Agency Management Systems / Insurance Exchanges; Commercial Auto; Digital Product Guide

July 2, 2012 | Vol. 90, No. 13

WEst REGION

We Are Still the One. As this market changes, we are still your safe harbor. We continue to show you the way with our knowledge, expertise and experienced underwriters. Remember when an immediate response was the norm? Those days have remained at Monarch. Various programs available – monoline and packages.

Personal Lines & Special Risk: Commercial Lines: • Homeowners • Contractors • Dwelling Fire • Property • Builders Risk • Inland Marine • Earthquake DIC • Pollution Liability Excess Flood & • D&O Liability Wrap Around • Mobile Home Parks • Personal Article Floaters • General Liability • Professional Equipment Floaters • Comm’l Packages • Personal Property Floaters • Professional Liability • Employment Practices • Excess Flood Liability • Umbrella & Excess • Professional Liability Derek Borisoff. Passion and experience. He’s at your service.

One Who Serves Derek Borisoff, President / CEO monarchxs@monarchexcess.com

You’ll Get the Royal Treatment

www.MonarchExcess.com La Crescenta 818-249-0100 • Simi Valley 805-577-6800 • San Diego 619-521-2170 • Rancho Mirage 760-779-5555 Novato 415-883-1411 • Fresno 559-226-0200 • Arizona 877-406-8026 • Hawaii 818-425-9847 • License 0697233

N6 On The Cover

WEST

Inside This Issue July 2, 2012 • Vol. 90, No. 13 • West Region

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Special Report: 10 Things Agencies Do Right (and Wrong) With Agency Management Systems

14

NATIONAL COVERAGE N4 Closer Look: LexisNexis Insurance Exchange N6 Special Report: 10 Things Agencies Do Right (and Wrong) with Agency Management Systems N10 Employers Fighting Healthcare Costs Turn to Holistic Benefit Planning N12 Spotlight: Helping Policyholders Understand Auto Glass Repair

WEst COVERAGE N20 Academy of Insurance: Alternative Workers’ Compensation Risk Financing Options to Consider N21 Academy of Insurance: Free Technical Skills Evaluation Assessments N22 2012 Digital Product Guide N27 P/C Industry Should Not Expect Traditional Hard Market Soon: Hartwig

N14 How Predictive Modeling Has Revolutionized Insurance

N27 Swiss Re Chief Economist Sees Rising Rates by Year End

N16 Public Companies Underestimate Risk of D&O Lawsuit: Survey

Idea exchange

N18 Academy of Insurance: Shifting the Conversation From Price to Value N19 Academy of Insurance: Q3 Schedule 4 | INSURANCE JOURNAL-WEST REGION July 2, 2012

N28

N6

N1 Minding Your Business: Oak & Strader N28 Closing Quote: 6 Ways to Motivate Top Talent

8 Insurer Sues Nocal Surgery Firm Over Alleged Overbilling 8 Colo. Ranchers Selling Off Cattle to Avoid Drought Loss 11 State Fund Files First Tiered Rating Plan 11 Report: Vehicle Theft Falls, California Still Dominates Top 10 List 12 J.D. Power: Auto Insurance Satisfaction Reaches All-Time High 16 Special Report: Health & Benefits ‘One Way or Another’ Agencies See Growth in Group Health

DEPARTMENTS

6 Opening Note 9 Declarations 9 Figures 10 People N2 MyNewMarkets www.insurancejournal.com

Successful companies typically find 1 or 2 things and do them very well.

We found 5.

Up to 30 rental units $1 million excess UM/UIM Combine personal and commercial policies LLCs, DBAs, estates and trusts Youthful and senior drivers

PersonalUmbrella.com.

We do.

WeST COVERAGE

Opening Note Time After Time

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s if there aren’t enough surveys to write about, there’s a new survey that shows how people spend their time — other than on conducting surveys and writing about them.

The Bureau of Labor Statistics recently issued its “American Time Use Survey” for 2011.

This survey reports the average amount of time per day in 2011 individuals spent in various activities, like working, household duties, childcare and leisure. It also focuses on eldercare. Evidently, 16 percent of the U.S. civilian noninstitutional population age 15 and over were eldercare providers.

Of the 39.8 million eldercare providers, 56 percent were women, and most were between ages of 45 and 64, according to the survey, which states that on the days those people provided eldercare they spent an average of 3.1 hours doing so.

The BLS survey also focuses on working. ‘…here’s some good news for Employed persons spent television makers and sellers: an average of 7.6 hours a day working, however men Watching TV occupied most of worked 47 minutes more the leisure time, consuming than women. According to 2.8 hours per day.’ the report, this difference partly reflects a woman’s greater likelihood of working part time — although full-time working men worked longer than women full timers (8.3 hours compared with 7.8 hours).

About one in five employed persons did some or all of their work at home, and 85 percent did some or all of their work at their workplace, the survey shows. Self-employed workers were three times more likely than wage and salary workers to have done some work at home — 56 percent versus 18 percent.

Of course there’s always time for some leisure.

On an average day, nearly everyone age 15 and over engaged in some sort of leisure, such as watching TV, socializing or exercising. Of those who engaged in leisure activities, men spent more time (5.8 hours) than did women (5.2 hours).

And here’s some good news for television makers and sellers: Watching TV occupied most of the leisure time, consuming 2.8 hours per day.

Socializing was the next most common leisure activity, taking up about 45 minutes per day.

But the sad part to all of this is that if you’re reading this, there’s a good chance you’re old.

People age 75 and up averaged 73 minutes reading on weekdays. The amount of time spent reading falls as you get younger. People who have just reached retirement age spend a little under an hour reading, while those age 55 to 64 spend about a half-hour. For the under 35 set it drops to about 15 minutes a Don Jergler West Editor day.

E D I TO R I A L

Editor-in-Chief Andrea Ortega-Wells | awells@insurancejournal V.P. Content Andrew Simpson | asimpson@insurancejournal.com East Editor Young Ha | yha@insurancejournal.com Southeast Editor Michael Adams | madams@insurancejournal.com South Central Editor/Midwest Editor Stephanie K. Jones | sjones@insurancejournal.com West Editor Don Jergler | djergler@insurancejournal.com International Editor Charles E. Boyle | cboyle@insurancejournal.com ClaimsJournal.com Editor Denise Johnson | djohnson@claimsjournal.com MyNewMarkets.com Associate Editor Amy O’Connor | aoconnor@mynewmarkets.com Columnists Catherine Oak, Marisa Strader Contributing Writers Jerry Beigel, Brad Remillard, Edward Tafaro, Steven Walker

SALES

V.P. Sales & Marketing Julie Tinney (800) 897-9965 x148 jtinney@insurancejournal.com West Dena Kaplan (800) 897-9965 x115 dkaplan@insurancejournal.com South Central Mindy Trammell (800) 897-9965 x149 mtrammell@insurancejournal.com Midwest Lauren Knapp (800) 897-9965 x161 lknapp@insurancejournal.com Southeast Howard Simkin (800) 897-9965 x162 hsimkin@insurancejournal.com East Dave Molchan (800) 897-9965 x145 dmolchan@insurancejournal.com New Markets Sales Manager Kristine Honey | khoney@insurancejournal.com Classified Advertising (800) 897-9965 x125 classifieds@insurancejournal.com

MARKETING/NEW MEDIA

Marketing Administrator Gayle Wells | gwells@insurancejournal.com Advertising Coordinator Erin Burns | eburns@insurancejournal.com (619) 584-1100 x120 New Media Producer Bobbie Dodge | bdodge@insurancejournal.com Videographer/Editor Matt Tolk | mtolk@insurancejournal.com

DESIGN/WEB

Vice President/Design Guy Boccia | gboccia@insurancejournal.com Vice President/Technology Joshua Carlson | jcarlson@insurancejournal.com Design and Marketing Executive Derence Walk | dwalk@insurancejournal.com Art Director Jamie Bethell | jbethell@insurancejournal.com Web Developer Jeff Cardrant | jcardrant@insurancejournal.com Web Developer Chris Thompson | cthompson@insurancejournal.com

I J A C A D E M Y O F I N SU R A N C E

Director of Education Christopher J. Boggs | cboggs@ijacademy.com Online Training Coordinator Barbara Dooley | bdooley@ijacademy.com

A D M I N I ST R A T I O N

Chairman Mark Wells Chief Executive Officer Mitch Dunford Accounting Manager Megan Sinclair | msinclair@insurancejournal.com

FOR QUESTIONS REGARDING SUBSCRIPTIONS: Call: 856-380-4176 or You may subscribe or change your address online at

insurancejournal.com/subscribe Insurance Journal, The National Property/Casualty Magazine (ISSN: 00204714) is published semimonthly by Wells Publishing, Inc., 3570 Camino del Rio North, Suite 200, San Diego, CA 92108-1747.

Periodicals Postage Paid at San Diego, CA and at additional mailing offices. SUBSCRIPTION RATES: $7.95 per copy, $12.95 per special issue copy, $195 per year in the U.S., $295 per year all other countries. DISCLAIMER: While the information in this publication is derived from sources believed reliable and is subject to reasonable care in preparation and editing, it is not intended to be legal, accounting, tax, technical or other professional advice. Readers are advised to consult competent professionals for application to their particular situation. Copyright 2012 Wells Publishing, Inc. All Rights Reserved. Content may not be photocopied, reproduced or redistributed without written permission.

Insurance Journal is a publication of Wells Publishing, Inc. POSTMASTER: Send change of address form to Insurance Journal, Circulation Department, PO Box 9049, Maple Shade, NJ 08052

6 | INSURANCE JOURNAL-WEST REGION July 2, 2012

ARTICLE REPRINTS: For reprints of articles in this issue, contact Rhonda Brown at 1-866-879-9144 ext. 194 or rhondab@fosterprinting.com. Visit insurancejournal. com/reprints for more information.

THE 2012

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Century-National Insurance Company 800-733-0880 http://bap.cnico.com

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weST COVERAGE

News & Markets Insurer Sues Nocal Surgery Southern Cal. Jurors Award Firm Over Alleged Overbilling $4.5M After Teacher Molest

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nited Healthcare Services has filed a $39 million lawsuit against a Northern California company that manages five outpatient surgery centers, claiming the firm overbilled the insurance carrier and offered doctors financial incentives for patient referrals.

The case filed in Santa Clara Superior Court against Saratoga-based Bay Area Surgical Management is similar to a $20 million suit Aetna brought against the company earlier this year.

The San Jose Mercury News reported that United Healthcare alleges that Bay Area Surgical billed the insurer $69,700 for an arthroscopic knee surgery and $32,300 for two spinal injections, rates dramatically higher than what other providers charge.

Partner Bobby Sarnevesht denies the allegations. He told the Mercury News the insurance companies are trying to strong-arm Bay Area Surgical into signing a contract with unfavorable reimbursement terms.

an Diego County, Calif. jurors have awarded two girls $4.5 million because they were molested by their Carlsbad elementary school teacher.

The North County Times says jurors also ruled unanimously that the Carlsbad Unified School District was negligent for failing to supervise the teacher.

After the verdicts were read, some jurors cried and hugged the mothers of the victims.

In his 2010 criminal trial, 41-year-old Raymond Firth pleaded guilty to two counts of sexual battery and one of false imprisonment. He spent 22 months in prison and was released in March. He did not attend the civil trial.

He will be responsible for 60 percent of the award, the school district for 40 percent. An attorney for the district says he doesn’t know if they will appeal.

@2012 Associated Press. All Rights Reserved.

@2012 Associated Press. All Rights Reserved.

S

Colo. Ranchers Selling Off Cattle to Colo. Supermax Inmates Sue Over Avoid Drought Loss Mental Health Treatment

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F

anchers in western Colorado are selling off cattle to avoid losing them to a severe drought.

Livestock auctioneer Bill Martin of Loma says his auction barn usually sees between 200 and 400 cows a week, but this year the numbers have sometimes nearly quadrupled.

Martin says the spike in animal sales is due to drought conditions across Colorado, forcing ranchers to sell off this year.

Rainfall on the western slope is down significantly, which makes it tougher and more expensive for ranchers to feed their animals.

ive inmates who say their mental health illnesses are deteriorating in solitary confinement inside the socalled Supermax prison in Colorado have filed a lawsuit against the U.S. Bureau of Prisons.

In the complaint filed in Denver, the inmates argue they are repeatedly denied adequate medication for illnesses such as post-traumatic stress disorder, paranoid schizophrenia and bipolar disorder.

@2012 Associated Press. All Rights Reserved.

@2012 Associated Press. All Rights Reserved.

8 | INSURANCE JOURNAL-WEST REGION July 2, 2012

www.insurancejournal.com

Declarations Risky

NRC Speak

Tragically Historic

“You have to get every risk in the pool – the healthy risks and the less healthy risks – to keep insurance affordable. Without the individual mandate that will be very difficult to do.”

— Susan Pantely, principal and consulting actuary with Milliman, Inc., and member of the Society of Actuaries, commenting before a pending decision by the U.S. Supreme Court to uphold or overturn the Patient Protection and Affordable Care Act.

“The phenomenon that we think causes this tube-to-tube interaction is definitely proportional to the power. At least in some theoretical sense, that might be part of the answer.”

— Nuclear Regulatory Commission Regional Administrator Elmo Collins talking about design flaws that appear to be the cause of excessive wear in tubing that carries radioactive water through California’s troubled San Onofre nuclear power plant.

“We’re really just at the start of our severe fire season. Given our fire danger I wouldn’t be surprised if it becomes a tragically historic season.”

— Carole Walker, executive director of the Rocky Mountain Insurance Information Association, commenting on two wildfires in Colorado and New Mexico in June – one considered the largest, and the other the most damaging. in each state’s history.

Haboobs “Haboobs blow through town / In one instant it is dark / Pull over and wait.”

— Phoenix resident Mindy Lee’s haiku submission in response to the Arizona Department of Transportation’s call for Twitter users to tweet haikus around the theme safe driving in haboobs – severe dust storms that hit Phoenix in the summer.

Figures

1.7

$

Million Is the increase to the Reno Air Racing Association’s insurance for the annual air races that last year killed 11 and injured several spectators when a modified World War II P-51 Mustang crashed in front of VIP boxes.

2,000

That’s how many Nevadans have been ticketed for cellphone-related traffic violations in the five months since the use of handheld phones has been banned in motor vehicles.

