e-Insight - July 2022 by Big I Illinois

JULY 2022

INSIGHT 2021 MARKETPLACE REPORT Summary of the Illinois Property & Casualty Insurance Marketplace

Plus

Influencers in the Wild - Part 2

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.

Editor & Graphic Design - Rachel Romines

July 2022

Advertising - Tami Hubbell

CONTENTS 10 12 18 22 25

Are You Prepared for Rising Interest Rates? By Matthew Sprang

Influencers in the Wild - Part 2 Marketplace Report - 2021 IL Property & Casualty Insurance Save the Date for CONVO 2022 IIA of IL Awards

In This Issue

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

7 11 17

Brett’s 2 Sense Trusted Choice

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28 32 33 34

Associate News Agency/Agent Spotlight IIA of IL News Classifieds

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

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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OMAHA NATIONAL SECURA INSURANCE UFG INSURANCE WEST BEND MUTUAL INSURANCE CO.

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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Industry What does our industry mean to the State economy, let alone the National economy? This industry is worth billions of dollars in Illinois alone and touches everyone’s lives at some point. Our industry is often forgotten until something bad happens, until something strikes, such as the P-word or the C-word. Legislators, Media and other industries like to point at company profits in these times of crisis. All for varying reasons. Whether it be to drum up votes, stir up emotion for rating cycles, or lastly, to distract from other issues. With the focus on climate change creating more catastrophic events (not a political debate here), our industry will be needed more than ever as that is part of what we do. So our industry is not just about the dollars it pumps into the economy but also the service it provides to the community. Broke and bankrupt individuals are what we would have without our industry’s existence. Agents have been participating in and building communities for hundreds of years. We have created the blueprint for other industries to follow. Many agents participate and lead community volunteer organizations as well as sit on not-for-profit boards. You show me a not-forprofit board, and I would bet an agent sits on that board. Insurers are the same way, but no one is more invested in local communities than your local independent agent. It’s hard to quantify our worth as an industry due to all the intangibles that independent agents bring to the table. I am sure that if our industry did not exist, most of the current independent agents would be doing something that would positively impact their community, as that is what is in their DNA. If you take the industry out of the community, the effect is much greater than pure dollars.

Brett’s 2Sense Now let’s dive into the forces that can have the most negative impact on our industry. Legislators are a big one and often don’t understand the consequences of their actions or even know the subject matter except for what they are told by so-called experts (people with the agenda-saving industry they represent). Fortunately, this is what we have Evan Manning for; he does a great job of educating them and preventing many adverse actions. For example, when COVID 19 hit, legislators wanted all claims COVID 19 related to be paid by the insurers knowing that most policies did not provide the coverage for claims that the insurer was going to be mandated to pay. We had to educate them on how this would bankrupt many insurers, thus negatively affecting agents and, ultimately, consumers. Legislators routinely point to insurer profits and agent commissions as part of the problem but only take into account the numbers that support their narrative. During a Workers’ Compensation reform debate, a legislator was pointing out insurers’ “obscene profits” for the previous two years (they were in the 10-15% range). What he failed to point out was that over the last ten years (including those obscene profit years), the industry had realized an average of 2% in profits. Additionally, over the previous twenty years, the average was still that 2% figure. By attacking us on these issues, it saves them from having the spotlight pointed in their direction (them being trial lawyers, hospitals, providers, etc.) continued...

Chicago Area Agents packing meals for Feed My Starving Children.

Agents from Consolidated Insurance in Carbondale helping a local animal shelter.

Aadvantage Insurance Group of Glen Carbon collected goods for Veda’s Care Closet in Edwardsville.

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

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Independent, Authorized General Agent for

An Independent Licensee of the Blue Shield Association

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The media often tries to have the quick hit piece that shines a light on the big mean old insurance industry as no one will ever see our industry as a victim. However, they fail to look at the entire situation in order to really expose the real problem. For instance, recently, a local reporter did a piece on a provider and health insurer’s contract dispute and only presented the provider’s side of the story, therefore never really exposing the true issue or problem at hand. The story was filled with false information just so they could get it in the news cycle. All this does is lead to misinformation becoming fact as perception is reality. All of these factors can loosen or change perception of our true impact on the communities we serve day in and day out. I would just ask that legislators and the Media be as thorough as we are when doing our jobs as independent agents. For the most part, I think most people in those professions are trying to be thorough and thoughtful. When they aren’t, they create a greater, more far-reaching harm as they have a greater impact than most professions. One action by them, whether it be a bad law or a materially untrue story that doesn’t present all sides, can cause us great hardship or even irreparable harm.

