February 2012 IIAW Magazine by Independent Insurance Agents of Wisconsin

wisconsin

independent agent FEBRUARY 2012

T H A N K YO U FO R YO U R S U P P O RT !

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independent agent Open Door Policy Insurance Regulation Belongs On The State Level . . . . . . . . . 4 Commentary From Counsel Reducing Personnel Costs In The Private Sector . . . . . . . . . . . 9

It’s important to prot ect the things your customers value. So it makes sense to in sure them with a compa ny that provides wha t they need. West Bend’s Home and Highway® polic y offers !"#$%&'"!$(%)!#*!&)+$ ,&!"$-.+/$0#+#1!23 $&+*456&+'7 3## 8)9#%.'#$:)%$;52 !$.0)5!$#9#%/!"&+'$ !"#/$),+7$ ")-#3$*)+6)3$)%$%#+ !.4$5+&!3$.2$,#44$.2$*. %23$ !%5*<3$0).!3$-)!)%*/ *4#3$2+),-)0&4#3$;#, #4 %/3$ even umbrella liabi lity coverage ... all on one policy with one prem ium. 3## Guaranteed repl acement cost with no cap 2)$&:$!"#$")-#$&2$6#2 !%)/#6$0/$.$1%#$)%$. $ !)%+.6)3$,#=44$(./$, ".!$&!$*)2!2$!)$%#(4.* #$&!3$ even if it’s more than the policy’s limits. 3## Automatic covera ge for some of the costs !"#/$-./$&+*5%3$&+*4 56&+'$-)2!$9#!#%&+.% &.+$ #>(#+2#23$&:$.$0#4)9 #6$:.-&4/$(#!$&2$!"#$ victim of a covered accident. 3## Five percent of th e annual premium back – in cash – if they don’t have a claim all year.

Technically Speaking When Automatic Is Problematic . . . . . . . . . . . . . . . . . . . . . . . . 10 Member Profile Anthem: Driving Innovation To Help People . . . . . . . . . . . . . . 12 Marketing Minute Why Elevator Speeches Defeat Sales . . . . . . . . . . . . . . . . . . . . 20 New From ACT Agency Opportunities In Changing Times . . . . . . . . . . . . . . . . 22 Government Affairs Legislature Considering Felon Employment Bill . . . . . . . . . . . 25 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 - Robert C. Jartz 2011-2012 Executive Committee President............................................................Mike Hierl P.O. Box 949, Fond du Lac, WI 54936-0949 President-elect .............................................. Michael Froh P.O. Box 1320, Sheboygan, WI 53082-1320 Secretary-Treasurer ......................................David Dunker P.O. Box 443, Brookfield, WI 53008-0443 Chairwoman of the Board ........................... Linda Steiner 555 Main St. #320, Racine, WI 53403 State National Director ..................................Skip Hansen 100 North Corporate Drive #100, Brookfield, WI 53045 2011-2012 Board of Directors Chris Costakis 251 Progress Way #300, Waunakee, WI 53597-2520

West Bend’s Home an

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Because if it’s wor th insuring, it’s wor th insuring well.

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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 Jeff Rasmussen 525 Junction Road, Madison, WI 53717

P.O. Box 595, Beaver Dam, WI 53916 2011-2012 Committee Chairs

Eric Schwartz, Editor On The Cover… In this issue we take some time to show our appreciation. The Exclusive Company Sponsors on the cover support our biggest events (like the convention in May...register now at iiaw.com!) and the independent insurance agency system. On the back cover are 72 more reasons why this Association is successful. The supporting members listed there are vital to the IIA of Wisconsin. We’re not done yet. On page 14, eight new members have joined our ranks and we’d like to welcome them. Finally, on page 16, we’d like to acknowledge the national and state-level PAC donors. Those contributions help our industry remain strong. To all of the companies and agencies that give their time and energy we can’t say it enough – Thank You.

> OUR ADVERTISERS AAA ................................................................ 27 ACUITY ............................................................ 31

Agency Operations................................. Sandra Hardrath P.O. Box 1030, Manitowoc, WI 54221-1030

Arthur J. Gallagher.......................................... 19

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

Axley Brynelson ............................................. 28

Employee Benefits............................................. Tim Bever 555 Main St. #320, Racine, WI 53403 Finance & Compensation ............................ Dave Dunker P.O. Box 443, Brookfield, WI 53008-0443 Government Affairs .....................................Tom Helbach P.O. Box 40, Mosinee, WI 54455-0040

Badger Mutual ................................................ 30 Big “I” Professional Liability.......................... 29

Industry Relations ..............................................Ted Haase P.O Box 6, Seymour, WI 54165

Burns & Wilcox .................................................11

Membership Development ................................. Jeff Thiel P.O. Box 1610, Waukesha, WI 53187-1610

The IMT Group ................................................ 23

Smaller Agencies .................................... Michael Walston P.O. Box 236, Kewaunee, WI 54216-0236

Insurance Associates of America ................... 28

Technical ......................................................Andy Burkart P.O. Box 1320, Sheboygan, WI 53081-1320

Partners Mutual ............................................. 30

Young Agents .......................................... Derek Wickhem P.O. Box 1500, Janesville, WI 53547-1500

Frederick Thomas 330 East Kilbourn Avenue, Milwaukee, WI 53202

Pekin .............................................................. 24 SFM – The Work Comp Experts ......................... 8

Cap Wallrich P.O. Box 90, Shawano, WI 54166-0090

West Bend ........................................................ 2

Matthew Weimer 100 North Corporate Drive #100, Brookfield, WI 53045

Wilson Mutual Insurance Co............................ 27

Donald Williams

FEBRUARY 2012

WISCONSIN INDEPENDENT AGENT

OPEN DOOR POLICY

INSURANCE REGULATION BELONGS ON THE STATE LEVEL In Oct. 2011, the Department of Treasury requested public input on how to modernize and improve the insurance regulation system in the United States. The Dodd-Frank Wall Street Reform and Consumer Protection Act created the Federal Insurance Office (FIO) and required them to conduct the study. Thankfully, the DoddFrank Act stopped short of creating a central regulatory authority and stripping states of that important right. The Independent Insurance Agents and Brokers of America (IIABA) strongly encouraged states to submit comments. The IIABA submitted comments to the FIO supporting state regulation. Our members and the Association have a considerable interest in the work being conducted by the FIO. As a result, I took the opportunity to weigh in on the important of maintaining state regulation of our industry. It is widely expected that next year’s FIO study will be a catalyst for both the House and Senate to conduct an indepth examination of ways to reform and modernize insurance regulation. What follows is an excerpt of my comments to the Treasury Department on behalf of the Independent Insurance Agents of Wisconsin (IIAW): Since the inception of our Association in 1899, the IIAW has strongly supported state regulation of the insurance industry. Created in 1871 by the Wisconsin State Legislature, the Office of Commissioner of Insurance (OCI) was vested with broad powers to ensure that the insurance industry responsibly and adequately met the insurance needs of Wisconsin citizens. OCI possess decades of experience in resolving complaints and disputes, handling countless investigations and audits, and has the ability to understand concerns and particular issues exclusive to the citizens of our state. In addition, they have a storied history working with consumer advocate groups, agents, companies and most importantly, consumers. Unlike the banking industry, Wisconsin’s insurance department conducts and handles business differently than other states due to the unique and vastly different marketplace that exists here. It would be nearly impossible for a federal agency to replicate the expertise, usefulness, knowledge and responsiveness that state regulators provide to interested parties. This localized, state-specific

representation and regulation provides Wisconsin citizens with direct and expedited access to their regulators and their staff with exceptional oversight by our state legislators and governor. Insurance regulation at the state level has an excellent track record, especially when compared to federal financial services regulators. During the recent financial crisis and as financial companies in other sectors were collapsing or obtaining government bailouts, state insurance regulators ensured that insurers were solvent, that claims were paid, and that consumers were protected from abusive practices.

It is important for independent agents to have a strong voice in the halls of Congress and at the state level. This authority and responsibility prescribed to OCI allows the department to closely monitor insurance companies’ [such as Ambac Assurance Corp. (AAC)] capital position and financial health. Certain events created a potential financial hazard to Ambac policyholders, creditors and the public. As a result, OCI decided to intervene.

AMBAC EXAMPLE In March 2010, OCI filed a petition to take control of and rehabilitate the segregated account of AAC, worth about $35 billion. While Ambac is a large New York bond insurer, the case has played out in Wisconsin, where Ambac was founded and incorporated 40 years ago. An offspring of what is now MGIC Investment Corp., the Milwaukee-based mortgage insurer, Ambac, was the nation’s first company to insure municipal bonds and essentially founded the financial guaranty industry.

WISCONSIN INDEPENDENT AGENT

In order to provide a durable solution for all policyholders, OCI filed the petition for rehabilitation with the Honorable William D. Johnston of the Lafayette County Circuit Court in Wisconsin. Ambac is domiciled in Wisconsin and their parent company, Ambac Financial Group, Inc., is headquartered in New York. Ambac Financial is not regulated in Wisconsin and wasn’t directly included in the OCI’s plan for rehabilitation. The Wisconsin Insurance Commissioner at the time, Sean Dilweg, acted as the rehabilitator and received court approval to impose a temporary moratorium on further claim payments to segregated account policyholders pending approval of a plan of rehabilitation. These actions taken by Commissioner Dilweg were intended to protect policyholders, including investors in thousands of state and local municipal bond issues and other public finance securities, who rely on AAC’s guaranty. The OCI had been closely monitoring AAC’s capital position and financial health since the subprime mortgage crisis began resonating through the economy. The economic downturn, combined with AAC’s substantial investment in, and insurance of, mortgage-related exposures damaged AAC’s business and financial position and reduced its claims-paying resources. These events created a potential financial hazard to policyholders, creditors and the public. There also had been a steady, significant increase in AAC’s projected loss impairments at the time. In Oct. 2010, the Wisconsin OCI filed a Plan of Rehabilitation for AAC’s segregated account in Dane County (Wisconsin) Circuit Court, with the intent to provide clarity and to ensure that policyholders would be compensated fairly for claims. > Matt Banaszynski is the Dilweg took this Executive Vice President tailored approach of the Independent for the benefit of Insurance Agents of policyholders and Wisconsin. Contact him the general public. at matt@iiaw.com.

