August 2014 Wisconsin Independent Agent Magazine by Independent Insurance Agents of Wisconsin

wisconsin

INDEPENDENT AGENT AUGUST 2014

PARTNERS DRIVING CONSUMERS

TO TRUSTEDCHOICE.COM

People who run a not-for-profit organization know. The most valuable things

are also the hardest to get.

This organization didn’t grow overnight. It came from years of hard work, confidence in what they could do, a strong commitment to the community, and making smart decisions. That’s why an insurance policy from West Bend makes sense. It protects these valuable and hard-earned businesses so your customers can focus on doing what they do best ... helping children, families, and individuals reach their full potential. And as an Official Supplier of The Silver Lining, it’s backed by your knowledge and experience. West Bend. Insurance your customers buy when they can’t afford anything less.

wisconsin

INDEPENDENT AGENT AUGUST 2014 Eric Schwartz, Editor

Open Door Policy The IIAW Project CAP Playbook . . . . . . . . . . . . . . . . . . . . . . . . . 5

On The Cover…

Commentary From Counsel Same-Sex Marriage, Employee Benefits & Uncertainty. . . . . . 6

Green Bay Packers football is huge in

News From ACT Your Blog Is Outdated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

the Green & Gold to promote TrustedChoice.

Government Affairs Will Wisconsin Finally Do Away With The Personal Property Tax?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

a huge audience and a powerful reach

Focus On Content The Future Of Website Design Can Be Found In The Past . . 14

about the Trusted Choice Web portal and

Virtual University Different Values For The Same Agency . . . . . . . . . . . . . . . . . . 15

marketplace. This exciting partnership will

Marketing Minute The Business Benefits Of A Pipeline Mentality . . . . . . . . . . . . 17 Errors & Omissions Imagine. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Wisconsin and the IIAW has partnered with com. The Packers Radio Network has throughout the state. During Packer games, consumers will definitely hear the message what independent agents bring to the drive business to you. Teaming with the Packers is just part of the plan to educate customers about TrustedChoice.com. See the insert in this magazine for the complete strategy.

Independent Insurance Agents of Wisconsin 725 John Nolen Drive, Madison, Wisconsin 53713 Phone: (608) 256-4429 or (800) 362-7441 ■ Fax: (608) 256-0170 ■ Web: www.iiaw.com Executive Vice President - Matt Banaszynski 2013-2014 Executive Committee

2013-2014 Committee Chairs

President....................................................... Dave Dunker P.O. Box 443, Brookfield, WI 53008-0443

Agency Operations....................................... Kim Dandrea 1300 South Green Bay Rd. #100, Racine, WI 53406

President-elect ........................................... John Wickhem P.O. Box 1500, Janesville, WI 53547-1500

Automation/Technology ............... Cathleen Christensen P.O. Box 949, Fond du Lac, WI 54936-0949

Secretary-Treasurer ......................................... Steve Leitch P.O. Box 85, River Falls, WI 54022

Employee Benefits............................................. Tim Bever 555 Main St. #320, Racine, WI 53403

Chairman of the Board ..................................... Mike Froh P.O. Box 1320, Sheboygan, WI 53082-1320

Finance & Compensation .............................. Steve Leitch P.O. Box 85, River Falls, WI 54022

State National Director ................................ Linda Steiner 555 Main Street #320, Racine, WI 53403

Government Affairs .......................................Skip Hansen 100 North Corporate Drive #100 Brookfield, WI 53045

2013-2014 Board of Directors

Industry Relations ............................................. Tom Sitter P.O. Box 2424, Oshkosh, WI 54903-2424

Mike Ansay 101 East Grand Ave. #11, Port Washington, WI 53704 Jason Bott 330 East Kilbourn Avenue, Milwaukee, WI 53202 Thomas Holter P.O. Box 938, Beloit, WI 53512-0938 Lise Meyer Kobussen P.O. Box 633, Sauk City, WI 53583 Bruce Kommers P.O. Box 66, Antigo, WI 54409-0066 Brian McClone 505 North Westfield Street, Oshkosh, WI 54902 Jeff Rasmussen 525 Junction Road, Madison, WI 53717 Michael Walston P.O. Box 236, Kewaunee, WI 54216-0236 Matthew Weimer 100 North Corporate Drive #100, Brookfield, WI 53045

WISCONSIN INDEPENDENT AGENT

Membership Development ................................. Jeff Thiel P.O. Box 1610, Waukesha, WI 53187-1610 Smaller Agencies .................................... Michael Walston P.O. Box 236, Kewaunee, WI 54216-0236 Technical ......................................................Andy Burkart P.O. Box 1320, Sheboygan, WI 53081-1320 Young Agents ............................................ Janelle Higgins 6200 Mineral Point Road, Madison, WI 53705-4504

> OUR ADVERTISERS AAA ................................................................ 26 ACUITY Insurance ........................................... 27 Applied Underwriters ........................Back Cover Autumn Retreat.............................................. 23 Axley Brynelson ............................................. 24 Badger Mutual ................................................ 25 Burns & Wilcox ................................................10 Capital Remediation ........................................18 EMC Insurance.................................................. 7 Guard Insurance .............................................. 19 IIAW Continuing Education .............................. 21 Northern Underwriting Managers ................... 12 Partners Mutual ............................................. 25 Pekin Insurance............................................... 16 Robertson Ryan................................................ 5 Society Insurance............................................ 13 The IMT Group ................................................. 14 West Bend ........................................................ 2 Western National Insurance ............................. 4 Wilson Mutual ................................................. 25 AUGUST 2014 | 3

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WISCONSIN INDEPENDENT AGENT

OPEN DOOR POLICY

THE IIAW PROJECT CAP PLAYBOOK TrustedChoice.com is unlike any other website currently available to insurance prospects. While some may offer consumer research and rate comparisons, none present the unique combination of benefits found on the website.

