Policy Magazine Winter 2017

POLICY WINTER 2017

WHY BUSINESS INCOME IS

Oklahoma’s Magazine

THE MOST IMPORTANT PROPERTY COVERAGE

Inside L

EB

R AT

Why Bonuses Don’t Work

I

N G

CE

IIAO Conferment Ceremony

I I A O

New Research Reveals IAs’ Priorities Are Changing

The best protection for the

worst job Offer your hardest-working commercial customers — like the Oklahoma pros who install and maintain septic tanks and other underground systems — the best protection the industry can provide. They surely deserve it.

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mcg-ins.com / 800-722-4994

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24

COVER

COLUMNS

24 WHY BUSINESS INCOME IS THE MOST IMPORTANT PROPERTY COVERAGE

4 GET INVOLVED! THE RETURN ON YOUR INVESTMENT IS REAL Joe Strunk, Chairman

WINTER 2017 | VOL. 51, NO. 11 EDITORIAL STAFF PUBLISHER Denise Johnson, CIC

MANAGING EDITOR Jerri Culpepper GRAPHIC DESIGNER Brandy Akbaran PRODUCTION EDITOR Cathy Cinotto

PROFESSIONAL STAFF

PRESIDENT/CHIEF EXECUTIVE OFFICER Denise Johnson, CIC CHIEF FINANCIAL OFFICER Malinda Day EDUCATION COORDINATOR Ashley Henderson COMMUNICATIONS COORDINATOR Laura Wolf MEMBER SERVICES AND EVENTS DIRECTOR Cathy Cinotto SPECIALTY LINES PROGRAM ACCOUNT MANAGER Cindy Munden, CISR E&O PROGRAM ACCOUNT MANAGER Lorrie Latimer WORKERS’ COMP PROGRAM ACCOUNT MANAGERS Susan Starr Niki Wigington Select graphics courtesy of Depositphotos.com

POLICY is the official publication of the Independent Insurance Agents of Oklahoma.

POLICY is published quarterly and distributed to all member agencies and other interested parties in Oklahoma. Manuscripts and contributions are welcome and will be considered for publication at the discretion of the IIAO Publications Committee.

Correspondence and advertising inquiries may be addressed to IIAO, P.O. Box 13490, Oklahoma City, OK 73113. Ph: (405) 840-4426 or 1-800-324-4426

FEATURES

19

7 19 INDUSTRY CHANGES YOUNG AGENT SPOTLIGHT BRING OPPORTUNITIES Denise Johnson, CIC 26 WHY BONUSES DON’T WORK

30 NEW RESEARCH REVEALS IAs’ PRIORITIES ARE CHANGING 32 2018 RINGS IN A FRESH NEW LOOK FOR IIAAOKC 33 VAUGHN GRAHAM SWORN IN AS IIABA CHAIRMAN 34 INSURANCE PROS HONORED AT IIAO CONFERMENT CEREMONY 38 NEWSMAKERS

12 POLICY AUDITS AND E&O EXPOSURE Tom Cooper

15 YOUNG AGENTS URGED TO GET, STAY INVOLVED Vaughn Graham Jr., CIC 17 FROM EDUCATIONAL RESOURCES TO A FREE CAREER BANK, IIAO IS HERE FOR YOU Gerald Keeton 22 PROTECT YOUR CLIENTS AND YOUR BUSINESS FROM CYBER THREATS John Doak

Visit iiaok.com

WINTER 2017

POLICY 3

GET INVOLVED!

THE RETURN ON YOUR INVESTMENT IS REAL

Joe L. Strunk

CHAIRMAN

A

t the spring conference, I spoke about the legislative agenda and why it is so important to our industry and our profession. I ended that same speech asking everyone to get involved.

I have the opportunity to speak to several young professionals across this state. I always encourage them to get involved in their respective association. Why? After 20 years of working with various professionals, the successful professionals have a common attribute; they are all active members in their association.

After 20 years of working with various professionals, the successful professionals have a common attribute; they are all active members in their association.

There is no doubt each of us has his or her own goals or ideas about how to be the best insurance professional to our clients. But I have witnessed first-hand that the insurance professionals who struggle with markets, income, staff, growth, etc., are the same insurance professionals I never see at any IIAO event, committee or education class.

And even worse, sometimes they 4 POLICY

never understand how easy it would be to turn their business around by getting involved.

I already told you that the biggest reason to get involved is to support our legislative agenda to protect your profession. If that isn’t enough reason, I think I can more easily show you a return on your investment of your time and money by being an active IIAOK member.

Need advice or a mentor?

You can’t just call up another insurance agent and start asking them how to evaluate an insurance risk/prospect, how to hire correctly and what market should be used.

You must establish trust and a solid reputation. A mentor is more likely to share with you if others he/she trusts speaks highly of you. If no one knows who you are, the mentor will just say “good luck”.

Want more markets?

You want a certain market or a contract with a certain carrier? You can’t just call up a carrier and ask them for a contract or have them quote your prospect. Carriers who don’t know you are less likely to give you a contract or even “the time of day”.

WINTER 2017

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Haven’t you ever heard insurance is about relationships?

It is as true today as it was decades ago. Each of these questions has to do with an active relationship with IIAO. As an active member, each of these is “easy and possible”. And most importantly, what do ALL of these have in common? They increase the value of your insurance book or agency. So get involved, get your staff and producers involved.

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POLICY 5

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INDUSTRY CHANGES BRING OPPORTUNITIES

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t’s time for the holidays! I believe it comes faster every year. Here at IIAO, we are already preparing for 2018 and working to make it a successful year for all of our members.

“You’ll never make history in your comfort zone.”

One of my favorite sites to follow on Instagram is @businessmindset101. Their posts keep me focused on an ever-changing business environment. I’m inspired by it on a personal and professional level.

Our association is going through a variety of changes due to the changes within our industry. But with these changes come opportunities. There are so many things that I’m excited about in our future. Technology and information are always changing, so we are always looking for ways to make it benefit our members.

There was a day when it was all about the products and services that we could offer, and today is no different.

Here’s a sampling of our offerings: • The finest E&O program in the industry.

We are you. We can offer you a variety of coverages and companies to meet your needs. Lorrie Latimer is our E&O administrator. She has an extensive background in professional liability and can assist you in your needs. And don’t forget – with a Westport policy, you get a member benefit of 5 percent back.

How many companies do that for you?

• Our Education program is by far the strongest in the state (and many other states). We offer certifications in CIC/CISR/CRM and more. Ashley Henderson has taken on the challenge in this new environment to find ways to meet the education needs of our members.

• Eagle Agency is a powerhouse! With products ranging from Personal Umbrella, Home Business, Farm & Ranch, and Workers Compensation, we offer so much for our members. Cindy Munden, WINTER 2017

Denise Johnson, CIC

PRESIDENT/CHIEF EXECUTIVE OFFICER

Niki Wigington, Susan Starr and Lorrie are all available for your questions or comments.

• Communication is the key. We are always looking for ways to communicate with you and for you! As we develop better forms of technology, we will find better ways to get our message out. Stay tuned for more!

There are a lot of things to be proud of, but in case you didn’t know: • We have more than 500 agency and associate members throughout our state. We are in all four corners (even the Panhandle!), representing close to 3,000 insurance professionals. That’s a BIG footprint!

• We are the No. 1 trade association in Oklahoma for P&C agents, and we work hard to help independent agents be successful.

• Our PACs (OkPAC and InsurPAC) play a major role in our successful legislative issues on a state and federal level. We work on many levels to ensure strength in our industry through the legislative process.

• We have the dedication of a board of directors that meet on a monthly basis and actively work in various committees to benefit our members.

As always, we are open to your thoughts or comments. Please feel free to contact us and share your story. n

POLICY 7

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OkPAC CONTRIBUTORS OkPAC is IIAO’s political action committee. It provides financial support for state elected officials who will provide support for or have shown support of issues affecting the insurance industry and to those who share our business philosophies. Only individuals or partnerships can make contributions to OkPAC. Under Oklahoma law, OkPAC can accept no contributions from corporations.

2017 Fred Barker Wes Becknell Stewart Berrong Robert Bramlett Jr. Travis Brown Jeff Burton Paul T. Caraway

Kent Casteel Hal Curry David Eaton Latisha Hornbeck Patricia Gillespie Vaughn Graham Jr. Raymond Hale III

Denise Johnson Gerald Keeton Austin Landes Guy Landes Deborah M. Lawyer Thad Leonard Larry Neal

Kathy Reeser T. J. Riley Gary Rosenhamer Michael Ross Daniel L. Somers Mike Somers Adriane Stachmus

Janna K. Story Joe L. Strunk Richard Teubner Christopher Webb

InsurPac CONTRIBUTORS InsurPac is IIABA’s political action committee. It pools the voluntary and individual financial contributions of thousands of independent insurance agents to help elect candidates to Congress who share IIABA’s business philosophies. InsurPac is the largest property-casualty insurance industry PAC in the country.