FEBRUARY 2012

Commissioner Dilweg, at the time, said that “the Plan of Rehabilitation (“the Plan”) maximizes claims-paying resources, limits damage to policyholders and provides a clear framework to address claims in an orderly and reasonable manner.” On Jan. 25, 2011, OCI obtained confirmation of the Plan in Dane County Circuit Court. Once the Plan took effect, holders of permitted policy claims could receive 25 percent of their permitted claims in cash and 75 percent in surplus notes bearing annual interest of 5.1 percent, with a scheduled maturity on June 7, 2020. The new insurance commissioner, Ted Nickel, said the “decision to adopt a 25/75 split was guided by the need to preserve sufficient cash to pay all valid policy claims, including those that exist today and those that may arise in the future.” The cash/note ratio may be adjusted in conjunction with a yearly assessment of liabilities and claims-paying resources. Substantially, all claims-paying resources of AAC were made available to pay claims of policyholders. The Ambac situation clearly highlights how state regulation has performed well both historically and in recent years to ensure policyholders and consumers are protected, but there are ways in which it could be improved to benefit agents and consumers alike.

effectively create one-stop producer licensing for non-resident licenses while leaving untouched resident licensing requirements. Agents could remain licensed in the traditional manner or could apply for NARAB membership (governed by a board composed of state insurance regulators and marketplace representatives) and take advantage of onestop nonresident licensing. This bipartisan legislation would build upon regulatory experience at the state level, promote efficiency and preserve consumer protections. NARAB II has previously passed the full House in both the 110th and 111th Congresses by voice vote.

SUPPORT OF STATE REGULATION There are countless examples, such as Ambac, in which the state regulatory system in place

INDEPENDENT INSURANCE AGENTS AND BROKERS Congress and the FIO can play a helpful role by enacting targeted measures such as the National Association of Registered Agents and Brokers Reform Act (H.R. 1112). State law requires insurance agents and brokers to be licensed and comply with strict standards. For agents conducting business in multiple states, obtaining and maintaining the necessary licenses is a costly and time consuming effort that obstructs an agent and/or brokers ability to assist consumers. NARAB II would streamline non-resident insurance agent and broker licensing while preserving state insurance regulation. NARAB II provides a mechanism for establishing true nonresident licensing reciprocity for our Association’s members who operate on a multi-state basis. For those agents operating in multiple states and those who wish to expand their operations, NARAB II would

FEBRUARY 2012

has aided in the industry’s success while ensuring consumers are protected. We strongly oppose establishing a federal insurance regulatory system and implore you to continue with targeted reforms to maintain our state’s regulatory authority. In doing so, small business owners, such as our members, will be able to have a local avenue to pursue support and provide assistance in helping consumers. State insurance regulation has a storied, successful history and a track record that far exceeds federal financial regulation in other sectors. Opinion leaders at both the federal and state level should concentrate on addressing existing problems rather than search for a solution to which there is no problem.

WISCONSIN INDEPENDENT AGENT

Wisconsin joined 16 other states in submitting comments to the Department of Treasury and FIO. I am cautiously optimistic that the FIO will continue to allow states to regulate the insurance industry while enacting targeted reforms. Recently, Michael McRaith, director of the FIO, reiterated that the FIO is not a regulatory authority; it’s our job to make sure it never is. As the FIO sorts through all of the comments submitted by agents, companies and advocates to prepare a report on insurance modernization, I am reminded of the importance of a strong national and state Association. Our Association is only as strong as our members. A.M. Best recently interviewed me about the importance of agents having a voice in the halls of Congress and at the state level. Government regulation and legislation can have a sweeping impact on our members. The insurance industry is one of the few industries constantly under pressure from regulators and legislators. An independent agent’s voice and direct contact with their customers makes them a powerful friend or foe if they know how to effectively lobby and educate their elected officials. Having a strong voice can mean the difference between going on the offensive or defensive. The IIAW will be holding its first annual Day on the Hill in Madison on March 7. I strongly encourage all of our members to attend. Visit www.iiaw.com to register today or if you can’t make it, consider making a contribution to Insuring Wisconsin PAC. You can do that on our Website as well. Whether it’s the Patient Protection and Affordable Care Act, agent licensing reform, or the exploration of a federal regulatory authority, all of these, for better or worse, have a significant impact on the states. That’s why it’s important for our Association and its members to get more involved in the government affairs process. Attending the Day on the Hill or contributing to Insuring Wisconsin PAC are as important as submitting comments to the Department of Treasury. The FIO appears harmless now but it could manifest itself into something like the SEC or even worse, the IRS. We need our members to do their part and get more involved in the government affairs process before it’s too late. I look forward to seeing you at the Day on the Hill.

AGENCY E&O SURVEY: WHY AGENTS BUY COVERAGE Agency owners have a lot to protect. Of course, first and foremost they must protect their clients. But they must also protect their book of business. They must protect their relationships. They must protect their reputation in the community they serve. One way agency owners protect themselves and their business is by purchasing agency errors and omissions coverage. Most independent insurance agencies and brokerages purchase E&O coverage today, but why do they buy it? What are they actually protecting with E&O coverage?

lawsuits can be costly for agency owners. “And there are an awful lot of them these days that need to be defended and E&O will cover that.” Most agencies buy E&O coverage to avoid paying out those large losses from their own pocket, says Chris Burand, founder and owner of Burand & Associates LLC, based in Pueblo, Colo.

The vast majority of agency owners (86.5 percent) say they buy agency E&O coverage to protect the assets of their agency, according to Insurance Journal’s 2011 Agency E&O Survey.

“In most cases, agencies don’t have enough cash on hand to pay those losses,” he said. “They would have to sell their book of business, or some portion of their book of business, or even their entire agency, in order to pay the claim if they didn’t have E&O insurance,” Burand said.

Protecting an agency’s assets — financial and possibly even reputational assets — is why most agency owners choose to buy E&O,

It’s not the technology that’s

Diamond says the asset agency owners want to protect the most is the agency’s book of business.

increasing the E&O exposure; it’s the E&O carrier’s reaction to the technology that’s increasing the exposure as more carriers require encryption as part of E&O policies.

the experts agree. But these same experts warn that their E&O policy may not cover everything agents think it covers. “If an agent makes a mistake in anything that they do on behalf of a client, and the insurance company ends up not covering it, they’re responsible for it,” says Al Diamond, president of Agency Consulting Group in Cherry Hill, N.J. “They’re basically acting as the primary insurer for their clients if the insurance companies don’t cover the losses that occur > Andrea Ortega-Wells is within their editor in chief of Insurance agency.” Journal magazine. This article was first published by Insurance Journal in November 2011.

Diamond says even frivolous

“The revenue stream created by the book of business is their greatest asset,” he says. Diamond agrees that most agencies are cash poor businesses, with little in the way of funds to pay out claims on hand. “The bulk of the value of an agency is in this book of the business. … 90 percent to 95 percent of the value of an agency is in its book of business.”

But while good E&O coverage may be important to protect an agency’s financial assets, the coverage does nothing to protect an agency’s reputation, according to Burand. “E&O insurance does not protect their reputation and that’s a big deal,” Burand said. One defensive tactic to guard against reputation damage could be an E&O audit. “That’s really where E&O audits come into play,” Burand says. “That’s one of the key reasons agencies should pay for E&O audits; because an audit does more to protect their reputation by helping them with risk management than an E&O policy does. … It’s their only protection for reputational damage.”

WISCONSIN INDEPENDENT AGENT

ALTRUISTIC E&O BUYER A small portion of the Agency E&O Survey respondents, 13.3 percent, reported that they buy E&O mainly because their carrier partners require it. This is not the best reason agencies should buy coverage, says Tony Messec, president of Western E&O Brokers in Albuquerque, N.M., an independent insurance agency that specializes in insurance agents’ and brokers’ E&O coverage. Messec agrees that agency E&O coverage is important when it comes to protecting agency assets, but he says asset protection should only be 50 percent of the reason for buying E&O coverage. “They should not be buying it because their carriers require them by contract to buy it,” Messec says. Agents should buy E&O because it protects their agencies and their clients, he says. Buying E&O to protect clients should be the other 50 percent, Messec adds. Messec believes there should be an altruistic motivation to buying E&O coverage as well. “If the agency really and truly has erred and one of their clients is damaged doesn’t that agent want to have some means of making the client whole to the point that the agency should have made them whole if only they had done their job properly? That’s what E&O coverage does,” Messec says. “It repairs that damage to the client as if the agency had done the job correctly to start with, which to me is an equally valid reason for buying E&O coverage,” he says. “So you could buy for selfish reasons, you could buy for altruistic reasons, or you could buy for both. I prefer the both.”

NEWER EXPOSURES If protecting the agency and its clients are not reason enough to purchase E&O, the rising number of E&O exposures should serve as motivation to invest in appropriate coverage and limits, experts say.