The Nevada Highway Patrol, Reno police and Washoe County sheriff’s deputies say that’s partly because they’ve been teaming up to crack down on drivers using their phones. www.insurancejournal.com

7

Out of the top 10 areas in the National Insurance Crime Bureau’s 2011 report on auto thefts were in California. The report showed thefts were down for the year, but areas in California like Fresno, Modesto and Bakersfield dominated the list.

$27 Million

Is how much San Diego Gas & Electric Co. will pay to the city of San Diego to settle claims over 2007 wildfires that devastated wide sections of the city.

Government investigators found SDG&E’s power lines were at least partly responsible for three fires that killed two people, destroyed 1,347 homes and charred 324 square miles.

July 2, 2012 INSURANCE JOURNAL-WEST REGION | 9

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People Chip Holden

Hugh Coyle

Dave Ring

Concord, Calif.-based Jenkins Insurance Group named Hale “Chip” Holden III a vice president.

Holden’s primary focus will encompass commercial insurance for large corporate accounts.

With more than 30 years in the insurance industry, Holden’s background includes experience as a broker, servicing large accounts for a risk management insurance company, and serving as an excess and surplus underwriter and facultative reinsurer. Most recently Holden worked as a broker for Wells Fargo Insurance Services.

Jenkins Insurance Group, as part of Leavitt Group, provides property and casualty, risk management, employee benefits solutions, and other services. Jenkins has offices in Concord, Sacramento and San Jose.

Integro Insurance Brokers named Hugh Coyle to its San Francisco office as principal and West Coast real estate development and construction practice leader.

Coyle’s specialty is in the design, marketing and implementation of consolidated insurance programs. At New York, N.Y.-based Integro he will be responsible for all aspects of client production and retention, including program design and marketing, as well as safety and claims consulting services.

Coyle has 21 years of insurance experience, and has placed insurance programs for nearly $4 billion of construction projects, including bridges, tunnels, several high-rise condominiums and prestigious museums in San Francisco. Most recently Coyle served as senior vice president with Willis of California.

Andrew Petersen has been named executive vice president of business development for San Diego, Calif.-based Atlas General Insurance Services.

Petersen’s responsibilities include business development for new carriers, new programs, new lines of business and geographic expansion. He will also work in identifying stra-

ASTISH15197.indd ASTISH5333.indd 11 10 |ASTISH14873.indd INSURANCE JOURNAL-WEST REGION July 2, 2012

tegic acquisition targets, and he will have a role in existing program and portfolio management.

Prior to Atlas, Petersen held senior positions at Guy Carpenter. Most recently, he was senior vice president of Guy Carpenter in San Francisco, where was head of co-sales. He focused on casualty driven reinsurance placements and has worked extensively in the workers’ compensation and MGA space.

Glendale, Calif.-based insurance wholesaler KF&B Inc. named Eric Whiteside vice president of operations.

He will be working out of the Glendale office, and will be working with the management group to continue the expansion of the past several years Whiteside has nearly 25 years of experience in insurance and reinsurance. Previously, he was underwriting director of CNA Select Risk – Transportation where he led the specialty auto segments. His prior roles include senior production and marketing roles with Guy Carpenter and Gallagher Re. KF&B Inc. specializes in public auto business across the United States.

San Francisco, Calif.-based Woodruff-Sawyer & Co. named Dave Ring a producer in the agency’s property/ casualty practice.

Ring will focus on business development and client relationship management in the firm’s developing presence in the Central Valley.

Ring has over 23 years of sales, management and marketing experience. Prior to Woodruff-Sawyer, he was the general managing partner at Fairway Corp. and a sales representative for RJR Nabisco Co. In addition to his insurance background, Ring is also a PGA Golf Professional.

Woodruff-Sawyer has offices throughout California and in Portland, Oregon.

1/27/11 9:42 AM 6/11/11 9/6/11 2:54 8:30 PM www.insurancejournal.com

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News & Markets Report: Vehicle Theft Falls, California Still Dominates Top 10 List

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he National Insurance Crime Bureau reported 2011 is on track for another consecutive year of declining vehicle thefts, but California still dominates the top 10 list for areas highest auto theft rates.

Seven of the top 10 areas were in California, mostly in the central and northern portion of the state.

The report is a reflection of vehicle thefts on a per capita basis, and the authors of the report note that an area with a

Top 10 Auto Theft Rates

Fresno, Calif.

Modesto, Calif.

Bakersfield-Delano, Calif.

Spokane, Wash.

Yakima, Wash.

San Francisco/Oakland/Fremont, Calif.

Stockton, Calif.

Anderson, S.C. Vallejo-Fairfield, Calif.

Visalia-Porterville, Calif.

2011 Ranking

2010 Ranking

1 2 3 4 5 6 7 8 9 10

1 2 3 4 10 9 7 33 5 8

much smaller population and a moderate number of thefts can, and often does, have a higher theft rate than an area with a much more significant vehicle theft problem and a larger population to absorb it.

The report uses vehicle theft data obtained from the National Crime Information Center.

The FBI’s preliminary 2011 crime statistics released in June indicate a 3.3 percent drop in vehicle thefts from the 2010 number of 737,142.

Des Plaines, Ill.-based NICB is a not-for-profit organization dedicated to preventing, detecting and defeating insurance fraud and vehicle theft through data analytics, investigations, training, legislative advocacy and public awareness. The NICB is supported by more than 1,100 property and casualty insurance companies and self-insured organizations.

State Fund Files First Tiered Rating Plan ing all California employers manage the cost of their insurance,” Vargen said.

Vargen, who acknowledged that State Fund is an “organitate Compensation Insurance Fund has filed its first zation in transformation,” said the switch to the tiered rating tiered rating plan with the California Department of plan is not part of the organization’s ongoing efforts to reduce Insurance. costs.

The plan, which would apply to policies renewing or “This rate filing is definitely something that we’ve been incepting on or after Sept. 1, is a move to expand State looking at for some time,” she said.

Fund’s range of pricing, according to Jennifer ‘We believe this will Currently State Fund is in its Vargen, senior vice president of marketing and communications for State Fund, California’s be an important tool second phase of its geographic stratpart of an overall plan to cut largest provider of workers’ compensation insurfor us in helping all egy, costs, which included plans for masance.

California employers sive workforce reductions earlier “State fund has generally had one base rate manage the cost of this year that were canceled in April and had modifiers off that base rate for any following the voluntary exodus of policy,” Vargen said. “What that did was limit their insurance.’

1,300 workers. The restructuring is the range of pricing that we could achieve.” expected to save State Fund $200 million a year.

The rate filing calls for a zero net increase in overall rates, but manual rates will increase for some classifications, At the end of 2010 State Fund announced a geographic restructuring initiative to reduce real estate. The first phase according to State Fund. was completed in 2011, and the second phase will be unfold State Fund underwriters will be able to start quoting ing in 2012 with more moves and closures in next several under the tiered rating Aug. 1. months, Vargen said.

“We believe this will be an important tool for us in help-

By Don Jergler

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www.insurancejournal.com

July 2, 2012 INSURANCE JOURNAL-WEST REGION | 11

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News & Markets J.D. Power: Auto Insurance Satisfaction Reaches All-Time High

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verall customer satisfaction with auto insurance companies has reached an all-time high, according to the Westlake Village, Calif.-based J.D. Power and Associates’ 2012 U.S. Auto Insurance Study.

The satisfaction rate was driven primarily by increases in satisfaction with policy offerings, billing and payment practices, the study shows.

The study measures customer satisfaction with auto insurance companies across five factors: interaction; price; policy offerings; billing and payment; and claims.

Overall satisfaction with auto insurance companies is 804 (on a 1,000point scale), up 14 points from 2011.

Satisfaction levels in 2012 are the highest since the study was launched in 2000, according to J.D. Power.

Satisfaction increased in all factors in 2012, with significant improvements in

Customer Satisfaction Index Ranking California Region Wawanesa Automobile Club of Southern California (AAA) State Farm GEICO The Hartford Ameriprise Safeco California Average Mercury NCNU (AAA) Progressive Liberty Mutual Allstate Nationwide 21st Century Farmers Infinity P&C *USAA

823 807 806 801 798 792 786 785 780 779 773 770 764 761 757 754 705 912

*USAA is an insurance provider open only to U.S. military personnel and their families and therefore is not included in the rankings. ** Based on a 1,000-point scale 12 | INSURANCE JOURNAL-WEST REGION July 2, 2012

seven regions. policy offerings (+30 points) and inter Results by region are as follows: action (+19 points).

California Region: Wawanesa Satisfaction with price is unchanged ranks highest among award-eligible from 2011. insurers in the region with a score “Although satisfaction with price of 823, followed by remains consis‘Although satisfaction Automobile Club of tent from 2011, Southern California auto insurance with price remains companies have consistent from 2011, (AAA) (807) and State (806). made great strides auto insurance com- Farm West Region: in all other areas,” panies have made State Farm (837) ranks stated Jeremy highest among awardBowler, senior great strides in all eligible insurers in the director of the other areas.’ region, and is the only insurance practice award-eligible insurer to perform above at J.D. Power and Associates. regional average.

The study finds that 20 percent of customers have experienced an insurer- Central Region: Texas Farm Bureau (857) ranks highest among award-eligiinitiated rate increase from 2011, with ble insurers in the region, followed by 63 percent of these customers expeState Farm (832) and GEICO (830). riencing an increase of $50 or more.

Southeast Region: Farm Bureau Satisfaction among customers whose Insurance - Tennessee (828) ranks highpremiums increase by at least $50 is est among award-eligible insurers in 735, compared with 797 among those the region, followed by North Carolina experiencing an increase of less than Farm Bureau (823) and State Farm (821). $50.

North Central Region: Auto “Among customers whose insurers Owners Insurance and State Farm (in meet or exceed all their service expeca tie at 828 each) rank highest among tations, modest rate increases appear award-eligible insurers in the region, to be well tolerated, provided the rate followed by Erie Insurance (823). adjustment amounts to less than $50,” Northeast Region: Amica Mutual Bowler said. “However, larger rate (867) ranks highest among awardadjustments may trigger customers to eligible insurers in the Northeast consider shopping for a new insurer, region, followed by New York Central especially those customers who are Mutual (811) and GEICO (793). less engaged with their insurance com Mid-Atlantic Region: Erie pany.”

Insurance (834) ranks highest among Discussing rate increases with cusaward-eligible insurers in the Midtomers and offering options may have Atlantic region, followed by State Farm a positive effect on satisfaction. Of auto (813). insurance customers receiving a rate Customer satisfaction varies from increase, 56 percent were not notified an average high of 814 in the Southeast prior to the renewal notice, among region to a low of 784 in the Northeast whom satisfaction is 746. Satisfaction region. among customers who were notified The 2012 U.S. Auto Insurance Study prior to a rate increase and had a disis based on nearly 35,000 responses cussion with their insurer is 807. from auto insurance customers The study measures satisfaction between March and May. with auto insurance companies in www.insurancejournal.com

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Business Moves Atlas Atlas Financial Holdings Inc. has started selling its core commercial automobile insurance products in Utah, becoming the 31st state where Atlas is actively underwriting.

Atlas’ insurance subsidiaries, American Country Insurance Co. and American Service Insurance Co. Inc., distribute their specialty insurance products focused on “light” commercial auto industries (taxi cabs, non-emergency paratransit, limousine/livery and business auto) through a network of retail independent agents.

Together, American Country and American Service are licensed to write property and casualty insurance in 47 states throughout the United States.

During 2011, Atlas expanded its core commercial automobile insurance product offering in a total of 10 additional states, with

another seven states added in 2012. With the addition of Utah, Atlas is now actively underwriting in 31 states and views this as the primary near-term distribution footprint.

While Atlas may continue to expand into new states in the future, it now will begin to transition from geographic expansion to a vertical growth strategy as it enters the second half of 2012, with an emphasis on generating more business from existing agents.

sible for risk management activities.

The principal benefits for members of the CRO Network include: Peer Networking- Access to colleagues at peer life, health and property & casualty insurers to develop relationships, exchange ideas, discuss ERM challenges and approaches, and share lessons learned; Expert Access-Access to industry CROs and industry experts to discuss emerging best practices that help insurers operationalize new processes and maximize ERM value within their organizations; Topical ERM Issues- Insights into current ERM topics and issues that are prioritized by member companies and provided during the CRO Network series of educational events The CRO Network is open to CROs and executives with risk management leadership responsibilities at life, health and property & casualty insurance groups with significant operations located in the United States, Bermuda and Canada.

There is no cost to join the CRO Network.

Towers Watson Towers Watson, a global professional services company, has launched the Chief Risk Officer (CRO) Network, a knowledge-sharing network dedicated exclusively to senior risk officers of life, health and property & casualty insurers with significant operations in North America.

The CRO Network will provide an ongoing series of events, including conferences, webcasts, and networking opportunities for CROs and other senior executives respon-

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SPECIAL REPORT

Health & Benefits ‘One Way or Another’ Agencies See Growth in Group Health

By Don Jergler

“O

ne way or another.”

Is that the best way to describe a sound investment strategy nowadays?

Yes. If you’re talking about the growing number of agencies investing in group health benefits offerings.

It’s the attitude being echoed by more and more agencies when asked why they are increasingly investing in group benefits despite a looming decision from the U.S. Supreme Court that could overturn parts of the Obama Administration’s healthcare reform.

Many of those spoken with said that despite the decision, which had yet to be made at the time this story went to print, they were moving ahead by beefing up workforce and investments in resources to prepare for growth in this sector.

The consensus: One way or another, as times change and the world becomes ever more complex, the healthcare landscape is changing, and businesses small to large are going to need help navigating whatever system happens to be in place in coming years.

“Frankly, we want to take advantage of whatever changes take place,” said Shawn P. Pynes, a principal with Barney & Barney LLC in San Diego.

Barney & Barney, which has numerous divisions, including a growing property/casualty division, sees group benefits as one of its biggest growth

16 | INSURANCE JOURNAL-WEST REGION July 2, 2012

opportunities, and the agency is pony- petition among insurers and detailed inforing up both fiscal and human resourcmation regarding about the price, quality es to be prepared for that growth. and service of health coverage,” according Regardless of what the Supreme to a statement from the state government.

Court does with the Obama Currently the Exchange is soliciting Administration’s healthcare plan, or comments via public forums and online whether the Republican challenger to develop its policies, which it plans to Mitt Romney gets in office and halts release for comment in July to be finalized the sweeping reforms, the elecin August. Enrollment may begin starting tions themselves are going to in October 2013 for coverage as of Jan. 1, shape the implementation of 2014, according to the Exchange. healthcare reform.