The IIA of IL wants to highlight your service to the community! Fill out a short form, and we’ll feature your agency in an upcoming edition of the magazine. Go to www.iiaofil.org/ Community-Service-Spotlight or scan this code for details.

july 2022

Independent insurance agents are needed more than ever to guide consumers through this world by providing them peace, knowing that a loss won’t bankrupt them. Then the consumers can focus on being a better part of their community. This magazine issue will point out all of the positive numbers that our industry contributes to the economy. But we will never be able to quantify all the intangible and tangible good we bring to the table. Communities are the backbone of our country, and the independent agents give those communities the means to thrive. Whether by money or time, independent agents can be counted on for both. What we provide cannot be put on a graph like all the other quantifiable data. Keep doing what you are doing by providing great service, peace of mind, and being pillars in our local community. So let’s look into the mirror together and cite Stuart Smalley, “I’m good enough, I’m smart enough and doggone it people like me.” The first five people to send a picture of them participating in a community event to me (bgerger@iiaofil.org) will receive a Starbucks gift card. 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.

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INSURANCE PROGRAM MANAGERS GROUP CLAIMS MANAGEMENT SERVICES

IN THE WORLD OF INSURANCE, CLAIMS DO HAPPEN. IPMG’s Claims Management Services division (CMS) is that partner. As a full-service claims management company, IPMG CMS accepts the responsibility and expects to be held accountable for the results we achieve on behalf of our clients.

SERVICES AND RESOURCES: » » » »

» » » » » » » » » »

Workers’ compensation claims management Property and liability claims management Auto liability and physical damage claims management Professional liability claims management » Strong emphasis on public entity and long-term care sectors Nurse case management Risk management/loss control Medical bill review Pharmacy benefit management Aggressive litigation management Utilization review Electronic claim reporting with immediate acknowledgment and adjuster assignment 4-hour assigned adjuster contact on every claim Online claim review including adjuster notes and financials Industry leading analytics with national database for benchmarking purposes

INTERNAL QUALITY CONTROL AND COST CONTAINMENT PRACTICES: » Adjuster book of business analysis – to ensure workload does not affect service levels » Closing ration analysis – a monthly review to ensure adjusters are achieving maximum production » Claims diary tracking » Formal litigation handling guidelines and practices » Comprehensive medical bill review – average 59% cost reduction » Pharmacy benefit program – average 35% cost reduction » ISO claims search » Medicare section 111 data reporting and compliance

For more information please contact:

MIKE CASTRO

BOB SPRING

Sr. VP, Claims Management Services Mike.Castro@ipmg.com 630.485.5895

VP, New Business Development Bob.Spring@ipmg.com 630.485.5885

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Are You Prepared for RISING INTEREST RATES?

By Matthew Sprang Any banker who’s lived through a few business cycles will tell you it’s nearly impossible to predict interest rate movements. According to data from the Federal Reserve Bank of St. Louis, the prime rate has changed 348 times since 1955. Over that 67-year period, the prime rate has dipped as low as 3.25% and risen as high as 21.5%. Believe it or not, in 1980 the prime rate changed 37 times! On July 23 of that year, it was 11%. Less than six months later, it soared to 21.5%. This year, the Federal Reserve Board has embarked on a new round of rate increases to battle inflation. What’s different this time is that the Fed has clearly signaled its intention to raise the federal funds rate (which banks use to set their prime rate) six or seven times in 2022. This may be one of those rare periods where we know for sure the path interest rates will take. It isn’t often that insurance agency owners and prospective agency buyers can gaze directly into the Fed’s crystal ball — and know with 100% certainty that the cost of capital will rise in the near term. What should agencies be doing, then, to prepare for these rate increases, which may see the prime rate lifted to 5.5% or higher by the end of the year?

The Impact of Rate Increases on Agency Values

to increase during the pandemic. Ditto with respect to mergers and acquisitions (M&A) of insurance agencies. M&A activity doesn’t show signs of slowing down. The reason for this is that the fundamentals remain strong for the independent agency system. Agencies have a remarkable capacity to generate cash flow through good times and bad times. We’ve certainly seen that over the last few years, despite COVID-19. Last year, M&A activity reached record highs. And it also broke records the year before that. A hardening insurance market bodes well for continued growth on the revenue side. Sure, agencies face the same challenges as other businesses when it comes to attracting and retaining good people and coping with higher expenses, but agencies have always shown a tremendous ability to weather economic downturns. We don’t see that changing in 2022, despite inflationary pressures and continued uncertainty due to supply-side shortages and the war in Ukraine.

Variable-Rate Borrowers Should Convert to Fixed-Rate Loans If you have a fixed-rate loan, your borrowing costs won’t change. Prospective borrowers, however, should lock in a fixed-rate loan as soon as possible. And if you have an existing variable-rate loan, you should consider converting it to a fixed-rate note if you can.