FEBRUARY 2012

“Agents don’t realize what exposure they have right through their Web site and through the social media they use,” Diamond says. “They have to be extremely careful. Once you hit that ‘enter’ button, or once you post something on the Web site, if it offends anyone, you can get sued for it. … Whether you’re joking or not, if you’re critical about them, you face certain lawsuits, and that risks your assets tremendously.”

impossible to be an expert in all of them; and it’s very difficult to be competent in all of them.” Burand cites a traditional business owner policy (BOP) as an example where coverage changes and differences could potentially be an E&O issue. “There’s a lot of difference in BOPs,” Burand says. “Sometimes they’re real small and

But Burand says it’s not the technology that’s increasing the E&O exposure; it’s the E&O carrier’s reaction to the technology that’s increasing the exposure as more carriers require encryption as part of E&O policies.

But Diamond says the greatest E&O exposure facing agents today might just be renewals. “Don’t let any insurance renewals be renewed as is without having someone competent review them,” Diamond advises. “A small insurance policy, one that doesn’t pay much premium, can still be sued for millions of dollars.” The good news: 84.1 percent of IJ’s Agency E&O Survey respondents reported that their agency looks to update the exposures of clients at each renewal. The same number of respondents said they have also enhanced the agency’s effort to education customers on insurance issues in the past three years.

Market

“Agents haven’t read those memos. Agents have not read those clauses,” Burand says. “Those are just phenomenally increasing exposure to agents and most agents have not adopted adequately for it.”

Even with the rising number of exposures facing agency E&O today, the market for coverage continues to improve and enhance coverages to better protect agency assets, the experts say.

Messec doesn’t see technology as an E&O threat as much as he sees coverage changes as a threat to agents today.

“Over the 25 plus years that I’ve been doing E&O, coverage has improved in both pricing and availability,” Messec says. “Today’s agency has a much better chance of having solid gold coverage at an affordable price than an agency did 25 years ago.”

“I’m not quite as concerned with the new method of delivery,” Messec says. “Generally speaking it makes no difference to an insurance agent’s E&O policy whether the policy was sold online or face-to-face in the retail agency’s office.”

Messec says only agencies with underwriting issues see undesirable terms, conditions and higher prices for coverage. But for the most part, it’s a soft market, he adds.

Not that there aren’t some new exposures in the technology space, Messec adds. “But those don’t concern me nearly as much as the way in which coverage is changing and expanding,” he says.

sometimes they’re significant. It depends on the client. It depends on the carrier. But there are a lot of differences.”

“The world of insurance is creating new products, improved products, at a much more rapid rate than it did decades ago and agents have to stay up on all these things to know what their clients need, what’s available for them. And that I believe has increased the exposure to E&O, quite significantly,” Messec says.

Burand says it’s an area where he sees that most agencies fail to manage E&O exposures. “If you look at just the vast number of BOPs that exist in any agency, then just by sheer numbers, the fact that they’re moving, that they have that many, there’s a good chance of an uncovered exposure.”

It’s not only the newer coverages but also the new exclusions that are creating additional E&O challenges for agencies.

Dogs are another area of coverage concern. In 2010, the insurance industry paid out more than $410 million in dog bite claims, according to the Insurance Information Institute. In today’s world of mixed breeding in dogs, many insureds don’t even know the combination of breeds in a household pet.

“It’s not just enhancements; it’s changes,” Messec says. “There is just an immense amount that must be known and it is

FEBRUARY 2012

WISCONSIN INDEPENDENT AGENT

“It’s always a competitive market,” Messec says. “It doesn’t make a difference whether or not it’s a soft market or hard market it’s always competitive.” The majority of respondents (63.0 percent) to IJ’s Agency E&O Survey reported satisfaction with terms, conditions and limits in their E&O coverage. However, some 74.9 percent reported that their agency had not increased the E&O limit in the past three years. And even though many E&O claims are closed out without payment, one claim could make or break an agency, Diamond says. Having the right E&O limits is critical. “It’s like life insurance. You may have only one claim, but it’s a doozey. You don’t want to go into it without being protected,” Diamond says.

COMMENTARY FROM COUNSEL

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REDUCING PERSONNEL COSTS TREAD IN THE PRIVATE SECTOR CAREFULLY As far as the law goes, the new year is usually a quiet time. This year is no exception as I write this column, but of course, by the time it is published there may be recall campaigns in progress and the Capitol will be buzzing with a new session underway. The new year — and a presidential election year in particular — also turns the focus for businesses to the economy, as they look back at financial results and then look forward to find ways to improve them. A core focus when it comes to managing businesses large and small

An important early step is to identify the decision makers; the process varies bases on size and type of organization. Various levels of management may need to be involved and, of course, human resource professionals should play a role. Another early step is the identification of target staffing levels, which focuses on the business needs of the company and not on individuals. This can help the company defend against claims of discrimination or other unlawful activity down the road, if necessary. Finally, companies should consider all the alternatives, including, among other things, limits on overtime, furloughs, voluntary early retirement programs, temporary reductions in pay, temporary shutdowns and involuntary reductions-in-force. This column surveys several issues related to reductions in hours of work, aka furloughs, as a means of managing personnel costs.

Furloughs In The Private Sector: Exempt Versus Non-Exempt Employees

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Employers considering furloughs must recognize the difference between how nonexempt (generally hourly) employees may be furloughed and how exempt (generally salaried) employees may be furloughed. Under federal and Wisconsin wage and hour laws, nonin a tight economy is controlling personnel costs, so I turned to my firm’s labor and employment team to query them for hot issues. There was consensus on at least one point: employers’ who take careful, managed steps to control personnel costs can remain profitable, even in a down economy. Economic downturns give rise to numerous personnel issues that often involve reduced work strategies, reductions-in-force, furloughs, wage reductions or freezes, and severance and benefit obligations. Each of these issues implicates various employment laws — at both the state and federal level — that can drive decision-making processes.

A CORE FOCUS WHEN IT COMES TO MANAGING BUSINESSES LARGE AND SMALL IN A TIGHT ECONOMY IS CONTROLLING PERSONNEL COSTS.

exempt employees may be furloughed for single days, or even hours, within any given workweek. For example, a non-exempt employee who normally works 40 hours could be limited to working a 32-hour week for a given furlough period, thus resulting in saved labor costs for the employer. Exempt employees, however, must be treated with care. To qualify as exempt under Wisconsin and federal wage and hour law, employees must be compensated on a salary basis and meet certain duty requirements. Employees are paid a “salary” for purposes of Wisconsin and federal law if they receive the same pay each week in which work is performed regardless of the number of hours worked that particular week. As a result of this general rule regarding the definition of an exempt employee, a company may not force exempt employees to take, for example, one or two unpaid days of leave in a workweek and prorate their salaries accordingly without jeopardizing the salary basis portion of their exempt status. If the exempt status is lost as a result of such a practice, the employees could inadvertently be converted to non-exempt hourly employees eligible for overtime compensation. Within these legal requirements, some budget-cutting, time-off options for exempt employees include: !"Requiring exempt employees to use paid vacation (or other paid time off) on days when the exempt employees are required not to work, provided that, in any given workweek, the employees receive their full salary for that workweek. In other words, without violating an employee’s > Josh Johanningmeier is the IIAW’s General exempt status, an Counsel. Call the Legal CONTINUED ON NEXT PAGE

Services Hotline at (877) 236-1669.

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FEBRUARY 2012

WISCONSIN INDEPENDENT AGENT

TECHNICALLY SPEAKING

WHEN AUTOMATIC IS PROBLEMATIC: ADDITIONAL INSUREDS Have you seen a continued increase in requests for additional insureds to be added to your insureds’ policies? Have you decided that putting on an automatic additional insured endorsement will solve this problem? Two words of advice…BE CAREFUL.

The endorsement may cause problems (and opportunities) for the following reasons:

1. The contract must be in writing. Not all agreements look that way.

A common endorsement agents add to a commercial general liability (CGL) is the ISO CG 20 33 additional insured – owners, lessees or contractors – automatic status when required in a construction agreement with you. This endorsement does one thing: it amends your insured’s policy automatically to include, as an additional insured, a person or organization for whom your insured is performing ongoing operations and your insured and that additional insured have agreed in writing in a contract or agreement to add that person or organization as an additional insured to your policy.

2. It does not cover completed operations. This is a BIG GAP! Most contracts will require that your insured provide completed operations coverage for the additional insured and the ISO CG 20 33 does not do this. You would have to add the ISO CG 20 37 additional insured – owners, lessees or contractors – completed operations form each time to provide completed operations coverage. The above gap is a significant one. It is also a great marketing opportunity. If you saw on a prospect’s policy the CG 20 33, but did

not see any CG 20 37 endorsements on the policy, they probably have a gap and you have an opportunity. ISO does not have any automatic additional insured endorsements that cover for completed operations so be careful because automatic can be very problematic.

> Dave Pauly is the president and CEO of Capitol Insurance Cos. In Middleton, WI. Find them on the Web at www.capitol.net.

REDUCING PERSONNEL COSTS IN THE PRIVATE SECTOR: TREAD CAREFULLY CONTINUED FROM PREVIOUS PAGE

employer could require an exempt employee to work Monday through Thursday and take Friday off in a given workweek, if the employer required the employee to use paid vacation pay for the Friday off in order to ensure that the employee is paid his or her full salary for the entire workweek. !"Giving exempt employees the option (at the employees’ sole discretion) to take unpaid leave in full-day increments. This form of leave does not jeopardize the salary basis test because it is taken at the sole election of the employee. In order to preserve exempt status, however, such voluntary unpaid personal days must be taken in full-day increments, and there cannot be a suggestion that the employer mandated the leave. !"Requiring exempt employees to take weeklong unpaid furloughs (i.e., Sunday through Saturday). Week-long unpaid furloughs do not jeopardize the salary basis test because the employees are not required to work any hours during the workweek in which they are not receiving a salary. !"Instituting a prospective reduction in

exempt employees’ salaries (without reducing the workweek). !"In some circumstances, a company may be able, due to a “business slowdown,” to reduce exempt employees’ salaries in conjunction with a reduction in hours. This adjustment may not be made on an ad hoc basis, however. These arrangements are complicated and risky, and the Department of Labor has cautioned that short-term business needs will not justify a reduced workweek/salary arrangement. Businesses should always consult with counsel before implementing any of these types of modifications to ensure that the plan fits their actual circumstances and the law.

