxury of time and doing this shortly before an ownership transfer is the training and implementation that can be done prior to (and proving the validity of) an ownership transfer and the need to establish the reporting system without any evidence that the new owners are capable of achieving the requisite goals to assure sufficient success to manage the value paid for the agency. If you have the time, you establish the management reporting program as a test of the ability of the agency (and its potential new owners) to support the financial strength needed to buy out the old owner(s). If the agency with its younger owner-potentials can accomplish this in the years available to them prior to the buy-out, the older owner can be reassured of the agency’s continued stability. The achievement of the objectives can be the prerequisite for the ownership transfer and could, potentially, provide a ‘way out’ for an ownership change that could be disastrous if actually implemented. Doing what’s best for the old owner is also doing what’s best for the new generation. If they are capable of handling the ownership change, it’s wonderful. If not, we know this prior to any change in ownership and other avenues can be explored. If you are a ‘short-timer’ and need to make a transition quickly, this same management reporting requirement can be used to sell to a new owner who will either retain and build the business or have to re-sell it to satisfy the retired owner. No owner will ever be surprised again by their payments suddenly stopping and a sorrowful letter explaining the cash shortfalls that make further payments difficult. The reporting process and balance sheet liquidity reporting requirements will reflect any negative changes very quickly and the Sale Agreement will contain very specific remedies if the agency cannot support its payments. Plan ahead and any change of ownership can be managed to provide the maximum value to the old owner with a payment schedule that makes the burden bearable without sacrifice to the new owners. With over 50 years of insurance experience, Al Diamond, President of Agency Consulting Group, Inc. has become the industry’s pre-eminent authority on agency valuation. Besides a thriving consulting practice for individual insurance agencies directed to the growth, profitability and productivity of independent agencies throughout the U.S. and Canada, Al has authored the PIPELINE, a monthly national newsletter for agency principals, since 1985 and acts as an Expert Witness in both state and federal venues to opine and educate regarding the values and common practices of insurance agencies. Al can be reached at 800-779-2430, by e-mail at al@agencyconsulting.com and through www. agencyconsulting.com , a website devoted to all issues related to operating successful insurance businesses. insight

In with the New

YOUNG PR to LONG-TERM

How to Guide

If you’re having a tough time recruiting new talent at your agency, you’re not alone. The insurance industry has been challenged to attract, acquire and develop young, diverse talent for as long as I can remember. In 2014, the average age of an insurance producer was 59 and the industry was on trend to lose a quarter of its workforce by 2018, according to McKinsey & Co. There is no doubt about it, we still have a problem making this industry an exciting option for young professionals. But when I think about all the career opportunities this industry can provide, I can’t help but think that we have a messaging problem. Recently, I had a conversation with an agency principal on that exact topic. He asked me how to pitch producer candidates on getting into the industry. Here are the three things I told him:

You get to decide who you want to be.

Unlike many industries, producers get to decide who they want as a customer. This is powerful. In what other professions can you say that? The challenge is that new producers are rarely given the opportunity or guidance to intentionally develop a clienttype mindset.

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Too frequently, new producers start out as generalists and are rarely encouraged to become specialists. Without specialization, it’s difficult to develop a compelling value proposition, connect with prospects at a meaningful level or go upstream and work on larger, more complex accounts. Helping a new producer identify two or three niches that align with their passion, marketplace opportunities and revenue expectations is one of the greatest gifts an agency principal can bestow.

A vast majority of businesses are at risk and don’t know it.

Surprisingly, this particular assertion isn’t always believed. Yet, as a trainer in the industry, I can attest to the truthfulness of this statement. Reviewing policy after policy, we see a substantial number of policyholders at risk of paying out of pocket for a claim because their insurance policy is either inadequate or inaccurate. What’s the cause? Producers falling into the “commodity trap.” That’s a term coined by Peter Drucker, who also said, “in a commodity market, you can only be as good as your dumbest competitor.”