Aside from the ability to evaluate multiple insurance companies, the chance to select an independent agent who will advocate on their behalf is an advantage many consumers will find invaluable. A basic profile on TrustedChoice.com is free and automatic for all IIAW/IIABA members. Agencies enrolled in the new Advantage Subscription also receive an expanded profile, enhanced positioning, unlimited prospects and other key benefits – all rolled into one monthly subscription. A comprehensive strategy, if executed successfully, could be a HUGE win for the IIAW, IIABA, CAP, our carrier partners, consumers and most importantly, YOU, our agency members. This would also allow us to provide a product/service that increases the value of your membership in the IIAW.

introduce them to CAP, Trusted Choice, and its benefits has been underway for the last 18 months. A concentrated effort will be made to get more agencies to use the Trusted Choice co-brand and the marketing reimbursement program. More agencies promoting Trusted Choice will greatly contribute to the success of the strategy. There is an ancillary benefit of increasing brand and product awareness among carriers. A comprehensive marketing strategy has been developed to drive consumers to TrustedChoice.com and create greater brand awareness and benefits among independent insurance agents and carriers. There will be a digital advertising buy, followed by more traditional advertising and then concluded with another round of digital advertising. The advertising now has a centralized purpose and will benefit all members.

Inserted into this magazine is our strategy: the IIAW Project CAP Playbook. This Playbook is broken up into four components, each being equally important to the overall objective. Without each component, success is greatly diminished. Overall, it’s intended to elevate all interested parties by bringing the IIAW into the digital era by putting money directly into your pocketbook.

Our Association is currently paying for at least 115 agency CAP subscriptions for the first year. So far almost 50 have signed up. However, the agency would be required to commit and pay for a second year. Since CAP will constantly be evolving and over time provide ongoing value, this two-year commitment would be important to long term success.

A digital and print marketing and education campaign aimed at IIAW members to re-

We are setting meetings with targeted carriers who are not already part of

TrustedChoice.com. Travelers, State Auto, Safeco, Selective, Austin Mutual and others are already participating. Members of the IIAW Board of Directors and key employees of Project CAP will meet with carriers to go over data. This data is included on the insert. These meeting will provide prospective companies with information on the advertising buys to date, review the strategy for the remaining advertising buys for the remainder of the year, and discuss the number of agencies that have signed up to take advantage of the promotion. Ideally, these factors will all contribute to greater carrier participation in the portal and a better, more coordinated advertising campaign aimed at promoting TrustedChoice.com. Again, the strategy is detailed in the insert in this magazine. Please review it and consider being part of this exciting opportunity. More people than ever are buying insurance > Matt Banaszynski is online so this the Executive Vice is our future. President of the Let’s make it Independent Insurance Agents of Wisconsin. a successful Contact him at matt@ venture together. iiaw.com.

ϳϬй ŽĨ ĂŐĞŶĐǇ ŽǁŶĞƌƐ ĚŽŶ͛ƚ ŚĂǀĞ Ă ƉĞƌƉĞƚƵĂƟŽŶ ƉůĂŶ Ͳ >Ğƚ ZK Zd^KE Zz E Ğ WĂƌƚ KĨ zŽƵƌ &ƵƚƵƌĞ You’ve built a successful agency and book of business but don’t have someone to take it ŽǀĞƌ ǁŚĞŶ ǇŽƵ ƌĞƟƌĞ͘ tŚĂƚ ĚŽ ǇŽƵ ĚŽ͍

Plan your future with Robertson Ryan & Associates͘ Ǉ ũŽŝŶŝŶŐ ŽƵƌ ƚĞĂŵ ŝƚ ĂůůŽǁƐ ǇŽƵ ƚŽ͗ ͻ ͻ ͻ ͻ ͻ

Keep your book Remain a trusted advisor to your clients to give them peace of mind ŽŶƟŶƵĞ ǁŽƌŬŝŶŐ ƵŶƟů ǇŽƵ ĚĞĐŝĚĞ ƚŽ ƌĞƟƌĞ Find the right buyer for your book within Robertson Ryan to maximize your return Ğ ŝŶ ƚŚĞ ϯϬй ƚŚĂƚ ŚĂǀĞ Ă ƉůĂŶ

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AUGUST 2014 | 5

COMMENTARY FROM COUNSEL

SAME-SEX MARRIAGE, EMPLOYEE BENEFITS AND UNCERTAINTY

Last year, this column discussed the United States Supreme Court’s landmark decision involving the Defense of Marriage Act in the United States v. Windsor , in which the high court struck down DOMA’s definition of marriage, which had excluded gay couples from more than a thousand federal benefits. See the August 2013 Independent Agent.

On June 6, 2014, at the federal courthouse in Madison (pictured above), Wisconsin U.S. District Court Judge Barbara Crabb declared the Wisconsin constitutional amendment and statutory provisions The Windsor decision upheld the rights of states to regulate and define marriage, and left future questions regarding the effect of DOMA for gay couples living in states (like Wisconsin) that did not allow or recognize gay marriages; it also left each state’s regulation of marriage subject to challenge.

limiting marriage to only unions between “husband’ and “wife” unconstitutional. This decision is under appeal so the current law is unchanged but employers face uncertainty regarding employee benefits.

a widely publicized decision issued on June 6, 2014, Wisconsin U.S. District Court Judge Barbara Crabb declared the Wisconsin constitutional amendment and statutory provisions limiting marriage to only unions between “husband” and “wife” unconstitutional under federal law.

unchanged until the appeal is concluded. In addition, the United States Court of Appeals for the Seventh Circuit (which oversees Wisconsin’s federal courts, among several other states) has consolidated the appeal with a similar case arising in Indiana, and will hear oral arguments on the consolidated cases on August 13.

While implementation is uncertain, and Judge Crabb’s decision could be overturned or modified, employers should carefully evaluate employee requests for benefits relative to same-sex domestic partners or spouses, because some benefits may be available under existing law.

In the meantime, Wisconsin employers are left to wonder what effect Judge Crabb’s decision has on them, particularly where they are required to provide certain benefits to “spouses.” Here is a summary of changes employers may have to deal with following the resolution of this case, as well as some details on Wisconsin law that already impact same-sex couples.

Since Windsor, a number of courts around the country have addressed such challenges. As you no doubt saw in the media, in

Family Medical Leave

6 | AUGUST 2014

Judge Crabb has since stayed her decision pending an appeal. As a result, the current definition of marriage in Wisconsin remains

Under the Federal Family and Medical Leave Act (FMLA), employees are entitled to leave WISCONSIN INDEPENDENT AGENT

COMMENTARY FROM COUNSEL to care for a “spouse.” The federal law defers to each state’s definition of spouse when interpreting this benefit. If Judge Crabb’s decision is implemented, Wisconsin’s definition of spouse will include same-sex spouses and, therefore, provide employees the ability to take up to 12 weeks of jobprotected leave to care for a same-sex spouse with a qualifying serious health condition.

stepchildren that are acquired as a result of a same-sex marriage. (Note also — the Obama Administration has previously issued an Administrator’s Interpretation stating that same-sex partners are entitled to FMLA leave to care for a child of the partnership to the extent the partner assumes the role of a parent.)