Furloughs And Unemployment Benefits Businesses must also be mindful of how furloughs affect their employees’ eligibility for unemployment insurance. Wisconsin unemployment insurance law provides that an employee who is working (or is paid the equivalent of) 35 or more hours is not eligible for unemployment insurance benefits, subject to a few conditions. Employers reducing

WISCONSIN INDEPENDENT AGENT

hours must be cognizant of how their unemployment insurance account may be impacted — and run the cost-benefit analysis of implementing such reduced hours.

Larger Employers And Mass Layoffs In addition, businesses reducing personnel hours must be cognizant of how long the reduced hours are in effect so as not to trigger the Worker Adjustment and Retraining Notification Act (WARN) and state mass layoff laws. Under WARN and its Wisconsin counterpart, the Wisconsin Business Closing Law (WBCL), Wis. Stat. § 109.07, employees may be deemed to suffer an “employment loss” based on a reduction in hours over a period of time (varying between state and federal law). Thus, it is possible for a business to inadvertently trigger obligations under these laws if care is not taken during periods of reduced hours. A lot to digest? Sure, but these are important considerations for businesses of all sizes in the private sector. If you are interested in ongoing updates on issues like these, I encourage you to follow the law blog, All in a Day’s Work® at www.godfreykahnlawblogs.com.

FEBRUARY 2012

MEMBER PROFILE

Anthem Blue Cross and Blue Shield:

Larry Schreiber has been president of Anthem Blue Cross and Blue Shield in Wisconsin since Aug. 3, 2009.

Driving Innovation To Help Patients By Eric Schwartz

When put to the test for positive pursuits, human beings can be creative, clever and resourceful.

The Apollo 11 on-board computer, the one that powered the spacecraft to the moon in 1969, had 2 kilobytes (K) of memory and 32K of storage. As a modern reference, a typical, twopage Word document today is about 50K. It’s not exactly apples-toapples, but the Apollo 11 computer could not save that Word file. However, at the time, NASA’s computer was a scientific marvel ahead of its time. That technology managed to carry the astronauts to the Moon and back to Earth. Now flash forward more than 40 years. Technology has advanced light years and our phones are now powerful computers. We take it for granted as we text dinner plans or play Angry Birds. But today’s cutting edge computer technology is still being harnessed for incredible ideas. Anthem Blue Cross and

Watson can read and understand 200,000,000 pieces of text in less than three seconds. 12

application of this incredible program. “Watson is to medicine as Google is to the Internet,” said Larry Schreiber, president of Anthem Blue Cross and Blue Shield in Wisconsin. “It can read and understand 200,000,000 pieces of text (about one million books) in less than three seconds.” Anthem Blue Cross and Blue Shield’s Wisconsin headquarters in Pewaukee.

Blue Shield, a subsidiary of WellPoint Inc., is one of the nation’s largest health insurers with enterprises in 14 states, including Wisconsin. One-in-three Americans carries a Blue Cross and Blue Shield insurance card. In Sept. 2011, Anthem partnered with International Business Machines Corp. — IBM — to purchase a version of IBM’s Watson technology. People may remember Watson from the game show Jeopardy! Watson handily defeated two of the show’s greatest champions, Ken Jennings and Brad Rutter, and won more than $77,000 for charity. Watson is named after IBM’s founder, Thomas J. Watson. Anthem’s use of the supercomputer goes well beyond games. Anthem is programming Watson with a massive library of information to help doctors and other health providers diagnose and then effectively treat their patients. It is the first commercial

WISCONSIN INDEPENDENT AGENT

One million books in three seconds is difficult to get the brain around but the practical use of Watson is not; it will improve the delivery of quality health care. In short, it will help people. Watson is like the most brilliant, fastest diagnostician that never gets tired. “This technology will allow doctors to be more efficient,” said Scott Larrivee, Anthem’s Public Relations Director. “This is a tremendous tool for providers to have at their disposal.” Anthem and others in the health care industry know that it’s critical to have this type of technology assisting with treatment plans as more and more physicians, hospitals and other providers use electronic/digital means at work. Watson has something else going for it; it can learn. Artificial intelligence is here and the future is now. “After it’s initial programming, Watson will not have to be programmed,” Schreiber said.

FEBRUARY 2012

Anthem partnered with IBM to harness the power of the supercomputer Watson. Anthem is programming Watson with a massive library of information to help doctors and other health providers diagnose and then effectively treat their patients.

“It will understand and come up with the best possible answers.” Schreiber said Anthem plans to implement Watson in early 2012 by working with a group of select oncologists to find the best treatment protocols for patients. This pilot program is an exciting venture that could do

for the health care industry what the Apollo program did for space exploration. “Employing technology like Watson fits into our mission of serving our customers,” said Schreiber. “We drive innovation by trying to think outside of the box.”

Anthem Blue Cross and Blue Shield of Wisconsin, headquartered at N17 W24340 Riverwood Drive in Pewaukee, is an exclusive company sponsor of the IIA of Wisconsin. There are also Anthem locations in Eau Claire, Fond du Lac, Madison, Milwaukee, Platteville and Waukesha. Find them on the Web at www.anthem.com.

HISTORY OF ANTHEM BLUE CROSS AND BLUE SHIELD IN WISCONSIN 1940 Six Milwaukee hospitals formed the Associated Hospital Services – a prepayment insurance plan that provided people with hospital coverage. This became known as Blue Cross of Wisconsin.

1943 The Medical Society of Milwaukee County formed Surgical Care Blue Shield – a prepayment plan that provided physician coverage.

1966 The federal government created the Medicare program. Blue Shield won the contract to process Medicare Part A claims.

2000 The Wisconsin United for Health Foundation was created in conjunction with the conversion of Blue Cross & Blue Shield United of Wisconsin from a service insurance corporation to a stockholder owned health insurance company. The Foundation’s charge is to contribute the proceeds from the sale of those shares over the next five years to the University of Wisconsin Medical School and the Medical College of Wisconsin to help WISCONSIN FEBRUARY 2010 fund public heath initiatives in the state of Wisconsin.

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1971 Seventeen Milwaukee area doctors formed a “prepaid group practice” called Compcare Health Plan, or Compcare. Compcare is Wisconsin’s oldest and most experienced Health Maintenance Organization.

1980 The administrative staff of Surgical Care Blue Shield and Blue Cross of Wisconsin merged and became a not-for-profit organization known as Blue Cross & Blue Shield United of Wisconsin.

2001 2003 Blue Cross & Blue WellPoint Health Networks Shield United of acquires Cobalt Corp. and its Wisconsin converted to family of companies, including a stockholder owned Blue Cross and Blue Shield company and combined United of Wisconsin. with United Wisconsin Services, Inc., to form INDEPENDENT AGENT Cobalt Corp.

WISCONSIN INDEPENDENT AGENT

2004 Anthem, Inc. and WellPoint Health Networks, Inc. merge to become WellPoint, Inc.

WELCOME TO THE IIAW! NEW IIA OF WISCONSIN MEMBERS FOR 2011-12

Best Insurance Associates Principal: William Ikpi T2505 N. 124th Street Brookfield, WI 53005 Phone: (262) 923-7457

GBG Insurance Agency Principal: Dale Gilliam 1930 N. Martin Luther King Drive Milwaukee, WI 53212 Phone: (414) 264-1400

Thai Vang Agency Principal: Charles Vang 7212 W. Fond du Lac Avenue Milwaukee, WI 53218 Phone: (414) 431-0644

Gabrielle O’Brien’s Ethics In Today’s Changing Times session proved to be a big hit in January. This great class raises awareness about ethical issues in the insurance workplace and gets attendees thinking about these important issues. More than 50 agents

Sparks Insurance Inc. Principal: Bonnie Knoedler 6303 75th Street Kenosha, WI 53141 Phone: (262) 697-9600

Benefit Partners Principal: Matt Kolling 975 Indianhead Drive Mosinee, WI 54455 Phone: (715) 693-4343

WISCONSIN INDEPENDENT AGENT

and other insurance professionals enrolled in the class in Eau Claire, Appleton and Madison. In this photo, the class studies course materials at the IIAW home office in Madison. Check for more continuing education opportunities at www.iiaw.com.

B R AV I N G T H E C O L D . . . A N D T H E G A M E

JC Rose Associates Principal: Barbara Schlaefer 4710 E. Broadway Madison, WI 53716 Phone: (608) 310-7040

Westland Insurance Services Principal: John Katsma 1610 7th Street S. Wisconsin Rapids, WI 54495 Phone: (715) 423-5400

Valley Benefits Brokerage Principal: Christine Haase 1111 N. Lynndale Drive Appleton, WI 54914 Phone: (920) 380-9636

E T H I C S S E S S I O N P O P U L A R A C R O S S S TAT E

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They had a good time at Lambeau Field despite the lackluster showing by the home team. The Packers 37-20 loss to the New York Giants on Jan. 8 was a disappointing way to end a fantastic regular season. It should be noted that not one of these guys fumbled while tailgating but there were one or two personal fouls. Front: Misha Lee, director of government affairs at Sentry Insurance, and Matt Banaszynski, IIAW Executive VP. Back: Bruce Mattison, principal at Mattison Insurance; Casey Haen, market manager at SECURA Insurance; Ted Nickel, Wisconsin’s Commissioner of Insurance; Rep. John Nygren, 89th Assemblyman District; and Lance Schmidt, managing agent at Family Insurance-Greenville.