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RODUCERS RM SUCCESS The trap is often unintentionally set by business owners or managers who make insurance buying and risk management decisions by “spreadsheeting” quotes, trying to make an apples-to-apples comparison. The trap works because few producers have an alternative approach to offer, and, as a result, follow the buyer’s lead and end up supplying quotes instead of leading buyers toward a more effective approach. While this is scary to think about, it provides a significant opportunity for new producers who gain the skills necessary to lead buyers and help them self-discover business risks and threats they were previously unaware of.

There’s never been a better time to be an agent.

By Susan Toussaint

A pandemic, a hard market, global climate change creating unexpected and significant weather-related events, and an increase in cyberattacks provide ample opportunities for discussion about insurance and risk management strategies. The past few years may be remembered as the years of COVID-19, but it should also remind us of the important and meaningful work producers can do to protect the personal and professional assets of their clients. Susan Toussaint is a practice leader at Oceanus Partners, a ReSource Pro company. Oceanus Partners is a firm dedicated to helping insurance professionals working in all lines of business insurance improve sales and client retention. She can be reached at susan@oceanuspartners. com.

If there is one bright spot in 2020 and 2021, it’s that businesses are seeing the holes in their insurance programs and are seeking to engage with insurance professionals who can help them identify additional areas where they may be at risk.

There is no doubt about it, we still have a problem making this industry an exciting option for young professionals. But when I think about all the career opportunities this industry can provide, I can’t help but think that we have a messaging problem.

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Winning the

TALENT WAR

By WAHVE

As of September 2021, the US talent shortage reached a ten-year high. A Manpower Group survey revealed that talent shortages had more than tripled, and 69% of employers were trying their best to fill positions. In 2010, just 14% were having trouble locating talent. What’s more, retirements have accelerated. Baby Boomers (born between 1946 and 1964) have sped up their exodus amid the pandemic. In the third quarter of 2020, 28.6 million left work behind, a 3.2 million increase over the same period in 2019, says data from the Pew Research Center. For those in the insurance industry, the talent shortage has been a growing issue. Adding a pandemic to the equation has made the situation even more dire, particularly in smaller companies looking to augment their current staff. So how can your agency or small business find the talent you need in one of the most impossible labor markets in recent history? By employing the very people who are leaving, reemploying them in remote positions. In fact, remote work is finally getting its due among employers, especially given the new data on what today’s workforce wants. A recent EY Work Reimagined Employee Survey shows that globally, employees want remote work – 54% of those surveyed would consider switching jobs if they are not offered more flexible work arrangements.

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This coming from people who are 76% more likely to be satisfied with their jobs and are 93% more likely to stay in their current roles for the following 12 months. That’s where the savvy company can attract the right talent – by offering what others won’t. And by targeting that demographic that is opting to retire instead of ride out the pandemic. Yet many of today’s retirees find that retirement is not quite suiting them. The US Bureau of Labor Statistics found that of the 40% of people aged 55 and older who were actively looking for work, there was a marked increase in how many of those people were in the 65 through 74, and 75 and older categories. By 2024, BLS projects that 13 million people over the age of 65 will be part of the workforce. What today’s retiring/retired worker wants are things that cost your company nothing, but can bring immense benefits: A remote position. Retiring veteran employees, especially in the time of pandemic, want simplicity. They’re eager to skip the commute, pass on management burdens, and opt to step into a more administrative role with less responsibility and stress.

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Their own hours. Many retired workers have other responsibilities and needs – caring for parents, grandchildren, or a loved one, volunteering, traveling. They want to work, but don’t want work to consume their lives as it may have done previously. Since remote workers have been proven to be more productive at home than in an office. A Stanford University and Ctrip study shows higher productivity from remote workers than in-house staff, and an Upwork report revealed that 32.2% of managers said that productivity has increased since employees started working from home in 2020. A Mercer report found that of 800 employers surveyed 94% said that work productivity was the same or higher since employees started working from home.

At a time when talent is dwindling and competition for experienced workers is at its most fierce, having a viable alternative to traditional talent acquisition is critical to the success of your company. Look no further than the talent that is exiting or has already left the industry.