Other Benefits Under the Wisconsin Family and Medical Leave Act (WFMLA), employees are already entitled to up to two weeks of job-protected leave to care for domestic partners or spouses with a serious health condition. Therefore, little should change with the administration of this benefit in light of the recent decision. However, when the legislature expanded the leave entitlements under Wisconsin law to domestic partners in 2009, it declined to amend the statute so that it was clear that employees could take leave to care for their domestic partner’s child (other than a child that was adopted or a legal ward). Accordingly, if Judge Crabb’s decision is implemented and marriage encompasses same-sex unions, employees will likely be entitled to leave to care for

If Judge Crabb’s decision is implemented, then a same-sex spouse of an employee may become entitled to coverage under the group health plan of the employee’s employer. Specifically, an employee’s samesex spouse likely would become entitled to enroll in the plan unless the plan’s definition of “spouse” is explicitly limited to opposite-sex individuals. Furthermore, the implementation of Judge Crabb’s decision likely would focus attention on the question of whether a self-insured plan (which generally is not subject to state law) can even exclude same-sex spouses if it covers opposite-sex spouses. In any case, an employer with questions in this area must ensure that it complies with applicable law, but also must be cognizant of insurance

company (or, if the plan is self-insured, stop-loss carrier) concerns with respect to a same-sex spouse’s eligibility for coverage.

Dealing with the Present Uncertainty While implementation is uncertain, and Judge Crabb’s decision could be overturned or modified, employers should carefully evaluate employee requests for benefits relative to same-sex domestic partners or spouses, because some benefits may be available under existing law, as discussed above. Employers should also stay apprised of the legislative changes that may occur as a result of the recent decision and > Josh Johanningmeier be prepared to is the IIAW’s General update policies Counsel. Call the Legal Services Hotline at (877) and practices 236-1669. accordingly.

Retention Strategy

CLAIMS METRICS

“ When it comes to claims, we know the score!” Beckie Januszewski, Milwaukee Branch Claims Supervisor

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Home Office: Des Moines, IA

WISCONSIN INDEPENDENT AGENT

AUGUST 2014 | 7

NEWS FROM ACT

YOUR BLOG IS OUTDATED AND IT’S TIME TO KILL IT! (With an example of how this can apply to an independent insurance agency)

Blog (bläg) Noun: a personal website or web page on which an individual records opinions, links to other sites, etc. on a regular basis. Verb: add new material to or regularly update a blog. “it’s about a week since I last blogged.” Swarthmore student Justin Hall is credited with creating the first blog ever — Links. net — in January 1994. By the end of 1997, online diarist Jorn Barger coined the term

and, more specifically, the easy creation of websites. WordPress — originally a blogging platform — is now one of the most popular content management systems (CMS) used to power 22% of the world’s websites. I first began writing articles — creating content — in the mid-90s that were published in national and state insurance association publications. In 1996 I was asked to write a regular column for Rough Notes magazine. I registered my website,

Learning Center, Education Center or Information Portal just might be a better way to describe the content you include on your web site. “Weblog” for “logging the Web,” which was shortened to “blog” by programmer Peter Merholz in 1999. In August 1999, Blogger rolled out the first popular, free blog-publishing tool which was then acquired by Google in 2003. WordPress, a free open source blogging tool, was released the same year. And the rest — as they say — is history. The ability to create content and easily place it on a website is perhaps one of the biggest advantages brought by the Internet

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But, your blog is now outdated and it’s time to kill it. I haven’t liked the word “blog” for a while now – mainly because the word itself no longer adequately explains what it is and the value it can have for an individual and certainly for a business. It bothers me when I see a website with “Blog” as a main option on their navigation bar, as if the Blog is something separate that I should go to read. It’s time to update the terminology that you use for creating content and posting it online for your audience – in Seth Godin’s terms, your tribe – to read, interact with, and respond back through comments. We need to find a word or phrase that better describes the content – in all its various forms – that is created and lives on the website.

SteveAnderson.com, in July of 1998 and that site continues to be the cornerstone of my Internet presence.

I don’t have a blog. I have multiple websites where I post my thoughts, ramblings, and ideas.

Publishing content on a website – Blogging – has a long and illustrious history. Many individuals and companies have built entire businesses based on being able to easily create and post articles, videos, and other types of content online for anyone to consume. Because of these platforms, individuals today have a voice and can offer their thoughts and opinions unlike at any time in the past.

I am not a blogger. I am a writer, author and speaker. I help individuals and businesses understand emerging technology and how it can be effectively implemented within their organization. I educate and train using written and spoken words. I don’t blog. I publish articles, editorials, my thoughts, product reviews, and opinions to WISCONSIN INDEPENDENT AGENT

NEWS FROM ACT my own website as well as other platforms (like LinkedIn) where people can interact with me based on this information.

5 Reasons to Stop Using the Word Blog Here are five reasons why you should stop using the word Blog on your website and in all of your communications: 1. The word blog has outlived its usefulness. In the late 90s and early 2000s we needed a way to describe this new type of publishing platform. “Blog” served a useful purpose — at that time — to separate this from other types of publishing activities. 2. Only insiders really know what it means. Have you ever tried to explain to a friend or a family member what a “blogger” does? Do > Steve Anderson you talk about content is an authority on marketing? Or, how insurance technology. He is a prolific writer SEO affects your and frequent speaker online visibility? Or known for his knack for translating “geek speak” how you make money into easily understood by writing articles and concepts. Check out his then adding “affiliate free weekly newsletter links” to make a small “TechTips” and other resources on his website. commission?

WISCONSIN INDEPENDENT AGENT

3. The words we use are important. If you really want to have an impact on your “tribe” then why use a word that immediately puts up a barrier. People don’t want to feel stupid because they don’t understand what something word means. 4. It doesn’t describe what you do. If you have a blog, you are writer. So, why not describe yourself as a writer? 5. Who are you trying to impress? Using the words blog, blogging, blogger may make you feel better about what you do and impress certain people, but are you putting up unnecessary barriers to the people who actually need and want to hear what you have to say? The website of Neckerman Insurance in Madison, Wis., is an example of this new way of thinking about information posted on a website. Their website is powered by Joomla, an open source content management platform similar to WordPress. You will not find the word “Blog” on their site. On their home page they show “News,” which is a list of articles that have been added (published) to the site.