Armando Amor Neil Barfield Fred Barker Stewart Berrong Robert Bramlett Jr. Travis Brown Jeff Burton Scott Cornelius Bill Cox Hal Curry

John “Jed” Dillingham David Eaton Phil Eitzen David Gammill Benjamin Gorrell Jr. Vaughn Graham Vaughn Graham Jr. Raymond Hale lll Charles Harris Rich Haverfield

Contributors as of Nov. 1, 2017

2017

Denise Johnson Gerald Keeton Russ Keller Austin Landes Guy Landes Thad Leonard Patrick Mandeville Melissa M. Manus Mark McPherson Kelly Miller

Michael Mosley Larry Neal Michael Owens Horace Phillips Kathy Reeser T.J. Riley Michael Ross Jane Seals Daniel Somers Michael Somers

Joe L. Strunk Belynda Tayar Richard Teubner Ryan Teubner Brad Warwick Christopher Webb

Is your name not on the list? Use the contributor’s statement on the back of this page to donate.

At M. J. Kelly, we focus on providing you with diverse products, superior service, industry knowledge, and real solutions. Tap into the strength and success of four decades as leading brokers and managing general agents. Our success is yours, and we appreciate the past while growing to access new markets and deliver superior products. We’ve built our business on relationships and results.

Together we can do so much.

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Insure Your Future!

InsurPac

OkPac

Independent Insurance Agents & Brokers of America c/o IIAO, PO Box 13490, OKC, OK 73113 P: 202/863-7000, F: 405/840-4450 InsurPac@iiaba.net

Independent Insurance Agents of Oklahoma IIAO, PO Box 13490, OKC, OK 73113 P: 405/840-4426; F: 405/840-4450 info@iiaok.com

_____________________________________________________________________________________________________________________

OkPac Contribution  Yes, I want to INSURE MY FUTURE with a Personal Contribution to OkPac! (Check contribution below.)

 $5000 Millennium  $250 Pioneer

 $2500 Platinum  $150 Founders

 $1000 Centennial  $100 Young Agent

 $500 Gold  Other $_______

InsurPac Contribution  Yes, I want to INSURE MY FUTURE with a Personal Contribution to InsurPac! (Check contribution below.)

 $5000 Millennium  $250 Pioneer

 $2500 Platinum  $150 Founders

 $1000 Centennial  $100 Young Agent

 $500 Gold  Other $_______

_____________________________________________________________________________________________________________________

Contributor Information Name ____________________________________________________

Occupation ______________________

Agency _____________________________________________________________________________________ Address ____________________________________________________________________________________ City _________________________________________

State _____________ ZIP ______________________

Phone_________________________________ Email ______________________________________________ Declaration: The contribution listed above was freely and voluntarily given by me from my personal property. I have not, directly or indirectly, been compensated or reimbursed for the contribution listed above.

Signature ______________________________________________________________

Date ______________

_____________________________________________________________________________________________________________________

Payment Information

(All contributions must be made by PERSONAL check or PERSONAL credit card.)

 Personal Check – Separate personal checks made payable to InsurPac and OkPac. $____________ to InsurPac

$____________ to OkPac

 Personal Credit Card – One-time personal credit card contribution. $____________ to InsurPac Credit card information:

$____________ to OkPac  MasterCard

 Visa

 American Express

Credit Card Number ________________________________________________ Expiration Date ____________ Name as it appears on card _____________________________________________________________________ Contributions or gifts to InsurPac and OkPac are not deductible as charitable contributions for purposes of federal income tax.

Federal and State law require us to use our best efforts to collect and report the name, mailing address, occupation and name of employer for each individual. Your contribution should be considered strictly voluntary. Any corporate contributions are prohibited.

10 POLICY

SUMMER 2015

IIAO LEADERSHIP CHAIRMAN Joe L. Strunk, CIC, CAPI Alexander & Strunk Inc., Oklahoma City

CHAIRMAN-ELECT Chris S. Floyd, CRM, CIC Brown & Brown Insurance Professionals, Pryor

TREASURER Jeff Burton, CIC, CPCU, CRM INSURICA, Oklahoma City

SECRETARY Christopher K. Mosley, CIC Mosley Agency Inc., Chickasha

STATE DIRECTOR Gerald W. Keeton Cole, Paine & Carlin, Oklahoma City

IMMEDIATE PAST CHAIRMAN Thad Leonard Rich & Cartmill Inc., Tulsa

DIRECTOR Stewart L. Berrong, CIC, CRM Ed Berrong Insurance Agency Inc., Weatherfod

DIRECTOR Heidi Nease-Walker, CISR Nease Insurance Agency LLC, Okeene

DIRECTOR Christopher W. Webb, CIC, CRM Rich & Cartmill Inc., Oklahoma City

YAC CHAIRMAN Vaughn Graham Jr., CIC Rich & Cartmill Inc., Tulsa

IIAO MISSION STATEMENT The mission of the Independent Insurance Agents of Oklahoma, working in the public’s best interests, through active member participation, is to be the unrelenting advocate of independent insurance agents and to fulfull the education, political and business needs of its members.

ABOUT IIAO The Independent Insurance Agents of Oklahoma is the largest insurance trade association in Oklahoma. With more than 475 independent insurance agencies, we represent nearly 3,000 independent insurance agents and their employees and more than 100 company members. IIAO member agencies range in size from one person to some of the largest agencies in the region.

Founded in 1906 as the Oklahoma Association of Local Fire Insurance Agents, IIAO is a result of the consolidation of the Independent Insurance Agents of Oklahoma, Inc. (IIAO) and the Oklahoma Association of Professional Insurance Agents (OAPIA) on Jan. 1, 1992.

IIAO policy is set by a board of directors elected at the annual conference. Policy is implemented by a professional

staff located in Oklahoma City. IIAO’s mission is carried out through a variety of programs designed to enhance the business of independent insurance agencies.

IIAO is an active advocate on behalf of independent agents before legislative, regulatory and judicial groups in Oklahoma and at the federal level.

IIAO is affiliated at the national level with the Independent Insurance Agents and Brokers of America with offices in Alexandria, Virginia, and Washington, D.C. IIAO is an excellent source of information through POLICY magazine, published quarterly, and the Oklahoma Agent, a monthly newsletter of time-sensitive material for its members.

POLICY AUDITS AND E&O EXPOSURE

O

ver the years, I have been asked to represent insurers in collection actions against commercial insureds who resisted paying additional premiums as a result of an audit. I have also been asked to represent the insureds who are doing the resisting. But most importantly, I have represented various agents who have been sued by their customers as a result of a policy audit. And I can tell you that those types of claims are on the rise.

No one likes surprises, and agency customers are no different. While a customer may have knowledge that a policy is auditable (if for no other reason than the fact that the past several CGL policies have all been subject to audit), a customer may

obligation to advise a customer about the nuances of auditable policies. That said, as a practical matter, I think a producer can (and Tom Cooper, Attorney at Law likely should) call the customer’s attention PIGNATO, COOPER, – in writing – to the fact that a policy is KOLKER & ROBERSON, P.C. subject to audit, the fact that it’s important to have realistic estimates for the coming year, and the fact that the premium required by the insured could increase substantially.

This can be done within a proposal, or even within the cover letter to the insured with which the policy is transmitted to the insured. And, instead of endeavoring to explain each and every nuance of an audit provision of a policy, the simple act of calling the insured’s attention to the issue and asking the insured to call with questions is a nice middle ground. If the agency As I have written in past articles, is later pulled into a lawsuit, and if the customer admits that he was invited to but Oklahoma is not a “duty to advise” state. didn’t ask questions, this is great evidence. not fully appreciate the potential additional The volatile nature of policy audits premium that may be payable after the and the litigation that can result therefrom policy year is complete. The original gross was recently underscored in a case that sales or gross receipts figures may have went to trial in Tulsa County. At the time been based on a conservative view of the of writing this article, I had just learned coming year, and the insured’s business about this case. Given that it had been may have ended up growing nicely. Or, pending for close to two years as of the perhaps an exposure or risk not present time of trial, and given the sheer volume at policy inception developed during the of the court file, at present I can provide course of the policy year, such as the insured only a cursory discussion of the case. Still, purchasing another company, broadening the size of the verdict – and the fact that operations, or the like. the retail agent was included and forced to As I have written in past articles, endure the litigation process for over a year Oklahoma is not a “duty to advise” state. before finally being dismissed – is worthy of That is, absent a “special” or “fiduciary” type mention. relationship with a customer (which is very Burlington Insurance Co. provided rare), technically, producers have no legal CGL and liquor liability coverage to a small continued on page 14

12 POLICY

WINTER 2017

POLICY AUDITS AND E&O EXPOSURE

continued from page 12

business. The policies were subject to audit. Premiums were estimated based upon the gross sales figures the customer provided the agent. Pursuant to the terms of the policy, the insurer had up to three years after the policy expiration to conduct the audit. Burlington conducted an audit and, because gross sales were higher than estimated, sought additional premium.

