Insurance Journal - The Texas Issue

June 17, 2013 | Vol. 91, No. 12

TEXAS

Texas COVERAGE

News & Markets Relationships, Expertise Drive Successful Partnerships in E&S Marketplace ent things that can get you in trouble,” he said.

While retailers may be uring the past 20 to 30 years typical comfortable with standard business dealings between wholecompany forms, “when sale insurance brokers and retail agents they step into our world have evolved from being purely transit’s a completely different actional experiences to those that are world,” Helveston said. highly dependent upon relationships “These companies are and expertise, according to professionals revising their forms every on both sides of the excess and surplus two years. Do you think insurance industry. they’re revising them to Today, quality relationships and deep give us extra coverage? I expertise are essential for successful don’t think so.” working partnerships, but it hasn’t A really good wholesaler always been that way, said Pat Arthur, who truly understands his products can a producer and shareholder with retail “keep you out of trouble. Because there agency MHBT in Dallas. At one time, if are a lot of pitfalls in the market today,” a retail agent had an account that was he said. Loss situations do happen in difficult to place, “we’d throw it out the E&S market and when one occurs, there and see who could get it placed, “it’s really nice to know there’s a wholeand keep going down the road,” Arthur saler standing next to you trying to said during a panel discussion at the negotiate to get you out of the situation.”

Independent Insurance Agents of Texas’ Arthur said quality wholesalers will 2013 Joe Vincent Management Seminar. look at their retail clients in the same Now, both wholesalers and retailway that a retail agency looks at its ers alike are seeking partners that they clients. “We want our can trust and are a good ‘[T]here are a lot clients to not only trust fit in terms of markets, experience, philosophy of pitfalls in the us and be our friend, but they expect us to and the needs of their market today.’ respond when they are customers. That evolution in need,” he said. has occurred alongside changes in the In the same way, wholesalers must be way that E&S insurers do business, said a resource for retailers.

Ron Helveston, with CRC Insurance “I know the hardware for Travelers Services, a wholesale operation based in forms,” Arthur said. “I know how those Birmingham, Ala. claims are going to be handled. I don’t Thirty years ago, E&S insurers offered necessarily know in detail Westchester’s one umbrella form and wholesalers [forms] or how their claims are going used one endorsement manual. Now, to be handled. … We lean on you [the Helveston said, every company has their wholesaler] to do for us what our buyer own form. The value that wholesalers leans on us to provide them. That’s the bring “is that you [the retailer] can’t posbiggest change in the last 25 years.” sibly know all the forms. We probably If the relationship and expertise are have 50 GL carriers, 50 umbrella carriers there, less is more when it comes to and that many property carriers. I promworking with insurance wholesalers, ise you each one of them has a different according to Martin Yung, area presiform, different endorsements and differ-

By Stephanie K. Jones

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dent of Hub International Insurance Services in El Paso.

“What we try to do, just like with any of our relationships on the carrier level, we try to pick our wholesale partners and be very selective, so we don’t have 50 of them, 60 in the shop. We want maybe three or so, four,” Yung said..

Those wholesalers also need to have specialty areas that match up to the retailer’s book of business, he said.

“I’m what you’d call a working broker,” Yung said. “When I’m not managing I’m working on my book. I have the largest book in our office. So what I look for and what our producers look for are people that will have individual expertise for the areas we work in.”

Finding and developing strong relationships with essential wholesalers can take years, Yung said.

“You can look at my wholesale relationships and most of them span 20, 25 years, as long as I’ve been in business,” he said. “If I find someone who’s a really skillful property person or a really skillful person in general liability or professional liability, then I tend to personally favor them because I’ve got experience with them, they’re a known quantity to me. I know I can trust what they’re doing. … I know what I’ll get back from continued on page 4 www.insurancejournal.com

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News & Markets E&S Marketplace, continued from page 2

them is something that works for me and my client.”

It’s also not always about size, Yung said. “We need people that have access to certain tools and knowledge base that I might not necessarily have. … Size is not

always everything. The biggest isn’t always the best. … I’m looking for a philosophical alignment with the wholesale partner.

I want someone who will view the world somewhat in the same way as I am.”

Relationships between retailers and

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wholesalers also have to work both ways, said Paul Rainey, president of RSI International, a Texas-based managing general agency with offices in Arlington, Texas, and St. Louis, Mo. “When we look at retailers, that’s what we’re trying to see. We don’t want somebody who’s just going to bring us business, we want somebody who’s going to partner with us through the ups and downs, through the gaps in coverage, through the mistakes we make, through the mistakes they make,” Rainey said. “As long as they see it as a partnership, we have the ability to grow with the retailers and vice versa.”

As an example, Rainey described a situation in which a strong, long-term relationship with an agent led to a contract for a new insurance product.