Under “Policyholder Services” they list a number of different activities a visitor or client can access, including “Informational Videos” where they explain important insurance coverages and concepts. The Neckerman website is a wealth of information for both new visitors and existing clients. The site provides those visitors a place to learn more about insurance. Maybe a better term is learning center, or maybe an education center, or perhaps an information portal. But, it’s not a blog anymore. Learning Center, Education Center or Information Portal just might be a better way to describe the content you include on your web site. Certainly better than a “Blog.” What do you think? Am I being too picky? Do the words we use really matter? PS: I also think this same line of reasoning applies to Podcasts. They are “On Demand Radio Shows” that I (we) listen to on our own schedule.

Neckerman Insurance, a Madison-based independent insurance agency, has embraced Joomla, an open source content management system, to power its website. This technology allows the agency to update their site with useful information for existing clients and prospects.

AUGUST 2014 | 9

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GOVERNMENT AFFAIRS

WILL WISCONSIN FINALLY DO AWAY WITH THE PERSONAL PROPERTY TAX? The Wisconsin legislature has adjourned for the year, but the summer and fall down time for some lawmakers presents an opportunity to more carefully study issues of public interest in preparation for the next legislative session beginning in January 2015. One item being discussed of significant importance to the business community is reforming Wisconsin’s onerous property tax on personal property that many of you pay each year. In Wisconsin, personal property is taxed separately from real property and is designated under four categories: furniture, fixtures, and equipment; machinery, tools, and patterns; boats and other watercraft; and all other personal property. Since personal property is self-assessed by property owners, business owners are often burdened by the lengthy and costly process. The discussions at the State Capitol among lawmakers include revisiting the possibility of eliminating the personal property tax altogether. It’s certainly not an issue without political controversy, as many local governments rely on this source of revenue to fund certain services. According to the non-partisan Legislative Fiscal Bureau (LFB), for the 2013 property tax year, net taxes on personal property that went to local units of government was an estimated $270.4 million, or 2.8 percent of total taxes. Interestingly, ten states including our neighbors Illinois and Iowa, do not tax tangible personal property at all. Nonetheless, this amount of revenue is not something local units of government are going to willingly surrender. As business owners who are forced to deal with the costs and administrative headaches of compliance and self-reporting your personal property tax liabilities, you know that this issue is not new to Wisconsin. For years, a broad based coalition of small and large business and industry groups have advocated with state

property from taxation to the point where in each of the four statutory categories of personal property, more personal property is exempt under state law than is subject to the tax. For instance, in 1974, manufacturers’ machinery and equipment was exempted from the personal property tax. In 1977, the legislature again chose to gradually exempt farmers’ livestock and commercial and manufacturing inventories. And then in 1999, an exemption was added for computers and related equipment. The list of exemptions goes on and on. This again begs the question: why doesn’t Wisconsin finally do away with the personal property tax - even if the loss of revenue to municipalities means replacing it with some other simpler form of taxation? It’s a question lawmakers plan to examine more closely in the months ahead. The debate over eliminating the personal property tax goes as far back to the mid1950s during Governor Gaylord Nelson’s administration. One significant challenge confronting those who seek to reform the personal property tax is the many young newcomers to the legislature that do not have the familiarity or historical knowledge of this issue from prior legislative sessions. Last session, Rep. Mary Williams (R-Medford) agreed with the need to do away with the

Despite recent legislative inaction, strong interest remains among lawmakers and the greater business community to continue a healthy dialogue on this issue.

> Misha Lee is Owner/ Founder of Lee Government Relations, LLC and lobbyist for IIAW. Follow Lee Government Relations on Twitter @mishavlee.

policymakers for certain exemptions - and for the total elimination of the personal property tax. Over time, the legislature has passed laws exempting numerous items of personal

WISCONSIN INDEPENDENT AGENT

personal property tax and introduced legislation (2013 Assembly Bill 911) very late in the session proposing to eliminate it. Unfortunately, the legislature adjourned before the bill could have a public hearing and gain any real momentum. And Rep. Williams will not be around next session to champion the issue again because she is retiring. But despite recent legislative inaction,

strong interest remains among lawmakers and the greater business community to continue a healthy dialogue on this issue. In order to better understand and examine all the issues surrounding the state’s personal property tax, the current legislature recently established a Legislative Council Steering Committee for Personal Property Tax. This 9-member, bipartisan committee is made up of five members of the Assembly and four members of the Senate who have been asked to come up with recommendations regarding the state’s personal property tax, including the possibility of eliminating it. Specifically, the steering committee will look at the fiscal effect of the personal property tax and various exemptions, the constitutional concerns that may arise in the context of personal property tax reform, and the administrative and compliance costs for businesses and local governments. When the committee completes its review of these items, it will develop recommendations for personal property tax reform to the legislature in the form of an official committee report. It will then be up to both houses of the legislature, in close consultation with the Governor, on determining what recommendations, if any, to enact. The committee held its first meeting in July and has scheduled several additional meetings for July 30th, September 3rd, and October 1st. It remains to be seen what the committee’s final recommendations will be, but many in the business community remain hopeful that positive changes can be made to help improve our state’s overall economy. As your lobbyist in Madison, I look forward to attending these meetings over the next several months on your behalf and will keep your Association updated on the committee’s final report to the legislature next session.

AUGUST 2014 | 11

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FOCUS ON CONTENT

THE FUTURE OF WEBSITE DESIGN CAN BE FOUND IN THE PAST I loathe the acronym KISS or Keep It Simple, Stupid not because the term itself is without merit (that couldn’t be further from the truth), I don’t like it because stupid is a terrible word and should be banned from all of our lexicons. da Vinci said it best: Simplicity is the ultimate sophistication.

But when speaking to the business world about the future of website design and development, I tell our clients that simplicity is the solution we should be striving for. And

only with the few tools they were given. Want more history? The great Chicago architect, Mies Van Der Rohe said, “Less is more” and long before him Leonardo da Vinci said it better than anyone, “Simplicity is the ultimate sophistication.”