The insured reluctantly paid the additional claimed premium to avoid a collection action, but not long thereafter sued Burlington for fraud and breach of fiduciary duty. The insured was critical of Burlington for waiting until the policy was expired to conduct an audit (even though there is no other way to get accurate figures for the year). The insured was also critical of the timing and tenor taken by Burlington in its attempt to collect the debt. In particular, the plaintiff claimed that Burlington threatened the insured that he was 30 days past due when he was less than a week overdue. The insured even threw in a “bad faith” claim based upon a third-party claim made against the insured which the insured had chosen to settle out of pocket for $500.

Of course, the insured included in the lawsuit not only Burlington, but also the retail agent, the broker and the

company hired to conduct the audit. From what I can tell upon a cursory review, the primary allegation against the agent was simply that the agent had not sold the type of policy requested by the customer (i.e., that the insured was not fully aware of what it was getting into).

Not surprisingly, the agent was dismissed from the case before it went to trial. (In other words, in cases of that type, the true target is almost always the insurer, not the agent.)

The other defendants were dismissed as well. The jury returned a verdict against Burlington on the fraud claim in the amount of $2.5 million in actual damages. The jury also threw in an extra $8,000+ in punitive damages for one of the alleged invoicing errors.

So, the lesson here is that, with the assistance of a skillful attorney, an insured can cause quite a ruckus as a result of a premium audit. And, regardless of who is right and who is wrong between the insured and the insurer as a result of the disputed debt, the agent is likely to get dragged into the quagmire. But, how long the agent is forced to litigate may very well depend upon the quality and quantity of written communications between the agent and the customer with regard to the auditable nature of the policy. n

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14 POLICY

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WINTER 2017

YOUNG AGENTS URGED TO GET, STAY INVOLVED

G

reetings! As we head into the holiday season and the end of 2017, I’m reminded how much this year has flown by. On behalf of the Young Agents Committee, I want to thank all of the Vaughn Graham Jr., CIC young agents in the state of Oklahoma as well as the YOUNG AGENTS company partners for contributing to a great year.

COMMITTEE CHAIRMAN Since I wrote my last article for Policy, the Young Agents hosted the annual Young Agents Conference.

Shangri-La resort at Grand Lake. This will be in We had a great turnout for the two-day event, held conjunction with the IIAO Fall Conference, which will during September in Oklahoma City, and received some be held at the same time and location. You will not want wonderful feedback from our attendees. Many thanks to miss this event; so mark your calendars now for to our speakers – Mike Crandall (5 Things Every Young Oct. 3-5. Details are forthcoming.

Agent Needs to Be Successful in Business and Life); our Finally, please stay involved as a young agent. If you friends from Michigan, Will and Lisa Lemanski (Moving Up in Agencies and the Dynamics of a Family Business); Sydney Roe (Social Media:The Human We are working hard on planning some Story in Business); and Jerry McConnell (Active exciting young agent events for 2018, Shooter Presentation). I believe every young agent including our Young Agent Conference in attendance left that conference feeling the during the fall at the newly renovated knowledge they gained would make them better Shangri-La resort at Grand Lake. agents with a more solid foundation for success.

And, I’m pretty sure no one had a bad time at the dinner/piano bar event that Thursday night! enjoy participating in young agent events, we thank As important as anything during the event, we raised you and encourage you to bring a friend or two to the nearly $1,900 for InsurPac. All of this could not have next event. If you haven’t attended a young agent event been done without the hard work of our committee or haven’t attended one in a long time, we’d love to and the work of our former YA liaison, Susie Current. have you come to the next one. Our events are only as Thanks. Susie, we will all miss you and wish you luck good as the number of young agents that attend. I’m with your new position at Mercury Insurance! confident you will enjoy our events and come away As we look forward to the end of the year and with either more friends/contacts in the industry and/or beginning of 2018, please mark a couple of dates on more knowledge that will help you be successful in your your calendar. Our final lunch bunches of the year career. will be in Oklahoma City on Dec. 5 and in Tulsa on As always, please don’t hesitate to give me a call or Dec. 13. shoot me an email if you ever have any questions. n We are working hard on planning some exciting young agent events for 2018, including our Young Agent Conference during the fall at the newly renovated

WINTER 2017

POLICY 15

★

★

TOP

Y NC

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0 P/C AGE 10

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FROM EDUCATIONAL RESOURCES TO A FREE CAREER BANK,

IIAO IS HERE FOR YOU

A

s I visit with fellow agents across the state and nation, I find that the many state and national association resources are greatly underutilized. Visit the IIAO’s website at www.iiaok.com and view the various opportunities and products available today that range from the best educational programs to the career bank, InsurBanc, and InVest, in addition to numerous insurance products.

• The career bank is free to all persons seeking employment in the insurance industry and to all member organizations trying to fill positions.

• InsurBanc is a full-service bank that can fulfill your banking needs and also assist you in agency acquisitions and perpetuation.

• InVest is an association-sponsored program that provides an insurance curriculum to our high schools, colleges and vocational schools.

From IIAO’s website home page, click on the IIABA link in the upper lefthand corner to be directed to the national website. There, you will find additional resources and products. The following are just some of the resources and products available through IIABA. • Numerous high-profile agency principals have told me that they could not operate without Virtual University or Ask an Expert.

• Virtual University has a volunteer faculty of experts who are there to answer your coverage questions. Give it a try. It is one of the many benefits of your membership in IIAO. • You will also find valuable information concerning agency management topics such as customer service, carrier evaluation, perpetuation, sales, professional development and valuation.

Gerald Keeton

STATE DIRECTOR

• Big “I” Markets is a very valuable resource that gives you access to insurance companies you may not be able to approach otherwise.

• IIABA will personally assist you in staff development and legal advocacy issues such as contract review.

Your state and national associations exist to provide its members a sustainable, competitive advantage. Don’t fail to use these and other resources available to you.

I would be remiss if I did not mention Trusted Choice. Much has been said and written about TrustedChoice.com and, it should be, as this is the future for us in marketing our products in this age of social media and internet shopping. Most insurance buyers go to the internet first before making a decision. Trusted Choice continues to fine-tune and perfect this tool because it is an essential component to the independent insurance agent’s ability to get his or her message out to a changing world. If you are not taking advantage of Trusted Choice, perhaps you should. We live in a digital world, and to retain our place in the market, we must be found and recognized.

In summary, your Association is there for you. It is there to help you run your business, provide education, make a difference legislatively, and in general provide you with relevant resources and products that will make a difference and provide a sustainable competitive advantage. n

• There are non-insurance and insurance products available that may just be the answer you’ve been looking for.

WINTER 2017

POLICY 17

A Commitment to Young Independent Agents

2017

Together, Your Future is Our Future 2017 Heavy Hitters Program Union Standard is committed to working with young independent agents because their future is our future. Investing in the education and development of the next generation of agency professionals provides the support necessary to achieve the real goal of mutual success.

We recognize the need to foster new talent to perpetuate the independent agency system, as well as provide our best young agents an even greater competitive advantage.

Interested in participating in our Heavy Hitters Program?

Contact your Regional Sales Director, Wes Becknell, today.

Union Standard’s Heavy Hitters Program – Preparing Agents for Tomorrow

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YOUNG AGENT SPOTLIGHT presented by

YOUNG AGENT SAYS CAREER CHOICE HER GREATEST ACCOMPLISHMENT

By Jerri Culpepper

A

CANDICE RICHARDSON, PRODUCER SULLIVAN INSURANCE AGENCY

rdmore native Candice Richardson’s path to a career in the insurance industry was anything but direct. In fact, she says, laughing, “I fell into insurance by accident, and I’m so glad that I did!”

Richardson’s original goal was to teach science to middle school or high school students. But in the course of pursuing her studies at the University of Oklahoma, her career goals changed, and after graduating from OU in 2006 with a bachelor of science degree in botany, she returned to her home town to serve an internship conducting molecular plant research at the Samuel Roberts Noble Foundation.

The internship offered flexible hours, up to 30 hours a week. With a little extra time on her hands, she accepted a part-time job offer from a family friend who was opening an independent agency. “It was the perfect scenario because it allowed me to do my internship, yet help out a friend and make some extra money,” she recalled.

When her year-long internship with the Noble Foundation ended, Richardson said, “I was offered the opportunity to move into a full-time position as a research assistant (basically making minimum wage) or continue with the part-time agency position I was at. I realized that I really did enjoy the insurance business, and knew that I wouldn’t be in science research my whole career, so I started looking into other insurance opportunities.”

In August 2010, she applied and was hired for a position as a personal lines CSR with the Sullivan Insurance Agency in Ardmore.