In fact, more than half of insurance exec Those are Pynes’ thoughts on utives believe that most health insurance the matter. will be sold through exchanges within five

He adds a thought: States years, and nearly a third believe they will like California that have embraced be government-run exchanges, according healthcare reform, or Obamacare as to a survey by Connecture Inc., a sales many call it, are likely going to go automation technology company focused through with healthcare exchanges on the health insurance industry. The firm that will shape the health insurance conducted its survey during the America’s landscape regardless — thus driving Health Insurance Plans Institute’s 2012 employer need for services and prodconference in late June. ucts, or at least some help figuring While surveys on what firms will do in things out. the face of healthcare reform vary broadly, “Regardless of what the Connecture the federal government ‘What we’re trying to survey shows does, California is moving nearly twodo is be prepared to that forward with the health thirds, 61 percent, deal with individuals believe that five insurance exchange,” he said. instead of just com- years from now Starting in 2014, panies. We recognize the majority of Californians will have the businesses we’re going to have small California Health Benefit will not offer to get more connect- health insurance Exchange, touted as a way to make it easier for ed to the end users.’ to their employindividuals and small busiees, according to nesses to compare plans and buy health the survey. insurance in the private market.

Despite what surveys show, or what “The Exchange will enhance compethe pending election or Supreme Court tition and provide the same advantages ruling brings, Paul Saich, CEO of San Jose, available to large employer groups by Calif.-based Thoits Insurance Service Inc., organizing the private insurance maris firmly in the “one way or another” set. ket, including a more stable risk pool, “No matter what direction it goes there’s greater purchasing power, more comalways going to be a need for consultants www.insurancejournal.com

on employee benefits,” Saich said. “We are at full throttle ahead with the benefits department.”

The last three big hires Thoits has made have been on the benefits side, and those hires have been to prepare the agency for expected growth in that segment, he said.

For a hint of Thoits’ strategy think “captives.”

“Benefits is really going that direction,” Saich said.

Thoits is setting up captives to bring together companies together with similar synergies. Such captives can be comprised of a combination different of firms, as long as they have similar buying needs, he said.

www.insurancejournal.com

Additionally, Thoits is negotiating with carriers to take bundled group benefits products and “unbundling the entire thing,” he added. “The idea is that we’re going to take the best of everything.”

The resulting products, and Thoits’ strategy, are geared toward the midsized market.

“It’s really a solution geared for the middle market,” Saich said.

In other words it’s for companies that are not big enough to do it themselves, but big enough to understand the process.

It takes a minimum of 100 to 150 employees to start talking about group captive, but ideally Thoits likes companies with employees numbering in the 200 to 250 range, and putting those companies with five, 10 or more others, he said.

“Usually we like to see about 1,000 lives to make a group successful,” Saich added.

Pynes of Barney & Barney said his agency is exploring numerous options to answer the building demand for group health offerings, including developing their own private exchange, and the agency is taking a strategic approach by focusing on a particular segment of the market as well.

“We really believe that the

jobs are going to be created at the lower end of the market,” Pynes said.

Their focus is on assisting their existing clients — and obtaining new clients in —

‘Regardless of what the federal government does, California is moving forward with the heath health insurance exchange.’ the small group space.

“We think a lot of brokers are running away from small group because of uncertainty that exists,” he said.

Pynes believes that while some employers will dump their employees from their benefit plans, move them into exchanges and take the penalty and get out, he doesn’t think that will be the case with the majority of companies.

And that’s why Barney & Barney is sold on employee benefits. About half of the agency’s revenue comes from employee benefits, and 70 percent of that is tied to healthcare specifically, Pynes said.

Some of the investments Barney & Barney is making is in retirement services, compensation consulting, and two years ago the agency invested in enrollment and customer support by acquiring a small firm, Virtual Cosourcing Solutions in Orange County.

VCS specializes in enrollment and retention services primarily for the insurance carrier industry.

The purchase provided Barney & Barney a platform to deliver consumer insurance offerings. Expanded services will include extended customer service hours, online enrollment services and an online purchasing portal.

Tools “What we’re trying to do is be prepared to continued on page 18 July 2, 2012 INSURANCE JOURNAL-WEST REGION | 17

weST COVERAGE

News & Markets Group Health, continued from page 17

“There is definitely deal with individuals instead of just compaa ground swell toward nies,” Pynes said. “We recognize we’re going voluntary benefits,” to have to get more connected to the end said Albanese, who users.” has worked in the Barney & Barney also sunk some research group health arena for and development cash and resources — Aon, Marsh, Deloitte Pynes wouldn’t say how much — into their & Touche and Blue actuarial department to develop what he Shield of California. described as “a robust healthcare reform The mounting numremodeling tool” to help walk employers ber of options has led through the financial implications of their Heffernan to gear up healthcare decisions through 2018 when to provide employers reform is supposed to be fully implemented. overwhelmed by the The tool is a computer software program options — or those that allows Barney & Barney to plug in that need of more help variables — financial data, Census data, for their employees employee salaries — to help calculate what — services like enrolla customer’s benefits cost will look like ment support. over next five years based on how reform is “A lot of employers, they just can’t be worded now. present enough with the employees,” The software tool will tell an employer Albanese said. what it will look like if he cancels all his insurance and pays a $2,000 penalty and Alternatives sends all employees to an exchange. Want Albanese’s bottom line: It’s all about alterto know what happens if you gross up salnatives. ary so employees can buy their own cover “With healthcare reform there’s definitely age? How about if you continue to offer the a trend toward people looking for innovacoverage you offer today and just things let tive alternatives in the medical arena,” she play out? said.

“What we’re finding is it’s not that ‘No matter what direction it Employee wellsimple of an equagoes there’s always going to ness is one alternaHeffernan is tion,” Pynes said. be a need for consultants on tive pushing. In fact, “If you really walk employee benefits. We are at the agency itself through what the implications are, it’s full throttle ahead with the has a dedicated wellness expert in not that easy of a benefits department.’ its office. decision.”

“We have a huge emphasis on wellness,” There’s also the moral decision some are Albanese said. struggling with to do “the right thing, what Heffernan is working on alternatives to ever that is,” he added. the state exchange. Providing, or advising “That model, what it really shows, is it’s on, such alternatives are the baseline of not a cut-and-dried decision,” Pynes said. where Heffernan sees its growth in the next It is very far from cut-and-dried, said five years, she said.

Karen Albanese, senior vice president “I would expect we can grow our busiHeffernan Insurance Brokers in San Rafael, ness by 10 to 20 times what it is,” added Calif.

Albanese, who said she is going after the Albanese is seeing a great deal of interest upper mid-market businesses with fewer in voluntary benefits, which employees are than 5,000 employees. choosing to purchase through their compa “I go after the underserved mid-market,” nies at rates lower than they could get on Albanese said, referring to that segment as a their own.

18 | INSURANCE JOURNAL-WEST REGION July 2, 2012

market with “a unique need.”

“They’re big fish in a small pond,” she added.

Albanese too takes the “one way or another” attitude about the future of group health.

“I’ve talked of lots of CFOs who said if there’s an option I’m out,” she said, adding that she’s talked to about as many who have said they plan to continue giving their employees benefits.

The question that remains, she said, is: how do you spend your money?

Like other agencies, Heffernan has invested heavily in tools like financial predictive modeling to help clients make those decisions.

“There’s a lot involved and it’s a very important discussion and it takes a lot of knowledge to help guide somebody thought that discussion,” she said.

“And we’re always retooling ourselves,” she added. “The focus on what the evolution is. Wellness, improving administration efficiencies, assisting clients in communicating, helping with strategies over the long term.”

Speaking of the long-term, Albanese was asked her thoughts on how the industry will shape up out to 2018, when and if healthcare reform is supposed to be in full affect.

“I think we’re just going to see further consolidation,” she said. “Mostly we’re going to see fewer and fewer brokers.” www.insurancejournal.com

IDEA EXCHANGE

Minding Your Business 5 Tips Learned From Grandma For Running a Business Rules to Run Your Business and Your Life

M

ama knows best … a familiar phrase?

Well if mama is so clever, she must have learned from the Crockpot of Wisdom: Grandma.

Whether it’s perfecting her pot roast or how to run an effective and prosperous business, my Grandma Roxy has imparted her knowledge in more ways

By Catherine Oak than one.

One hundred and five years of life has equipped Roxy with a plethora of tactics on how to survive and stand strong in the most unlikely of situations. Six wars, the Great & Marisa Strader Depression, civil rights movement, nuclear standoff, and countless scandals have been witnessed during Roxy’s life. I think it’s safe to say that there isn’t a curveball too sharp for Roxy to handle. Having recently celebrated her 105th birthday, we asked dear Grandma Roxy to share some of her secret tips about business.

Here is what we learned.

Work Smarter, Not Harder. It’s not about how hard you work, but how smart and efficient you are that separates the average from the peak performers.

A strong work ethic is a valuable asset, but the brain behind the labor is truly priceless. Being open-minded and willing to adapt is an incredible advantage in a business. Innovation and creativity are essential tools to keeping up with the times.

With more than a century under her belt, Grandma Roxy has learned to go with www.insurancejournal.com

the flow while also remaining headstrong and true to her values. If you put your heart into your work, it will reflect in your outcome.

Be impeccable with your word, thoughts and actions. Honesty and follow-through are leading advantages not only in the business world, but also in your personal life. Never make a commitment you don’t intend to keep; always be on time; look your best; and live up to your fullest potential. Otherwise, you are cheating yourself out of excellent opportunities, however small they may be at the time.

Don’t take things personally. Do not create problems that do not exist; petty drama is your worst enemy, as it will hold you down and consumes your valuable energy. In the midst of trying to control everything around you, you will lose control of the most important tool, your mind. The only way to conquer a situation is based on how it is approached. Therefore, before reaching outward to attempt to grasp at the material, it is best to look within yourself and master your mind.

Have a positive attitude and be a team player. As the only

woman who remained employed in her town’s bank in Wisconsin during the Great Depression, Roxy was greatly humbled and learned the true essence of gratitude. A positive and thankful attitude is a magnet for opportunity ... and it’s contagious! The more motivated you are, the more willing your team is to follow. Work together for a greater purpose, and experience the trials and rewards as a whole.

Appreciation is the key to attraction.

Simply taken, these rules hold a powerful place in both personal and business life — a solid foundation of morals and values that harbor the potential to excel.

To receive richly, give generously. No matter how much she struggled, Roxy never missed an opportunity to give to struggling businesses, charities, and anyone who may be in need.

“You never know where life will take you … one day you could be in a position of desperation praying for someone to lend a helping hand when you need it most. Treat others how you wish to be treated, and you will make your life a much easier place to live.”

Roxy’s wise words ring true from firsthand experience while struggling to maintain through the Great Depression.

My Grandma Roxy is still sharp at the ripe young age of 105 years old. She has enriched the lives of many with her lively presence.

She continues to complete crossword puzzles, is an avid reader, hangs out with young people, frequents the casino, still loves to learn, and is forthright in her opinions and values. As she ages, her grace and wisdom is lovingly shared with her beautiful family and wonderful friends.

Oak is a partner at the international consulting firm Oak & Associates, providing services for mergers, acquisitions, management and financial consulting. Strader is a part-time financial analyst with Oak & Associates. E-mail catherine@ oakandassociates.com. Phone: 707-935-6565. Website: www. oakandassociates.com.

July 2, 2012 INSURANCE JOURNAL-NATIONAL REGION | N1

NATIONAL COVERAGE

MyNewMarkets Hazardous Waste Storage & Disposal Facilities Market Detail: Environmental Insurance Agency Inc. (EIA) (www.eiains.com) offers coverage for storage tank pollution liability. Coverage includes releases from scheduled storage tank systems for corrective actions on-site and off-site.

Bodily injury and property damages also are covered. Policies meet U.S. Environmental Protection Agency and state financial responsibility requirements. Minimum premium is $500.

Available limits: Maximum $5 million Carrier: Unable to disclose States: All states except D.C. Contact: Customer Service at 800-977-3335

Hospice (Medical & Non Medical) Market Detail: Negley Associates (www.jjnegley.com) is the underwriting manager for an A+XV rated carrier, whose coverages include: professional and general liability; directors and officers (including employment practices liability insurance); excess liability; and property for alcohol/drug rehabilitation centers, mental health facilities, group homes, sheltered workshops, and related organizations. Negley is also an underwriting manager for the Mental Health Risk Retention Group.

Available limits: As needed Carrier: Unable to disclose States: All states Contact: Customer Service at 973-830-8500

States: All states except Fla., Okla., and Texas Contact: Reynaldo Valdesuso at 877-807-8708, ext. 6156 or email: rvaldesuso@kdins.com

Outdoor Recreation Insurance Program Market Detail: Veracity Insurance Solutions LLC (www.veracityinsurance.com) offers coverage for: outfitters and guides; shooting ranges; trail rides; horse arenas; kiteboarders; skate parks; kayak rentals; motocross tracks; paintball facilities; climbing walls; ropes courses; zip lines; canopy tours; and equipment rental stores, etc.

Available limits: Minimum limit $1 million, max $10 million

Bringing Market Seekers and Market Providers Together • Find markets in our database • Promote your markets on our site • Join our community forums • Membership is free!

www.mynewmarkets.com

Market Detail: Pet Salons/Kennels/Supplies Topa Insurance Co. (www.topains.com) offers a monoline general and professional liability package or insurance coverage for pet grooming, kennels and other related animal care businesses.

Available limits: As needed Carrier: Unable to disclose, admitted and non-admitted States: Ariz., Calif., and Nev. Contact: Grainne Heatherington at 310-201-0451 or email: gheatherington@topa-ins.com

Package Policy - Older Buildings Market Detail: Kevin Davis Insurance Services Inc.’s (www.kdisonline.com) eligible buildings include: condos; apartments; shopping centers/strip malls; commercial, warehouse offices; and vacant and partially occupied buildings. Eligible risks are buildings built between 1945 and 1975. (Buildings built prior to 1945 will be considered if underwriting guidelines are met.)

Available limits: maximum $5 million on frame, $10 million on masonry (higher limits may qualify) Carrier: Unable to disclose, admitted N2 | INSURANCE JOURNAL-NATIONAL REGION July 2, 2012

Carrier: Unable to disclose, non-admitted States: All states Contact: Cameron Allen at 801-763-1375 or email: allen@ stratusins.com

Trade & Professional Associations Market Detail: Aon Association Services (www.