First, let’s look at what rate hikes probably won’t do. There’s no indication that rising rates will have much of an impact on agency values, which have continued 12

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Many agencies have financing through the Small Business Administration’s 7a loan program, which are likely variable rates that adjust quarterly. These SBA borrowers will see significant changes in the cost to service that debt as interest rates rise over the next 12 months and beyond. Just plugging your numbers into a simple amortization calculator can give you an indication of what lies ahead. For example, if you had a $1.5 million, 10-year loan at 5.5%, you’d currently be paying $16,279 a month. If the loan increased to 7.5%, your monthly payment would jump to $17,805. Over the life of the loan, your total interest payments would go from $453,473 to $636,632! The best thing you can do right now is eliminate any variable-rate exposure you have. Converting to a fixed-rate note will keep your payments about the same and prevent them from going up. This will give you long-term stability and allow you to better budget expenses for the future. The good news is that most variable-rate loans don’t have prepayment penalties, so there’s really no reason not to convert to a fixed-rate loan.

When Borrowing Makes Sense for Agencies Growth and profitability remain strong for independent agencies, so it’s important for owners to continue to invest in their business. You need to keep up with technology and attract top people to your agency and retain them. In today’s extremely competitive job market, now is not the time to scrimp on staffing costs. Nor can you become complacent in your marketing efforts or in updating your agency management system. Growing your agency organically by putting earnings back into your operation is a good way to reduce your borrowing needs. However, there are times, even in a rising rate environment, when borrowing makes sense. You may want to bring on a new producer, modernize your operating systems, optimize digital investments, buy a book of business, or purchase a new building. In each of these cases, you’ll want to weigh the cost of acquiring capital versus the expected return on your investment.

Cash management is important, too This is also a good time to review your cash-management strategies and make sure you’re positioned to put your funds to work. While banks won’t be increasing their deposit rates right away, you’ll want to be ready when they do. Electronic fund transfers, zero balance accounts and sweep accounts are some of the ways you can quickly move money to capture the best yields available. The earnings from money market funds and overnight accounts are essentially “free money” that goes straight to your bottom line. It helps you increase your cash flow and ultimately the value of your agency.

Work With a Bank That Understands Your Business In these times, you need a banking partner who can help you navigate not only interest rate increases but also the ups and downs of a fast-changing marketplace. Now is the ideal time to assess your banking relationship to see whether it’s meeting your needs. Look for a bank with the expertise in the industry and desire to help you grow and prosper -- one that understands the independent insurance agency model and can suggest ways to operate your business more efficiently and stay ahead of the competition. Matthew Sprang is senior vice president and director of Agency Banking at InsurBanc, a division of Connecticut Community Bank, N.A. InsurBanc specializes in financial products and services nationally for the independent insurance distribution community. Started in 2001 as a vision of the Big “I,” InsurBanc finances acquisitions and perpetuations and helps agencies become more efficient by providing cash-management solutions. Reprinted by permission of Standard Publishing Corp. © 2022. To subscribe to The Standard and stay up-to-date on what’s happening in New England insurance, please go to www.spcpub.com or call 617-457-0600.

Yes, the cost of capital is going up, but it’s not likely to outpace your ability to generate new revenue. The income opportunities are still there. It’s a matter of managing interest rate changes, controlling expenses and continuing to bring in new business.

A hardening insurance market bodes well for continued growth on the revenue side. Sure, agencies face the same challenges as other businesses when it comes to attracting and retaining good people and coping with higher expenses, but agencies have always shown a tremendous ability to weather economic downturns.

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Influencers in the

Wild Part 2

Insight had the opportunity to sit down with some “influencers” in the insurance industry and discuss topics impacting our business. We received some great answers from Bradley Flowers, Derek Hayden, Syd Roe, and Olivia Schmitt. Part one appeard in the June issue of Insight.

Bradley Flowers

Bradley Flowers is a nationally recognized insurance agency owner and business enthusiast. He runs the day-to-day operations at Portal Insurance in Mobile, Alabama, a scratch independent agency he founded and is building on the back of social media, personal branding, content, and technology. Bradley is the co-host of the “Insurance Guys Podcast,” one of the most listened to podcasts in the industry.

Derek Hayden

Derek Hayden is a certified risk architect & certified benefits and wellness advisor for Dansig Insurance Risk Advisors in Shelbyville, Illinois. He is the winner of the The Protégé Reality Show and also hosts the Central Illinois Business Leaders Podcast.

Syd Roe

Syd Roe is extremely passionate about one thing – helping the independent agent compete in the wild wild west of digital transformation. Her work at TrustedChoice.com, Agency Nation, b atomic, and now as director of agency marketing for Vertafore, has inspired thousands of agents across the country to embrace content marketing, social media, & video; craft a tech-stack unique to their operation; and weaponize their data.