“I was in that position for about a year, and then moved into a commercial lines CSR role,” Richardson said. “I spent five years as a commercial lines CSR and was recently presented with the opportunity to become a producer. I was definitely a little nervous about the

transition, but also very excited. And here we are, about a year later, and it’s been the best decision that I could have made!”

Richardson admits that the move from account manager to producer has been challenging. “As a CSR, I was the one who handled the day-to-day tasks of each account. Many times, I handled everything from initially, collecting the insured’s information, picking the markets to approach, generating the submission or quoting directly online, and completing the proposal to hand off to the producer. I take a lot of pride in being very organized and even a bit OCD when it comes to my accounts and the way they are handled. It has been extremely difficult for me to let go of those reins and fully get into the sales mentality. I am fortunate to have a fantastic account manager, which makes each day easier in making this transition.”

Richardson happily found a mentor in her boss, John Sullivan. “This man is an incredible wealth of knowledge,” she stated. “He truly knows and gets the business. He has some really great stories and has ridden this industry out through the good, the bad and the ugly. It is truly humbling to have him to learn and grow from and turn to at any given second.”

Richardson also cites her relationship with Union Standard as an important ingredient in her success thus far. “They are one of the best markets to have at your fingertips,” she said, adding, “They are so easy to work with, eager to write business and do such a great job creating and sustaining the agency relationship. They are definitely a go-to market, without a doubt!”

Now that Richardson has committed to insurance as a career, she regularly seeks out opportunities to grow and learn. continued on page 20

WINTER 2017

POLICY 19

YOUNG AGENT SPOTLIGHT

continued from page 19

She has already earned her CIC designation, and plans to start the CRM program in 2018. She also has taken several other insurance courses through the National Alliance.

“Their programs are full of great material, along with some of the best presenters in the country,” she said. “I tend to stick with the Oklahoma-based courses, but I have had the opportunity to travel to several other states taking Ruble seminars and some courses from the Dynamics Series.”

Professionally, Richardson holds membership in Young Agents of Oklahoma, and she attends as many conferences, functions and events as possible. “Networking with my peers, building relationships with my marketing reps and constantly learning from the wide variety of professionals is extremely important and beneficial in this industry,” she added, noting she also has completed the Future Insurance Leaders of Oklahoma program and currently is a part of the Texas Grain and Feed Emerging Leaders Program.

Richardson cited her decision to take the leap into the insurance industry as her greatest accomplishment thus far. “I have a college degree and thought that I had a plan to go with it. This career kind of fell into my lap, and I am

so glad that I took the bull by the horns and went with it.

I essentially started at the bottom and worked my way to where I am today. I work with an incredible team here at the agency, and do not take any of it for granted.”

She added, “There is no doubt that I made the right decision to pursue this career path. The Sullivan Insurance Agency has been very good to me and has allowed me to really spread my wings and grow. I would not be where I am today without my principle’s faith and trust in me. It hasn’t always been easy, but it has been so rewarding.”

Outside work, Richardson enjoys spending time with husband, Gabe, a CPA who owns his own firm, Jackson, Fox and Richardson PC (he also is a member of the U.S. Air Force Reserves), and their two children, Collin, 5, and Cooper, 1.

“They keep me on my toes, but they are truly my little blessings,” Richardson said, adding that she and her husband are avid OU Sooner fans who attend as many home and away football games as possible. n

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PROTECT YOUR CLIENTS AND YOUR BUSINESS FROM CYBER THREATS

I

providers, investigating data breaches and notifying regulators of a cybersecurity OKLAHOMA INSURANCE event.

COMMISSIONER “Considering the recent series of data breaches, cybersecurity is more important now than ever,” said Ted Nickel, NAIC president and Wisconsin insurance commissioner. “Regulators have a critical role to play in protecting consumers as the cyber landscape continues to evolve and this model law sets cybersecurity customs for insurers to help safeguard consumers.”

The model law progressed through the NAIC Innovation and Technology (EX) Task Force and the Cybersecurity (EX) Working Group during the NAIC’s Summer 2017 National Meeting. I serve on both groups and am proud of the final This is an issue that continues to be at the product. Our working group solicited forefront of the insurance industry. input from regulators as well as industry and consumer representatives throughout times users don’t even know a botnet has the drafting process. infected their system. And the impact is “We’ve made significant progress severe. One study found that billions of on cybersecurity this year, and passing dollars were stolen in virtual attacks in this model law creates a platform that 2016. enhances our mission of protecting Recently, the National Association of consumers,” said Raymond G. Farmer, Insurance Commissioners adopted the NAIC secretary-treasurer, South Carolina Insurance Data Security Model Law. It insurance director and chair of the creates rules for insurers, agents and other Cybersecurity (EX) Working Group. licensed entities covering data security, This is an issue that continues to be at investigation and notification of breach. the forefront of the insurance industry. In This includes maintaining an information October, I attended a joint cybersecurity security program based on ongoing risk forum hosted by the NAIC and the assessment, overseeing third-party service Stanford Cyber Initiative. The event John Doak

22 POLICY

n the past year, we’ve seen a wave of major cyber data breaches in a multitude of industries, including health care, finance, retail and government. Despite the high-profile attacks, the hits keep coming with the hackers getting more and more creative in their attempts to infiltrate computer systems.

The use of malware is relentless.

Intrusion devices such as bots allow online criminals to remotely take control of compromised computers. The “botnets” or internet-connected devices that may contain PCs, servers and mobile devices are then infected and controlled by a common type of malware. Many

WINTER 2017

provided great insight into current cyber threats and the role insurance plays in mitigating risks.

The forum featured a keynote from Richard A. Clarke, former U.S. National Coordinator for Security, Infrastructure Protection and Counter-Terrorism.

His address was accompanied by panels focusing on understanding cyber risks, the range of cyber threat scenarios and identifying potential gaps in cyber insurance coverage and risks. The event was a great opportunity to engage with some of the nation’s leading scholars in cybersecurity to enhance our work in protecting consumers.

Your small business is a prime target for hackers because you have sensitive information, but you may have less security than larger companies. Cybersecurity insurance provides coverage for compromised security or privacy breaches at work. Business cybersecurity policies tend to be highly customized and costly.

I encourage you to take these steps to help secure your business: • Conduct a security and self-risk assessment.

Determine what to protect, what protections exist

and where the gaps exist. Identify the tools you need to protect this information.

• Implement sound cybersecurity procedures and training for employees. Educate employees on smart use of social media, how to spot suspicious emails and not connecting to public Wi-Fi on a company device.

• If you don’t have such a disaster recovery plan, consider creating one. Developing procedures and identifying threats is important but you also must understand your vulnerabilities.

• Always back up important business systems and data. Implement settings encouraging regular password changes and restrictions on the websites employees can access, as well as strong security software.

This is an issue that’s not going away any time soon.

While we may never eliminate the threat of cybercrime, we can do our best to minimize it. If you have any questions, please don’t hesitate to contact our office at 1-800-522-0071. n

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POLICY 23

FEATURE

Why Business Income Is the Most Important

Property Coverage

By Chris Boggs

N

o business exists for pride of ownership or to give the owner something to do. Businesses exist for one reason only: to make money.

Any business that generates insufficient or no income and profit will cease to exist. And that’s why business income insurance is the most important property coverage.

The Facts In 2015, there were approximately 104,600 nonresidential and commercial structure fires in the United States, according to statistics from the FEMA U.S. Fire Administration for the most current year with complete data. That number translates to a nonresidential or commercial structure fire every five minutes — and nearly $2.7 billion in direct property damage alone.

But what those numbers don’t include is an amount for indirect business income loss, which could be four times higher than direct property loss.

It’s difficult to find indisputable statistical data regarding the number of businesses that never reopen following a catastrophic property loss, such as a fire.

The insurance industry has long held that 25 to 30 percent of businesses never reopen after suffering 24 POLICY

a catastrophic loss that causes a total shutdown for longer than 30 days. But this percentage could be much higher — at least one study puts it at 43 percent.

Even this oft-quoted yet unsubstantiated statistic fails to include the percentage of businesses that do reopen but ultimately close, with the failure directly traceable to the catastrophic loss. Estimates suggest 30 to 40 percent of businesses that do reopen still fail within five years, pushing the total business failure rate due directly to an individually catastrophic loss percent to 50 to 60 percent when you consider both scenarios — not reopening, and closing shortly after reopening.

Additionally, the Institute for Business and Home Safety reports that 25 percent of businesses that shut down due to a “major disaster” never reopen. In this case, a “major disaster” is defined as a communal event, such as a hurricane or flood, rather than an individual event, such as fire. Note that IBHS developed these statistics before Hurricane Katrina.

If 60 percent of all nonresidential and commercial fires are catastrophic — and some reports indicate as many as 90 percent are — the United States lost approximately 15,690 businesses as a result of the 2015 fires. Add these fire-related shutdowns to the major disaster business closures reported by IBHS, and WINTER 2015

FEATURE

the number of business failures due to individual and communal disasters in 2015 climbs even higher.