FEBRUARY 2012

WISCONSIN INDEPENDENT AGENT

PAC DONORS HELP THE CAUSE OF INDEPENDENT AGENTS Having a strong lobbying coalition is important. InsurPac is the Political Action Committee (PAC) of the Independent Insurance Agents & Brokers of America (IIABA). It represents the unified political

voice of IIABA’s 22,000 member agencies and 300,000 agents and brokers nationwide. The Insuring Wisconsin PAC (IWPAC) is the newest addition to the IIA of Wisconsin’s already active government affairs program.

Thank you to the following IIA of Wisconsin members who have contributed to InsurPac and the Insuring Wisconsin PAC!

INS U R PAC D O N O R S PLATINUM CLUB Skip Hansen, Diversified Insurance Services

Linda Steiner, Johnson Insurance Services, Inc. Mark Truyman, Truyman-Haase- Zahn Insurance Agency

CENTENNIAL CLUB Tom Helbach, Ansay & Associates

FOUNDERS CLUB Mark Behrens, Johnson Insurance Services, Inc.

GOLD CLUB Mike Ansay, Ansay & Associates Matt Banaszynski, IIA of Wisconsin Michael Derdzinski, Johnson Insurance Services, Inc.

Jeff Rasmussen, Johnson Insurance Services Mike Walston, Walston Insurance Associates, Inc.

Gary Ascher, Coverra Insurance Services Inc.

Tom Schaetz, Ansay & Associates

Robert McIntyre, The Horton Group Inc. Hugh Morgan, Robertson-Ryan & Associates Inc. Kevin Murray, Johnson Insurance Services Cheryl Roohr, Johnson Insurance Services Ken Rossi, Johnson Insurance Services, Inc.

GENERAL CLUB Roger Abbott, Johnson Insurance Services, Inc. Anton Arneson, The Neckerman Agency

Bob Nadolske, The Monroe Agency Inc.

Lois Kinlen, The Neckerman Agency Terrence Maloney, Robertson-Ryan & Associates Inc.

Charla Magee, Prescott Insurance Agency Inc.

James McCormack, Diversified Insurance Services

Robert Klessig, McCormick-Klessig & Associates, Ltd.

Mike Hierl, Hierl Insurance Inc.

Brian Schwarz, Schwarz Insurance Agency Inc.

Daniel Gaumond, G2 Insurance Services, Inc.

Thomas Hentges, The Badger Agency

Randy Krantz, The Neckerman Agency

Tom Holter, Holter Insurance Agency Inc.

Mike Froh, Burkart-Heisdorf Insurance Agency Inc.

Jean Dunker, Zingen & Braun Insurance Agency Inc.

David Fritz, TriCor Inc.

Chris Lie, Johnson Insurance Services, Inc.

PIONEER CLUB Dave Dunker, Zingen & Braun Insurance Agency Inc.

Doug Dittmann, The Neckerman Agency

Tim Bever, Johnson Insurance Services, Inc.

Andy Spaeth, Ansay & Associates Michael Theisen, McCormick-Klessig & Associates, Ltd. Ruth Vorwald, Johnson Insurance Services

NEW SURVEY FINDS BAD ECONOMY HAS

MANY CONSIDERING CHANGES TO INSURANCE POLICIES Opportunity for agents to discuss the value of a personal umbrella policy Many Americans are facing financial struggles and considering making changes to their insurance policies, according to a new national survey of homeowners by the Independent Insurance Agents & Brokers of America (the Big “I”). Almost twenty-four percent of those surveyed, representing about 39 million homeowners, say they have made changes to their insurance coverage because of the troubled economy, leaving them vulnerable to serious financial loss. “In tough economic times, people look for ways to trim household expenses, but cutting back on insurance coverage may leave them open to even bigger financial hardship,” says Madelyn Flannagan, Big “I” vice president for education and research.

HOW CAN I SAVE MONEY ON INSURANCE? The survey found that more than 18 percent of respondents (more than 30 million Americans) have considered reducing their auto, home, life or health insurance coverage in the last few months. How can that create a marketing opportunity for an agent or producer? Take a proactive response to the consumer uneasiness and implement a customer contact process that

shows your clients you are concerned about helping them get the best value for their insurance premium. One of the easiest things you can advise your clients to do is to change their deductibles.

HIGHER DEDUCTIBLES Owners of expensive homes and cars need to consider whether a low deductible makes sense. If someone steals the TV, it isn’t going to break the bank. Those same consumers need lots of insurance for a total catastrophe, though, or if they get sued. Therefore, they may want to take a $1,000 deductible or higher and use the savings, which can be 10 to 20 percent, and buy a reasonably priced “umbrella liability” policy to give them $1 million or $2 million of coverage in case they’re sued. This is a very important point. You want to help your clients save money where it makes sense but you also have to advise them that sometimes they have to spend money to save money. How so? When it comes to personal umbrella polices ask your clients a few simple questions: ! What if someone slips and falls in your yard and you get sued and the jury awards

more in damages than your homeowner’s policy provides coverage for? ! What if someone in your household, perhaps your teenage driver, is responsible for an accident, you get sued and the judgment exceeds the liability limits on your auto policy? The answer to both of these questions is that your clients would be on the hook for the awarded damages, unless they had a personal umbrella policy. That’s why your clients who already have a personal umbrella policy need you to remind them of how important it is for them to keep it and why you need to offer a personal umbrella to all your clients who don’t have one. By showing them how they can pay for most if not the entire umbrella premium by increasing their deductibles on both auto and homeowner’s policies, you will be demonstrating your value to them. You have access to an A+ rated personal umbrella product from RLI Corp. For more information, go to www.iiaw.com, select Industry, and then RLI Personal Umbrella Policy.

Derril Yerigan, New Richmond Insurance Agency

Chris Costakis, The Murphy Insurance Group

Robert Sowinski, Diversified Insurance Services National funds are allocated locally. InsurPac has donated to the campaigns of these Wisconsin politicians:

FROM THE ARCHIVES

Rep. Sean Duffy (R-WI) - $5,000; Rep. Reid Ribble (R-WI) - $5,000; Rep. Paul Ryan (R-WI) - $3,000; Sen. Ron Johnson (R-WI) - $2,500); and Rep. Gwen Moore (D-WI) - $2,500.

INSURING W I SCO N S I N PAC D O N O R S GOVERNOR’S CLUB Jerry Couri, Couri Insurance Agency Dave Dunker, Zingen & Braun Insurance Agency Skip Hansen, Diversified Insurance Services

Lise Meyer Kobussen, Meyer Insurance Agency Jeff Rasmussen, Johnson Insurance Mike Schulte, Robertson Ryan & Associates Linda Steiner, Johnson Insurance

REPRESENTATIVE’S CLUB Chris Costakis, The Murphy Insurance Group Thomas Sitter, Richards Insurance Don Williams, Choice Insurance Agency

Fred Thomas, Robertson Ryan & Associates

CABINET MEMBER Chris Nemec, Nemec Insurance Cap Wallrich, Wallrich Agency Inc.

Mike Froh, Burkart-Heisdorf Insurance

Mark Truyman, Truyman Haase Zahn Insurance Group

Mike Hierl, Hierl Insurance

Matt Weimer, Diversified Insurance Services

SENATOR’S CLUB Jean Dunker, Zingen & Braun Insurance Agency

Bruce Kommers, McCormick-Klessig & Associates

John Wickhem, John Wickhem Agency

Vince Lombardi, the legendary coach of the Green Bay Packers, was the featured speaker and trophy recipient at the 1964 IIA of Wisconsin state convention in Green Bay. The man to Vince’s left is Bob McKenna, then the IIAW president. Bob was also the president of Murphy Insurance. Former Packer defensive tackle Jim Temp later became president of Murphy.

FEBRUARY 2012

WISCONSIN INDEPENDENT AGENT

B L I P S O N T H E 20 1 2 WO R K CO M P RA DA R In 2010, Steve Klingel, NCCI President and CEO, described the state of the workers’ compensation industry as “precarious,” while adding that the industry faces “a number of difficulties that will confront market stakeholders in the weeks and months to come.” Here are a few areas that should be given attention as we head into the New Year.

The Aging Workforce Their coming was foretold in 2008, when the first Baby Boomer hit 62 and filed for Social Security. The Institute on Aging at the University of North Carolina has released data showing that 20 percent of workers will be 55 or older by 2020. Although older workers tend to get injured less on the job, when they do get hurt we find larger claims and more days off the job. According to a report by The National Council on Compensation Insurance a determining factor in the high claims cost can be traced back to older workers having higher salaries so their compensation for loss-work time is higher. According to the Bureau of Labor Statistics, older workers take an average of 15 days off per injury compared to one day off for younger workers. Plus, they require more extensive medical treatment then, say, a teenage worker. Factor in the statistics showing older workers are less likely to return to work after an injury (in some cases over 80 percent less likely, compared to 12 percent for a worker in his 20s), and you see a disturbing trend. The best we can do when it comes to getting an aging workforce back on the floor is to make a concentrated effort to customize the returnto-work program based on the severity of the injury, age, existing medical conditions, etc. In other words, ease workers back into the fold and make the workplace conducive to them, even if it’s simply making sure there is enough bright light in the work area. (The eyes always seem to be the first thing to go.)