The chance to mentor. Let’s face it – veteran workers have plenty of knowledge and on-the-job experience. And many of them are willing to share those skills with the new workforce. Retiring/retired workers feel valued when employers re-engage them and tap into their talents to help a new generation learn the ropes. Moreover, younger workers can in turn train more senior workers on the latest technology. This sharing builds stronger, more cohesive teams.

For more information about the IIA of IL partnership with WAHVE, go to https://tinyurl.com/IIA-WAHVE.

Many of today’s retired insurance professionals are wanting more than just retirement; they’re looking for a meaningful next career move. By keeping their talent engaged in a remote position, they get the step-down career transition they want, and you get a wealth of talent at your disposal. This article originally appeared on the WAHVE blog at https://wahve.com/blog/winning-the-talent-war/.

How can your agency or small business find the talent you need in one of the most impossible labor markets in recent history? By employing the very people who are leaving, re-employing them in remote positions.

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No matter where you are in the hiring cycle, IIA of IL has a solution to fit your needs.

CAREER PLUG: PROVEN HIRING SOFTWARE TO HELP YOU HIRE THE RIGHT PEOPLE FASTER. Finding and hiring the right staff to maintain and grow your business is an important key to your success, and likely your biggest challenge. The IIA of IL has partnered with CareerPlug, our recruiting software of choice, to support all members in hiring. Post to the new IIA of IL Careers Page using a free CareerPlug account, or upgrade to pro for enhanced features.

Recruit

DIY RECRUITING TOOLS THROUGH BIG “I” HIRES Templates to help you design job descriptions, employment ads, applications, screening questions, offer letters, training schedules, and more!

WAHVE: INSURANCE REMOTE STAFFING SOLUTIONS Work At Home Vintage Experts (WAHVE) provides an innovative contract talent solution to help retiring insurance professionals stay productive longer, feel valued, and achieve greater work-life balance; and to help insurance firms have continued access to experienced insurance talent regardless of location, with less time invested than traditional hiring and at a cost-savings for IIA of IL members. WAHVE's unique qualifying process and technology platform matches the right vintage talent wherever they may live to the needs of our clients wherever their offices are located.

MEMBER RATES ON PRE-LICENSING COURSES This course and accompanying study tools have been designed and by industry professionals at IIA of IL to help students pass the licensing exam the first time!

SCHOLARSHIP FUNDS

Train

NEW HIRE TRAINING THROUGH NEW LEVEL PARTNERS Online learning that is designed for new hires and those ready to expand into new roles is an excellent way to fit education into the workday. Choose from general education or coverage-specific learning.

DESIGNATION PROGRAMS AND CE OPPORTUNITIES

IIA of IL is proud to offer our members and their staff the opportunity to earn educational scholarships to education programs to qualifying applicants through the Eugene Sberna Educational Scholarship (www.iiaofil.org/Education/Scholarships-Awards) program and through a newly-established Diversity and Inclusion Scholarship (https://tinyurl.com/IIA-DEI).

The IIA of IL offers numerous CE opportunities to keep your staff in compliance and designation programs to reward employees that excel and provide them with opportunities to grow.

HR RESOURCES

Retain

Big “I” has partnered with Affinity HR because every organization, regardless of size or number of employees, should have basic human resource policies and procedures in place to both ensure legal compliance and serve as a resource for employees and their supervisors. Access a full array of HR support tools that are customized to meet the unique needs of your agency at a discounted rate by calling (877) 660-6400 and identifying yourself as a Big “I” /IIA of IL member. Also, don’t forget to check out the IIA of IL Solution Center for answers to common agency operations questions. Members can also access one free Legal Consultation with our partner HeplerBroom each year.