Olivia Schmitt

Olivia Schmitt is the operations manager for Catalyit, the “go-to” technology resource for independent insurance agencies. Olivia has held a variety of roles in the industry, including working on the agency side and on the InsurTech side of the business. Her “Monday Magic” videos on LinkedIn dive into a variety of topics and struggles we all face as professionals. Here is part two from our conversations with this multi-talented group. Culture is so critical to success, retention, and growth. What are agencies “missing” about how important culture is to their agency and their future?

Aggregators and M&A have changed the world of the “local agency”. What will that mean for the future and what opportunities has it brought to the forefront?

Flowers: What they often miss is what culture is actually about. It’s not really about having a ping pong table or letting people run over you. You also can’t have too much “fake culture”, which I define as culture without accountability. You have to have both to be successful, and employees will recognize if you don’t and leave more quickly.

Flowers: As far as aggregators, they need to provide value above carrier access. Agencies need to really read contracts and understand what the true “cost” is to joining. M&A can eliminate the competition if you’re willing to be the “local” guy. You just need to identify your value-add and make sure your local market knows about it.

Hayden: Culture plays a big role internally and externally. The business world moves fast and leaders need to slow down and listen to their team and key clients. The more stress there is on your team the harder it is to build. You’ll get more growth from slowing down and listening. Roe: This may sound like I’m picking on agency owners, but good culture comes from good leadership. If you’re thinking, “this isn’t what envisioned,” then look in the mirror. If the wrong people are “on the bus” you will likely not have a team that self-selects buying in to the culture. Owners need to understand that they have the power to change the culture in both directions. Schmitt: One of the things I talk about is career-pathing for individuals. Part of the traction issue we have in insurance is people having “Where can I go next?” as a mindset. That’s not something everyone has, but they do want to know their options. Mentors are great, but even just helping people have the vision for their opportunities and potential would help with culture and retention. july 2022

Hayden: For the future, it is still key to be targeting specialties and setting yourself apart from other agencies regardless of size. As far as M&A, even those that get acquired are still local people. And if you’re the one getting acquired, you can still be that local client’s problem solver. Roe: You have to get out the mindset of the “local” agency. You have more access to the audience you want if you get outside of your “front door” mentality. What’s it going to take to reach the bigger audience? That should be the question agencies are asking themselves. Schmitt: Ownership can be anywhere. M&A isn’t slowing down, but there is still the presence of the local office and the local people. We’re just redefining what “local” means. You need that local presence, but with a different mindset. This environment also breeding more start-ups and new ventures, and that is leading to even more creativity in our space.

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One of the most common challenges in our industry right now is finding and developing talent. What’s your take on how we approach this? Flowers: We need to recognize that insurance is boring on the surface, but it is one of the best industries to be inside of and it’s not boring when you specialize. We to communicate that and do a better job with our image as an industry. Hayden: Culture. The younger generations don’t have a good image of us. They picture “suit, tie, and stale” and they need to see the difference in what we really are. We have to change that as an industry. We can’t be viewed as “peddlers” of insurance anymore, and there is plenty of opportunity for us to fix that. Roe: I don’t think technology is the only answer here, but it does have a role. However, cool tools aren’t the only answer, the deeper answer is progress. How can we do something a little different that will signal that we’re tapping into who we are at our core. Who we want to attract is a big piece of it too. If you want talent, you have to offer flexibility and be willing to try different things to succeed. Schmitt: I think starting earlier is a key. High school career fairs and classrooms are an opportunity, and mentorship is a key. How can we help bring relationships into this industry? I believe we can do it by getting people connected so that they know they have potential. When people start feeling stuck is when they begin to have doubts for their future in our industry. When people are connected and they love what they’re doing, they’ll work harder and look for ways to achieve. We have as many as five generations at one time in our workforce right now. How do we navigate that? Is it a waiting game or an opportunity? Flowers: There is opportunity in this, but all the generations want to be managed differently. In many cases, the Boomer wants the company way, while the Millennial is building from themselves outward. Neither is really right or wrong, but they need different paths to succeed. Hayden: It’s an opportunity to learn from each other and understand each other. Technology, communication, thought processes, they can all be assets for each generation to build on. And if you use them, you can then improve what you’re doing and cater to more people because of your diverse age groups. Focus on developing yourself and your agency for your best opportunities.