If fire loss statistics remain constant in 2017 and natural disaster-related closures match IBHS numbers, the nation may lose more than 30,000 employers as a result of individual and communal disasters this year — which could put 100,000-200,000 people out of work.

The Solution Most businesses that close as a direct result of a catastrophe don’t cease to exist because they lack adequate building and/or business personal property insurance. They close because there’s no money coming in the door.

Few businesses can remain viable without a source of income. Mortgages must be paid; rental expenses continue for the building, machinery and equipment; employees expect a paycheck or start looking for other jobs; and the insurance carrier wants its premium.

These types of expenses continue even if the business is not open.

Obviously, the optimal goal is to properly insure the building, its contents and the business income. But of the three coverages, the most important is business income. Even if the building or contents are horribly underinsured, a business could still reopen and succeed in the aftermath of a catastrophe if it has sufficient business income coverage. Getting a loan to make up the difference between the insurance proceeds and the actual cost of rebuilding a building or replacing its contents is much easier when the business can show the bank a viable and sufficient income stream.

The Sale But the hardest aspect of business income insurance is selling it. Why? First of all, many insureds don’t keep adequate records — and even if they do, they may be reluctant to release the required financial data. In addition, business income insurance isn’t a required coverage by lending institutions or lessors.

You essentially have two minutes during your client meeting to introduce, explain and convince your insured they need business income protection. Consider using the following script to help them see the light. You can WINTER 2015

easily tailor this to suit your specific approach and client: Your business exists to make money — money to pay your employees, cover bills for rent, mortgage, supplies, taxes and so on, and hopefully leave enough for your personal use and benefit. The money you take home pays for your necessities — your house, food, clothes — as well as “niceties,” like a bigger house, great vacations or private school.

Without an income stream, employees don’t get paid, bills don’t get paid and YOU don’t get paid.

Business income protection assures both your business and you maintain a stream of income following a major loss.

Estimates suggest more than 30 percent of all businesses that suffer a “catastrophic loss” — one that causes them to close for more than 30 days — will never reopen, and another 25 percent will close within three to five years.

It is highly unlikely that these businesses closed due to the lack of or adequate insurance coverage for the building or the contents. Undoubtedly, most of these businesses closed due simply to lack of income. You may be able to get a loan to aid in rebuilding the building or replacing the contents, but lost income is just that — lost.

Yes, there’s an additional premium to cover your business income. But don’t view this coverage as an expense — it’s an investment in the continued viability of your company. Without a flow of income or massive cash reserves, your business and your personal income may cease to exist following a major loss. Of all the property coverages available, business income is the most important.

In reality, business income coverage is an exceptionally cheap protection considering the alternative. Does this sound like protection that will allow you to sleep better? n

POLICY 25

FEATURE

WHY BONUSES

DON’T WORK

By Tom Baker

I

n the early days of my career, I was general manager for Milgram Kagan, a retail specialty store company. James worked in one of our Dallas stores, and his proactive style enabled him to make his car payments by receiving a bonus for selling a shoe care product that softened and cared for leather shoes. We paid 50 cents per can sold, and in the late 1970s, 50 cents was a great bonus for a $3 product.

What makes this success story both amazing and disappointing is that out of 13 stores and over 60 employees, James was the only one who made the most out of this bonus. The other 59 employees might have made $10 to $15 a month, but no one paid their car off, even though any of them could have attained the same results as James.

As an agency owner, you have probably experienced similar stories.

Most owners have tried bonuses to increase customers who signed up for EFT, number of policies sold, new referrals or life insurance quotes. And, as an agency owner, you probably feel a similar frustration as I experienced as a young executive managing a group

26 POLICY

of shoe stores. Some people seemed to care for a while, but only a few, if any, actually seemed to appreciate and make the most of some great bonus opportunities.

I would be surprised if you didn’t come to the same conclusion I did – bonuses don’t work. Bonuses don’t work because they are almost always used for the wrong reason.

totally different. Competition and an unpredictable economy no longer guarantees increased sales. Rather than offering bonuses with confidence they will put more money in the bank, we offer bonuses hoping to get staff doing more of their job. Even worse, many agencies offer bonuses because staff comes to expect the bonus as part of their compensation.

Here are seven reasons why bonuses History of Bonuses often fail.

Business owner’s experience with Reason #1 – Bonuses can be bonuses began in the middle of the an excuse for poor management.

20th century. As the industrial revolution Our society really dislikes discomfort. continued to gain traction, the We most often try to make the workforce moved rural self-employment symptoms go away rather than dealing to urban employment in factories and with the root problem. Many owners other businesses. offer bonuses hoping to change the By the time of post-World War II results without investing the time and economy, manufacturers could sell energy needed to learn why staff fails almost anything they produced. to deliver the desired results in the first Americans were buying new homes, place. As a result, bonuses can become cars, appliances, toys and everything a poor substitute for delivering what else included in the American staff really needs: a reason to grow. dream. Sales and manufacturing Employee engagement — providing organizations willingly began offering real-time feedback, recognition and bonuses because they knew increased resources to grow both personally and production meant increased sales − professionally — is the true mark of and that meant increased revenue. effective leadership.

Bonuses cannot Fast forward 60 years or so, and will not ever take its place. and bonuses represent something

WINTER 2017

FEATURE Throwing money at a problem will not solve the problem. And if money does appear to solve the problem, then it was never your real problem!

Reason #2 – Bonuses try to bribe staff to do their job.

Bonuses are usually explained something like, “I am giving you the opportunity of making more money. If you achieve these goals, you will make more money. In fact, you can make as much money as you want.”

Do you see a problem with this explanation?

What if they don’t want more money?

What if they lack initiative and just don’t want to work harder?

What if they just don’t want to do what you incent them to do?

This strategy empowers staff to decide how they do their job based on what is best for them, not what is best for the agency. It is never in the agency’s nor staff’s best interest to bribe people to do their job.

Bonuses are effective to kick-start specific behaviors or provide fun and spontaneity by achieving goals, but staff should never have the option to define what is and isn’t their job.

Reason #3 – Bonuses fail to create a “pain of loss.”

Many people live by a simple goal − get through today and hope tomorrow will be better. When we yield to this view, nothing substantial exists beyond the problems of today.

In sales, you always want to create a “pain of loss” in which customers don’t want to give up what you provide because they don’t want to lose something valuable they perceive as “theirs’ ”.

Long-term goals such as yearend bonuses lack substance when compared to today’s challenges. Bonus dollars lack a feeling of reality for many employees, at least not as real as the stressors they face today. Therefore, they don’t feel a “pain of loss” if they never see their bonus.

WINTER 2017

Reason #4 – Bonuses only work for certain types of behavior.

According to author and speaker Dan Pink (“Drive”), “We are not as endlessly manipulatable and predictable as you would think.” Pink reports that research at MIT and funded by the Federal Reserve Bank took a group of students and gave them

tasks to perform, such as memorizing a string of numbers, solving a puzzle and physical tasks such as throwing a ball through a hoop. The group was offered cash rewards for the level of performance.

The study found that as long as the task required only mechanical skill, bonuses for top performers worked as expected. Higher pay equaled continued on page 28

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POLICY 27

WHY BONUSES DON'T WORK

continued from page 27

better performance. But once the task called for even basic cognitive skills, including conceptual or creative thinking, a larger reward led to poorer performance.

The Harvard Business Review points to similar results in a study that found, “The more cognitive sophistication and open-ended thinking that was required, the worse people performed when working for a reward.” The Review also reports that, “Over the next 30 years, studies continue to confirm that people who expect to receive a reward for completing a task or for doing that task successfully do not perform as well as those who expect no reward at all.

Reason #5 – Bonuses don’t produce lasting change.

Research suggests that rewards such as bonuses only produce temporary compliance. Once the rewards run out, people revert to their old behaviors. The reason is simple – bonuses change what we do but not why we do it.

A professor of management at the University of Utah’s Graduate School of Management, Frederick Herzberg, argued that, “Just because too little money can irritate and demotivate does not mean that more and more money will bring about increased satisfaction, much less increased motivation. It is plausible to assume that if someone’s takehome pay was cut in half, his or her morale would suffer enough to undermine performance. But it doesn’t necessarily follow that doubling a person’s pay would result in better work.”

If you incent staff to do their job, some individuals will participate as long as the bonus is offered. You haven’t gained an engaged employee. You trained them to beat the system by choosing how much money they want or need and what behaviors they are willing to perform to get paid.

Reason #6 – Bonuses become an entitlement that can never be taken away.

Once upon a time, bonuses such as a year-end, merit or Christmas bonus was a meaningful way for management to express appreciation to their employees. In today’s workplace, however, these types of bonuses become expected, and they are difficult, if not impossible, to stop without significant consequences.