FIND OUT MORE: WWW.IIAOFIL.ORG/PRODUCTS-SERVICES/NON-INSURANCE-PRODUCTS-SERVICES 26

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january 2022

How Marketing Can Lead to Hiring By Daniel Smith

79.6%. That was the increase in stockbroker job searches after the success of the 2013 movie The Wolf of Wall Street. If you haven’t seen it, the movie portrays the lavish (albeit morally questionable) lifestyles of get-rich-quick stockbrokers led by real-life Wall Street sensation (and later convicted felon) Jordan Belfort. Why such a spike in interest in such a career after a movie about criminal activity in the finance world? It’s both simple and complex. The movie portrayed people making money, having fun, and living lifestyles they only ever dreamed of having. The fact that they did much of it illegally also attracted interest – but the wrong kind. So, what lesson can be learned from the positive results of the job search spike? Marketing culture can lead to interest in a career field. Let’s be honest, if you ask most people under 25 about working the insurance industry, they’re not likely to have a positive opinion. They envision a stuffy sales job with boring day-to-day tasks and difficult sales pitches. In reality, we know that insurance is far from boring. We have the opportunity to sell interesting policies in interesting industries. We help people in difficult times of loss. We are invested in our communities and often play important roles in the success of local businesses and economies. But how would they now that? Are we telling them? Are you telling them, and others, about what you do at your agency? Marketing is about creating demand. But that demand can be for more than just insurance policies. You can create demand to be a part of the culture of your agency, and demand to work with you based on your reputation. And, as is the focus of this article, creating that demand can lead to hiring opportunities. So, how do you showcase what you do to create this demand? Here are a few ideas: january 2022

Community Involvement Many agents are active in local charities, networking groups, philanthropic efforts, and more. Publicizing these (in an appropriate way) is something you should be doing. Don’t want to “humble brag” about the work you do? Great, use it as a way to cross promote the groups you’re a part of helping. Agency Culture A lot of agencies have staff that is like a close-knit family. They have staff outings, celebrations, contests, and other events. Tell your audience and prospective audience about your agency’s culture. Client Appreciation You have great clients. Maybe not all of them, but you some great ones. Show appreciation for them by sharing their reviews and testimonials. Thank them publicly for their years of loyalty. Cross-promote their business in your own marketing. If you’re worried about losing them because you publicize them, keep in mind that they’re already being solicited by other agents frequently. Showing your appreciation for them should only help your retention. Utilizing this type of content in your marketing will help the reputational value of your agency. And that value will come into play when people research you, whether that is to work with you – or for you. Daniel Smith, CAE is the Chief Marketing Officer and Co-founder of Market Retrievers, a digital marketing firm focused on building and implementing strategies for independent insurance agencies. He previously worked for the independent agents association in Tennessee for over 14 years and served as the CMO and COO. He is also a licensed P&C agent. He may be reached at dsmith@marketretrievers.com. insight

INSIGHT | associate news Thank you to our Associate Members.

Diamond Level

Platinum Level

Progressive Surplus Line Association of Illinois

Gold Level AAA Insurance Arlington/Roe Blue Cross/Blue Shield of IL Keystone Insurance Group, Inc. Pekin Insurance

Silver Level Grinnell Mutual Reinsurance Company Imperial PFS

IMT Insurance West Bend Mutual Insurance Co.

Bronze Level A. J. Wayne & Associates AMERISAFE AmTrust North America Auto-Owners Insurance Co. Badger Mutual Insurance Company Berkshire Hathaway Guard Insurance Companies Chubb ClickVSC Columbia Insurance Group Continental Western Group Cowbell Cyber CRC Group Donald Gaddis Company, Inc. Donegal Insurance Group EMC Insurance Encompass Insurance Encova Insurance Foremost Choice Property & Casualty Foremost Signature Auto & Home Forreston Mutual Insurance Company Frankenmuth Insurance Grange Insurance Homeowners of America Insurance Company Illinois Mine Subsidence Ins. Fund Illinois Public Risk Fund Indiana Farmers Insurance Insurance Program Managers Group 28