but we can have perspective that adds to decision making and finding alignment. We should be deciding together how to move forward, and a strong agency leader can steward the viewpoints. Schmitt: There was a time when I didn’t always think that we could coexist, but now I see that it’s just an expansion of opportunities. One generation can mentor in one area, and another can help in the area that’s strongest for them. A 25-year-old may help a 70-year-old with a workflow process, and the 70-year-old may impart their knowledge about technical insurance, sales, and many other timeless topics. Building on relationships and sharing knowledge is much better than waiting it out. Is traditional “selling” dead? Are cold calls, drop-ins, lead lists, and prospecting a thing of the past? Or have we lost the art of it? Flowers: They’re absolutely not dead, and tech has not replaced it all, it’s enhanced it. Add voicemail drops, texts, and other strategies to the traditional methods and be empathetic to how they want to be reached. There is a generation issue in the contact method as well, and we need to all understand who we’re talking to and how. Hayden: They’re still alive and well but you have to be different. Speak to the person that you want to attract. A cold caller typically doesn’t care about you or your history. You must make the conversation about them and provide it on their terms. “Because I know XYZ about you I am reaching out to help you.” All those methods are still there, but the approach has to be good enough to cut through the noise. Roe: It’s more about not using just one strategy, it has to be. If I get a cold call and they’re good, it disrupts me and causes me to think about the value proposition. But then when the call is over, I’m still going to research them. If they don’t have a digital marketing strategy, they’ve missed an opportunity to convert because of the back end. Things like your website, social media, Google reviews, etc. really matter. Schmitt: I don’t think any of it is dead. There is an art to it, and this is another area where people can be mentored. A salesperson is going to hear “no” a lot in their career, and the faster people get used to it and move past it is key. While a “drop-in” may be different after COVID, a personal visit and similar tactics are still huge pieces of relationship building. The only thing “dead” is thinking one thing will work in every scenario.

Roe: This is a huge opportunity if it’s accessed. The opposite is where the problem lies. Having those diverse ideas and experience levels potentially means that things can move forward faster. Friction can definitely happen,

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e INSIGHT -

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

JU LY 20 22

INSIGH T

2021 MAR REPOKETPLAC E RT

Summ Insura ar y of th nce M e Illino is arketp lace Property & Ca su

alty

Plus

Influen W ild - cers in the Par t 2

What’s the Cost of Doing

Nothing? By AgentSync & Insurance Journal

In this month’s e-Insight. july 2022

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MARKETPLACE REPORT 2021 Illinois Property & Casualty Insurance

The IIA of IL is providing this summary of the Illinois property and casualty (P-C) insurance marketplace as a benefit of your membership. What follows is a numeric and visual summary of the P-C insurance marketplace from an independent agent’s perspective in Illinois. The full report can be downloaded from the IIA of IL website at www.iiaofil.org.

U.S. Direct Written Premium: $785 Billion

Illinois Percent of U.S.

U.S. Per Capita Premium

Illinois Per Capita Premium

3.9% of U.S.

$2,369

$2,380

P-C Insurance Industry Analysis Provided by: Real Insurance Solutions Consulting, LLC Paul A. Buse, Principal www.realinsurancesc.com 18

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Premiums: Top Agent-Focused Lines of Business Illinois - Independent Agent Distribution (Total - $18,773,152,000)

Illinois - All Distribution Styles (Total - $30,463,715,000)

U.S. - Independent Agent Distribution (Total - $483,695,862,000)

U.S. - All Distribution Styles (Total - $785,288,646,000)

The above pie charts show which lines of business are the most important to independent agents based on direct written premium. The top 10 lines of business are shown in each pie chart, with premium from all other lines of business combined in the “All Other” pie section.

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Penetration: Top Agent-Focused Lines of Business

The clustered bar chart above shows independent agent penetration trends for the top lines of business. Shown are the top 10 lines of business in order of direct written premium written through independent agents. The percentages above are calculated based on premiums through independent agents, divided by all premiums for each line of business.

Penetration =

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Independent Agent Written Premium by Line of Business All Written Premium by Line of Business

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Commissions: Top Agent-Focused Lines of Business

The above bar chart shows the commission rate paid by all insurers for 26 independent agentfocused lines of business in alphabetical order. Shown last, Total (All Lines) is the average commission paid on all lines of business. The formula shows how commission percentages are calculated, where the Commission % equals the line of business direct and contingent commissions divided by the line of business written premium.

Commission % =

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Line of Business Direct and Contingent Commissions Line of Business Written Premium

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IL Surplus Lines: Top Lines, Premiums and Utilization Rate

IL - All Commerial Auto 2021 - Illinois: All Commerical Auto Written Premium (5 year average penetration - 81%)

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2021 - Illinois: All Commerical Auto Loss/Combined Ratio (5 year average 61% / 96%)

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IL - All Private Passenger Auto 2021 - Illinois: All Private Passenger Auto Written Premium (5 year average penetration - 25%)

2021 - Illinois: All Private Passenger Auto Loss/Combined Ratio (5 year average 63% / 91%)

IL - Commercial Multi-Peril 2021 - Illinois: Commercial Multi-Peril Written Premium (5 year average penetration - 79%)

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2021 - Illinois: Commercial Mulit-Peril Loss/Combined Ratio (5 year average 62% / 102%)