AonAssociationServices.com) has more than 30 years of experience in working with nonprofits, associations and other affinity groups. Expertise is in designing, implementing, servicing and administering program business. Aon works with more than 56,000 nonprofit organizations and their members throughout the United States, ranging in size and needs from an Elks Lodge seeking general liability coverage to a long-term care facility seeking more complex products and services.

Each program is tailored to the needs of the client and is managed by a dedicated team.

Available limits: As needed Carrier: CNA States: All states Contact: Sharon Fine at 800-432-7465 or email: sharon_fine@ aon.com www.insurancejournal.com

Closer Look

Insurance Exchanges

A Year Later: The Growth and Outlook of the LexisNexis Insurance Exchange

T

he LexisNexis Insurance Exchange — an online single-entry submission system that streamlines the Clyde Owen flow of application data among agents, brokers and carriers — celebrated its first anniversary in June.

The Exchange, conceived by the Council of Insurance Agents and Brokers (CIAB) and established by LexisNexis Risk Solutions, CIAB and Marketcore Inc., has grown rapidly during that time. (The Exchange was originally launched in late 2010 and underwent an “early adopter” program until June 2011.) In the past year since going public industry-wide, more than 40,000 submissions have gone through the system. Some 125 brokers and 325 markets now use the

Exchange. As the number of users grew, the Exchange has been extending its products and functionality, embedding new data, analytics and marketing tools to the system.

The Exchange has ambitious plans. Currently, the system focuses on helping property/ casualty and employee benefits agents, brokers and carriers collaborate on commercial lines accounts. But in the future, the Exchange plans to add new capabilities for personal lines, life insurance and even reinsurance.

Further, the Exchange wants to expand its real-time market information to encompass all providers of coverage in the North American marketplace. It even wants to become an online collaboration and social media platform — a kind of Facebook or LinkedIn for insurance professionals.

LexisNexis Insurance Exchange’s General Manager Clyde Owen recently spoke

N4 | INSURANCE JOURNAL-NATIONAL REGION July 2, 2012

with Insurance Journal to discuss the Exchange’s progress and future plans. Below is an abridged version of the interview. A longer version is available on InsuranceJournal.com, and a podcast is also available on InsuranceJournal.tv.

IJ: The exchange has been available industry-wide for a year now. How is it doing and how much has it grown?

Owen: We’ve been live about a year, and before that we were probably a year or so in development. We think that it’s going very well. This was a very unique challenge to the industry to try to bring together brokers and carriers in a sort of new way of doing business. Our idea was to bring a new level of connectivity to brokers and agents — one in which there would be more efficiency, more collaboration, increased accuracy, security, certainly analytics and data about the process, and more transpar-

ency. So, we had a lot of goals from an agency perspective.

We wanted to give them, for the first time ever, a true marketing system. I think marketing is universally accepted within this industry as something that’s important, but [there’s] no real system. The marketplace is fractured from the agency management system to carrier portals to carrier proprietary systems, but nobody really in that fractured universe focuses on how to gather all the information relevant to a marketing process, whether from an agent’s perspective or from a carrier’s. We’ve rolled out the functionality that was our roadmap that we deemed sort of most critical at launch, and we continue to add to that every day.

How many carriers, agencies and brokers are using the exchange now?

Owen: On the exchange, we have about 125 brokers, and that www.insurancejournal.com

missions or more transactional-based submiswould include both wholesalers and retailsions or specialty lines or personal lines or ers, and some what you might refer to as life or health or benefits, we wanted to have managing general agencies. We have about 325 insurance carriers who are receiving busi- one place that the agency could do that marketing and behind the scenes the LexisNexis ness within the exchange. We’ve gone from Insurance Exchange would define the protono transactions at the beginning to now tens col to execute that marketing submission. of thousands of transactions having gone We’re not yet done through the exchange. with commercial. We’re In terms of the types of It is about creating a not yet doing transagencies, there are some community in which actional processing, agencies that you would people can communicate which we intend to do. think of as small agencies in a business language Once we get beyond — i.e. less than 10 producers — to some very we define as insurance. that, we will begin to turn our focus to other large agencies. lines of business such Most of the major markets in the United States have received some as personal lines and likely life, and maybe even reinsurance. business in the exchange; some more than Our long-term vision is that there ought others. The exchange has a number of prodto be an insurance marketplace, there ought ucts and tools at this point in time. We span to be a place where agents and brokers can the gamut of functionality from lead generaunderstand what their markets are looking tion to bind. Within each of those steps, or for and how they’re looking for it specificalcomponents, of the marketing workflow, ly, and how it’s not to be only submitted to different users find different needs and them, but understood. So when an insurance different functionality. So, for example, a carrier rolls out a new product to the agents producer likely uses our lead generation, or with whom they’re contracted or to an open our lead management, or our sales managebroker space, how do they know about that? ment process. If I’m a CSR, then I might use There are probably 4,000 or 5,000 prothe marketing capabilities. If I’m an agency proprietor, I likely focus on the analytics and viders of market in the North American the reports that come out of the system.

marketplace. For any individual broker to understand those offerings turns out to be an impossible task in today’s environment.

But it’s not impossible from a technology standpoint. In fact, all that data and content could be available today in the Exchange if the markets would provide it, and we could then essentially make that available as information to a community.

As people are on an exchange, there is also the opportunity for them to collaborate with each other. So for example, the agents and brokers can invite their customers or the insureds into the process in a secure place through notes and through chat, and through other online mechanisms. A carrier can instantly educate and update their insurance community in a secure platform that can be targeted just to their users. So really, you could think of it as a Facebook or a LinkedIn but in a secure environment within insurance, with people communicating with each other who have essentially befriended or appointed each other. So it is about creating a community in which people can communicate in a business language we define as insurance for the purposes of either educating each other or placing insurance and/or other things that might arise out of that.

Which accomplishments are you most proud of from the past year?

Owen: We pride ourselves on really listening to our customers and reacting to their needs. That has led to some very useful and interesting extensions of our products and functionality. Some of it has resulted from extending into the sales management and lead management process; by beginning to add data assets and infusing those in the process at the right place such as lead generation; such as information that can be used within the underwriting and submission process; and wrapping a mobile app around the entire product suite.

The LexisNexis Insurance Exchange at its outset sought to be the single place where marketing, sales management and lead management would take place within an insurance agency. Whether that agency was focused on mid-market commercial line subwww.insurancejournal.com

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7/21/11 9:34 AM July 2, 2012 INSURANCE JOURNAL-NATIONAL REGION | N5

Maureen Boeing is chair of ASCnet (Applied Systems Client Network) and principal of Landmark Insurance Agency LLC in Cincinnati. Applied Systems Client Network (ASCnet. org) is the international network of Applied Systems technology users that helps members increase agency value by driving better system utilization.

Records, Reporting, Value Creation

As a volunteer engaged with a network of agency management system vendor clients, I have an opportunity to hear from my peers about their experiences and compare this with what goes on in our own office. While we all find immense value in our systems, we also struggle with maximizing automation — whether it’s our management systems or other technology. Everyone could stand to spend a little more time getting to know what their automation offers and learning how to use these features. Doing so will produce positive results for the agency and create greater agency value. — Maureen Boeing

Todd Arnold is the co-founder of AB Solutions (www. absolutions inc.com). He has more than 20 years of experience working in the insurance industry as a network administrator, commercial lines CSR, surety representative, agency accountant, producer, marketing manager and agency consultant. He is also well-known for his ability to extract data from the system via reporting and integrated documents.

Chris Burand is the founder and owner of Burand & Associates LLC (www.burandassociates.com).

He is a nationally recognized speaker and author, and is a monthly columnist for Insurance Journal’s “The Competitive Advantage” column. He also publishes Burand’s Insurance Agency Adviser for independent insurance agents.

The Complete System

Effectively using all agency management systems — policy, document, benefits and sales — is critical to an agency’s productivity and effectiveness. Purchasing and maintaining these various systems is a significant expense for an agency. Making sure users take full advantage of these tools is an ongoing training and education process. — Steve Anderson

Jeff Yates is the executive director of Independent Insurance Agents & Brokers of America’s Agents Council for Technology (www.act tech.org). He works with independent agents, companies, vendors, user groups and industry associations to advance effective technology solutions and improve business processes within the independent agency system.

N6 | INSURANCE JOURNAL-NATIONAL REGION July 2, 2012

Opportunities to Maximize

As ACT’s executive director and an active Real Time/Download Campaign participant, I interact with many independent agents and brokers who are committed to implementing the most effective workflows and processes. The common denominator is that all have invested in agency management systems, which helps them eliminate keystrokes and enhance efficiency. Still, many agencies underutilize their system capabilities, leaving dollars on the table that could go to their bottom line. — Jeff Yates

www.insurancejournal.com

Kitty Ambers is the executive director of the American Insurance Marketing & Sales Society (www.AIMSSociety. org), which provides marketing and sales training, tools and idea-sharing opportunities to property/casualty insurance agency owners, producers, support staff and insurance company personnel.

Always Do Better

I have many opportunities to explore with front-line agency and broker staff how management systems support strong sales and marketing results. In our CPIA education programs and our AIMS Society member interactions, I see examples of innovation. At the same time, I find agents and brokers who want to do more.

Agency and broker professionals do many things well. Even in these areas, it is possible to improve on system use to increase revenue, bolster retention and boost profits. By making modest shifts or expanding existing workflows and procedures, agents and brokers can find more value in their agency systems and can use them to increase sales, build stronger client relationships and achieve better overall results. — Kitty Ambers

Wasted Time

If you are accessing carrier websites and typing information into their system without any use of the real-time interface tools provided in your agency management system, you need to be angry. All of us on the agency side of this equation are far too passive about allowing this state of affairs to continue. It’s 2012 now, and the day when this ridiculous waste of our valuable time should have stopped is long past due. — Todd Arnold

www.insurancejournal.com

Angela Adams is president of Angela Adams Consulting Inc. (www. angelaadamsconsulting.com). She has 25 years of experience, including serving as an agency owner, chief financial officer, commercial and marketing manager. She also has nine years of experience in agency consulting. She has been a regular speaker at the AMS National Users’ Group Conferences and teaches local AMS Users’ Groups nationwide.

Patricia M. Alexander (www.patalexander. com) is a consultant, coach and mentor.

Her experience spans standard insurance carriers, retail agencies, surplus lines insurance carriers and managing general agencies. She is considered an agency systems and operations specialist and is dedicated to the best use of technology as a means to enhance the service experience and to improve agency profitability.

Steve Anderson (www. steveanderson.com) is executive editor of The Anderson Agency Report (TAAR), a monthly newsletter dedicated to providing independent agents with the technology information they need to more effectively manage and grow their agencies. He is also president of The Anderson Network Inc., which was formed to help agents maximize productivity and profits using practical technology.

July 2, 2012 INSURANCE JOURNAL-NATIONAL REGION | N7

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3

— Maureen Boeing

7 Front End Scanning.

How paper is routed is becoming less important.

Almost all of the agencies I speak with are no longer maintaining non-electronic files. The superiority of capturing incoming items electronically early is being recognized and adopted by a majority of agencies. — Todd Arnold

8

Accounting Tools.

Agencies use their agency management system as an effective accounting tool. This is the basis for the beginnings of these systems. Agencies have had many years of practice using this portion of their systems.

Create Agency Value.

The information we record and maintain within our systems is invaluable.

It not only helps answer the question, “How much are you worth?” but also, “How much are you worth to someone else?”

Create Efficiencies.

Improve their internal processes to increase efficiencies. This includes a tremendous growth in the number of agencies that are using front-end imaging to achieve the long elusive goal of a paper “less” (not paper free) environment. This can reduce the amount of time that staff spends doing tasks that do not have a perceived client value, allowing them more time to spend with clients.

— Patricia Alexander

— Angela Adams

4

Give Friendly, Conscientious Service. Manage-

ment systems are the hub of good client service; nearly all agency employees tap the functionality to support client-focused interactions. Some use system database information to help them be proactive, offer alternatives, and ask (and record answers to) more probing questions, including why someone leaves or cancels. — Kitty Ambers

Claims Download. Save

considerable time in accounting departments with direct bill commission statement download.

Also, claims departments are more efficient with claims download, particularly following natural disasters.

— Jeff Yates

N8 | INSURANCE JOURNAL-NATIONAL REGION July 2, 2012

9

5

Personal Lines Download. Implement

6

personal lines download and save a huge amount of time with it. Because their systems synchronize with their carriers’, agency staff can provide clients more accurate and complete information, which means better service and reduced E&O exposure. — Jeff Yates

Create Workflows.

Every agency system has a pre-defined way to process various transactions. Agencies have been successful in using these processes to build agency procedures. Efficiencies — as well as errors and omissions protections — are maximized when everyone in the agency uses consistent procedures for processing daily activities. — Steve Anderson

Client Relationships.

Agencies manage their client relationships through their agency management systems.

One further step would be to improve their prospect management through their agency management systems.

This will reduce their errors and omissions exposure and make new sales more efficient.

— Chris Burand

10

Cloud Computing.

Software as a Service (SaaS). A trend has been the move from managing internal computing platforms to outsourcing to the cloud. Moving network management, data backup, version upgrades and user issues to an outside firm frees up agency resources for more productive projects.

— Steve Anderson

www.insurancejournal.com

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Updates and Changes.

Agencies often do not keep up with system updates, while vendors create enhancements and fix bugs in their systems. The changes often include workflow improvements that are not implemented; staff continues to use “the old way.” Agencies should ask what the changes make possible and adjust workflow to improve efficiency. — Steve Anderson

5

Real-Time Quoting and Inquiry. Functionality

exists for both personal lines and commercial lines that helps employees work consistently with numerous carriers, directly from their agency management system.

Real-time automates carrier password entry and relays information directly from the agency system to the carriers’ — eliminating re-keying.

Real-time lets agencies realize their vision of SEMCI (Single-Entry, Multiple-Company Interface). — Jeff Yates

9

No Standards. Agencies

don’t define user system standards (i.e., the lack of well-defined activity codes). The agency should define each activity description. This enhances the system search functions, and the ability to quickly retrieve what the user is looking for.