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J C Restoration J M Wilson Kemper Liberty Mutual/Safeco Insurance Madison Mutual Insurance Company Marble Box Marsh, Berry & Company Maximum Independent Brokerage, LLC Mercury Insurance Group Midwest Insurance Company Nationwide Previsor Insurance PuroClean Emergency Restoration Services RT Specialty - Naperville Restoronics Sensa, Inc. ServiceMaster DSI Society Insurance Specialty Risk of America Synergy Select The McGowan Companies Travelers UIG - The Agent Agency United Fire Group Utica National Insurance Group W. A. Schickedanz Agency, Inc./Interstate Risk Placement Western National Insurance Westfield january 2022

associate news | INSIGHT Donald Gaddis Co. Hires David Shapiro as Brokerage Associate Wholesale broker Donald Gaddis Company is pleased to announce that David Shapiro has joined us as a Brokerage Associate specializing in hard to place Property and Inland Marine accounts, as well as many classes of General Liability and layered insurance programs. David is looking forward to building relationships with both our retail insurance agency partners and our appointed carriers. He brings over two decades of insurance industry experience with a focus on surplus lines. His recent employer was Avondale Insurance, where he underwrote on behalf of Lloyds. Prior to that he worked as a staff member at Seneca Insurance Company, as well as with brokerage firms AON and USI Midwest.

Sensa Auto Insurance Launches in Illinois

Sensa Auto Insurance launches in Illinois on January 4, 2022, selling exclusively through independent agents. Sensa is the first proactive insurance company, providing all policyholders with real-time premium services at no extra cost. All agents partnering with Sensa benefit from a shortened claims process with pre-filled information and overall ease of doing business. “I am excited to bring Sensa’s life-saving services to the people of Illinois,” said Danny Vehovic, National Director of Business Development at Sensa. “Working in the personal lines space for almost a decade, I know Sensa is a gamechanger in what agents can offer their customers.” Founded by a medical doctor, Sensa prides itself on including lifesaving services activated during an emergency – at competitive prices. Bringing professional support and insurance expertise to the scene of the accident reduces the burden and hassle typically associated with an accident or a loss. For more information, visit www.joinsensa.com or contact Danny at danny.v@joinsensa.com.

Encova Insurance Receives IVANS Digital Insurer Awards in Commercial Lines and Personal Lines

Encova Insurance is a recipient of the IVANS Gold Digital Insurer award in commercial lines and the IVANS Silver Digital Insurer award in personal lines. Encova received the recognition for its ability to provide connectivity and automate information exchange with agency partners across the policy lifecycle – from marketing and quoting to servicing and renewals. “Through our partnership with IVANS, we’ve been able to improve the experience for our appointed agents and deliver on our mission to be the most trusted and responsive provider of industry-leading solutions,” Encova Executive Vice President and Chief Strategy Officer John Kessler said. “Recognition like this is a testament to the hard work and dedication of our teams. We are humbled to have received the award in commercial lines for three years running, and we are thrilled to now add this honor in personal lines.” january 2022

Commercial Lines Encova scored the highest and was ranked No. 1 out of the approximately 400 carriers doing commercial lines business with IVANS. Earning gold status indicates Encova is in the top percentile of digital technology adoption when compared to its peers. Since launching its innovative commercial lines solution, Encova has written over $1 billion in commercial lines premium on its platform. The solution is now available to independent agents in 19 states: Illinois, Indiana, Iowa, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Nebraska, New Hampshire, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, West Virginia and Wisconsin. Personal Lines Encova recently launched a transformation of its personal lines offerings, helping to earn the organization silver status. The transformation has included moving agents in eight states onto an industry-leading digital platform and will soon include putting Encova’s entire book of business on the modern, state-of-the-art system. IVANS Digital Insurer awards recognize insurers’ commitment to supporting independent agents’ need for digital connectivity. Encova has integrated dozens of state-of-the-art products to create a cutting-edge digital experience for agents, policyholders and associates. The personal lines transformation continues with Encova launching its new smart technology solutions to even more states in 2022.

Rockford Mutual Announces Staff Changes

Dan Yesbeck, previously the Director of Information Technology, has been promoted to Assistant Vice President (AVP) of Information Technology. Dan will continue to oversee our software development and infrastructure team and help grow Rockford Mutual Insurance Company into a strong competitor within the P&C market. Arica Plautz, previously an Agency Coordinator for Rockford Agency, a subsidiary of Rockford Mutual, has been promoted to Agency Manager. In her new role, Arica will lead the Agency staff in growing and expanding into new markets. Jessica Burns has joined Rockford Mutual as a Pricing Analyst in the Research & Development Department. She recently graduated from UW-Madison with a Bachelor of Science degree in Mathematics and Economics. Marcy Savage also joined Rockford Mutual as a Marketing Representative for Eastern Wisconsin. Marcy will be taking the place of Donna Murphy, who retires at the end of 2021. Marcy comes to us with 20+ years of experience in the insurance industry.