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IL - Fire Peril Only 2021 - Illinois: Fire Peril Only Written Premium (5 year average penetration - 91%)

2021 - Illinois: Fire Peril Only Loss/Combined Ratio (5 year average 56% / 83%)

IL - Homeowners 2021 - Illinois: Homeowners Multi-Peril Written Premium (5 year average penetration - 32%)

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2021 - Illinois: Homeowners Mulit-Peril Loss/Combined Ratio (5 year average 75% / 105%)

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IL - Inland Marine 2021 - Illinois: Inland Written Premium (5 year average penetration - 76%)

2021 - Illinois: Inland Marine Loss/Combined Ratio (5 year average 53% / 86%)

IL - Multi-Peril Crop 2021 - Illinois: Multi-Peril Crop Written Premium (5 year average penetration - 87%)

july 2022

2021 - Illinois: Multi-Peril Crop Loss/Combined Ratio (5 year average 39% / 61%)

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IL - Other Liability (Claims-Made) 2021 - Illinois: Other Liability (Claims-Made) Written Premium (5 year average penetration - 91%)

2021 - Illinois: Other Liability (Claims-Made) Loss/Combined Ratio (5 year average 55% / 97%)

IL - Other Liability (Occurrence) 2021 - Illinois: Other Liability (Occurrence) Written Premium (5 year average penetration - 88%)

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2021 - Illinois: Other Liability (Occurrence) Loss/Combined Ratio (5 year average 64% / 97%)

july 2022

IL - Workers’ Compensation 2021 - Illinois: Workers’ Compensation Written Premium (5 year average penetration - 88%)

2021 - Illinois: Workers’ Compensation Loss/Combined Ratio (5 year average 47% / 76%)

Behind the Full Report

The full report can be downloaded from the IIA of IL website at www.iiaofil.org.

Data Source

The source of the data presented in this summary is A.M. Best and its Financial Suite, a system which allows various standard and custom reports. A.M. Best obtains the data from the annual statements filed by each domestic insurance company with its state regulator. In this report, standard industry reports and customized reports are combined and manipulated to arrive at the various agent-focused presentations of data. This report will be updated in 2023 as the data is assembled at the National Association of Insurance Commissioners (NAIC) and aggregated by industry data-watchers, such as A.M. Best Company, Inc.

Reading the Data

Unlike industry watchers of insurer profitability and insolvency, direct written premiums are used in this P-C summary not gross premiums or net written premiums. The latter is typically used by the industry press and industry analysts and those premiums can include reinsurance and inter-company transfers. While useful in the context of solvency or insurer profitability, net and gross premiums can cloud the picture of the independent agent’s experience in the marketplace. An aspect of insurer required filings is the required delineation of data by “Lines of Business” (LOB). These LOB are standardized for insurers. LOB are also often grouped by similar LOB as they are tracked as part of annual statements. As some LOB are overly specific (for example, automobile physical damage is separate from automobile liability), it is logical to combine some of these lines. In other cases, the individual lines are often so broad, they are then broken down further. Fire & Allied lines is a good example of that sort of standard LOB combination. In all cases, the goal of this report is to present the LOB data to align as closely as possible with insurance agency operations, marketing strategies or staff assignments.

Questions? Ask the Expert. P-C Insurance Industry Analysis Provided by: Real Insurance Solutions Consulting, LLC Paul A. Buse, Principal realinsurancesc.com (301) 842-7472

july 2022

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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 BlueCross/Blue Shield of IL Grinnell Mutual Reinsurance Company Keystone Insurance Group, Inc. Pekin Insurance

Silver Level 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 BluSky Restoration Contractors Chubb ClickVSC Columbia Insurance Group Continental Western Group Cornerstone National Insurance Company Cowbell Cyber CRC Group CRDN of Chicago (formerly Restoronics) Donald Gaddis Company, Inc. Donegal Insurance Group EMC Insurance Encova Insurance 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 28

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Insurance Program Managers Group J M Wilson Liberty Mutual/Safeco Insurance Madison Mutual Insurance Company Marble Box Marsh, Berry & Company Maximum Independent Brokerage, LLC Mercury Insurance Group Midwest Insurance Company Nationwide Pouch Insurance Previsor Insurance & Missouri Employers Mutual PuroClean Emergency Restoration Services Rockford Mutual Insurance Company RT Specialty - Naperville Sensa, Inc. ServiceMaster DSI Society Insurance Specialty Risk of America Synergy Select The McGowan Companies Travelers UFG Insurance Utica National Insurance Group W. A. Schickedanz Agency, Inc./Interstate Risk Placement Western National Insurance Westfield july 2022