Off-Site Workers In an age of technology, where more and more workers are doing their jobs from their homes, we are seeing a whole new can of work comp worms opening up. According to World at Work’s “2011 Survey on Workplace Flexibility,” in 2010, 26.2 million U.S. workers conducted business outside the

office. Companies see the advantages of homesome ways, related. In many states, employers based work (i.e., a decrease in absenteeism, let the employees choose what doctor they reduced stress), but overlook an untapped area want to see when injured, and employees of risk. Two recent cases illustrate what may be are most likely to choose their family doctor. a disturbing trend. A New Jersey court granted The problem here is the family physician sees workers’ compensation survivor benefits to the the worker as their client. So, if the employee family of a woman who died of a blood clot asks for a week off, the doctor will grant it. while sitting at her computer doing work. That Why not? Most family physicians have no same month in Oregon, a court ruled in favor experience with occupational medicine or the of a claim brought by a woman who broke importance of getting employees back to work. her wrist when she tripped over her dog while Another area of growing concern is the type carrying supplies from her home to her car. of drugs being prescribed to injured workers So how and their longdo employers term effects. monitor “atAccording to a home” risk? recent article The benefits of having Perhaps it is as in USA Today, healthy workers transcend simple as having the biggest someone visit the drug problem reduced health care home and make in America costs, including workers’ sure everything isn’t the heroin is ergonomically compensation and lower in order and void absenteeism. of any clutter or potential hazards. It’s also been suggested that the employer photograph the workspace. A more extreme being mainlined maneuver would be to invest funds in the in a back alley or workspace and set it up for the worker. This the cocaine being > Preston Diamond could be a one-time cost versus a much ingested in some is managing director and co-founder of the higher cost down the road should the worker run-down crack Institute of WorkComp somehow suddenly fall out of their chair and house. In actuality, Professionals (IWCP) break a hip. As for making sure any injury it’s the prescription in Asheville, NC. In happens on “work time,” experts suggest painkillers sitting in 2010, IWCP created a having the worker log in on their computer so medicine cabinets sister organization, the Institute of Benefits time at work and time off can be tracked. No in Middle America. & Wellness Advisors, employer wants to pay a claim because one They kill 18,000 that trains, tests of their workers hurt his back while lifting a people per year. and certifies benefit turkey out of the oven on Thanksgiving. And don’t think and P & C agents in wellness and employee this hasn’t raised an benefits. Preston can Rising Medical Costs eyebrow to workers’ be contacted at (828) and Prescription Drugs compensation 274-0959 or preston@ Medical costs continue to soar and it can payers, who are workcompprofessionals. be attributed to several factors which are, in com. CONTINUED ON PAGE 21

WISCONSIN INDEPENDENT AGENT

FEBRUARY 2012

Expand Your Reach by Merging With Gallagher To support your professional advancement, Gallagher offers career paths for merger partners and their employees. As a result, many merger partners move up steadily into our executive ranks and their employees gain access to a full range of education and training programs—all aimed at career advancement and maximum earning potential. “After owning an agency for 16 years, our firm merged with Gallagher. Since joining, Gallagher has continued to provide me with opportunities to grow personally and professionally by allowing me to lead the Energy Practice, and most recently, to assume the regional leadership role for the South Central territory. Selling our company was a very emotional event for my family, partners and employees. My personal and professional expectations have been exceeded by the Gallagher team.” — Mike Henthorn, South Central Regional Manager

When you’re part of Gallagher, your business grows.

For more information, contact: Dave Koberstein Managing Director Arthur J. Gallagher Risk Management Services, Inc. 18000 W. Sarah Lane, Suite 100 Brookfield, WI 53045-5840 262.792.2202 dave_koberstein@ajg.com

MARKETING MINUTE

WHY “ELEVATOR SPEECHES” DEFEAT SALES There are few offenses in business worse than challenging the validity of the near sacred “elevator speech,” that one-minute message verbalizing the unique qualities of what a salesperson does or sells. The need for the “elevator speech” seems obvious since hordes of salespeople fumble and stumble when asked what they do. Even though they may have adequate knowledge of what they sell and the company they represent, they’re unable to verbalize the message clearly and succinctly. As someone said, “If you don’t have an elevator speech, people won’t know what you really do.” It’s no wonder that sales managers make it a top priority to motivate their people to prepare and practice minimessages. If all this is true, then why knock it? Why challenge something that’s needed and useful to a salesperson? To put it bluntly, an “elevator speech” is damaging because it’s a one-way, robotic “conversation” that defeats sales. It “tells” but doesn’t “sell.” To better understand the “elevator speech” problem, consider one of the most common complaints of sales managers: salespeople talk too much. Silence seems to drive them crazy so they fill “the empty space” with a constant flow of patter about anything and everything. There’s more to the story. Customers also complain that salespeople turn them off by talking constantly and failing to listen. It’s becomes a vicious circle: they’re poor listeners because they won’t shut up. On and on they go babbling about their product, service and the company they represent and don’t stop long enough for customers to ask questions. “Many salespeople feel compelled to recite their canned pitch regardless of the customer’s actual interest,” comments Steve W. Martin of USC’s Marshall School of Business. In other words, they spin their spiel rather than interacting with customers and prospects.

Of course many salespeople talk too much –– and it’s always about themselves and their company. That’s what they know. It’s drilled into them day-after-day. And they simply regurgitate the words because that’s what they’re told to do. So, why should anyone expect them to change or do otherwise? Salespeople go to lead generation groups, stand up and talk about themselves. No one listens, particularly when they’ve heard the same words week-after-week. In such situations, salespeople should be asking themselves this question: “Why should the people sitting around the table recommend me?” But they don’t because they’ve been taught to mouth an “elevator speech.” They show up at networking meetings

MANY SALESPEOPLE FEEL COMPELLED TO RECITE THEIR CANNED PITCH REGARDLESS OF THE CUSTOMER’S ACTUAL INTEREST.

WISCONSIN INDEPENDENT AGENT

and say (a dozen times over), “Hi, I’m Susan from Gotcha International and….” Susan is doing what she has been told to do and leaves with a handful of business cards. Back at the office, she tells her boss that it was a good day for Gotcha. When making cold calls, salespeople invariably start out by saying, “Hi, I’m Roscoe and my company….” Whether it’s in person, on the phone or in e-mails, it’s time to slam the door, hang up or hit delete. It’s time salespeople got the Special Memo: no one cares who you are or what you’re selling. The “elevator speech” approach breeds disaster. It undermines and kills sales because it fails to engage customers. In fact, it has just the opposite result: it bores the listener. No one wants to spend even 60 seconds listening to people talking about themselves. It’s far and away the most successful method of driving prospects away. They don’t want to do business with those who have zero interest in anything but what they want to accomplish. So, what should a salesperson say when someone asks, “What do you do?” Instead of pressing the “elevator speech” button and jabbering about the products or services they sell or the company they work for, the best response is simply to say, “Thanks for asking.” If played correctly, the next step gives salespeople the opportunity to begin a conversation. What this takes is a captivating statement that compels someone to ask what it means. Here are several examples of how to do that: ! “It’s my job to snoop around and find where my clients are spending money needlessly.” Much better than saying, “I’m a consultant.” ! “Businesses depend on me to make sure they have a constant flow of new prospects.” That’s far more interesting than saying, “I’m in marketing.”

FEBRUARY 2012

! “My customers depend on me to make sure they won’t run out money when they need it most.” Much better than saying, “I’m a financial advisor.” ! “I help my clients take advantage of new, profitable opportunities.” Much better than saying, “I’m a commercial loan officer.” By now, the picture should be clear. When a salesperson makes this type of statement, it opens the door for the prospect to ask a question: “How do you do that?” or “What does that mean?” Now, a situation is right for moving forward and starting a conversation. By engaging people in such a way that they are intrigued, they will want to know more. Now, they are the ones asking for additional information, which is so much better than turning them off. This approach is far more demanding that parroting an “elevator speech.” It requires thinking and most importantly, careful listening, something that’s impossible when we’re talking. It also forces salespeople to think about what they really do and then express it in a way that pulls prospects closer. On one occasion, the president of a company asked what I did. I responded by saying, “I help CEOs avoid embarrassing themselves.” Looking confused, he said, “Can you explain that?” I did, saying, “I help them recognize that they are too close to the business to manage the company’s marketing objectively.” As long as salespeople are “stuck” with the “elevator speech” mindset, it’s difficult, if not impossible, to actually engage others. They give their little “speech” about what they sell, instead of initiating a conversation that draws the other person into a dialogue. Without this involvement, potential buyers tune out. The shift from “elevator speech” thinking to an “engaging conversation” is not difficult. When you think > John Graham, a about it, it begins marketing and sales consultant and a with asking the business writer, lives key question, in Boston. He can be “What is it that I contacted at (617) really do for my 774-9759 or johnrg31@ customers?” me.com.

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on the lookout to ensure that addictive drugs that are over-prescribed by doctors aren’t affecting workers’ comp cases. Evidence has shown that some doctors are prescribing pain medication usually targeted for cancer patients for simple back strains. According to Gregory L. Johnson, a health care management consultant, “There is an increase in medical costs as a percentage of all claims; there is an increase in pharma as a percentage of all medical costs. And there is an increase in opioids as a percentage of pharma. So it’s driving a lot of overall loss results in workers’ comp.” Another industry expert contends that employers may find themselves not only paying for the medication but also funding detox programs, drug overdose claims and treatment for long-term side effects. It’s imperative that employers, doctors, claimants and insurance carriers all get on the same page to make sure such abuse does not occur.