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INSIGHT | associate news | Rockford Mutual Insurance Company Releases New Mobile App for Policyholders

Rockford Mutual Insurance Company (RMIC) has developed and released a new mobile application, Rockford Express Mobile. This new app will benefit all Rockford Mutual policyholders. Using Rockford Express Mobile, policyholders can view their coverages, ID cards, documents, and policy details; tap to call for roadside assistance, pay their bill, review their claims history, and get in touch with their local Rockford Mutual Insurance Agent, all from their mobile device. Rockford Mutual policyholders can find Rockford Express Mobile in the Apple App Store and in the Google Play Store.

SECURA Insurance Donates $37,500 to Nonprofits in Honor of Agency Partners

SECURA Insurance will donate $37,500 to 26 nonprofit organizations through a #GivingTuesday contest designed to help independent insurance agencies support organizations in their communities. Agents nominated local nonprofits through the #SECURAGivesBack campaign. Twenty-six participating agencies were selected at random to receive a $1,250 donation to a nonprofit of their choice. SECURA also donated an additional $5,000 to one agency’s nominated nonprofit in honor of the campaign’s fifth anniversary. Illinois winning agencies and the nonprofits that will benefit include: • Industrial Insurance Associates, an Acrisure LLC Partner benefiting St. Coletta’s of Illinois • Murfee & Weishaar Insurance benefiting Community Support Systems For additional information about the company’s charitable giving and community support, visit secura.net/community.

SECURA Insurance Welcomes Christine Cousineau as Chief Financial Officer, Announces Upcoming Retirement of Jeff Kargus SECURA Insurance announced the upcoming retirement of Jeff Kargus, Vice President and Chief Financial Officer, and welcomed Christine Cousineau as its next Chief Financial Officer.

Christine Cousineau joined the company in October 2021 after working for Thrivent Financial, where from 2007-2020 she served as CFO and then COO of Thrivent Credit Union, and, in July 2020, became President & CEO of Thrivent Credit Union. She led the credit union to achieve financial and membership goals, developed organizational strategies, and launched several programs to serve members. Cousineau also led several significant conversions to position the credit union for growth, all while maintaining high levels of employee engagement. Most recently, she navigated an unprecedented year, leading the credit union and serving members with excellence in the midst of the pandemic. Prior to this, Cousineau worked in public accounting for Grant Thornton and Spurlock, Runyan, Miller & Associates, and was previously a SECURA associate in internal audit, accounting, and finance.

BluSky Restoration Contractors Announces Merger with Illinois-Based J.C. Restoration, Inc.

BluSky Restoration Contractors, LLC, a leading national property restoration company in the U.S., has announced a merger with Rolling Meadows, Illinois-based J.C. Restoration, Inc. (JCR). The merged companies will continue as BluSky Restoration Contractors, operating 41 offices in 18 states from coast to coast. In addition to restoration services currently provided by J.C Restoration, Inc., BluSky plans to add its commercial roofing and healthcare restoration business lines to the Illinois markets. Founded in 1982, J.C. Restoration, Inc. is a family-owned and operated restoration firm that has successfully restored damaged properties in the greater Chicagoland area for thousands of home and business owners. JCR president Warner Cruz will step away from day-to-day operations of the merged company and join the BluSky corporate development team. Kent Stemper will continue as CEO of the merged firm. This announcement is the eighth in a strategic plan of mergers and acquisitions in the last four years to support BluSky growth. BluSky has grown from a privately-owned Colorado startup in 2004 to one of the largest national restoration firms in the United States.

Jeff Kargus joined SECURA in 2003 and served as Controller and VP-Controller before becoming Chief Financial Officer in 2016. Kargus led the areas of financial analysis and planning, financial reporting, enterprise risk management, investments and treasury activities, expense management, and external compliance and tax reporting. He will retire in March 2022.