associate news | INSIGHT

In Memoriam Sue Sutphen of Arlington/Roe passed away on May 22, 2022. Sue had been with Arlington/Roe for the past 12 years and was a tremendous worker and associate. She originally joined Arlington/Roe in 2004 working in policy services. After leaving to spend time with her young children, she returned in 2014 as a commercial lines assistant underwriter and was promoted to commercial lines underwriter in 2018. Sue took great pride in finding the right coverages for our agency partners and their clients. Sue was passionate about service to her agents. She loved to learn and was someone you could always count on for help. Her 12 years in the commercial lines department made her a wealth of knowledge for not only her agents but also her colleagues. She truly cared for Arlington/Roe and her Arlington/Roe family. Sue’s family and friends remember her perfect smile and witty humor. Sue’s biggest accomplishments in life are her three children, her longstanding marriage and her successful career as a commercial lines underwriter. She enjoyed spending time with family and friends; swimming, boating and just relaxing by a fire. The IIA of IL Board of Directors and staff send our condolences to Sue’s family, coworkers, and friends.

SECURA Insurance Promotes Larry Wright to Senior Vice President

SECURA Insurance promoted Larry Wright to Senior Vice President and Chief Claims Officer effective May 23, 2022. Larry began his career at SECURA in 1997 as an IT programmer/analyst. He held progressive positions, including IT supervisor, IT director, workers’ compensation claims representative, workers’ compensation claims supervisor, claims project manager, casualty representative, litigation coordinator, and vice president – claims. Most recently he was promoted to Vice President and Chief Claims Officer in 2018. Larry earned a bachelor’s degree in business administration from the University of Wisconsin–Eau Claire and an MBA from the University of Wisconsin Oshkosh. He earned his Chartered Property Casualty Underwriter (CPCU), Certified Insurance Data Manager (CIDM), Associate in Insurance Services (AIS), and Associate in Claims (AIC) designations. He also earned a Master’s Certificate in project management from the University of Wisconsin–Madison School of Business. july 2022

2022 JM Wilson INS INSIGHT OUTLINES.indd 1

insight3:10 PM 29 12/6/21

iia of il

October 4-6

Crowne Plaza, Springfield

2022

Plu

or e!

Industry Related Hot Topics

ch m

Cyber, Phishing & More

Legislative & Regulatory Update

Agency Operations/ Procedures

Technology Solutions to Increase Efficiency

E&O/ Ethics

Sales

Premium Fund Trust Accounts & Rebating Regulations

Pl us

Inc lud ing ...

Education for Everyone in the Agency!

Wednesday General Session features Steve Anderson with Catalyit who will be reviewing the Evolution of Insurance with several key panelists from the industry. Learn from other “thought leaders” and “problem solvers” like yourself on how they have faced challenges in the areas of Hiring, Creating a Culture, DEI, Efficiencies, Implementing Technology and more. Thursday morning features an Industry & Election Forecast….Association Resources, Industry Insights & Election Analysis – with Amy Walter, Popular On-Air Political Analyst; Hannah Meisel, NPR State Government and Political Editor; and Dana Popish Severinghaus, Department of Insurance Director.

ILConvention.com

Workers’ Compensation We distinguish our Workers’ Compensation coverage by providing value-added services before, during, and after a claim. Upfront loss control measures Responsive claims handling Facilitation of quality medical care (when an accident does occur) We’ve been successfully protecting our policyholders and their employees since 1983. Browse all of our products at www.guard.com.

APPLY TO BE AN AGENT: WWW.GUARD.COM/APPLY/ Our Workers’ Compensation policy is available nationwide except in monopolistic states: ND, OH, WA, and WY.

AWARD WINNER YOUR NAME HERE

IIA of IL AWARDS Nominations Now Being Accepted!

Agency of the Year agent of the year young agent of the year Deadline is August 1. Go to www.iiaofil.org/IIA-of-IL-Awards or scan this code to make your nomination. (Self submissions encouraged)

In March, the IIA of IL highlighted the achievements of women in insurance. The following is one of the submissions we received. Check back next month for more. If you would like to see your agency highlighted in a future issue of Insight, fill out the short submission form at www.iiaofil.org/Agency-Spotlight-Submission.

Cindy Jackman Arlington/Roe

We would like to hear more about your time in the industry. Why did you choose insurance and when did you begin?

Although I never thought I’d end up in the insurance industry, here I am 38 years later, and still loving it! I started as a receptionist in an independent agency to help pay my tuition in college. I was promoted to Personal Lines CSR, then Commercial Lines, Marketing Director, Agency Manager and ultimately owner. I had a personal goal to be an agency owner by age 30 and I achieved that goal. I have also worked as an Independent Contractor/ Producer so I guess you could say I’ve covered a lot of responsibilities on the agency side. I got involved with the IIA of IL in the late 1980s on the Young Agents Committee and have thoroughly enjoyed my service through the years serving on many task force/committees, Regional Director, Executive Committee and President in 2015/16. I currently serve on the Executive Committee as Secretary/Treasurer. After serving as Association President, I realized I enjoyed helping the independent agents across the state grow and enhance their agency which led me to challenging myself/expanding my knowledge and transitioning to the managing general agency side. Today I love working with the agents, the association, the many dear friends I’ve gained over the years and business associates working in what I consider to be the best industry!