The agent, he said, “came to us several months ago with an idea [for] coverage that he wanted to put into effect. He looked all over the place and couldn’t find a market for it. Not only couldn’t he find a market for it, he couldn’t find anybody doing it. So he brought the idea to us.”

The idea seemed like a good one, so we “took it to London and actually walked out with a contract,” Rainey said.

The client now has the opportunity to “chase his dream,” Rainey said. The reason he has that opportunity because of that solid relationship, he said.

Similarly, because of the relationship “London had with our company, we were able to say ‘this is a solid individual’ and we walked out with a contract in hand,” Rainey said.

The value of the relationship can’t be overstated, he said.

“Believe me, wholesalers talk,” Rainey said. “And a lot of you do business with several of us. And the [retail agents] that are not necessarily driven by relationships, I’m not sure those are the ones that are going to be successful in the long run.”

This article is based on a panel discussion, “Best Practices Between Wholesalers and Retailers Revisited,” that was moderated by Gil Hine and took place at IIAT’s Joe Vincent Management Seminar. www.insurancejournal.com

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Texas COVERAGE

News & Markets Social Media: It’s Here to Stay The Most Successful Users Know Their Markets there, “which is what any consumer wants to hear from their insurhe value of social media as a tool ance agent as they’re for marketing and selling property/ going through a claim casualty insurance may be a matter or disaster or someof debate but one thing is for certain: thing. They want to While the nature of social media may be know that their insurevolving, it’s not going away. ance agent is there for Many property/casualty insurance them.” agencies have embraced tools like With both Facebook Facebook, Twitter and LinkedIn to varyand Twitter, “everying degrees. The most successful users thing goes back to are those who know their markets and your website,” Rixford are focused on what they’re going after, said. “It’s where you said Laird Rixford, vice president of put all your content, Products and Marketing at Insurance where you educate Technologies Corporation (ITC), based your customers. It’s in Carrollton, Texas. your home on the web, “The big pitfall is in not knowing so everything points your market,” Rixfor said. “If you’re sitback to there.” ting there trying to sell commercial That’s exactly the strategy employed policies on Facebook, it’s just a waste of by the Ron Patterson Insurance Agency time.”

Inc., in Richardson, Texas.

On the other hand, Facebook and “What we’re using Facebook for priTwitter offer the ability to showcase the marily is education to our clients,” said personality of an insurance agency and agency Chairman Ron Patterson. “Take assure customers that they matter to claims for example. We had a recent fire you. here two weeks On Facebook, ‘When they go to our ago that was “one out of every caused by a leak seven posts should Facebook page they go of gas. Fortunately be self-promotionback to our website to the house didn’t al,” Rixford said. find out the products and explode. But that “The other six services that we offer.’ could happen should be just fun in a commercial things that you building just like it could happen in a are doing for charity, your community, residence. We use that. We warn people what’s going on in your community. Just about those types of things as a commubeing out there is what people like to nication tool.” see.”

Patterson, speaking during a Through Twitter, an agent is able to panel discussion at the Independent communicate to their customers that Insurance Agents of Texas 2013 Joe the agency is available and is listening to Vincent Seminar, said his agency uses them. such educational opportunities on “Twitter is more of a consumer cusFacebook to drive people back to its tomer support channel,” Rixford said. website.

It’s about letting them know you are

By Stephanie K. Jones

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He cited another instance in which he had the opportunity to connect with his customers through Facebook, this time about car fires.

“We had a car that caught on fire in a parking lot down the street from us.

One of our staff people took a picture of that car. … We took that picture and put it on our agency Facebook page — you know what happened? We spiked the interest. An incredible number of people looked at that,” Patterson said.

As a result, Patterson was able to educate customers on the dangers of car fires and ways to prevent them.

“That’s the connection that we’re making,” Patterson said. “When they go to our Facebook page they go back to our website to find out the products and services that we offer.”

Business-to-Business While Facebook and Twitter are commonly seen as effective ways for retail agencies to communicate with consum-

continued on page 10

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Texas COVERAGE

News & Markets Rathgeber Appointed Texas Insurance Commissioner as Kitzman Exits

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n the same day that Eleanor Kitzman exited her post as state insurance commissioner, Texas Gov. Rick Perry appointed Julia Rathgeber of Austin to take over leadership at the Texas Department of Insurance.

Rathgeber’s term expires Feb. 1, 2015.

Kitzman, appointed in between regular sessions of the legislature, was never confirmed by the Senate, so her term as commissioner ended as lawmakers wrapped up the 2013 regular session on May 27.

Rathgeber previously was deputy chief of staff in the Office of Lt. Gov. David Dewhurst.