Here is a brief history of the Christmas bonus, according to the Princeton sociologist Viviana A. Zelizer at The Huffington Post: “At the turn of the 20th century, U.S. employers began substituting the traditional 19th-century Christmas offerings to employees — turkeys, watches, candy or gold coins — with a cash bonus. As early as 1902, J. P. Morgan & Company had apparently broken the record by giving each of their employees a full-year’s salary as a Christmas present. Gifts of cash were increasingly standardized, calculated as a percentage of the wage. By 1911, 10 percent was considered ’liberal.’ Some banks went as far as substituting the Christmas present for a first-of-the-year merit increase in salary.

28 POLICY

“By the 1950s, the Christmas bonus officially lost its status as a gift: when a firm announced a reduction in its annual Christmas bonus as a way to make up for the expense of introducing a costly new retirement plan, the union tried to negotiate the employees’ holiday bonus.

“After the company refused any bargaining, the union appealed to the National Labor Relations Board. The Board ruled that the Christmas bonus could no longer be considered an employer’s discretionary gift but an expected and negotiable component of a worker’s wage.”

Reason #7 – Bonuses can create conflict.

Equal year-end bonuses for staff can and does cause significant conflict. The most common example is when someone who considers himself the “good child” sees someone they perceive as the “bad child” receiving an equal year end profitability or profit-sharing bonus.

In the 1960s, behavioral psychologist J. Stacy Adams introduced what he called “The Equity Theory”. Adams proposed that employees seek to maintain a balance or equity between the inputs they bring to a job and the outcomes they receive from it against the perceived inputs and outcomes of others.

Assigning KPIs to all staff shapes a communal environment in which everyone shares responsibility for making the agency the best it can be. Even though KPIs may differ between job responsibilities, everyone feels a sense of equity because each person is required to achieve their KPIs (input) in order to receive all of the performance income (output).

While bonuses are often ineffective when used for the wrong reason, they can be effective when used to deliver short-term “course corrections” or spontaneous recognition of achievements.

Conclusion So are all bonuses “bad”? Absolutely not. Bonuses are effective when used to create fun, excitement and focus for short-term goals that exceed minimum standards of job performance. A 90-day contest offering $5 for each new umbrella policy is a fantastic idea. It is clear that this is not part of compensation. It is also clear that you have a contest with a start date and end date, which means that the bonus is not perceived as an entitlement. This type of bonus helps everyone focus on a short-term goal that can change longterm behavior, particularly when combined with recognition, praise and appreciation. These intrinsic “bonuses” are the ones that truly produce lasting ad profitable change. n Tom Baker is the CEO of Catalyst Insurance Systems. As an author, speaker and coach, he has developed a unique talent management system, Symphony. Symphony empowers agency owners to implement a performancebased compensation system that transforms compensation from an expense to an investment.

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FEATURE

New Research Reveals IAs’

Priorities Are Changing

By Myrna Estrada

I

believe in the enduring value of independent agents. After all, in an era of rapid change and new risks, consumers need a trusted adviser who can guide and advocate for them. They need an independent agent.

how agents want to spend their time now and in 2020 now in 2020 26%

23%

21% 15%

At Safeco Insurance, we’re constantly looking forward to retaining clients uncover opportunities and challenges that lie ahead for the independent agent channel. By knowing what’s around the corner, we can share actionable insights and help develop capabilities that enable you to be an Agent for the Future – one who is not only thriving today but is also continuously evolving to take advantage of new opportunities.

Safeco’s recent Agent for the Future survey asked 600 independent agents about how they are adapting to current industry trends and how those trends are expected to shape insurance through the year 2020.

One key finding – agents want to spend substantially less time responding to service needs and shift their focus to growing their business.

IAs have new priorities for 2020

I wasn’t surprised by how much time agents currently spend servicing and retaining clients – and I certainly appreciate the challenge of finding time for new business.

However, in 2020 – just two years from now – agents indicate they want to make a complete 180° and spend the majority of their time quoting and pursuing new business.

This shift in priorities signals compelling opportunities for growth and the beginning of an exciting new era for the independent agency channel. It also raises the question: How can IAs grow their business without compromising service or jeopardizing retention?

30 POLICY

21% 16% 10%

responding to service needs

9%

quoting new business

prospecting for new clients

The answer: divide and conquer

I believe this is where harnessing the power of digital solutions and expanding your partnership with trusted carriers comes in. Leveraging carrier customer service programs will support your customer service needs and aid retention; they can also boost your efforts to grow the business.

Today’s consumers want more ways to engage and do business whenever they want, from wherever they are and on whatever devices they have handy. This doesn’t come as a surprise to IAs. Safeco’s Agent for the Future survey revealed that 60 percent of agents recognize consumers’ need for online and mobile solutions is of major importance.

Traditionally, it’s been thought that every interaction with a customer is an opportunity to build long-term loyalty. While that may once have been true, that’s no longer the case. However, the likelihood of an agent building long-term loyalty over low-value transactions – such as sending new ID cards or changing a method of payment – is relatively small. That’s where mobile and online account management tools come in. Customers get the access they expect, and your team can focus on growing the business.

WINTER 2017

FEATURE A growth mindset

Agents have identified a compelling mix of strategies to drive growth, and they don’t need to tackle this on their own. Not only does leveraging customer service programs satisfy customers’ changing needs and aid retention, but they can also boost efforts to grow the business. I’d like to focus for a moment on two areas: crosssales and attracting new market segments.

how agents plan to grow in the next five years

50%

increase marketing investment

38%

50%

new market segments

31%

new lead resources

adding new producers

The majority of agents we surveyed believe increasing cross-sales could be a key driver for growth. This is a prime example of where working with a carrier service program can make a big impact.

For example, did you know that 1 in 12 customer calls to Safeco Gold leads to a cross-sell opportunity? Better yet, we close nearly 50 percent of the time. In 2016 the company generated $39 million in new business for Safeco Gold agencies.

New market segments

For 31 percent of agents surveyed, the path for growth includes pursuing new market segments. Offering online and mobile tools exemplifies how agents are adapting in order to attract new customers such as tech-savvy millennials.

Given all of the discussion about the size of the millennial population, it could be easy to overlook the emergence of other important demographics. However, 67 percent of agents surveyed recognize that change in ethnic impact could have some effect on their agency in the next two years.

For instance, the United States Census Bureau estimates that there are 55 million Hispanic people in the country, making up more than 17 percent of the U.S. population.

67% of IAs surveyed believe change in ethnic makeup will have some effect on their agency by 2020

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48%

78%

Cross-sales

67%

new digital capabilities

increasing cross-sales

(mobile, chat)

I appreciate that it might seem daunting or costprohibitive for agencies to hire to meet the needs of nonEnglish-speaking customers. Today, only 25 percent of agents surveyed offer non-English-speaking options and 42 percent say non-English communication tools are not a necessity.

This is another example of where carrier service programs can become an extension of your agency and support your efforts to attract new customers. The Safeco Gold team offers Spanish language support, with other languages supported via interpreters.

Go confidently together!

Safeco has, and will continue to be, exclusively focused on independent agents and their success. I believe that, working together, we will continue to win in the marketplace.

Earlier this year, Safeco launched AgentfortheFuture. com, a new resource providing all IAs with data, insights and inspiration to help you succeed today and prepare for the future. I invite you to check out the site and read Safeco’s new report — “Independent Agents Shift Focus from Service to Growth.” n Myrna Estrada is vice president and general manager, Central Region, Safeco Insurance.

hola!

42%

42% of IAs surveyed don’t think it’s important to speak other languages

POLICY 31

2018 RINGS IN A FRESH NEW LOOK

FOR INDEPENDENT INSURANCE AGENTS ASSOCIATION OF GREATER OKLAHOMA CITY

F

or the past few years, I have been fortunate to serve on the Independent Insurance Agents Association of Greater Oklahoma City board of directors. It’s a board with a vast history within the insurance industry in Oklahoma City and its surrounding communities.

For more than 75 years, the board has been active in providing scholarships to high school seniors who have family involved in either the OKC Fire Department or OKC Police, Putnam City Public Schools, Oklahoma City Public Schools, and our association. We have also awarded a scholarship to a UCO student who is currently studying in the insurance program.

This year, I am excited to serve as president of the IIAAOKC association. It is an exciting time! While we are still providing scholarships, we are also looking at ways to increase membership as well as provide different opportunities for our membership in addition to monthly luncheons.

In 2018, in lieu of a monthly luncheon for February and April, we will be adding a happy hour event and a volunteer day, respectively.

For the volunteer day we will be partnering with the Independent Insurance Agents of Oklahoma Young Agents as well as the State Board in order to bring everyone together and have an opportunity to give back. More details for both the happy hour event and volunteer day will be forthcoming.

The board is very excited to announce a CSR Appreciation 32 POLICY

luncheon that will be held in lieu of the regularly scheduled lunch meeting on March 12. As producers and principles, we cannot be successful without the help of CSRs. Thus, we want to have an opportunity to celebrate them and have a luncheon in their honor.