— Patricia Alexander

www.insurancejournal.com

No Audits. Not auditing processes and workflows to ensure consistency, time-saving techniques, and documentation. Too many procedure manuals sit on the shelf gathering dust because they were not written in a way to make auditing them a natural consistent process. — Angela Adams

3

Top to Bottom Planning. Often, there is a

disconnect between managers who decide what needs to be measured; tools and technologies used to present the measurements; and the procedures and staff that drive data processing that those measurements will be built upon. You can still find people in charge of overall agency operations who believe it is OK not to understand agency procedures or what their automation systems are capable of.

4

Report on Too Little.

System functionality can be more robust to track employee performance, plus offer financial, activity, performance, expiration and book of business reports to help managers understand workload, productivity and revenue per employee.

— Maureen Boeing

— Todd Arnold

6 Engage With Peers.

Real benefits come from participating in agency management system user group conferences, local meetings and online communities. Agents can learn from fellow agents how to maximize their systems. — Jeff Yates

10 Not Using Full System.

Some agencies leave agency management system features and functionality on the table, using much less than the system’s full capabilities. Perhaps they think they don’t need to use the features, they don’t know how, or they don’t know their systems include certain capabilities. — Maureen Boeing

8 7

Not Consistent With Data Entry.

There is a definite “cause and effect” between good, consistent data entry and sales. A robust database can have a huge impact on cross selling and account rounding opportunities and bolsters the value of management reports. Remember, attaching a copy of a declarations page isn’t the same as entering policy data into the system. You cannot pull reports from an attachment!

— Kitty Ambers

Not Consistent With Data Entry.

There is a definite “cause and effect” between good, consistent data entry and sales. A robust database can have a huge impact on cross selling and account rounding opportunities and bolsters the value of management reports. Remember, attaching a copy of a declarations page isn’t the same as entering policy data into the system. You cannot pull reports from an attachment!

— Kitty Ambers

July 2, 2012 INSURANCE JOURNAL-NATIONAL REGION | N9

SPECIAL REPORT

Health & Benefits Employers Fighting the Rising Cost of Healthcare Turn to Holistic Benefit Planning as a Solution

By Andrea Wells

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he nation’s largest employers don’t anticipate finding cost-relief any time soon when it comes to health and benefits coverage. But they have been listening more and waking up to ideas from their brokers that could help them turn the cost curve in the long run.

Regardless of how the U.S. Supreme Court rules on the Patient Protection and Affordable Care Act, many of the reform strategies launched by employers and the insurance industry will move forward, according to Rebecca Knoll Lawrence, J.D., assistant vice president, National Legal and Research Group for Willis North America, Human Capital Practice. (The decision had not been handed down as of IJ Magazine’s deadline.)

Group plan premium increases are nothing new — health costs have been going up for decades.

Also, the cost of compliance with federal healthcare reform is just one factor driving up costs for employers.

But employers today seem to have a new appreciation that the rising costs need to be addressed and that there are ways to do this. Reality is creating a new and more attentive employer audience when it comes to considering health and benefit options, Lawrence says.

“For the first time in the last year or two, we’ve had an awakened audience that says, ‘Oh, I see where thinking about benefits as a whole can be beneficial,” she says.

N10 | INSURANCE JOURNAL-NATIONAL REGION July 2, 2012

It’s not just about the insurance premium or an employer’s self insured plan, she says. Employers must examine their benefits strategy as a whole and think about how other methods of cost control can help the bottom line.

In today’s healthcare environment, employers need to look at wellness programs, bonus structures, vacation plans, and employee assistance plans as ways to counterbalance rising healthcare costs, Lawrence says.

Willis has long advocated that employers explore health and benefits features that impact overall cost, but interest in these cost control options has accelerated as employers have been coming to terms with the compliance mandates under the federal healthcare reform act.

“We (Willis) have always been pushing other methods of cost control and thinking about benefits as whole, but what I think we have experienced is a lot more interest and engagement when we talk about these issues,” she says.

“Brokers need to be thinking about all

of those aspects and not just about the bottom line healthcare costs.”

There are a lot of other ways to head-off rising premiums, she says.

“Enhance the operation of the benefit plan, but also move money from one area to another to stabilize the whole offering of benefits, and non-health perks that a company can provide,” she says. Push really hard on the strategic planning, and work more on a nitty-gritty level with employers that now see how such planning can impact their company, she says.

Expertise Experience and resources in the health and benefits sector will play a big role moving forward regardless of the Supreme Court ruling, Lawrence says.

“If an employer wants to look at healthcare reform after the Supreme Court decision and figure out what impact it’s going to have on them, how they can plan, and how they can move forward, then they need to bring in expertise from a number of areas,” she says.

Employers, in particular large employwww.insurancejournal.com

ers, will need analytics and benchmarking to see what their competitors are doing, she says. They will need to look at market trends and legal requirements as well as HR trends. Most important, she says, employers “need to find someone that can bring all of that expertise to them.”

The need for heightened expertise may leave small employers at a disadvantage, Lawrence says.

“Large employers have certain needs, certain healthcare goals, certain financial penalties … They have slightly different concerns than small employers.”

Small employers may end up getting neglected in a post-reform healthcare world, Lawrence says.

“The impact of healthcare reform could be even-more harsh on a small employer because they may not have resources to guide them through reform compliance concerns. Instead, small employers may make decisions that result in negative employee morale. Small employers are also generally less inclined to consider a total rewards strategy for their employees,” she says. For that reason, the role of insurance agents and brokers will become increasing important.

“It behooves small employers to make sure they are working closely with their broker, working closer with their outside counsel, and effectively using tax advisors to determine what needs to be done with regard to healthcare reform and resulting plan changes.”

Fully-insured small employers can rely to a certain extent on their carriers.

“Those carriers have to comply with federal and state law,” Lawrence says. “So a small employer is going to receive some benefit just by placing fully insured benefits because they can rely somewhat on the insurance carrier. But a small employer is still going to need to look at healthcare reform requirements, what kind of employee growth is projected, and the resulting plan design pricing for next year.”

Whatever they do, no matter their size, employers can’t do nothing.

“Small employers should definitely not sit back and think that everything is fine and that all they need to do is place the insurance,” she says. “Even a small employer www.insurancejournal.com

needs to think about total rewards and how benefits and compensation and company perks work together to attract employees and provide a total rewards package that makes sense for the company.”

In the end, employers must decide what’s most important to them when it comes to health and benefits coverage.

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“They need to take a comprehensive, holistic approach and look at their vacation plan and voluntary benefits. Perhaps the employer may want to incorporate more non-employer sponsored benefits that employees would appreciate, but at the same time do not cost the company money on the front end.”

July 2, 2012 INSURANCE JOURNAL-NATIONAL REGION N11 2/10/12 3:03 |PM

SPOTLIGHT

Auto Helping Policyholders Understand Auto Glass Repair Or Replacement Options

By Jerry Beigel

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By Jerry Beigel

id you know that the most frequent of vehicle claims is glass damage at the rate of 7.5 million per year, and 80 percent of those are windshield damage versus side or back glass? When a policyholder experiences windshield damage, it’s important to understand the differences between the repair and replacement options, and what the customer can expect, so that you can guide them through the experience.

Following are the top 10 questions your personal or commercial policyholder may have for you.

Can windshield damage be repaired?

Damage is caused most often by a rock hitting the windshield while driving, which creates a chip. While most

people assume the rock hit them, it’s actually the car in its forward-motion that hit the rock.

Today’s lightweight windshield designs allow for the glass to splinter into a multitude of micro cracks that can actually be filled. Chips or cracks larger than one might expect can, in most cases, actually be repaired by experts in the vehicle glass industry. If the damage is larger than six inches, a replacement is strongly recommended.

It’s important to understand that a repair is not just a cosmetic fix. Rather, it is a bonding solution to restore the windshield’s structural integrity.

Why should I bother with a repair?

A small chip or crack in the windshield will likely spread. If it happens while driving, it can cause a dangerous

thats

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Should I get a pre-inspection?

A pre-inspection can save the policyholder from unnecessary work. Not all blemishes are chips. Sometimes there will be a scratch or pit in the surface that doesn’t reach down to the vinyl inbetween the layers of glass. Because this type of damage does not weaken the windshield, it is not necessary to fix.

In addition, there has been a large increase in questionable vehicle glass claims due to companies who offer “free” windshield repair. Sometimes, they try to convince the car owner to repair damage that may not need to be fixed. They will often begin the repair process before your policyholder has a chance to contact you,

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transportation • surety • executive products marine • personal liability • home business

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distraction. The most common causes of a chip spreading into a crack include sudden stresses, such as driving over potholes or speed bumps; swift changes in temperature from using the windshield defroster in cold weather or the air conditioner in hot weather; high heat by itself; or just the accumulation of stress and vibrations from everyday driving.

A repair is an economical and effective solution that can prevent the need for a replacement once the damage spreads. It is also a faster and more convenient alternative, requiring 30 minutes or less.

6/19/12 9:49 AM

Title: RLI: PERSONAL SERVICE Insurance Journal 07.2012

www.insurancejournal.com

and they will even agree to assist in calling in the claim after the work is performed.

How does a repair work?

A vacuum is created over the damaged area. The air and moisture is removed, and the resin is injected penetrating and filling the finest micro cracks. Then UV light is used to harden the resin.

What if a repair is not an option?

If the damage is too large to be repaired or if the damage is close to perimeter of the windshield or in the line of sight, a replacement is necessary. Replacement cost varies depending on the make and model of the vehicle. All vehicle glass installed in the U.S. must pass National Highway Traffic Safety Administration baseline standards.

What does repair or replacement cost?

Three states — Florida, Kentucky, South Carolina — waive the deductible for windshield replacement and repairs as part of

ATLASFIN15947.indd 1 www.insurancejournal.com

comprehensive coverage as mandated by state law because driving with a damaged windshield is dangerous. They are called “zero deductible” states.

Other states like Arizona, Connecticut, Massachusetts, Minnesota and New York allow policyholders to buy down the deductible for an increase in comprehensive premium.

In addition, auto glass coverage falls under comprehensive coverage so if the insured has comprehensive coverage, then usually their policy will cover the glass. The majority of insurance companies waive the deductible on a repair (but not a replacement).

Do I get to choose who does the repair or replacement?

Every insurance company must honor the policyholders’ choice of vendors. However, not all vehicle glass specialists are created equal. Glass repair or replacement doesn’t have to be a hassle. Appointments often can be made the same or next day. Many service

providers will come to the insured rather than bringing the vehicle to a shop.

How do I choose the best service provider?

Customer experience, quality, warranties and trust should all be factored into selecting a vendor. Guide your policyholder into considering these questions: How long do you train your technicians?

Are your technicians certified?

Do your technicians wear gloves to prevent oil and dirt from obstructing the adhesive?

What kind of adhesives do you use?

Do you guarantee your work?

When your policyholder calls about the naturally upsetting situation of windshield damage, you can provide them the peace of mind that you have them covered.

Beigel is the senior vice president of Safelite Solutions, a third-party administrator of vehicle glass claims for more than 175 insurance and fleet companies.

6/19/12 9:51 AM July 2, 2012 INSURANCE JOURNAL-NATIONAL REGION | N13

NATIONAL COVERAGE

News & Markets How Predictive Modeling Has Revolutionized Insurance

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redictive modeling has forever changed the way insurance policies are priced.

The tool allows insurers to design more sophisticated models that tap more detailed data sets to refine precisely how much each customer should be charged.

Casualty actuaries got an overview of how far the revolution will change insurance pricing at the session,“The Revolution and Evolution of Predictive Modeling,” presented at the recent Casualty Actuarial Society (CAS) Spring Meeting in Phoenix.

Claudine Modlin, senior consultant at Towers Watson, laid out how predictive analytics has advanced pricing in the past decade. Steven Armstrong, a CAS fellow, detailed ways the tools could improve insurance operations beyond the pricing function.

At the end of the 20th century, Modlin said, insurers were bound to mainframe

computers and highly aggregated data sets.

It was easy for a company to understand its competitors’ plans. And rating plans were finalized based on the collective judgment of underwriters and actuaries, with little data-driven guidance in how and where to deviate from the expected costs.

Today, insurers use predictive analytic tools to hunt through gigabytes of data to find sometimes non-intuitive variables that hold clues to a customer’s riskiness and purchasing behavior. Generalized linear models (GLMs) have become the global industry standard for pricing segmentation. This is due in large part to the multivariate framework, multiplicative nature of rating plans and high transparency in the results.

“As an industry, we have really learned a lot,” Modlin said. “We have advanced our toolkit.”

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Next Great Loss Predictor The use of insurance credit scores was a great loss predictor in the past two decades, and the search for the next great loss predictor is ongoing. As insurers follow the information revolution, they are improving the quality and accessibility of their internal data, investigating third-party data sources, and investing in more computing power to harness the information. This has led some companies to investigate thousands of predictors — including what other policies an insured has, whether they pay their bills on time, and various characteristics of the area in which the risk is located, etc.

Modelers employ a variety of techniques to cull the list of potential predictors. The process of variable reduction involves business judgment but is frequently supplemented with statistical data mining techniques, such as principle components analysis or classification and regression trees.

Companies looking to refine GLMs further pay attention to identifying interaction variables and to mining GLM residuals to improve the pricing of high-dimension variables (e.g., territory and vehicle groups).

In auto, insurers are starting to use telematics — gathering information about driver behavior from a device in the vehicle.

Information will flow in, virtually moment by moment, Modlin said. “Do you slam on the brakes? Do you peel around corners?”

As much of the industry has refined loss cost estimating, the use of science to understand customer demand lags. GLMs can help. The challenge is to capture customer attributes and price-related information (e.g., quote offered at new business or price www.insurancejournal.com

YO U D E S E RV E

more than the standard change offered at renewal) that will provide insights into customer elasticity.

The next evolutionary stage for pricing sophistication is for companies to learn to integrate their cost estimates with knowledge of customer behavior. This can involve scenario testing rate changes and measuring the effect on key performance indicators, taking the effect of customer behavior into account. Scenario testing involves price optimization techniques that systematically integrate cost and demand to indicate an optimal set of prices that meets or exceeds corporate objectives for profitable growth, while staying within company constraints.

Beyond Pricing Predictive model use doesn’t have to end with ratemaking, Armstrong said. Models can help in other areas. And actuaries can explain how the models work and what potential they contain.

“I want you to think beyond pricing” and help solve business problems, he said.

For example, predictive models could help underwriters work more efficiently.