Are there any unique professional struggles you’ve had as a woman in insurance, both in the past, and currently?

I don’t know if I’d say struggles, but it was definitely a unique situation when I started in the business as very few women were in the industry at that time. Attending a company meeting, networking event or educational class I can remember being one of the 2-3 women out of maybe 100 in attendance. Women in the industry has evolved over the years, as has the number of women in leadership positions. I never looked at those situations as challenges or barriers as my Dad instilled leadership qualities in me and my parents taught me the golden rule which I try to live by. Are there times I’ve felt overlooked, insecure or looked 32

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down on in the business because I am female? - yes but I didn’t let those times stop my ambition or keep me from reaching my goals.

What advice would you give to the next generation of female insurance professionals?

Set your goals and don’t give up until you reach them. There are so many opportunities in the industry for female professionals - follow your dreams of where you want to be and make those a reality. Reach out to experienced female professionals for support and guidance. There is nothing I like to see more than a young professional exceed in this business. I want them to fall in love with the industry as I did. Get involved with the association & networking groups - gain & share knowledge with other associates. This industry can provide a great career and a lot of fun at the same time. Fill your space, meaning whatever business setting you are in, don’t just show up to be there, show up to be better - learn, contribute, leave knowing more than when you arrived.

What do you think the future of the industry will look like?

The last two years have really changed a lot for the insurance industry. So much of our communication was forced to a computer screen. Although advancing technology is a good thing, insurance is still a people/ relationship business which is one of the things I like about it. I focus on relationships and plan to renew & expand those personal & business relationships, away from a computer screen. And, one day, down the road I plan to retire from a life-long career in insurance.

Anything else you’d like to add?

Being a female is not a deterrent for a successful career in the insurance industry today. Working hard, being committed, being honest are not gender traits - success can be found with those traits regardless of what gender. july 2022

iia of il news | INSIGHT

Education Classes july

6 6 7 11 12 13 13 19 21 21 25 27 28

Pre-Licensing-Property & Casualty Virtual Ethics: Essentials for the Insurance Producer Webinar Agent’s E&O: Defenses and Preventions Webinar E&O Roadmap to Personal Auto & Umbrella Ins Webinar CISR-Agency Operations Virtual Class CIC - JK Ruble Seminar Elk Grove Village

son! In Per

E&O Roadmap To Cyber & Privacy Insurance Webinar Pre-Licensing-Life & Health Virtual CISR-Personal Lines Miscellaneous Virtual Class E&O-Roadmap to Homeowners Endorsements & PIM Webinar E&O:Identity Theft, Red Flags, and Money Laundering Webinar E&O - Roadmap to Policy Analysis Webinar CISR-Commercial Casualty 1 Virtual AND In-Person (Springfield)

son In Petrual! or Vir

august

2 3 4 9 10 11 16 17 18 18 23 24 24 25 31

Pre-Licensing-Property & Casualty Virtual E&O Roadmap to Personal Auto & Umbrella Ins Webinar CISR-Commercial Casualty 2 Virtual Flood Insurance, FEMA, and the NFIP Webinar E&O Roadmap To Cyber & Privacy Insurance Webinar CISR-Elements of Risk Management Virtual class Pre-Licensing-Life & Health Virtual E&O:Identity Theft, Red Flags, and Money Laundering Webinar E&O - Roadmap to Homeowners Endorsements Webinar Why Good People Do Bad Things: Ethics Deep Dive Webinar CISR-Insuring Commercial Property Virtual CIC-Personal Lines Virtual E&O - Roadmap to Policy Analysis Webinar E&O: Duties, Best Practices, Certificates and More Webinar CISR-Insuring Persoanl Auto Exposures Virtual

New Members member agency The Boss Insurance Group, LLC Chicago, IL For information regarding IIA of IL membership or company sponsorship, contact Tom Ross, Director of Membership Services, at (217) 321-3003, tross@iiaofil.org. july 2022

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INSIGHT | classifieds for the insurance professional by the insurance professional

OPPORTUNITIES/SPACE AVAILABLE/RETAIN OWNERSHIP

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.

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:

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

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

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

INDEPENDENT INSURANCE AGENCIES WANTED

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 looking for Personal and Commercial Lines accounts with preferred companies. We look forward to hearing from you.

AGENCY WANTED

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.

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

Visit www.ciagonline.com for contact information.

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

insight

july 2022

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