We only read 28% of what’s on a web page. Basically, you and your content have a one-in-four chance of being seen. that goal, time and again, can be found in our past. The acronym KISS was actually stated by a fellow named Kelly Johnson nearly 50 years ago who was the Lead Engineer at Lockheed, the designer of jet fighters and spy planes. Supposedly, Johnson gave his team of engineers a handful of tools and challenged them to design a jet fighter that could be repaired under combat conditions

I speak throughout the country about the complexities of simplicity; if you think developing a website that is simple to navigate, that accesses content as quickly as you can say Jakob Nielsen, that tells a quick and compelling story, and leads the guest to an actionable task, well, I’ve got news for you, it’s not - and I mean not by a long shot. Think about it in these terms. The Nielsen Norman Group conducted extensive research

and concluded that we only read 28% of what’s on a web page. Basically, you and your content (words, videos, graphics, demos and the like) have a one-in-four chance of being seen. Those odds stink so why complicate matters? And as we all know, the average web visit can be measured in a couple of minutes and generally less. There’s no time to > Tom Marks is a prolific waste. producer of content and one of Wisconsin’s I have a lot more leading website writers. to write about this He founded TMA+Peritus subject, and I will in in 1983 and was one of the future, but for now, the first in Wisconsin to promote content I don’t want to overmarketing back around complicate things. the turn of the century.

totally

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WISCONSIN INDEPENDENT AGENT

AUGUST 2014 | 13

VIRTUAL UNIVERSITY

DIFFERENT VALUES FOR THE SAME AGENCY While every agency should know its value, a relatively small number actually identify this important measurement only when it’s time for a change in ownership. So, we are never surprised when strong independent agency owners call us inquiring about valuation methods. Most still cite “multiples” of some derivative as an understood value even though they are certainly intelligent enough to realize that no two agencies likely bear the same value even if their income sizes are similar. They simply have no other frame of reference to judge their own value.

If you can earn $1,000,000 over a reasonable period of time (as defined by the valuer), the business is worth no more than $1,000,000 to that person. After all, would you buy any investment opportunity for more than you could reasonably expect to achieve in returns on that property?

I’m afraid that the situation becomes even more confusing when we suggest that the value of the agency depends on who is valuing the agency or the purpose of the valuation. Agents would like to have a clean and simple way of judging their estimated or exact value. When they ask me to simplify the method for valuing their agencies, I cite the Antiques Roadshow as an example of why this is impossible.

O.K, with that being said, let’s get on to the “Who” and “Why” of valuations.

Who Is Valuing the Agency? If the valuation is done by the current owner for estate planning, the owner intends to continue to operate the agency and would like to validate an amount of insurance on himself/herself that would provide a fund for the owner’s family in the event of the owner’s

To begin, we must understand that an agency’s value depends on the earnings potential (profit potential after taxes) from the agency to the person or entity valuing the business entity. Recently, a table purchased at a yard sale for $25 was appraised on the show for several hundred times the purchase price. As far as the seller was concerned it was an old table that was worth $25. The buyer saw a potential in the table that he would have paid as much as $50 for it. The appraiser identified it as a Haywood Wakefield table worth several thousand dollars “to Like agents, all independent agencies are different. When finding the value of an agency, do not compare similar agencies. There are many factors involved in the the right buyer.” valuation including who is valuing the agency and the purpose of the valuation. Similarly, an insurance agency will have different values based on who is valuing the agency and the purpose of the valuation. To begin, we must understand that an agency’s value depends on the earnings potential (profit potential after taxes) from the agency to the person or entity valuing the business entity.

14 | AUGUST 2014

unexpected demise. The earnings potential the agency owner is estimating is that which the owner would be likely to enjoy over a period of time that he wishes to protect his family. If he can “earn” (as defined above) $100,000 a year and wishes to give his family 10 years of protection (after which he would likely retire and sell the agency), the proper

value and insurance amount is $1,000,000. If the same valuation is done by an internal successor for succession planning by the agency’s next generation of owners, (family or staff) the “earnings” potential could be the same as that of the current owner or may change based on the plans of the new owner(s). If they intend to continue the operations similarly to that of the former owner, then the trended history of growth and expenses would likely be continued into the future and the earnings capacity can be judged based on continuing those trends. Of course the time line would change to the time the new owner would need to pay for the agency (to the current owner or to a financial institution). So, if the agency were to be paid for over five years, its value would likely be the equivalent of five years of earnings. However, if the new owner had definitive plans for growth or expense change that differed from the historical trends, the calculation of earnings potential may change to include the new growth and/or expense expectations. After all, with notable exceptions, any business will only pay for itself with monies that can be earned from the business itself. If the same valuation is being done by an outsider for an acquisition, a new feature must be considered, the economies of scale that has made the acquisition market so strong for the last several decades. A strong agency with space and personnel may not need the acquired agency’s location, all of its staff, or some of the other redundant expenses that all agencies routinely experience (automation, professional fees, bookkeeping/ accounting departments, etc.). The savings to an acquiring agency could make the target agency much more valuable to acquire than it is to internally perpetuate or as an ongoing business to its current owner. These are only three of many potential types of valuers that could be valuing the same agency and reaching different values for the business entity. WISCONSIN INDEPENDENT AGENT

VIRTUAL UNIVERSITY What’s the Purpose of the Valuation?

D Involuntary Conversion

The “Standards And Guidelines For Appraising Insurance Agencies And Brokerages,” a publication of the American Association of Insurance Management Consultants (AAIMCO), is available at no cost from AAIMCO (www.aaimco.com) or from info@agencyconsulting.com. The publication lists the following common reasons for valuations/appraisal:

D Agency Perpetuation

D Sale

Each of the above purposes carries conditions that change assumptions of earnings according to the specific reasons. In addition, some valuations are calculated as Fair Market Valuations while others are necessarily “Going Concern” valuations, each of which has different components, as do Asset Valuations and Stock Valuations.

D Merger D Acquisition D Divorce

D Other purpose AAIMCO had to include the generic “other purpose” because the team putting this document together found no fewer than forty other purposes for which agents have requested valuations.