For instance in auto insurance, young drivers receiving good student discounts have to regularly turn in copies of their grades.

Predictive modeling could show that some types of students don’t need to perpetually update, while others would.

Armstrong said models also could help underwriters determine which workers’ compensation risks should be tapped for a premium audit.

Predictive modeling also could help marketing by researching what mix of social media grows the customer base or what brand attributes drive new business. The concept isn’t new to marketers, but the actuarial skill set can enhance understanding of the work.

And claims departments “swim” in a vast, vast pool of data that only awaits discovery — claims diaries, records on attorney involvement, and information on service providers and adjusters, Armstrong said.

The list of areas where actuaries could help insurers quantify and understand their operations seems limitless, he added.

“Wherever there is data, there is opportunity.” www.insurancejournal.com

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6/20/12 12:07| PM July 2, 2012 INSURANCE JOURNAL-NATIONAL REGION N15

NATIONAL COVERAGE

News & Markets

Public Companies Underestimate Risk of D&O Lawsuit: Survey

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espite the odds that public companies and their directors will be sued in the next 12 months, a new Chubb Public Company Risk Survey has found that more than 80 percent believe this is unlikely.

“This general lack of concern is disconcerting, especially in light of the fact that the directors and officers of nearly one-in-four (23 percent) of the public companies we surveyed already have been sued. In addition,

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6/18/12 9:08 AM 6/15/12 4:06 PM

activities such as mergers and acquisitions and enforcement of anti-bribery laws are increasing directors’ and officers’ exposure to future suits by shareholders, regulators, customers, vendors and competitors,” said Evan Rosenberg, senior vice president and global specialty lines manager for Chubb.

“Companies that actively manage this exposure have a greater chance of receiving more favorable terms and pricing for their directors and officers liability insurance.”

Merger and acquisition activity was reported to have increased more than 14 percent last year, Rosenberg noted. Sixty-four percent of the Chubb survey respondents have been involved in a merger, acquisition or restructuring in the past two years.

Despite a 90 percent chance that a company targeted for acquisition will be sued by its shareholders, the survey found many companies are not fully prepared for managing the risks. More than one-quarter of companies (26 percent) do not have documented merger and acquisition protocols and have no plans to develop them in the next 12 months.

“While M&A-related lawsuits may be covered by the company’s directors and officers liability policy, documented protocols may help improve the company’s defense in court or result in a lower settlement amount,” Rosenberg said.

He added that company executives should be concerned about more aggressive enforcement of the Foreign Corrupt Practices Act (FCPA) in recent years by the U.S. Securities and Exchange Commission and the Department of Justice. In 2011, there were a record-high number of settlements for FCPA violations. Yet a majority of Chubb’s survey respondents (78 percent) are not worried about an investigation due to an FCPA violation, and 13 percent have decreased the financial and human resources the company allocates toward mitigating losses related to the law.

The Chubb Public Company Risk Survey was conducted by Pollara, an independent public opinion and market research firm.

The firm conducted telephone interviews with decision-makers at 145 public companies in the United States and Canada. www.insurancejournal.com

Laugh!

IJ’s Satire Issue Is Back.

Readers, Submit Your Anecdotes!

Insurance Journal’s famous “Satire Issue” is back again. The August 20th issue will be packed with hilarious editorial content, wacky ads from our partners and lots of lighthearted surprises.

And just for fun, the most amusing-est reader-submitted content will be published in the magazine!

Submit your funny stories, insurance jokes or weird claims by August 3rd at www.insurancejournal.com/satire

Let’s have some fun with this!

Shifting the Conversation From Price to Value How ‘Daring to be Different’ Leads to Exceptional New Business Growth and Retention happens only when we demonstrate ongoing concern for our prospects and clients — before and especially after the sale. ational advertising beats the com Yes, we “sell insurance,” and sure we’re moditization drum every day, in every looking to earn a comfortable living for media. ourselves and our family. Most of the 40,000 “Give me 15 minutes, and I’ll save you 15 agencies and 400,000 producers view thempercent” is the slogan of the selves in that light. However, there is a day. “Flo” is a household much more noble name, and the “lizard” is People buy from people reason that starts to move us from just everywhere. they like and respect “having a sales job” This trend is to identifying and compounded addressing customer needs that matter: We whenever people and busiSteven Walker “save lives, prevent injury and illness, and nesses are struggling to stay help others avoid financial hardship.” We afloat. A poor economy has need to act in a way that recognizes that everyone searching for the best price. role and search out prospects that will likely As a result, price is where many clients start, especially when they view insurance as view us in that light … prospects that value what we do and make their buying decision a commodity and their agent as just another in recognition of what they really are buying. insurance peddler. Price is where most of Studies of insurance consumer buying habour competitors are living … and dying. its tell us that people buy from people they Therefore, price will be the issue unless you “like and respect.” When prospects like you, have and execute a strategy that differentirespect you and understand the ates you — and focuses on value. real value of the cover Your insureds purchase insurance for age offered, they will many reasons: accept a com• To protect themselves from a significant loss; • To free up funds that would otherwise need to be held in reserve; • Laws require it (i.e., workers’ comp and auto liability); • So that “someone else is looking out for me.”

Look at the last reason a little more closely. This view doesn’t happen by accident; it

By Steven Walker

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petitive price — even if it’s not the cheapest.

If we accept that these are the factors that impact the buying process, how do we “get noticed for caring and for offering value?”

Get Noticed There are at least seven ways to separate ourselves from competitors. Each differentiator signals that you are different, that you are offering value and that you care about your insureds. Plus, each moves the focus from price to value. Let’s examine them: 1. Focus on niche(s). A specialist in a world of generalists attracts attention.

Specialization demonstrates an expertise and an understanding of the problems/risks faced by prospects.

2. Be visible and viable. Visible means being seen and heard in places that matter, such as industry or community associations and publications. Viable means making a difference. Don’t just join an association; be active in promoting its success. Find opportunities to publish, such as a bi-monthly column in a newspaper or industry newsletter.

3. Construct your “value menu.” Create a listing of what your agency, your carrier partners and you personally offer that might be valued by prospects and clients. This list is the source of unique and differentiating questions, and will lead to product and service offerings that offer value at a competitive, but not always the cheapest, price.

4.

Connect on a personal level.

Insur ance Journal Academy of Insur ance Avoid an over-reliance on typical technical insurance conversation. Try to relate to the prospect/client as a person. Avoid terms and acronyms that reek of insurance.

5. Ask the right questions. Ask open-ended questions like, “Tell me about your business, how it started and where it’s going.”

Then, let the prospect talk — while you listen. Follow the 75/25 rule. Give advance thought to the likely value-added services you, your agency and your carrier partner can offer, and ask questions to determine

whether the prospect knows and/or cares about these services. Avoid responding with solutions in this initial conversation; simply note the responses and develop your proposal based on these responses.

6. Include relevant value-added services in your proposal. At proposal time, start with what you heard, saw and liked; what you can improve; and introduce and include a specific service plan and calendar. Then review coverage and gaps closed. Finally, close with price.

7. Proactively and consistently seek referrals. A referral positions you with new, at least partially qualified, prospects as someone who is different, who can be trusted and who cares about the client — characteristics that move the next prospect away from price as the determining factor.

Dare to be different. Follow these tips and you will undoubtedly see a pay-off in new business growth.

Walker is the sales and marketing director for Polestar.

Academy of Insurance Third Quarter Schedule July 11, 2012 Work Comp Retrospective Rating Plans Frank Pennachio, co-founder The WorkComp Advisory Group July 12, 2012 Property Valuation Chris Amrhein, president Amrhein & Associates and Insurance is Fun July 18, 2012 Managing Workers’ Compensation Injuries Stacey Cheese, director of workers’ comp The Seltzer Group July 19, 2012 Insurance Industry M&A Activity Ron Fry, senior vice president Sherman and Co. July 25, 2012 Building Strength within Your Agency Mary Newgard, senior search consultant Capstone July 26, 2012 London Calling: Insurance & the London Market Elizabeth Reinhardt Sherman and Co. August 1 & 29, 2012 How to Develop Program Business Within Your Agency Mary Eisenhart, owner Eisenhart Consulting Group August 2, 2012 Commercial Auto Class Terry Tadlock, president Coastal Plains Insurance www.insurancejournal.com

Aug 7, 21, Sept 5, 18, Oct 2, 16, 30, Nov 13, 2012 Producer Performance Development Polestar

August 8, 2012 Understanding E&O David Derigiotis, director of professional lines Burns & Wilcox

Restaurant Coverage Vale-Mary Anne Medina, instructor/trainer/consultant Vale Training Solutions August 23, 2012 The Legal & Contractual Aspect of Insurance Christopher J. Boggs, IJ Academy of Insurance Aug 30 & Sept 6 Crimes, Torts, Negligence, Legal Liability & Ins. Christopher J. Boggs, IJ Academy of Insurance

Aug 9, 16, 23, 30, Sept 6, 13, 20 IWKRIC- Risk Management Theory & Applications Christopher J. Boggs, IJ Academy of Insurance

September 12, 2012 Avoiding the Top 5 Mistakes in Hiring Producers Mary Newgard, senior search consultant Capstone

August 9, 2012 Risk Management Theory & Applications Christopher J. Boggs, IJ Academy of Insurance

Sept 13 & 20, 2012 COPE Christopher J. Boggs, IJ Academy of Insurance

August 15, 2012 Top 10 Things Agents do Everyday, But Shouldn’t Chris Amrhein, president Amrhein & Associates and Insurance is Fun August 16, 2012 What Makes a Risk Insurable Christopher J. Boggs, IJ Academy of Insurance

September 19, 2012 Developing Producer Compensation Plans Mary Newgard, senior search consultant Capstone September 26, 2012 Agency Planning for 2013 Chris Burand, president and owner Burand & Associates Inc

May 9, Aug 22, Nov 7, 2012 Secrets of Insuring Restaurants- 3-Part series Vale-Mary Anne Medina, instructor/trainer/consultant Vale Training Solutions

September 27, 2012 WC Large Deductible Plans Frank Pennachio, co-founder The WorkComp Advisory Group

August 22, 2012 Secrets of Insuring Restaurants- Overview of

To sign up for an Academy of Insurance Webinar visit: www.ijacademy.com July 2, 2012 INSURANCE JOURNAL-NATIONAL REGION | N19

Insur ance Journal Academy of Insur ance

Alternative Workers’ Compensation Risk Financing Options to Consider Pennachio Details Two Financing Plans in Upcoming Webinars

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eginning July 11, 2012, insurance professionals have the opportunity to gain insight into two alternative risk financing options for their workers’ compensation clients.

Frank Pennachio, co-founder of the WorkComp Advisory Group, will conduct two webinars for the Academy of Frank Pennachino Insurance focused on alternative means of financing workers’ compensation: retrospective rating plans and large deductible rating plans.

Pennachio, an agent, broker, consultant, and trainer for more than 35 years, says that his training approach integrates sales skills with technical and implementation skills because he believes there is much more to risk management than just selling insurance.

“To fill somebody (a producer) with technical knowledge can be a detriment to an agent if all they then know how to do is go out and do a ‘brain dump’ on a prospective

client who doesn’t have a clue as to what they’re talking about,” Pennachio says. “It creates confusion, and when confusion is created, people don’t change. The whole purpose of this ‘business of growing your business’ is to have people change, because they’re at greater risk if they don’t.”

As insurance rates begin to rise, Pennachio believes employers are going to seek alternative risk financing vehicles to cover many of their exposures, including workers’ compensation. Pennachio focuses on alternative financing mechanisms, like retrospective rating plans and large deductibles, in his two upcoming webinars.

In these webinars Pennachio explains the mechanics of each alternative, the pros and cons of each program, and how to analyze which clients fit into one of these programs.

“There’s never a program or rating plan that does not have advantages and disadvantages,” Pennachio says. “There’s a lot of misunderstandings and confusion around how

they work — what’s the upside and downside. They can be tremendously valuable to their customers. They can also have significant adverse impact on their customers.”

Beyond detailing each option, Pennachio also will tell students what to look for in a claims administration agreement, as well as how to structure it so that every party has an incentive.

“We like to call it aligning the incentives, where everybody has an incentive to make sure that the injured employee gets the right medical treatment at the right time and recovers as soon as possible.”

The dates for these webinars are July 11 and September 27. Pennachio’s live webinar detailing retrospective rating plans will be held on July 11. His second webinar discussing large deductible plans runs live on September 27. Both webinars begin at 1:30 p.m. Eastern (10:30 a.m. Pacific).

For more information: www.ijacademy. com/instructors/frank-pennachio.

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N20 | INSURANCE JOURNAL-NATIONAL REGION July 2, 2012

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Insur ance Journal Academy of Insur ance

Academy Launches Free Technical Skills Evaluation Assessments

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nsurance Journal’s Academy of Insurance recently launched a new Technical Skills Evaluation (TSE) program designed for: 1) use by managers to plan employee development; or 2) individual insurance professionals desiring a method to direct their continued professional development.

The TSE tests provide employers and individuals with an objective measure of the test-taker’s technical coverage knowledge.

Results from each test provides information regarding the area(s) of insurance coverage in which the test taker is proficient, and the area(s) of insurance coverage in which the completer is less proficient and requires more training.

Four tests are available to test your skill level or the skill level of each of your employees. The currently available tests include: • Commercial Property • Commercial Casualty • Workers’ Compensation and • Personal Lines.

All TSE tests are available online at the Academy’s website (www.ijacademy.com).

The number of questions varies based on the exam, and each exam is objective style (more commonly known as multiple choice).

Exams are taken online and the results are sent via email nearly immediately upon completion of a test.

Registration information and exam results are sent to three parties: 1) the participant; 2) the participant’s manager; and 3) the Academy of Insurance. Within a few days of the test, the participant and the manager receive a synopsis of the coverage area or areas in which the student may require additional training.

Exam results sent to each party include the question, the answer the participant prowww.insurancejournal.com

vided and the correct answer. In addition, an explanation of the correct answer is provided for training and instruction purposes.

Managers using the TSEs for multiple employees can use the completed tests as a basis for in-office training. Once the desired employees have taken one or all exams, managers can plan training sessions around these tests; the Academy has supporting on-demand classes, live classes and books to help in this training.

Be warned, TSE test questions are purposely and specifically written to be more difficult than most tests or evaluations used in the insurance industry. Because of the difficulty, test completers and their managers gain a clear direction regarding future training needs.