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january 2022

Board of Directors Profiles

David Jenk, J.D., CLCS, SBCS Region 7 Director

Northwest Insurance Brokers, Chicago, IL Executive Director Number of Years with Agency: 8 Year You Started in Insurance: 2013 What do you feel are major challenges facing our Association today? Most independent agencies face the challenge of scalability, which hinders their ability to immerse thoroughly in all the facets of the trade. From government regulations to market saturation and internal operations, these obstacles are difficult to approach in isolation. What suggestions do you have to respond to these challenges? The IIA of IL unites independent agents, so they are better equipped to face these challenges. Collaboration is the ultimate response to overcoming objectives. The strong network the IIA provides helps to bridge the gaps many independent agents face. What do you see at the greatest benefit to IIA of IL membership? The IIA allows for members to associate with individuals from various divisions of the insurance industry. Members share common obstacles and goals and learn from each

other, and together become a stronger unit to make a difference for the betterment of the industry and the clients we serve. What prompted you to get involved in the Association? At the suggestion of a colleague, I attended a local IIA event in Chicago. The experience was positive, and I met many individuals that had similar goals and interests which aligned with mine. Since then, I have continued to stay involved with the Association on multiple levels.

Lindsey Polzin, CIC Region 9 Director

Presidio, Naperville, IL Executive Vice President Operations Number of Years with Agency: 5 Year You Started in Insurance: 2000 What do you feel are major challenges facing our Association today? Membership engagement is a major challenge. What suggestions do you have to respond to these challenges? We need to find a way to continue to connect with the membership and encourage them to connect with each other - in person, virtually, blogs, classes, etc. What do you see at the greatest benefit to IIA of IL membership? Education - but I mean that in such a broad term. There is regular CE education, political/legislative education, networking and learning from your peers, etc. january 2022

Lindsey previously volunteered on the board as Chair of the Young Agents and Education Committees. insight

INSIGHT | agency members in the news Walter W. Schultz Agency, Inc. Celebrates 99th Anniversary

The Walter W. Schultz Agency, Inc., located in Lansing, IL, will celebrate their 99th anniversary on January 23, 2022. Founded in 1923, the agency prides itself on serving their community and providing excellent service to their customers. The goal of the agency has been, and continues to be, to provide coverage with great insurance so clients can live their best lives. The Walter W. Schultz Agency, Inc. also serves customers in Indiana. Congratulations to the team at Walter W. Schultz Agency, Inc.!

The Farm Agents Mid-Winter Education Meeting is the premier event for those in the Illinois farm, agri-business, and crop insurance to come together for networking, education and an industry specific trade show. This event draws over 100 agents all from all throughout Illinois, to learn about the impacts our industry is facing, legislative changes, and so much more. Learn how your business can grow, thrive and adapt to our ever-changing world with speakers Rick Pitts and Evan Manning.

www.ILFarmAgents.com 32

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january 2022

iia of il news | INSIGHT

Education Classes january

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Pre-Licensing-Property & Casualty Virtual CISR-Agency Operations Virtual Agent’s E&O: Defenses and Preventions Virtual CIC-Agency Management Virtual E&O-Roadmap to Cyber and Privacy Insurance Webinar Pre-Licensing-Life & Health Virtual Ethics: Essentials for the Insurance Producer Webinar E&O: Identity Theft, Red Flags, and Money Laundering Webinar CISR-Commercial Casualty 1 Virtual CISR-Commercial Casualty 2 Virtual E&O-Roadmap to Policy Analysis Webinar Farm Agents Council Mid-Winter Meeting Springfield

New Members member agency

january

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Pre-Licensing-Property & Casualty Virtual E&O Roadmap to Personal Auto & Umbrella Insurance Webinar E&O-Roadmap to Homeowners Endorsements Webinar Agent’s E&O Duties, Best Practices, Operations Webinar E&O Roadmap To Cyber & Privacy Insurance Webinar CISR-Elements of Risk Management Virtual Pre-Licensing-Life & Health Virtual Flood Insurance, FEMA, and the NFIP Webinar E&O: Identity Theft, Red Flags, and Money Laundering Webinar CISR-Insuring Personal Auto Exposures Virtual CISR-Personal Lines Misc. Virtual E&O - Roadmap to Policy Analysis Webinar CIC-Commercial Property Virtual The Evolution of Ethics in Insurance Webinar