The Need for Wellness Plans Healthier employees lead to lower premiums. If companies can help their workers improve their health without cutting benefits or shifting more premium costs to employees, why aren’t smaller companies using this proven method to lower their health care costs? Randy Boss, a risk architect with Ottawa Kent Insurance in Grand Rapids, MI, helps companies implement successful wellness programs. And he says he can understand how employers feel. “They’re frustrated because most likely they have tried things that didn’t work,” says Boss. “Businesses tend to think short-term and not long-term, and expect to see solid and immediate savings on their healthcare costs.” Yet, the benefits of having healthy workers transcend reduced health care costs, including workers’ compensation and lower absenteeism. Healthy workers are less prone to injury and when injured, they recover quicker than less healthy workers. If workers change and modify their lifestyle and reduce their health risks, medical costs decline. A University of Michigan study of a Midwest utility company’s workplace wellness program found that over nine years, the utility company spent $7.3 million for the program and reaped $12.1 million in savings. Medical and pharmacy costs, time off and workers’ compensation factored into the savings. The study, which took into account a number of costs, including indirect costs of implementing wellness programs, such as recruitment and the cost of changing menus, showed that wellness programs work long-term

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even though employees aged during the course of the study. Companies need to make a commitment to helping their employees stay in better shape. Says Randy Boss, “If companies don’t have the ability to fire all their old workers and hire young workers, then they need to concentrate on what they can control...the risk factors. That’s where a health and wellness program comes in. But to be successful you need high participation… preferably over 85 percent. We’ve been fortunate to have a 94 percent record without having to pay employees to participate. We do this by motivating and educating employees so they take the action steps to get the results.” An effective wellness plan only works if implemented from the top down. “We see participation rates up to 70 to 80 percent with management support and incentives, but only 10 to 20 percent without it,” says Susan Butterworth, director of Oregon Health Sciences University Health Management Services.

New NCCI Rulings NCCI has recently made significant changes to the split point that will ultimately affect the experience mod. The split point will be increased from $5,000 to $15,000 over a 3-year transition period. After the transition, the split point will be indexed for claim inflation in subsequent updates. Filing for these changes will likely be made in the third quarter this year. This change will take effect in 2013, based on each state’s usual rate filing date. For some, it will be Jan. 1, 2013, and for others later in the year. NCCI’s data indicates that close to 80 percent of experience mods will change plus or minus five points. The modification of the split point will most substantially impact the very best and very worst mods. Each company will be affected differently based on the costs of their employee injuries. A big positive for all businesses is that every company’s lowest possible mod will drop. This means that employers will have greater control over what they pay for workers’ compensation than they have before. For companies that take command of their workers’ comp program, the opportunities have never been better to reduce their costs, even though rates are increasing in many states. In summary, we may just be skimming the surface of what’s in store for our industry in 2012. But unless the Mayan calendar had it right and everything comes to a screeching halt on December 21, 2012, you can pretty much bet 2013 will be even more exciting.

NEWS FROM ACT

AGENCY OPPORTUNITIES

IN A TIME OF PROFOUND CHANGE This is an exciting time to be involved in ACT because we have so many future oriented initiatives underway.

What are the key consumer, technology and business trends that will impact our future? What will the agencies of the future look like and what will the attributes be for the most successful agency managers? How will the expectations of our clients change and how will they expect us to communicate with them? How will insurance processes change in an increasingly mobile world, opening up new ways to communicate among consumers, agents, carriers and other business partners?

It is sobering to realize that over the next 10 years, as many as 50 percent of current agency employees and principals will have retired. How can agencies create an attractive work environment for the future generations who expect to have efficient and integrated technologies available to them? How will agency automation and agent-carrier interfaces continue to evolve, so that we can automate more of the routine processes and free up time for agents to be trusted advisors to their clients – the true “value add” that independent agents provide? ACT has work groups or is participating in industry initiatives that are probing each of these issues. Stay tuned for future ACT articles as details emerge from these groups. One theme has struck me, however, that weaves its way through each of these groups and that is transition. We are seeing transitions happening with consumers, agencies, agentcarrier interfaces, agency management and other areas. What are some of these major changes and what kind of opportunities do

they open up for agencies and brokerages? Consumers In the next five years, millennials (those born in the 1980s and 90s) will become a major client segment for most agencies, and for some agents already are. These consumers grew up with technology and expect to interact with their business partners when and how they choose – not in the manner that the business partner chooses. These clients may prefer texting, mobile applications and/or using social media over traditional methods, such as e-mail. The desire to have communications choices is not confined to just millennials, however. We are witnessing this transition in communications preferences across all the generations to some extent, requiring innovative agencies to offer several communications options to their clients and to begin to maintain these preferences in their systems. Agencies have the challenge of managing multiple forms of communications with clients at varying stages of transition to new communication methods. Agency management system vendors will need to make it easy for agents to retain these preferences in their systems and to integrate with all of the innovative forms of communication, so that agents can easily keep a record of these conversations. Consumers increasingly want to be able to go online to do research and perform other self-service transactions when they want to, as well as to consult with an agent when appropriate. It is “both/and,” not “either/or.” In fact, having a personal connection with the client is becoming even more important at this time of growing mistrust of large institutions and government, and independent agents excel at creating these relationships. Agencies, however, will need to free themselves up significantly from routine processes using automation and potentially outsourcing, so they can truly focus on creating enduring relationships as trusted advisors.

“Era of Experience” At the Fall Big “I” Leadership Conference, Dr. James McQuivey of Forrester Research discussed how we have entered the “Era

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of Experience” where personal customer relationships are being enhanced by digital components that add value. For example, if an agency has contractor clients, having the ability for those contractors to issue routine Certificates of Insurance on the agency’s Web site, 24/7, according to preset agency parameters, is a highly valued enhancement to the traditional agency relationship. Another example is provided by those agencies which kept their clients well informed during the disasters we experienced last year using social media, taking advantage of its capability to deliver multiple messages to a broad audience instantly. McQuivey emphasizes that the personal relationship based on trust remains a core part of these evolving digital/personal relationships. The opportunity and challenge for agencies are to use digital tools to enhance the relationships they provide their clients, while using the automation provided to them by their agency management systems, Download, Real Time and electronic filing to free up their staffs to develop a binding personal connection with each client. Demographic Changes We continue to see a major transition in many of our communities to a more diverse population. The opportunity and challenge for independent agencies are to be able to reach out to and develop personal relationships with these different groups. Some agencies are hiring producers from the various ethnic groups found in their community because these producers understand the culture of their particular groups, speak the language and know how they want to interact with the agency – whether they want to come to the agency, have agents visit them, or deal remotely using e-mail, the phone and the other digital communications offered by the agency.

technologies available to them? Agencies have more choices than ever before in how they organize for the future. They are able to decentralize into very local offices to be even closer to consumers, because of technology that can bind multiple offices together and allow producers and other employees to operate from anywhere. In today’s mobile world, we are starting to see producers in the field almost 100 percent of the time, using the agency office only when needed for conferences. Many agency employees are able to do their work from home, opening up new opportunities to hire employees who want and need a more flexible work environment. We are seeing a major trend among businesses in general to outsource functions to third parties that are highly efficient and expert in given areas. These outsourcing firms may employ domestic and/or foreign workers. We are likely to see agencies outsource more in the future, as they have already started to do with their technology and routine processing such as policy and download checking.

The Challenge To Agency Managers The requirements for effective agency

management are also evolving. Agency strategic planning has become more important today as agencies have more options with regard to how they will organize and operate in the future. Managers will also have to take advantage of more business intelligence tools in order to effectively manage a more distributed workforce and potentially outsourced non-core functions. The managers of the future will also have to think through how they will create an online brand and digital/personal relationship with their clients that effectively differentiates their agency from their competitors. In addition, these managers will need to use their technology to the fullest, so that routine processes are automated to the maximum extent possible and their employees have the time to develop lasting personal relationships with their clients. ACT’s Agencies of the Future Work Group has started to discuss what it believes will be the critical attributes of tomorrow’s successful agency managers. These attributes include leadership skills (managing a business, not just an insurance technician), strategic thinking, anticipatory, agile, knowledgeable, social, knowing your consumer, good marketing and

sales skills, having a communications plan (clear brand positioning), efficient processes, and financial management. Not only is this an exciting time for ACT as a forum where many of these defining issues are being discussed; it is an exciting time to be an independent agent. Creating that personal connection and relationship is becoming more and more important to today’s consumer and independent agents excel in this arena. At the same time, agencies have more choices available to them as to how they organize, > Jeff Yates is executive manage their staffs, director of the Agents Council for Technology create an effective (ACT) which is part of the online brand and Independent Insurance establish enduring Agents & Brokers of digital/personal America. Jeff can be reached at jeff.yates@iiaba.net. ACT’s relationships with Web site is www.iiaba.net/ their clients in act. This article reflects the order to thrive views of the author and in tomorrow’s should not be construed as an official statement by ACT. insurance market.

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Changes In Agencies It is sobering to realize that over the next 10 years, as many as 50 percent of current agency employees and principals will have retired. How can agencies create an attractive work environment for the future generations who expect to have efficient and integrated

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S O PA A N D P I PA : C E N S O R S H I P O R P ROT ECT I O N O F I N T E L L ECT UA L P RO P E RT Y ? a nutshell, these laws would allow the US government During the last month, there’s been a lot of talk and controversy surrounding the Stop Online Piracy Act (SOPA) to seek a court order and even shut down Websites that contain content or links to copyrighted material. and its Senate counterpart, the Protect IP Act (PIPA). In To protest the legislation, Wikipedia and Google (and other companies) blacked out their Websites on Jan. 18, 2012. Their primary concerns involved the lack of due process needed for the government to shut down a Website. This could have implications for every industry, including the insurance industry. If an agency or company, for example, posted a copyrighted YouTube video to their home page, the government, according to the bills in their current form, would have the authority to bring down the Website. Marc H. Greenberg, professor at Golden Gate University School of Law said “SOPA (in its current form) allows penalties to be imposed against Websites that have any infringing content, regardless of its source, forcing the takedown of such a site.” This differs from the current law, the Digital Millennium Copyright Act, in that the Internet service providers would also be held liable, threatening a “key component of the Internet.”