The Academy cautions against using any test as a way to “rank” or grade employees; these are tools for developing a map for training employees already on staff to make them the best in the industry.

Tests are time limited to two hours.

Takers may use outside materials to assist them during the exam. Outside material is

allowed for two reasons: 1) Coverage questions should never be answered without first reviewing the coverage form or other information (statutes, etc.).

This trains the test taker to use coverage forms, and; 2) Allowing the use of external material teaches the test taker where to find the necessary information.

Remember — TSE tests are free. Neither the employer nor the employee pays to register, complete or receive the results of any test. Academy TSE exams are intended as a service to the insurance industry.

As part of this service, the Academy will provide the test taker and the manager information about any Academy course the employee may use as part of his or her customized training. But additional training can be garnered from any source desired by the employer. The TSE is a tool toward deciding which training to pursue.

For more information on the new TSE program, visit www.ijacademy.com.

July 2, 2012 INSURANCE JOURNAL-NATIONAL REGION | N21

2012 Digital Product Guide ** The following are paid advertisements.

Accounting / Billing / Financial

Agency Management Systems

AON eSOLUTIONS, INC.

EPIC-PREMIER INSURANCE SOLUTIONS, INC.

200 E. Randolph Chicago, IL 60601 Contact: Peter Govek Office: 920-451-9777 Mobile: 920-254-3466 www.aon-esolutions.com peter.govek@aon.com

4223 S. Pipkin Rd. Lakeland, FL 33811 Contact: Mike Cross Phone: 888-999-7736 www.epic-premier.com info@epic-premier.com

ConceptOne™

Aon eSolutions - iVOS Aon eSolutions is a leading provider of global risk and insurance solutions. Its iVOS product offers comprehensive claims management capabilities with sophisticated automation and rules-based workflow to enhance efficiency and service. iVOS also offers bill review, policy administration and billing modules for an integrated solution that can be configured to meet a client’s unique needs.

ConceptOne™ Enterprise Management Solution enables MGA/MGUs, Wholesale Brokers, Program Administrators and Specialty Carriers to experience a fully integrated Policy, Accounting, Claims, and Document Management Solution. This Single-Entry Paperless solution provides User-Defined Workflow Templates, Open Data Access and Rating Management. With its XML Engine, your ConceptOne™ solution is enabled for accelerated integration with Portals and other Web Services. Epic-Premier provides complete consulting and implementation services resulting in a solution that fits your organization and expectations, all while providing a Single Point-of-Accountability.

www.aon-esolutions.com

WWW.EPIC-PREMIER.COM

Agency Management Systems MGA SYSTEMS, INC. One Huntington Quad, Ste. 4N20 Melville, NY 11747 Contact: John Bennis Phone: 631-752-2222 Fax: 631-845-4772 www.mgasystems.com sales@mgasystems.com

QUALCORP, INC. 27240 W Turnberry Ln, Ste. 200 Valencia, CA 91355 Contact: Allen Beggs Phone: 888-367-6775 www.QualCorp.com Products@QualCorp.com

MGA Systems MGA Systems is a software development company working exclusively within the insurance industry. Our management has over 10 years of real-world brokerage and MGA experience which we use everyday in the design of our products. Our most current product, the Insurance Management System (IMS)®, is designed with brokers and MGA’s in mind and offers the following base features; clearance, quoting, binding, invoicing, state filings, document handling, claims handling, imaging, accounting, and general ledger. The IMS can be customized to meet our client’s particular needs, including the addition of custom raters or integrating with existing ISO raters. For more information, please visit our website at www.mgasystems.com

Agency Management Systems

QualCorp, Inc. QueryPlus is the first AMSUG endorsed reporting tool for the AMS AFW/360 Agency Management Systems.

www.QualCorp.com Agents / Consumer Portals

XDIMENSIONAL TECHNOLOGIES, INC.

OCEANWIDE, INC.

145 S. State College, Ste. 160 Brea, CA 92821 Contact: Roger Banks Phone: 208-755-4303 Fax: 714-672-8908 www.xdti.com sales@xdti.com

3400, De Maissonneuve W. Ste 1450 1 Place Alexis Nihon Montreal, QC H3Z 3B8 Contact: Mark Adessky Phone: 514-289-9090 ext. 111 Fax: 514-289-1909 www.oceanwide.com mark@oceanwide.com

XDimensional Technologies XDimensional® Technologies, Inc. (www.XDimensional.com) develops and markets Nexsure®, the Internet agency management solution connecting agents, brokers, carriers and policyholders, driving efficient business production and superior customer service. Nexsure offers robust contact management, sales force automation, advanced workflow, standard and custom lines of business, policy life cycle management, submission management, CRM, and multi-office accounting and reporting. As a Web-based Microsoft .NET solution, with built-in Web services, data processing and transactional capabilities, Nexsure provides unmatched ease of use, scalability and information availability.

N22 | INSURANCE JOURNAL-NATIONAL REGION July 2, 2012

Oceanwide Bridge Oceanwide Bridge is an integrated underwriter workstation and sales portal that automates sales, submission processing, underwriting and policy management.

Bridge can also act as a policy administration solution. Bridge is a multi-line browser-based platform that offers full rate-quote-bind-issue functionality for both direct to consumer and agent distribution channels. Bridge allows business users to quickly and easily adapt their products to exploit new market opportunities and respond to changing underwriting, rating or other market requirements-all without any programming . Bridge is offered on a success based pricing model, where annual fees are typically a percentage of premium issued through the system. www.insurancejournal.com

2012 Digital Product Guide ** The following are paid advertisements.

Claims PCIS

AON eSOLUTIONS, INC.

One Exchange Plaza New York, NY 10006 Contact: Abigail Cabingao Phone: 212-425-9200 ext. 8815 Fax: 646-442-8827 www.pcisvision.com acabingao@pcisvision.com

200 E. Randolph Chicago, IL 60601 Contact: Peter Govek Office: 920-451-9777 Mobile: 920-254-3466 www.aon-esolutions.com peter.govek@aon.com

Aon eSolutions - iVOS

CompVision® and ClaimsVision® For over 30 years, PCIS has teamed with our property and casualty insurance clients to develop easily integrated, knowledge-infused solutions. With our in-depth knowledge of technology and real-world business requirements, we understand the challenges of insurance carriers, self insureds and third

Aon eSolutions is a leading provider of global risk and insurance solutions. Its iVOS product offers comprehensive claims management capabilities with sophisticated automation and rules-based workflow to enhance efficiency and service. iVOS also offers bill review, policy administration and billing modules for an integrated solution that can be configured to meet a client’s unique needs.

party administrators.

www.aon-esolutions.com

Decision Management

Digital Marketing

DEMOTECH, INC.

ASTONISH

2715 Tuller Pkwy.

Dublin, OH 43017 Contact: Joseph Petrelli Phone: 614-761-8602 Fax: 614-761-0906 www.demotech.com jpetrelli@demotech.com

300 Centerville Rd., Ste. 200E Warwick, RI 02886 Phone: 888-899-1243 www.astonish.com sales@astonish.com

Insurance Marketing In The Digital Age

Demotech, Inc. Demotech, Inc. is a Columbus, Ohio based financial analysis and actuarial services firm providing a wide range of services including pricing analysis, state filings assistance, Financial Stability Ratings® and support for other required regulatory reporting. Having worked with insurers of all sizes, Demotech possesses broad experience addressing actuarial and financial analysis issues, whether the issue is unique to a particular insurer or faced throughout the industry.

Astonish is on a mission to change the way insurance is sold in America. They firmly believe the local distribution channel is the greatest asset of the insurance industry. They are dedicated to helping this channel (including the agencies, firms, and individuals) adapt to the modern landscape of Internet consumers in order to thrive and not get left behind.

The Astonish “FIND - SELL - KEEP” system has been successfully installed in over 3,500 businesses across the country in 3 different industries. In 2007, while looking for a new market, Astonish found incredible success in the insurance industry.

Since that time, Astonish has moved exclusively into insurance and has acquired over 750 clients that range in all types, shapes, sizes, and product specialties.

Astonish is currently one of the fastest growing technology companies in America.

Document Management FUJITSU COMPUTER PRODUCTS OF AMERICA, INC.

QUALCORP, INC.

1250 E. Arques Ave. Sunnyvale, CA 94085 Phone: 888-425-8228 http://us.fujitsu.com/scanners

27240 W Turnberry Ln, Ste. 200 Valencia, CA 91355 Contact: Allen Beggs Phone: 888-367-6775 www.QualCorp.com Products@QualCorp.com

Fujitsu Fujitsu Computer Products of America, Inc., is an established leader in the document imaging market, featuring state-of-the-art scanning solutions and services in the workgroup, departmental, and production-level scanner categories. Fujitsu offers the industry’s most comprehensive and competitive product offering. With scanning solutions from 15-120 pages per minute (ppm), Fujitsu possesses an extensive scanner lineup to meet the functional needs of customers at affordable price points.

www.insurancejournal.com

QualCorp, Inc. iForms – State of the art policy issuance software. iDesign – Robust form management tool – Design, implement

& maintain your own forms library. iConnect – Manage your XML data integrations with this

intelligent mapping tool.

July 2, 2012 INSURANCE JOURNAL-NATIONAL REGION | N23

2012 Digital Product Guide ** The following are paid advertisements.

Inspections

MGA / Wholesaler Website

CONTOUR INFORMATION SERVICES

INSUREZONE COMPARATIVE RATING PLATFORM

P.O. Box 10 Reseda, CA 91337 Contact: Jerry Burg Phone / Fax: 877-882-4388 www.contour-info.com jburg@contour-info.com

1612 Summit Ave., Ste. 100 Fort Worth, TX 76102 Phone: 866-243-5934 ext. 2287 www.comparativerating.com membership@insurezone.com

Real-Time Multi Carrier Comparative Rating

Contour Information Services We provide residential property inspections to insurance companies and MGA’s.

Order and receive inspections online for true paperless processing.

We can accept file dumps for new inspection requests and upload completed reports in batches to FTP site. All reports are PDF format and include detailed description of risk, hazards, photos, and tax record; diagram and RC valuation available. Convenient monthly statement billing.

Commercial & Personal Lines

· One application · Branded efficiency tools for · Retail Agency · Wholesaler/MGA · Cluster · 15,000 desktop users

Serving the insurance industry for over 25 years.

Get Real-Time Results Rate & Bind Multiple Carriers Get in the Zone….

Policy Administration / Processing AON eSOLUTIONS, INC.

Instec

200 E. Randolph Chicago, IL 60601 Contact: Peter Govek Office: 920-451-9777 Mobile: 920-254-3466 www.aon-esolutions.com peter.govek@aon.com

1811 Centre Point Circle, Ste. 115 Naperville, IL 60563 Contact: Carey Straetz Phone: 630-955-9200 Fax: 630-955-9240 www.instec-corp.com cstraetz@instec-corp.com

Aon eSolutions - iVOS

Instec’s quicksolver 3

Aon eSolutions is a leading provider of global risk and insurance solutions. Its iVOS product offers comprehensive claims management capabilities with sophisticated automation and rules-based workflow to enhance efficiency and service. iVOS also offers bill review, policy administration and billing modules for an integrated solution that can be configured to meet a client’s unique needs.

Instec delivers rating and policy administration software and services to commercial property and casualty (P&C) insurance carriers & MGAs – through reliable, well-engineered software and expert advisors. Instec’s quicksolver 3 is a complete P&C insurance rating and policy administration product that supports multi-state, multi-location, bureau and client-specific policy processing for all 50 states and all major commercial lines of business.

Instec is a business partner with ISO, NCCI and all independent bureaus, and has been for 20 years. Instec delivers over 3,000 revisions annually, well ahead of the effective date.

www.aon-esolutions.com

Policy Administration / Processing OCEANWIDE, INC.

PCIS

3400, De Maissonneuve W. Ste 1450 1 Place Alexis Nihon Montreal, QC H3Z 3B8 Contact: Mark Adessky Phone: 514-289-9090 ext. 111 Fax: 514-289-1909 www.oceanwide.com mark@oceanwide.com

One Exchange Plaza New York, NY 10006 Contact: Abigail Cabingao Phone: 212-425-9200 ext. 8815 Fax: 646-442-8827 www.pcisvision.com acabingao@pcisvision.com

Oceanwide Bridge

CompVision® and ClaimsVision®

Oceanwide Bridge is an integrated underwriter workstation and sales portal that automates sales, submission processing, underwriting and policy management.

Bridge can also act as a policy administration solution. Bridge is a multi-line browser-based platform that offers full rate-quote-bind-issue functionality for both direct to consumer and agent distribution channels. Bridge allows business users to quickly and easily adapt their products to exploit new market opportunities and respond to changing underwriting, rating or other market requirements-all without any programming . Bridge is offered on a success based pricing model, where annual fees are typically a percentage of premium issued through the system.

N24 | INSURANCE JOURNAL-NATIONAL REGION July 2, 2012

For over 30 years, PCIS has teamed with our property and casualty insurance clients to develop easily integrated, knowledge-infused solutions. With our in-depth knowledge of technology and real-world business requirements, we understand the challenges of insurance carriers, self insureds and third party administrators.

www.insurancejournal.com

2012 Digital Product Guide ** The following are paid advertisements.

Quotes

Photo Services FASTSNAP

INSUREZONE COMPARATIVE RATING PLATFORM

P.O. Box 0931 Reseda, CA 91337 Contact: Jerry Burg Phone / Fax: 877-764-1980 www.fastsnap.com sales@fastsnap.com

1612 Summit Ave., Ste. 100 Fort Worth, TX 76102 Phone: 866-243-5934 ext. 2287 www.comparativerating.com membership@insurezone.com

FastSnap - “Your Online Photographer” FastSnap is the premier web site for photos of residential or commercial properties, and intersections. Let FastSnap take the photos for you and return high quality digital photos directly to your desktop!

• Sales - New or renewal application submission

• Underwriting - Reviewing books of Business

• Claims - Verify loss details

• Loss Control - Follow-up on recommendations

Real-Time Multi Carrier Comparative Rating

FastSnap covers metropolitan areas NATIONWIDE!

Commercial & Personal Lines

· One application · Branded efficiency tools for · Retail Agency · Wholesaler/MGA · Cluster · 15,000 desktop users

Log on to www.fastsnap.com for more details and see how you can gain the FastSnap advantage.

Get Real-Time Results Rate & Bind Multiple Carriers Get in the Zone….