D ESOP This article was not meant to teach you valuation methodologies; it is meant to show readers and all agents to whom these documents are distributed that agency values

D Loan D Estate Planning

in terms of “multiples” are over-simplistic. Any agency value may be viewed in terms of multiples of revenues, commissions, earnings, or EBITDA – once the dollar value is known. However, it is NEVER appropriate to use the same multiple generated for one agency for another agency. That would be like assuming that every building in town is worth $1,000,000 because one building sold for that amount. Every agency is unique in terms of its owners, staff, clients, > With experience and business mix. in insurance agency Valuation CAN certainly operations and stock be done and should insurance companies, Al Diamond has spent be done for every 35 years consulting to agency. However, it the insurance agency should surprise no one industry. He is the leading when different valuing appraiser of insurance agencies in the U.S. companies present For more visit www. multiple valuations. agencyconsulting.com.

The Virtual University is a Big “I” members-only resource. Many articles are based on real-life questions received by the Ask an Expert service. This service ensures that the information is current and topical. Go to www.independentagent. com/Education/VU/. You will need to login with your IIABA username and password before using the VU. The IIABA does not assume and has no responsibility for liability or damage which may result from the use of any of this information.

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AUGUST 2014 | 15

MARKETING MINUTE

THE BUSINESS BENEFITS OF A PIPELINE MENTALITY

Today, the customer story is simple. Loyalty ranges from non-existent to temporary. Mining the Internet is second nature, relying on smartphone apps to cut through the clutter. With an endless array of channels available, engaging customers can be an exercise in futility. Surprisingly, the current situation hasn’t changed much, particularly for those in sales, who have always asked, “Whom can I talk to today?” The search for prospective customers is just as elusive as it has always been. In spite of all the changes, the prospect problem remains the same.

A different approach: a pipeline view To get beyond the barriers that keep us from engaging customers and avoid always asking the “Whom can I talk to today?” question, what’s needed is “a pipeline mentality.” The process is one of “customer creation,” of filling the pipeline with potential business while taking care of the new that flows from the pipe. Instead of spending valuable time and using limited resources on constantly looking for new business, a more prudent approach is to create a ‘pipeline mentality’ process that produces business.

Building the pipeline Here are the elements of implementing a pipeline strategy: 1. View prospects as “customers-in-themaking.” Although it contradicts traditional sales strategies, looking at prospects as ‘a potential sale’ distorts the selling process. Although most salespeople are quick to say that they are solution-oriented and want to help customers, their behavior betrays their words. It’s easy to spot the salesperson with one objective in mind: to make the sale. Everything is aimed at achieving that one goal. Prospects quickly sense the true mission and go on the defensive, either rejecting the salesperson or backing away from making a decision. To think of prospects as customers-in-themaking is more effective, whether they buy today or a year from now. The goal is to bring them into your orbit in such a way that they

16 | AUGUST 2014

will not go elsewhere. This is what allows selling to focus intensely on the customer. 2. Make prospect identification an ongoing commitment. It’s actually counter-intuitive to put making a sale ahead of creating a customer. The goal of prospecting should be to identify those who fit a company’s customer profile and who, when properly cultivated, hold a potential for becoming buyers. The most difficult task for most businesses is making prospect identification an ongoing task. The life force of sales is a pipeline that’s filled with prospects that have discovered the value of doing business with you, who recognize that there’s value in partnering with you, and who have discovered all this before becoming customers.

their databases and toss everyone in a couple of buckets, failing to drill down for personal preferences, lifestyle nuances, sales and demographic data. Although this is the ‘age of the individual customer’, the implications are largely ignored by most businesses. ‘Boiler plate’ proposals are deadly, and emails are often nothing more than not-so-thinly-disguised ads. All of which creates a negative impression. 4. Implement prospect cultivation tactics. There’s only one way to cultivate prospects successfully — and it’s not how a salesperson wants to go about it. Customers set their own buying schedules and they’re not about to abandon their priorities to fit a salesperson’s needs. They don’t want to be ‘bothered’ with multiple emails or repeated telephone calls.

They’re not moved by attempts to arrange a meeting or by someone saying, ‘’I’m reaching out to Most prospect you to gather information.” identification But when the prospect is efforts produce ready to buy, those who minimal results come to mind have the The life force of sales is a pipeline that’s filled with because they opportunity to make the prospects that have discovered the value of doing lack constant sale. Staying in front of business with you. attention. prospects regularly with They’re viewed helpful information builds as temporary ‘activity’ rather than as the the platform of success. lifeblood of the organization, the source of new business for the years ahead. 5. Be the resource for prospects. The most effective way to convince a customer to buy from 3. Segment prospects to focus on individual you is to make yourself invaluable. What you sell needs. Even after decades of discussion, few may help a customer become more successful, companies recognize the value of segmenting but what you know solves customer problems. WISCONSIN INDEPENDENT AGENT

MARKETING MINUTE There are those who are reluctant to share their knowledge, fearing that prospects will take what they want and never bother to become buyers. While there’s always the chance this can happen, it’s worth it in order to demonstrate a company’s competence and expertise.

fillings discovered that its customers were asking for help in developing marketing strategies and tactics for retailing their products. It then dawned on management that even high quality and innovative products were not enough. Their customers we’re

sending reminders, making personalized suggestions, keeping them informed and offering free shipping, easy returns, and incredibly fast deliveries. All of this sends the message that Amazon cares about customers.

A results-based approach

To think of prospects as customers-in-the-making is more effective, whether they buy today or a year from now. The goal is to bring them into your orbit in such a way that they will not go elsewhere. The best way for prospects to become aligned with a company is for them to discover the depths of your expertise and the extent of your knowledge. This is the value-added that makes a significant difference. 6. Help customers be more successful. If partnering has any value as a concept, it’s to be found in helping prospects and customers meet business challenges. Just selling them the right product or service isn’t nearly enough today to build a lasting bond. Almost any ‘vendor’ can do that. Going beyond the expected is today’s challenge. A supplier of bakery mixes and

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looking to them for ways to increase sales. Meeting this need was the first step toward selling more mixes and fillings. 7. Take the lead. While playing it cautious may seem prudent, it’s leadership that captures the attention of prospects. There’s a lot any business can learn from Subway, for example. The focus on ‘fresh,’ flavor and ‘foot-long’ low cost specials hits what young and older adults want today. But when it comes to pace-setting in customer service Amazon is the winner, not just in its broad range of products, but by having customers answer questions, rate products,

Because results are what count, wasting time chasing possible sales, following up on lessthan-serious prospects and preparing dead-end proposals doesn’t make sense. Spending time trying to find customers — those who fit your profile of buyers — is a futile waste of time and resources. What’s required is a strategy that fills the customer pipeline with prospects that can be nurtured so that there is a steady flow of new business from those who know and understand company’s capabilities. What’s needed is a ‘pipeline mentality’.