Greenberg cites this vagueness as primary grounds for concern: “The trigger for any claims under SOPA is that a given site either contains infringing material, or that it ‘facilitates’ such infringement.” There is nothing in the bill that defines “facilitates.” In other words, Big Brother could be watching and he may not like what he sees. The tidal wave of opposition to SOPA and PIPA after the blackouts has caused a legislative retreat. These were popular, bipartisan pieces of legislation. The House Judiciary Committee held hearings on November 16 and December 15, 2011. The committee was scheduled to continue debate in January 2012. However, in the wake of online protests held on Jan. 18, Rep. Lamar Smith, chairman of the committee, stated: “The House Judiciary Committee will postpone consideration of the legislation until there is wider agreement on a solution.” Sen. Harry Reid announced that the PIPA test vote scheduled for January 24 would also be postponed.

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Supporters of these bills say the laws are needed to stop copyright violation and theft of intellectual property on the Internet. The top five SOPA supporters are the Motion Picture Association of America, Pfizer, the Recording Industry Association of America (RIAA), the National Governors Association, and the US Chamber of Commerce. Cary Sherman, the RIAA’s CEO, defended SOPA by saying that it will protect consumers from rogue sites that deceive them by taking advantage of lax copyrights laws in countries such as China and Ukraine. “It should be unacceptable to any of us involved in legitimate commerce online that a rogue Website based outside of the United States — but hawking U.S. products or copyrighted works — can currently escape U.S. laws,” said Sherman. We’ll have to stay tuned as this legislation moves forward. It appears that the bills in their current form are dead in the water, but Congress will likely revisit these topics later in 2012.

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GOVERNMENT AFFAIRS

STAT E L EG I S L AT U R E TO CO N S I D E R F E LO N E M P LOY M E N T B I L L Proposal would revamp employment law to protect businesses from costly lawsuits After an extended holiday break, the state Legislature reconvened in January for what is expected to be a brief 2012 legislative session. Due to the political turmoil surrounding recall efforts against Gov. Scott Walker and a handful of Republican senators – coupled with the state’s precarious fiscal situation – the Legislature is expected to wrap up its business for 2012 by mid-April. However, lawmakers will still consider a number of policy initiatives, including a bill to overturn provisions in the state’s “Fair Employment Act” that protect convicted felons over the interest of Wisconsin businesses. Current state law prohibits employment discrimination based on age, disability, race and a number of other reasonable factors. But it also prohibits discrimination based on conviction record and provides protected

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Wisconsin is one of only a handful of states that consider felons a protected class. The law puts businesses in a no-win situation – hire a felon, or refuse employment and face an expensive lawsuit. The current policy also places Wisconsin at a competitive disadvantage in efforts to attract new jobs to the state. The Republican-backed bill to overturn the law would bring Wisconsin in line with almost every other state in the nation and provide much-needed liability protection to employers. The legislation, which is supported by the IIAW, would no longer consider convicted felons a protected class and would allow businesses to terminate or refuse to hire a convicted felon. The bill would also allow businesses to fire or deny employment to any individual who has been convicted but pardoned for a felony or convicted of a misdemeanor if the offense is substantially related to their specific job. Lastly, the initiative would prohibit local governments from enacting provisions that prohibit employers from considering felony records when making hiring decisions. If approved by the Legislature and signed by Gov. Walker, the proposal will give Wisconsin employers the ability to make personnel decisions that are in the best interest of their business, their employees and their customers, without the threat of being sued.

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Business owners must consider several factors when hiring new employees – including the safety of customers and staff – and should have the flexibility to fully

WISCONSIN IS ONE OF ONLY A HANDFUL OF STATES THAT CONSIDER FELONS A PROTECTED CLASS. screen potential employees. The Big “I” believes that flexibility should extend to the review of criminal records. Current law simply defies logic and should be repealed to minimize legal risks for Association members and other employers across the state. The legislation to repeal the law was recently approved by two key legislative committees. Although it lacks bipartisan support, the bill is expected to be considered by the full Legislature before the end of the session. The IIAW Government Affairs team will continue to support the bill and update members on new developments.

> Tim Hoven is the founder of Hoven Consulting in Madison, Wisconsin. Tim also served in the Legislature from 1994 to 2002. Hoven Consulting is the Government Affairs team for the IIA of Wisconsin.

FOUR TIPS

FOR GETTING THROUGH AND TALKING TO A PROSPECT One of the most frustrating aspects of selling is having a great list of potential leads and not being able to get through to talk to those people.

The culprit could be a bulletproof receptionist, a contact that won’t get back to you, a ‘No Soliciting’ sign, or that nagging question: how do I continue to chase this person without being a

I’m not telling you to deceive the receptionist and tell her you know the prospect when you don’t. A significant portion of communication is “how” you say something; if you simply ask for the prospect as if you’re a friend, you’ll find that many times the receptionist will hear that in your voice and put you through.

b. Call or stop by when the receptionist isn’t there. Most receptionists are there between 8 a.m. and 5 p.m.; simply call or stop by before 8 or after 5.

they do, simply state the purpose of your call. For example, say, “Oh, I’m sorry. My name is (your name) with (your company), I was just hoping to catch (prospect’s name) for a moment.” If they persist, say, “I’m not selling anything. I was simply hoping to introduce myself to (the prospect).” If they continue to stick to their guns, say thank you and leave. You can call on the phone later and try to set up an appointment or call before or after the receptionist is in. Obviously, the one sure way to avoid all No Soliciting signs is to call people on the phone.

4. You’ve reached the prospect the first time, but can’t get them back on the phone. If you reached a contact once, but can’t seem to catch them again, try these techniques:

c. Get referred to the prospect. Mentioning a friend or business associate that referred you to the prospect will usually get you past the receptionist.

a. Try contacting them at different times during the day. Most people have a time during the day when it’s best to reach them. It could be the first thing in the morning, at lunch, later in the day, or after normal business hours. Simply try at these different times. You can also make a note after the first call as to what time of the day you initially reached them.

pest or seeming desperate? This month, we’ll look at the quickest ways to get past these obstacles and talk to the prospect.

d. Send a letter, e-mail or fax, and follow up with a phone call or send any of these and request a meeting with the prospect.

1. Getting past the receptionist. Probably

2. No-pest multi-contact prospecting to make initial contact with the prospect. If

Either ask the prospect on the first call or, ask the receptionist on a follow-up call.

you are targeting specific prospects, you need to reach out to them seven to 10 times before you give up and move on. You can’t expect people to get back to you after one or two contacts.

c. Make a follow-up appointment the first time you talk to them. At

b. Ask when the best time to reach them is. the most common roadblock to the prospect is the receptionist. To get around the receptionist, employ the following techniques:

a. Speak as if you know the prospect. Imagine calling a friend at work — how would you ask for your friend? If the receptionist asked who was calling, what would you say and how would you say it? Use that “friend” mindset when calling. When you encounter the receptionist, say: “Hi, is (prospect’s first name) there?” in a friendly and upbeat tone. When she asks who’s calling, say: “Yeah, (your name).” If she asks what company you’re with, say: “Um, (the name of your company).” And say the company name in a questioning tone of voice, as if the company name is not of any significance.

If you are targeting specific prospects, reach out to them seven to 10 times.

Start with a phone call and send a follow-up e-mail or letter immediately. Call again and send out another letter or e-mail a week later. Repeat this the following week. After your third call and letter, stop by in-person. If an in-person visit isn’t feasible, make a fourth call a week after the third call and letter. Finally, finish with a “last-chanceto-get-back-to-you” phone call. Remember to be pleasant and conversational in all your communications, as if you are talking to a close friend or family member.

3. How to handle No Soliciting signs. If you visit a prospect’s office and see a No Soliciting sign, ignore it. Occasionally, someone will refer to the sign, but you’ll find that people won’t. If

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e. Call every hour until you reach the prospect. This is a technique you will use sporadically for the hard-to-reach hot prospect. Make sure you’re calling from a blocked or unknown number and don’t leave any messages.

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the end of the first call, get on their schedule for the follow-up call.

d. If you’ve been calling on the phone, stop by in person.

> John Chapin has more than 21 years of sales experience and is the co-founder Complete Selling Incorporated, a company helping salespeople significantly increase their results. For free access to John’s free white paper on what it takes to be successful in sales (along with a monthly newsletter) visit his Web site at www. completeselling.com.

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Food for Thought: GET OFF MY YARD YA WHIPPERSNAPPER! Randall Cobb, a rookie receiver for the Packers who was born on August 22, 1990, returned the opening kickoff of the opening game for a touchdown against the New Orleans Saints. With that play, he became the first player born in the 1990s to step on the field in the NFL. Too bad he couldn’t duplicate that feat against the Giants. Source: profootballtalk.nbcsports.com

ORIGINS OF RISK MANAGEMENT: THE ODD DIAGNOSIS YEARS In 1662, John Graunt, a London merchant, published the first set of actuarial tables in his book, Natural and Political Observations Made Upon the Bills of Mortality. Graunt provides many interesting statistics regarding causes of deaths in London in 1632. Seven people are listed as being murdered, 10 people died of cancer, while 34 people drowned. On the other hand, 38 died from ‘king’s evil,’ another 98 from ‘rising of the lights,’ one death occurred from something called ‘frighted,’ and five people succumbed to ‘lunatique.’ Source: edstephan.org

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