Rating Software M & R INFORMATION SERVICES

INSTEC

P.O. Box 2188 Frankfort, MI 49635 Contact: Mike Madden Phone: 231-882-9536 Fax: 231-882-9537 www.MandRInfoServices.com mail@MandRInfoServices.com

1811 Centre Point Circle, Ste. 115 Naperville, IL 60563 Contact: Carey Straetz Phone: 630-955-9200 Fax: 630-955-9240 www.instec-corp.com cstraetz@instec-corp.com

Work Comp Rating Software Specialists

Instec’s quicksolver 3

Build your Book of Business! Over 1,200 workers’ compensation professionals in CA, GA, IL, MI and PA use E!Z Work Comp Rater, M & R’s on-line software.

E!Z Work Comp Rater enables Producers, Brokers, MGAs, Wholesalers, and Uunderwriters to confidently rate work comp accounts for 99% of the carriers in the state, knowing they are using continuously updated, always current and correct rates and rating factors. Coming soon to NC and NY. Now integrated with TAM to streamline your workflow.

Instec delivers rating and policy administration software and services to commercial property and casualty (P&C) insurance carriers & MGAs – through reliable, well-engineered software and expert advisors. Instec’s quicksolver 3 is a complete P&C insurance rating and policy administration product that supports multi-state, multi-location, bureau and client-specific policy processing for all 50 states and all major commercial lines of business.

Instec is a business partner with ISO, NCCI and all independent bureaus, and has been for 20 years. Instec delivers over 3,000 revisions annually, well ahead of the effective date.

www.MandRInfoServices.com

Underwriting Tools

Workers’ Compensation

OCEANWIDE, INC.

AON eSOLUTIONS, INC.

3400, De Maissonneuve W. Ste 1450 1 Place Alexis Nihon Montreal, QC H3Z 3B8 Contact: Mark Adessky Phone: 514-289-9090 ext. 111 Fax: 514-289-1909 www.oceanwide.com mark@oceanwide.com

200 E. Randolph Chicago, IL 60601 Contact: Peter Govek Office: 920-451-9777 Mobile: 920-254-3466 www.aon-esolutions.com peter.govek@aon.com

Oceanwide Bridge

Aon eSolutions - iVOS

Oceanwide Bridge is an integrated underwriter workstation and sales portal that automates sales, submission processing, underwriting and policy management.

Bridge can also act as a policy administration solution. Bridge is a multi-line browser-based platform that offers full rate-quote-bind-issue functionality for both direct to consumer and agent distribution channels. Bridge allows business users to quickly and easily adapt their products to exploit new market opportunities and respond to changing underwriting, rating or other market requirements-all without any programming . Bridge is offered on a success based pricing model, where annual fees are typically a percentage of premium issued through the system.

Aon eSolutions is a leading provider of global risk and insurance solutions. Its iVOS product offers comprehensive claims management capabilities with sophisticated automation and rules-based workflow to enhance efficiency and service. iVOS also offers bill review, policy administration and billing modules for an integrated solution that can be configured to meet a client’s unique needs.

www.insurancejournal.com

www.aon-esolutions.com July 2, 2012 INSURANCE JOURNAL-NATIONAL REGION | N25

2012 Digital Product Guide ** The following are paid advertisements.

Workers’ Compensation M & R INFORMATION SERVICES

PCIS

P.O. Box 2188 Frankfort, MI 49635 Contact: Mike Madden Phone: 231-882-9536 Fax: 231-882-9537 www.MandRInfoServices.com mail@MandRInfoServices.com

One Exchange Plaza New York, NY 10006 Contact: Abigail Cabingao Phone: 212-425-9200 ext. 8815 Fax: 646-442-8827 www.pcisvision.com acabingao@pcisvision.com

Work Comp Rating Software Specialists

CompVision® and ClaimsVision®

Build your Book of Business! Over 1,200 workers’ compensation professionals in CA, GA, IL, MI and PA use E!Z Work Comp Rater, M & R’s on-line software.

E!Z Work Comp Rater enables Producers, Brokers, MGAs, Wholesalers, and Uunderwriters to confidently rate work comp accounts for 99% of the carriers in the state, knowing they are using continuously updated, always current and correct rates and rating factors. Coming soon to NC and NY. Now integrated with TAM to streamline your workflow.

For over 30 years, PCIS has teamed with our property and casualty insurance clients to develop easily integrated, knowledge-infused solutions. With our in-depth knowledge of technology and real-world business requirements, we understand the challenges of insurance carriers, self insureds and third party administrators.

www.MandRInfoServices.com

Advertisers Index Readers, browse, contact, or do product searches on any of our full page advertisers at: http://www.insurancejournal.com/adshowcase/ E: East, M: Midwest, N: National, SC: South Central, SE: Southest, W: West

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FL3

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www.astonishresults.com N3; W10; SC12; SE10; E8; M10

Pacific Gateway Insurance Services

Atlas Financial Holdings

www.pgiainsurance.com

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N13

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FL8

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W13; SC7; M7

www.cnico.com

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SE13

www.gicunderwriters.com

FL5

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W14 SC5; SE5; E5; M5; W5 SC11

Regency Insurance Brokerage Services FL16

RiskMeter.com N11

RLI www.rlicorp.com

Granada Insurance Company

Quirk & Company

www.riskmeter.com

GIC Underwriters, Inc.

N15

PersonalUmbrella.Com

www.regencyinsurancebrokerage.com

Florida Surplus Lines Association

www.webcetera.com

W15

www.quirkco.com

Century National

N16

Pacific Interstate Insurance Brokers

www.personalumbrella.com

Builders & Tradesmen’s Insurance

www.vantiv

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Atlass Insurance Group

FL11

Webcetera

Morstan General Agency of Florida

Astonish Results

www.gotapco.com Vantiv

Monarch E & S Insurance Services

Applied Underwriters www.applieduw.com

www.macneillgroup.com Midlands Management Corporation

American Integrity Insurance Group

TAPCO

MacNeill Group, Inc.

Agency Ideas

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N26 | INSURANCE JOURNAL-NATIONAL REGION July 2, 2012

www.insurancejournal.com

NATIONAL COVERAGE

News&Markets P/C Industry Should Not Expect Traditional Hard Market Soon: Hartwig

A

lthough insurance rates have been drifting upward in recent months, the property/casualty industry is unlikely to see a return to the traditional hard market this year or next, an insurance expert told reinsurance actuaries at the Casualty Actuarial Society’s Seminar on Reinsurance.

Robert Hartwig, president and economist of the Insurance Information Institute, noted that four criteria have to be present for a truly hard market, one in which rates climb sharply — in excess of 10 to 15 percent or more: First, the industry must Robert Hartwig endure a sustained period of large underwriting losses. Only when underwriting losses are large and sustained do insurers turn disciplined, Hartwig said.

But this may be beginning, he said.

Underwriting losses hit $36.5 billion last year, driven by above average losses from U.S. catastrophes. Last year was the fifth worst ever for insured catastrophe losses in the United States, adjusted for inflation.

So far this year, catastrophes have been relatively benign.

Second, the industry suffers a material decline in industry surplus or capacity. When surplus falls, rates rise

Finally, the industry must show as customers compete for access to the renewed underwriting and pricing dissurplus. But industry surplus remains cipline. high, Hartwig said, hitting a record There are some signs this is begin$565 billion as of first quarter 2011 and ning to happen, Hartwig said. Rates falling off only slightly during 2011, are creeping up in commercial lines, despite all the catastrophic losses. after having fallen steadily for several Third, the reinsurance market must years. be “tight,” meaning reinsurance costs Commercial insurance rates rose are rising and there is a shortage of 4.4 percent in the first quarter, which reinsurance capital. was the third consecutive quarter of That’s somewhat in place, Hartwig higher rates, according to the Council said. Much of the excess capacity in of Insurance Agents reinsurance at the beginning of 2011 The industry must show and Brokers. That fol30 consecutive was eaten up by renewed underwriting lowed quarters of declining the cost of earthand pricing discipline. rates. quakes in Japan Of all lines, workand New Zealand ers’ compensation rates are rising fastand floods in Thailand. est, up 7.4 percent in first quarter. But Reinsurance rates have risen, especially in markets where the mega-catas- that’s in part because results have deteriorated so much in that line. Workers’ trophes occurred. And in the United comp combined ratios were 110.6, 116.8 States, reinsurance prices for catastroand 115.0 over the past three years, phe business are “modestly higher,” vs. 99.5, 101.0 and 107.5 on commercial Hartwig said, about 8 percent. lines overall.

But the current increases pale in Workers’ compensation results are as comparison to increases seen after bad as they were a decade ago, he said, other bad years for catastrophe, he the last time the industry experienced observed. More important, the current a hard market. environment contradicts “this notion The Casualty Actuarial Society has that somehow big catastrophe losses 5,700 members in P/C insurance, reinare somehow [by themselves] going surance, finance, risk management, and to affect prices here,” he said. “That enterprise risk management. notion is incorrect.”

Swiss Re Chief Economist Sees Stronger U.S. Economy by Year End

O

n the heels of the U.S. Federal Reserve’s decision to maintain the target fed funds rate at zero to 25 basis points Swiss Re’s Chief Economist, Kurt Karl, said: “The U.S. economy has been weak recently, but is likely to strengthen in the second half of the year.” He says, “While downside risks to the global economic

www.insurancejournal.com

outlook have increased lately, along with the uncertainty surrounding the future of the Euro area, recent indicators continue to suggest that moderate growth of the U.S. economy will be sustained. Consumer spending remains resilient, vehicle sales are strong, construction spending is growing, and more signs point to further improve-

ment in housing activity. Housing starts and sales are up and prices appear to have bottomed-out. Real GDP growth is expected to rise from about 2 percent this year to 2.5 - 3 percent next year. ... Yields on the 10-year treasury note are forecast to rise to 2.2 percent by end-2012 and to 2.8 percent by end-2013.”

July 2, 2012 INSURANCE JOURNAL-NATIONAL REGION | N27

IDEA EXCHANGE

Closing Quote 6 Ways to Motivate Top Talent in De-Motivating Times

T

By Brad Remillard

o retain your top talent, it is absolutely critical to ensure they are motivated. In difficult times, this is often not high on the priority list of managers or CEOs. Most people are working long hours and doing the job of two people, stress is at an all-time high, fear of layoffs is a reality, salaries are frozen or have been cut, and forget about any bonus. For many companies this is their current culture.

So how do you motivate your top talent to achieve the company’s goals? How do you keep them from contacting recruiters? How do you keep them passionate about coming to work? How do you keep them engaged day after day?

The answer is “culture.” Even in difficult times top talent will always rise to the occasion. They will always strive to be the best. If they don’t, they aren’t top talent. However, even top talent can burn out, get frustrated, not see the light at the end of the tunnel, or wonder if they are contributing.

It is the role of all CEOs and managers to ensure these things don’t happen. There seems to be a consistent theme as to what great managers do in difficult times to hold onto and even attract top talent.

The following are six areas managers must focus on to ensure they keep their top talent motivated: Companies must have a performance-based culture.

Even in difficult times, there must be clearly defined goals for the company. These goals must cascade down to top talent. They must have quantifiable objectives that motivate them, so when reached, they feel a sense of accomplishment.

Dysfunctional culture. This is probably the biggest reason top talent gets nervous and begins to think outside your company. Do you know your company’s culture? Can you Top talent insists define it? Will your executive on getting better. staff define it the same way?

Will in-the-trench worker bees define it the same way? If not, this is the time to work on it.

Once the culture is well defined, do the behaviors match the culture? Do managers from the CEO on down demonstrate this culture day-to-day in how they deal with employees, customers and vendors?

Respect and appreciation. This is probably the least expensive and least used method to motivate and retain top talent. Small things can make a big difference with top talent. Respecting their contributions, listening to them, including them in decision-making, asking for their thoughts and ideas all make them feel respected and appreciated.

Consistent feedback. This includes regular and structured one-on-one feedback sessions; not standing in the hallway conversations, but actually sitting down and focus-

N28 | INSURANCE JOURNAL-NATIONAL REGION July 2, 2012

ing on them, giving feedback, encouraging them, listening to what their needs are (even if you can’t meet them, just listening), taking an interest in their career and building a shared bond. This makes them feel their manager cares about them as a person, not just an employee.

Praise. A little praise goes a long way to motivate people.

In difficult times when people are doing more than expected and yes maybe they should be glad to have a job, demonstrating appreciation will be returned when the economy turns and they don’t have to be working there any longer.

Education and Growth. Top talent insists on getting better. They know once their learning curve flattens out, future opportunities can become limited. Top talent does not like to have limited growth potential. Giving your best people the opportunity to take some additional classes, lead a project outside their normal job, challenge them with new opportunities, give them a chance to serve on a cross functional team or take an online class will ensure they are becoming better.

Consider these six areas as a way to motivate your top talent. Your best people will appreciate this more than most managers realize. The increase in productivity by having motivated employees is the best ROI any company can receive.

Remillard is a speaker, author and trainer with more than 30 years of experience in hiring and recruiting. He is also the co-founder of Impact Hiring Solutions and co-author of, “You’re NOT the Person I Hired: A CEO’s Guide to Hiring Top Talent.” Website: www.bradremillard.com. www.insurancejournal.com

Video Made Easy

You have choices for video.

You can reach in your pocket and take a video with your phone. A really shaky one with bad audio. You can get a cheesy infomercial that very few people except your staff and your mom will see.

Or you can spend your entire annual marketing budget and weeks in development on a professional shoot.

Here’s another idea: Hire Wells Media Group for your next project.

We’ve produced professional video for the insurance industry for almost a decade.

Our full time new media team consists of a 2-time Emmyaward winning Photojournalist and a world-travelling videographer with hundreds of production credits.

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See our reel at:

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800-897-9965, ext. 148.

promotional power of the largest property/ casualty insurance media network in the World. Our insurance video experts will also script, cast, film, and edit for you.

So whether you need custom video, promoted webinar, or just a quick audio podcast, we have packages to fit just about every budget. (Plus, we make it easy and fun!)

ExpEct big things

from AppliEd UndErwritErs.

We’re saving companies big money on workers’ compensation. Expect broad acceptance and few class limitations nationwide.

Expect competitive commisions. Expect big things from Applied Underwriters®. For information visit auw.com.

©2012 Applied Underwriters, Inc., a Berkshire Hathaway company. Rated A by A.M. Best.