> John Graham of GrahamComm is a marketing and sales consultant and business writer. He publishes a free monthly eBulletin, “No Nonsense Marketing & Sales.” Contact him at johnrg31@me.com, 617.774.9759, or johnrgraham.com.

AUGUST 2014 | 17

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ERRORS & OMISSIONS

IMAGINE….

Imagine you have a long time friend and customer…let’s call her Mary. Imagine you have written insurance for her businesses for more than 20 years. Imagine Mary calls you and tells you she is starting a new business and needs to get her BOP/CGL, workers’ compensation, and all the other usual coverages for this new business. Imagine you think you know everything about her and her businesses. Imagine you get some basic information from her and then complete the applications for her.

Imagine Mary comes to your office to sign the applications, but because she’s in a hurry to go talk to her banker, she tells you she’s sure everything is fine and she doesn’t read or review the applications, she signs them and leaves. Imagine you didn’t insist that she review the applications. Imagine you send them to the carriers, the policies are issued and all is well. Just imagine… Imagine six months later Mary calls you and tells you that one of the employees

If the information on the application is not correct and the client filled it out, then they are responsible. If the information on the application is not correct and YOU filled it out, then YOU may be responsible. of this new business has severely injured their back and she needs you to contact the workers’ compensation carrier to report the claim. Imagine you ask her where the employee was injured and she tells you it was while he was working in the neighboring state. Imagine your surprise when you hear the words “neighboring state,” because remember, you know everything about

Mary’s business, except that she had employees working in a neighboring state. Imagine, because you never considered she would do that because she never had before. Imagine, because you didn’t include “all states” coverage on the workers’ compensation policy. Imagine, the carrier denies the workers’ compensation claim because coverage is limited only to the home state. Imagine the claim is a minimum of $500,000. Imagine the next call you make is to your E&O carrier.

REALITY… The reality is that this story happens. Maybe not exactly like this, but it happens. It may not be a business customer but it happens with homeowners or personal auto policies or virtually every other type of policy available. Regularly. So what can you do about it? Simple: don’t complete applications for your customers. “But that’s not good customer service.” Actually, it is because having your customer complete the application gives them an opportunity to really look at what they do and what they want insured. Who knows this better than themselves?

Regardless of how well you think you know your customer, things change. What was true yesterday, may not be true today. Does that mean you can’t help them if they have questions? Of course not. That is exactly what customer service is all about. But the responsibility to provide accurate information belongs to your customer. If the information on the application is not correct and they filled it out, then they are responsible. If the information on the application is not correct and YOU filled it out, then YOU may be responsible especially if you did not have them review the application. It’s as simple as that. So imagine your longtime friend and customer Mary > Richard F. Lund, JD, calls you and is an Assistant Vice tells you she has President of Swiss Re/ a new business. Westport, underwriting insurance agents errors Imagine you and omissions coverage. send her the He has also been an insurance insurance agents E&O claims counsel and has applications. presented numerous Imagine…. E&O loss control seminars nationwide.

This article is intended to be used for general informational purposes only and is not to be relied upon or used for any particular purpose. Swiss Re shall not be held responsible in any way for, and specifically disclaims any liability arising out of or in any way connected to, reliance on or use of any of the information contained or referenced in this article. The information contained or referenced in this article is not intended to constitute and should not be considered legal, accounting or professional advice, nor shall it serve as a substitute for the recipient obtaining such advice. The views expressed in this article do not necessarily represent the views of the Swiss Re Group (“Swiss Re”) and/or its subsidiaries and/or management and/or shareholders. WISCONSIN INDEPENDENT AGENT

AUGUST 2014 | 19

CONTINUING EDUCATION

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$ &

2014 A

U T U M N

E T R E A T

OCTOBER 8-10, 2014 THE WATERS RESORT MINOCQUA, WI REGISTER AT IIAW.COM

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WS E N E H T N I S R E B M ME Company Promotes Two New Directors J.M. Wilson is proud to announce the following Associates have been promoted: Roxanne Barry, Director of Property & Casualty Underwriting and Erin Dey, Director of Sales and Agency Relations. In addition to her role as Property and Casualty Manager at the Michigan office, Roxanne will also lead the professional development of all Property and Casualty underwriters throughout Roxanne Barry the organization and serves as a direct liaison to Property and Casualty Companies for the purposes of maintaining excellence in underwriting. Roxanne holds a Certified Insurance Counselor (CIC) and Certified Insurance Sales Representative (CISR) designation and has been employed with J.M. Wilson for 17 years.

Erin Dey

“We’re honored to be named among the best of the best,” said Dave Gross, who took over as SECURA’s President and CEO on July 1, 2014, after 17 years with the company. “SECURA has been in business since 1900, and our mutuality means we maintain a long-term view and make decisions in the best interests of our policyholders. This acknowledgement speaks to the power of that philosophy.” For more information about SECURA, please visit www.secura. net.

Company Earns Top Awards for Creativity

In addition to visiting agencies and instructing Continuing Education classes, Erin will develop a Sales Training program for underwriters, to enhance their skills and understanding of the importance of sales to the underwriting process. Furthermore, Erin will create a Sales Team who will be responsible for being a resource for independent agents. Erin has been employed with J.M. Wilson for 5 years.

These Directors work closely together to maintain focus on J.M. Wilson’s corporate initiatives with a concentrated effort on sales, underwriting expertise, marketing, and customer service. Their goal is to remain consistent in providing exceptional customer experiences and to continue the professional development of their associates though ongoing training and the use of sales and marketing tools. For more information about J.M. Wilson, please visit www.jmwilson. com.

SECURA Among 2014 Ward’s 50 Top Performers SECURA Insurance was recently recognized in Ward’s 50 top performers for achieving outstanding results in the areas of financial performance and consistency over a five-year period (2009-2013).

22 | AUGUST 2014

Annually, Ward analyzes more than 3,000 property-casualty insurance companies domiciled in the United States and identifies top performers. Each Ward’s 50 company has passed all safety and consistency screens and achieved superior performance over the five years analyzed.