James Sager Agency Salem, IL Sage Insurance Agency Mattoon, IL

associate bronze Sensa, Inc. Austin, TX For information regarding IIA of IL membership or company sponsorship, contact Tom Ross, Director of Membership Services, at (217) 321-3003, tross@iiaofil.org. january 2022

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INSIGHT | classifieds for the insurance professional by the insurance professional

INDEPENDENT INSURANCE AGENCIES WANTED

AGENCY WANTED

GALO Insurance Agency, Inc (847) 832-0888 steve@galoagency.com

Visit www.ciagonline.com for contact information.

20. Since 2004, Central Illinois Agents Group LLC has been providing independent agents with a variety of markets with contingency opportunities. Agents have availability to several markets that they may not be able to sustain or maintain on their own. We have markets for personal, commercial, agricultural and crop insurance lines. Let us help you get to the next level.

17. We are an Independent family-owned agency located in the Chicago area. We are looking to expand through growth and acquisition. If you have a small to medium sized agency and are looking to sell, call or send us a message. We are strictly looking for Personal Lines and Small Commercial accounts with preferred companies.

AGENCY/AGENTS/PRODUCERS WANTED

02. Forest Park/Oak Park agency for over 60 years, will meet your needs by providing space, markets, marketing & sales support, automation, merging with or purchasing your agency. Perpetuation/ Succession Plans, BuySell Agreements also available. We have experienced, educated and dedicated staff for you and your clients. Have access to our numerous companies, office services and many other resources. Retain ownership in your book with contingency. Please look closely at us- we are an agency you want to do business with! We’ve done it before, we know how- we make it easy! Visit our website at forestagency.com/agents.html, or call for a confidential discussion and a list of Agency benefits.

OPPORTUNITIES/SPACE AVAILABLE/RETAIN OWNERSHIP

13. We are a 100 year old Northbrook agency looking to discuss any mutually beneficial opportunity. Our producers, mergers, clusters and agency purchases receive 50% commissions on new and renewal business without any expenses. We can provide: office space, phones, agency management system, service renewals and changes. The companies we represent are: Badger Mutual, Employers Mutual, General Casualty, Guide One, Hartford, Kemper, Progressive, Rockford Mutual, Safeco, State Auto, Travelers and Met Life. Contact:

Dan Browne will provide an agency evaluation/appraisal at little cost to you. Please call:

Nancy Solomon Martini, Miller & Schloss, Inc. (847) 291-1313 Ron@martini-miller.com

Dan Browne or Cathy Hall Forest Insurance (708) 383-9000 www.forestinsured.com/mergers-acquisitions

We Make Hiring Easier

+ CareerPlug’s hiring software helps agents attract more qualified candidates, identify the right candidates with confidence, and improve hiring results. CareerPlug will provide IIA of IL members access to a free account that can be used to post jobs, manage applicants, and improve the organizations’ employment brand. Association members can also access a “Pro” version of CareerPlug for a special rate to take hiring to the next level.

Learn more about CareerPlug and check out the brand new IIA of IL job board at

www.iiaofil.org

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january 2022

Commercial | Personal | Farm-Ag | Specialty

Matthew B. Illinois Sales Manager

Tricia B. Personal Lines Underwriter

Tyler H. Agribusiness Lines

Underwriter

Honest relationships SECURA’s team of insurance experts is making insurance genuine. They are here to support you and your clients. Our underwriting teams are quick to reply, open-minded, and know their stuff. Plus they are backed by our caring claims group who will get your clients back on their feet.

Interested in building a relationship? Contact us at secura.net/IL-agents.

Tyler S. Specialty Lines Underwriter

Kelly L. Commercial Lines Underwriter

Hear from our experts. Want to learn more about what SECURA has to offer? Scan the QR code or visit secura.net/IL-agents for more information about the SECURA team.

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