Technology has been, well, nonexistent for the most part within our city association. Emails are sent out to our membership regarding monthly luncheons, but we haven’t had any presence on social media or the internet. Currently, we have a Facebook page (Independent Insurance Agents Association of Greater Oklahoma City) and are looking at options to add a website, too! For those of you who have Facebook pages, we encourage you to “like” our page!

Finally, in our continued efforts in looking to the future, we have begun partnering with IIAO and the Young Agents in an effort to bring in new members and tell our story about the advantages of being a member of IIAAOKC. Our board members are going to put the pieces in place in order to have a more fruitful partnership.

We are looking forward to new members and adding some exciting events for the benefit of the entire membership.

Independent Insurance Agents Association of Greater Oklahoma City has been around for more than 75 years. We’re looking forward to the next 75 years with some exciting events coming soon! n

Ryan Teubner Meet IIAA of Greater Oklahoma City Board Members President – Ryan Teubner Rich & Cartmill, Oklahoma City Past President – Karen Nester Cole Paine & Carlin, Oklahoma City Scholarship Chair – David Paine Cole Paine & Carlin, Oklahoma City Vice-Scholarship Chair – Kevin Fillmore Rich & Cartmill, Oklahoma City At-Large – Avery Moore ECI, Piedmont At-Large – Dennis Bowman Frates Insurance & Risk Management, Oklahoma City At-Large – Keith Schideler Fennel & Associates, Ardmore Secretary/Treasurer – Mark Carlin Cole Paine & Carlin, Oklahoma City WINTER 2017

Sworn In Vaughn Graham

as IIABA Chairman

Dick Teubner, past IIABA chairman, swears in Vaughn Graham as the 2017-2018 IIABA chairman.

Generations: Vaughn Graham (second from left) and his son, Vaughn (far left), with Dick Teubner (second from right) and his grandson, Ryan Teubner

A contingent of Independent Insurance Agents of Oklahoma members were on hand to watch as Vaughn Graham, president of Rich & Cartmill, Tulsa, was sworn in as the 2017-2018 chairman of the National Independent Insurance Agents and Brokers of America during its Leadership Conference in Chicago in September. Graham previously served as chairman of IIAO, which recognized him in 2012 with its highest honor, the Eagle of Excellence Award.

While serving IIABA, Graham has chaired the IIAA Member Services Board since 2009 in addition to serving on the Big “I” National Board of Directors and the Big “I” Advantage Inc. Board of Directors. He also has served as a trustee on the InsurPac Board of Trustees and as a member of the Agents & Brokers Roundtable.

He is a graduate of the University of Oklahoma. He and his wife, Candace, have two grown children.

“Vaughn Graham will do an excellent job leading IIABA, and it is an honor for him to represent Oklahoma,” said Denise Johnson, IIAO president and CEO. “Vaughn is the fourth Oklahoman to

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Vaughn Graham and his wife, Candace, during his installation

serve as IIABA national chairman, and our members throughout Oklahoma are excited that he is serving in this very important and prestigious position within the independent insurance industry.”

Graham’s goals during his chairmanship include looking for the opportunities presented by the InsurTech “disruptors” and keeping a focus on the consumer and digital brand for independent agents, Trusted Choice® and TrustedChoice.com.

“The Trusted Choice brand is not in lieu of your individual agency’s brand — it is in addition to. It’s not competing,” Graham said. “It’s structured and it’s fostered and it’s meant to complement your own agency brand. If you’re not utilizing our brand, you’re missing the boat.”

Graham sees the biggest challenge and biggest opportunity in the area of membership. His goal is to learn more about what current members want from their national and state associations and understand how those expectations may differ from the next generation of members.

POLICY 33

Insurance Pros Honored at IIAO

Conferment

Ceremony I

ndependent Insurance Agents of Oklahoma held a Conferment Ceremony and luncheon Nov. 2 at the Oklahoma History Center to honor insurance professionals who earned a designation from the National Alliance in 2017.

IIAO’s Education Committee awarded the 2017 CSR of the Year Award during the luncheon to Jennifer D. Fryar, CIC, CISR, with the Sullivan Insurance Agency in Ardmore. She holds both the CIC and CISR designations from The National Alliance.

Fryar says that being a CSR can be complex at times, but the greatest reward is the relationships a CSR builds with customers. She relates that conversations with customers often involve issues beyond “insurance”; as those relationships build, discussions also revolve around kids, grandkids, weekend plans or perhaps just lending a listening ear when needed.

“Relationships are powerful,” she says. “Customers become good friends and ’family’; gratitude is given and received. Being proactive, prompt, motivational and going above and beyond will earn you the respect of customers and carriers.”

∫

Congratulations to CIC Designees Michelle Diane Lunski, CIC, CISR McLoud Deborah Avance, CIC, CISR The Beckman Co. Muskogee Kevin W. Fillmore, CIC Rich and Cartmill Oklahoma City

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Tiffany Ann Harvey, CIC, CISR, AINS Messer Bowers Co. Enid

Natalie Garrett, CIC, CISR, CPIW, AINS Triangle Insurance Co. Enid

Stephanie R. Mullen, CIC, CISR National American Insurance Co. Chandler

Emily A. Noland, CIC, CISR Sullivan Insurance Agency Ardmore

Michael N. Gray, CIC Oklahoma City

Pamela A. Clark, CIC, CISR Oklahoma City

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Jay Andrew Eshelman, CPA, CIC Arthur J. Gallagher & Co. Tulsa Jason D. Blair, CIC, AAI Oklahoma City Jillian L. Hobbs-Carrico, CIC Broken Arrow Stefanie A. James, CIC, CISR, CPCU, CPIW Liberty Mutual Insurance Co. Oklahoma City

CIC Conferees

CRM Conferees

Michelle Marie Morris, CIC Piedmont

CRM Designees Stewart L. Berrong, CIC, CRM Berrong Insurance Agency Weatherford Lena F. Sullivan Treanor, CIC, CRM Sullivan Insurance Agency Ardmore Marilyn Ann Young, CIC, CRM Chandler Bryan Huntington, CRM Chickasaw Nation Industries Norman Linda L. Wright, CIC, CRM, CRIS Rooney Insurance Agency Inc. Tulsa Paul R. Stabler II, CIC, CRM Rich & Cartmill Insurance Inc. Oklahoma City Creighton Allen Haddon, CIC, CRM, CLCS BancFirst Insurance Services Oklahoma City Fred S. Lewis, CRM Family & Children’s Services Tulsa WINTER 2017 2017

CISR Elite Conferees

CISR Conferees

CISR Elite Designees

CISR Designees

Pamela K. Harms, CISR Elite Harms Insurance Ageney Inc. Corn

Dana Andrews, CISR Enid Insurance Agency Enid

Laura J. Bradshaw, CISR Elite Brown & Brown Agency of Insurance Professionals Inc. Pryor

Laura G. Asaro, CISR HUB International Mid-America Tulsa

Leann Kathleen England, CISR Elite Integrated Insurance Services Pryor Myranda Denny, CISR Elite Ledbetter Insurance Agency Oklahoma City Rachel L. McCoy, CISR Elite National American Insurance Co. Chandler

Jamie M. Beezley, CISR Union Mutual Insurance Co. Oklahoma City Crissy Benjamin, CISR Oklahoma Insurance Department Oklahoma City Ashley Bigler, CISR Sullivan Insurance Agency Ardmore continued on page 36

POLICY 35

CONFERMENT CEREMONY

continued from page 35

Hannah Lee Bradley, CISR National American Insurance Co. Chandler

Amy Lynn Henninger, CISR BancFirst Insurance Services Oklahoma City

Jennifer Anne Pennington, CISR Arthur J. Gallagher Edmond

Nathan Britten, CISR Professional Insurors Agency Oklahoma City

Rebecca A. Hill, CISR HUB International Mid-America Tulsa

Sharlana Marie Scott, CISR Great Northwest Piedmont

Jan Marie Burr, CISR, AINS Hub International Tulsa

Nicole Hughes, CISR Ledbetter Insurance Agency Oklahoma City

Catherine Shults, CISR Overman Insurance Agency, LLC Cleveland

Charleigh Cole, CISR JT Neal Insurance Agency Lawton

Laurie Alyson Jack, CISR First United Insurance Solutions Pauls Valley

Erina Smith, CISR Sullivan Insurance Agency Ardmore

Lacy E. Davis, CISR Messer-Bowers Co. Stillwater

Dana Michele Johnson, CISR BancFirst Insurance Services Oklahoma City

Sarah Jo Spleth, CISR Hub International Mid-America Tulsa

Elizabeth M. Falls, CISR Fred Daniel & Sons, Inc. Tulsa

Lorie Ann Jones, CISR Oklahoma Insurance Department Oklahoma City

Julie Christine Foote, CISR Graham Rogers Bartlesville

Kimberly J. Knoedler, CISR Hometown Insurance Agency Owasso

Beverley JoAnn Stewart, CISR Standard Lines Services-Graham Rogers Bartlesville

Tania Garza, CISR HUB International CFR Tulsa

Austin T. Landes, CISR Louis Blosch Insurance Owasso

Stephanie Lynn Gates, CISR IIMNT Tulsa

Ashley N. Mack, CISR Frates Insurance & Risk Management Oklahoma City

Melissa Elise Griffin, CISR Willis of Oklahoma Oklahoma City

Sylena Mosher, CISR John Sullivan Ardmore

Carly Renee Harris, CISR National American Insurance Co. Chandler

Sherry M. Padgett, CISR CPC Insurance Agency Oklahoma City

36 POLICY

Lisa Kaye Stewart, CISR Fennell and Associates Ardmore Penny Vasquez, CISR Oklahoma Insurance Department Oklahoma City K.C. Walos, CISR INSURICA Oklahoma City Tiffani Mae Whitecotton, CISR Hub International CFR Tulsa