ACUITY announced that its 2013 Annual Report, created in partnership with DuFour Advertising, has earned several industry awards. The Insurance Marketing & Communications Association (IMCA) awarded ACUITY’s project a Best of Show Award in the Annual Reports - Private category. ICMA Showcase Awards recognize the most effective, innovative work from the best minds in insurance marketing and communications, and a Best of Show Award honors the entry receiving the highest score in its category. WISCONSIN INDEPENDENT AGENT

WS E N E H T N I S R E B M ME ACUITY’s 2013 Annual Report also earned:

testament to our operational consistency, stability, and efficiency.”

• A Gold Hermes Creative Award from the Association of Marketing & Communication Professionals (AMCP).

ACUITY’s first inclusion on the Ward’s 50 in 2000 marked the beginning of an uninterrupted period of growth, profitability, and consistency of performance that is unparalleled in the insurer’s nearly 90-year history. Year after year, ACUITY has outperformed the industry, and the company did so again in 2013, growing its revenue over 14 percent while recording a combined ratio of just 92.4. In 2013, ACUITY also surpassed the $1 billion premium and $3 billion in assets marks.

• A Gold ADDY Award in regional competition from the Fox River Ad Club of the American Advertising Federation (AAF). • A Silver Stevie Award from American Business Awards. Each year, ACUITY creates an annual report that is a cut above the rest. ACUITY’s 2013 Annual Report, entitled The Year That Bloomed, is a hardcover, keepsake book that was packaged and shipped with a dozen fresh-cut roses for each recipient. All told, ACUITY shipped 20,000 dozen roses, or nearly a quarter million individual flowers — enough to require an entire month’s harvest from three major growers. During the four-week shipping process, over 1,000 bouquets were sent each day by overnight mail. “ACUITY sets out each year to create an annual report that leaves an impression with readers, and we succeeded again in 2013,” said Ben Salzmann, ACUITY President and CEO. “Our annual report communicates our financial results to our stakeholders and, equally important, it reflects our corporate culture and the fact that we are willing to defy convention.”

Company Named a Top Performer by Ward Group ACUITY has been named to the 2014 Ward’s 50 based on the insurer’s overall performance, putting ACUITY in the top 2 percent of insurers nationwide. This is ACUITY’s 15th consecutive year on the Ward’s 50. To develop its annual list of the 50 top-performing insurance companies, Ward Group analyzes the financial performance of over 3,000 property-casualty insurance companies domiciled in the United States based on objective data and quality measures. Top performers have passed all safety and consistency tests and achieved superior performance over a five-year period. “ACUITY’s continued recognition by Ward Group as a top performer matters to all our stakeholders — our employees, our independent agents, and the individuals, families, and businesses who count on us to protect their financial wellbeing,” said Ben Salzmann, ACUITY President and CEO. “Being part of the Ward’s 50 for 15 straight years is a remarkable WISCONSIN INDEPENDENT AGENT

For more information about ACUITY, please visit www.acuity.com.

SAVE THE DATE! 2014 IIAW AUTUMN RETREAT OCTOBER 8-10 THE WATERS RESORT MINOCQUA, WI DETAILS COMING SOON IIAW.COM AUGUST 2014 | 23

DAVID GROSS NEW PRESIDENT & CEO OF SECURA INSURANCE In July 2014, Dave Gross became the President and CEO of SECURA Insurance, a mutual property and casualty insurer headquartered in Appleton. Prior to taking on overall leadership of the company, his career spanned more than 30 years in the insurance industry in executive leadership roles where he contributed strategically, and led sales and underwriting operations.

Dave Gross

Since joining the company in 1997, Dave helped shape the people-focused culture, fostering exceptional service to agents and policyholders. He successfully guided new product development, state expansion, and agency partnerships, ultimately helping profitably grow it to the nearly $500 million in sales (direct written premium) that the company will be by the end of 2014. Dave started at SECURA as Vice President-Sales & Marketing and was promoted to Senior

24 | AUGUST 2014

Vice President-Underwriting Operations in 2001. He was named President and COO and successor to the CEO in August 2013. Prior to SECURA, Dave worked for stock companies before finding his place at a mutual company with values that align well with his own. He held several management positions at USF&G and was a marketing representative with CNA. He also served as an independent agent with Woller-Anger & Company, giving him special insights into the agency side of the business. Dave earned a bachelor’s degree in marketing from the University of Wisconsin– Whitewater. Active in the community, he currently serves on the board of directors and the fund development committee for Big Brothers Big Sisters. Dave also was a board member several years for Junior Achievement – Fox Cities and the YMCA Fox Cities, as well as co-chair for the Y Strong Kids Annual Giving Campaign.

WISCONSIN INDEPENDENT AGENT

the We look for the best independent agents and build relationships that last the duration. We are committed to the independent agency system as the only means to deliver our products. Because of that, we work hand-inhand to help our agencies grow profitably.

Our agents set us apart. For information about becoming a Partners Mutual Insurance Agent please contact Brian Martin at 262.432.3439; Martin.Brian@PartnersMutual.com or Mike Ottman at 262.432.3418; Ottman.Michael@PartnersMutual.com.

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AUGUST 2014 | 25

FOOD FOR THOUGHT

WIZARD OF OCONOMOWOC

ANOTHER PROUD AUSTRALIAN MOMENT

The first publicized showing of the final, edited film was at the Strand Theatre in Oconomowoc, Wisconsin on August 12, 1939. No one is sure exactly why a small town in the Midwest received that honor. It showed the next day in Sheboygan, Appleton Oxford dictionary editors (yes, it’s a word) said selfie was first used in September 2002 to and Rhinelander, according to describe the photograph in a forum posting on the website of ABC, the public broadcaster. Hopey local newspapers. The official posted: “Um, drunk at a mates 21st, I tripped ofer [sic] and landed lip first (with front teeth premiere was at Grauman’s Chinese Theatre in Hollywood on August 15, attended coming a very close second) on a set of steps. I had a hole about 1cm long right through my by most of the cast and crew and a number of Hollywood celebrities. Source: thewizardofoz.info bottom lip. And sorry about the focus, it was a selfie.” Source: The Telegraph “Selfies” - a self-portrait photograph - are commonplace today and we have an Australian to credit or blame for the invention. The Aussie who is the first person known to have used the term selfie was a university student who called himself “Hopey” and posted a photograph of himself with a cut lip. After celebrating a little too much for his 21st birthday, Hopey fell on his face. He was seeking advice about stitches in his lips.

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