She is a past director of research for the Texas General Land Office, and a past director of the strategic assessment division for the Texas Natural Resource Conservation Commission, now the Texas Commission on Environmental

as a leader. Julia leaves my office with my Quality. She is a member of the State Bar respect, deep friendship, and appreciation of Texas and the Seton Fund Development for a job very well done.”

Board, and a member During the recent of and is a volunteer for regular legislative session, The Settlement Club and Democrats questioned The Settlement Home for Kitzman’s leadership and Children. her past ties to the insur Rathgeber received a ance industry, according bachelor’s degree and law to the Austin Americandegree from the University Statesman. She was of Texas at Austin. criticized for, among other “Governor Perry could things, her spending on $1.5 not have picked a betmillion on consultants to ter individual than Julia study ways to reform the Rathgeber to lead the Texas Texas Windstorm Insurance Department of Insurance,” Commissioner Julia Rathgeber Association and for not said Lt. Governor David doing enough to protect consumers.

Dewhurst in a statement released by his An Associated Press report quoted office. “TDI’s gain is my team’s loss, but Republican Sen. Bob Deuell of Greenville, we are confident that she will fully justify as suggesting that Kitzman “has ignored a the governor’s confidence in her abilities lot of rules.” Deuell added that he didn’t the votes were there to confirm her.

A confirmation hearing for Kitzman was never brought to the floor during the session ended May 27.

The Corpus Christi Caller Times reported that Rathgeber will retain oversight of TWIA, which has been under the supervision of the Texas Department of Insurance since early 2011.

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States OK Electronic Proof of Insurance

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exas and Arkansas are among the 17 states that passed legislation this year allowing drivers to show proof of auto insurance coverage on electronic devices. There are now 24 states that allow electronic proof of coverage, according to Property Casualty Insurance Association of America (PCI).

In Texas, SB 181 was signed by Gov. Rick Perry on May 24 and became effective immediately. In Arkansas, SB 243 was enacted in March 2013 as Act 175.

Louisiana adopted similar legislation last year. www.insurancejournal.com

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News & Markets Social Media, continued from page 6

presenting a complex ers, many wholesale insurance organizations subject such as insurance may not view those tools as being as useful isn’t going to be on the in a business-to-business environment. top of anyone’s list of ‘fun One specialty insurance wholesaler that things’ to research. That’s sees things differently is Addison, Texaswhy it is important to based South & Western, which uses social present your company media to supplement its overall branding in a fun or interesting initiative. manner when using “Although some millennials look to social social media.” media as their primary source of informa South & Western’s brand, tion when making buying decisions, in the for instance, centers around the financial services industry, more traditional company’s mascot, a golden retriever named communication methods at this point “Brighton,” Martin said. are more readily accepted,” said South & To that end, South & Western’s “web serWestern vice president Bill Martin. “When vices are appropriately referred to as ‘Rate we define ‘traditional,’ that would include Retrievers’ and ‘Policy Retrievers,’” Martin electronic forms of communication includsaid. And through Facebook, the company ing email marketing and highly functional promotes “Brighton” to its websites.” retail agency customers.

However, he said, ‘[I]t is important to presenting ‘Brighton’ social media “suppresent your company in a “By fun and fresh way ports the buying deciin a fun or interesting through social media, sion by presenting hopefully other insurance your company brand manner when using professionals are able to in a different and fun social media.’ experience a little humor environment. Since while becoming informed on some of the today most people use Facebook or Twitter products and services our organization can in a purely recreational or leisure setting,

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provide. The feedback we have received has been overwhelmingly positive,” Martin said.

A Powerful Tool “LinkedIn is an extremely powerful tool for staying in touch with business consumers,” Rixford said.

“It’s a very powerful tool, especially for people who are working larger accounts,” he said. For instance, if a producer is working an account but is not in contact with the actual decision-maker, they can go to LinkedIn to find the right person.

“By having just one connection with someone in that company, you can use LinkedIn to find other people in that company and connect with them. So you can get to the right person,” Rixford said.

“That’s really big on large commercial policies that take a lot of time and effort.”

LinkedIn is also an excellent recruiting tool, he said. It’s a way to find and keep in touch with good talent in the industry, people that you know are knowledgeable.

“You will see that they might change jobs, they might be looking for a job, you’re keeping in touch with them,” he said.

“It’s that networking aspect. … It’s being in communication with multiple people with an easy to use channel, where you can post and everybody in your network sees it.”

The return on the investment placed in social media is not easily identified, Rixford acknowledged. But when it comes to marketing, there’s value in just staying in touch with people.

“If you’re consistently out there and you’re asking your insureds to follow you and to be engaged with you, they’re going to know that you’re listening and that actually helps improve retention,” he said.

It’s unlikely that somebody would surf Facebook to find an insurance agent to buy car insurance from, but if they are already connecting with an agency through social media, they are more apt to stay with them longer, Rixford said. www.insurancejournal.com