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NEWSMAKERS

Morgin Freeman

Avery Moore

Two IIAO Members Named to IBA Magazine’s Young Guns List Each year, Insurance Business America asks its readership and top insurance companies and brokerages to assist in uncovering the exclusive list of impressive and elite young men and women who have already had significant impact in the insurance industry. The 2017 list recognizes young power players, all age 35 years old or younger, who are emerging leaders quickly rising into influential roles.

Morgin Freeman, Midlands Management Corp. senior underwriter and P&C team leader, Oklahoma City, and Avery Moore, ECI Insurance, Piedmont, have been selected as members of the 2017 Young Guns.

The 55 honorees on the 2017 Young Guns list represent a diverse sampling of the industry, from executives at major insurers to local heroes, and their accomplishments range from large acquisitions and investments to rapidly growing books of business and revenue. These honorees are inspiring peers and mentors alike who are paving the way for a bright future for the next generation of insurance professionals.

Following in the footsteps of her mother, a 30-plus-year veteran of the industry, Freeman began her own insurance career in 2006 with Gainsco. Seven years later, Freeman was hired at Midlands Management Corp. as an associate underwriter, and in the years since, she has quickly climbed the ranks to her current role as leader of Midlands’ P&C Binding team. From 2015 to 2016, Freeman’s team 38 POLICY

increased production by more than 135 percent as a result of her leadership and her ability to develop a culture of excellence within the team.

Freeman has established an efficient method of operations that ensures the consistent and accurate execution and delivery of Midlands’ products and customer support. By leading her team in customer-focused operations, she has effectively differentiated Midlands in an over-crowded marketplace, creating client loyalty and thereby ensuring long-term success.

“Morgin consistently goes the extra mile,” says Colin Caldwell, EVP at Midlands. “Her commitment, loyalty and integrity are obvious and have directly contributed to this company’s success.”

When Freeman isn’t helping agents and brokers find the right coverage, she is an avid boater and enjoys spending her free time on Lake Texoma with friends and family.

“It is an honor to be recognized by Insurance Business America alongside my remarkable and accomplished peers,” Freeman said. “In truth, I have a great team behind me and Midlands executive leadership laid the groundwork for the exponential growth the P&C book experienced last year.”

ECI’s Moore began her insurance career at a young age by doing odd jobs at her family’s agency. It was there that she learned the value of hard work and saw the opportunity WINTER 2017

to make a difference in a big way.

Fast forward to 2017: She is the third generation to take over the family business. Moore took on the role of vice president of sales development for ECI Insurance with a goal to expand the business exponentially. She has helped develop an online marketing program that led to ECI receiving recognition as having the No. 1 insurance website in the nation, increased her profitability margin in 2016 by 25 percent, and frequently extols the benefits of insurance careers to her fellow millennials.

“It’s an honor to be listed among this group of Young Guns and be able to promote the growth and evolution of our industry! As the next generation, it’s always encouraging to see others working toward that evolution.”

Outside of ECI, Moore is active in her community; she sits on numerous boards of directors, is involved with Oklahoma Young Agents and volunteers to speak to high schools and colleges across the state about the industry and the amazing opportunities available within it.

Be a Newsmaker | What’s happening in your organization?

Celebrating an anniversary, opening a new branch, or have a staff member who has received an outstanding award? Send us your WINTER 2017

IIAO New Members AGENCY MEMBERS US Insurance Group, LLC Contact: Todd Wendling Morley’s Insurance & Equine Specialties Contact: Theresa Morley Eagle Strategic Partners Contact: Barbara Buffington ASSOCIATE MEMBERS Berkshire Hathaway GUARD Insurance Cos. Contact: Shawn Roguskie

news, along with a photo and your logo, so we can recognize those achievements in our POLICY magazine. Please contact Cathy Cinotto at cathy@iiaok.com if you have questions.

POLICY 39

NEWSMAKERS The Oklahoma Agents Alliance Leadership Team accepting their Metro 50 Award (from left) Ron Hanna, Lonnie Hill, LeAnn Sanderson, Chris Moslander, Jeana Courtois, Tony Caldwell and Rick Simpson

Taylor Richardson (middle right) and Cassie Scism (middle left) accept Thrive Insurance Inc.’s award for taking the No. 6 spot on the fastest-growing list of companies.

IIAO Members Honored at Metro 50 Awards The Metro 50 Awards Banquet is one of Greater Oklahoma City’s most prestigious events. The metropolitan area’s fastest-growing privately held companies are ranked based on their percentage of annual growth between 2014 and 2016. Qualified companies are required to have revenues of at least $1 million for the previous year. The ranking of all Metro 50 winners was revealed by Oklahoma City Mayor Mick Cornett during the dynamic dinner on Sept. 25.

Thrive Insurance Inc. was named as the No. 6 fastestgrowing company. Taylor M. Richardson, CIC, founder and CEO of Thrive, accepted the award on behalf of his company.

“We’re grateful to be No. 6 on the Metro 50’s fastestgrowing companies list," said Taylor. “I’m thankful for

the driven and innovative team I get to be around every day and look forward to others who will join us along this trailblazing path!”

The Oklahoma Agents Alliance Leadership Team accepted the award on behalf of its entire dedicated team of insurance professionals.

“OAA is grateful for every independent insurance agent entrepreneur who has made the choice to partner with us,” said Tony Caldwell, co-founder and CEO. “Thank you for choosing OAA; we are dedicated to helping you achieve your dreams, and we find the harder we work to help our members achieve their dreams, the closer we get to ours!”

OAA was No. 39 on the 50 fastest-growing privately held companies in the metropolitan area.

2017 National Young Agent of the Year Ryan Teubner, producer at Rich & Cartmill, Oklahoma City, was recognized as the 2017 National Young Agent of the Year at the Independent Insurance Agents and Brokers of America fall leadership conference in Chicago in September.

“The national award is especially meaningful, as my grandfather, Richard ’Dick’ Teubner, set such a great example for me,” said Teubner. “I’m so proud to 40 POLICY

have earned this award during the same conference that my mentor, Vaughn Graham, was sworn in as IIABA’s chairman.

My grandfather mentored Vaughn, and Vaughn has given back to me,” he said.

Teubner is an active member of the Oklahoma Young Agents, serves on the National InVEST Board and is the current president of Independent Insurance Agents Association of Greater Oklahoma City.

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IIAO’s President Named Finalist Congratulations to Denise Johnson, IIAO’s president/CEO, on being named a 2017 finalist for the Woman of Distinction award for the Insurance Business America Awards.

Johnson is a native of Yukon and holds a bachelor’s degree from the University of Central Oklahoma. She was formerly vice president of ECI Agency in Piedmont, a family agency in business for 50 years. Prior to her insurance career, she was the executive director of Oklahoma’s Junior Miss for 11 years.

She was the first female chair of the IIAO Executive Board of Directors, and has been an advocate at the state and federal level for issues such as workers' compensation and tort reform. She has been an advocate for women in the insurance industry by assisting in MyNetwork – a mastermind group that started in Oklahoma and now has members across the country.

She and her husband, John, have three adult daughters and two grandchildren. Johnson has spent the past 25 years volunteering within many venues on the state and community levels. She enjoys reading, yoga and helping her husband remodel their 118-year-old house.

Winners will be announced in all categories during a black-tie gala on Nov. 29 at The Navy Pier in Chicago.

Best of luck, Denise!

for voting us for

NEW! Trusted Choice Member Resource Website Kevin Brandt, Executive Director at Independent Insurance Agents and Brokers of America

We are pleased to announce the release of our new Trusted Choice member resource website at trustedchoice.com/agents. On this site, you will find all kinds of tools for your agency from content to share to custom advertising materials – simply request and our designer will create a version specific to your agency. We also offer training resources, an easy way to submit your marketing reimbursement request and live chat.

Feel free to stop on by and check it out.

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POLICY 41

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POLICY 43

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44 POLICY

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