Insurance Journal West 2015-08-17 by Insurance Journal

WEST EDITION California Workers’ Comp Premiums Growing Workers’ Comp Side Agreements in California $55M Decision Against Three AIG Companies

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Inside This Issue

On The Cover

Special Report:

101 Sales, Marketing & Management Ideas

August 17, 2015 • Vol. 93 No. 16 • West

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IDEA EXCHANGE

10 Independent Agents Enjoy Organic Growth

W2 Washington City Sues Monsanto Over River Contamination

35 E&O Insights: Curtis Pearsall How Management Shapes Agency E&O Culture

10 Incoming, Outgoing Travelers CEOs Talk Transition, M&As

W2 Former Worker Sues Safeway in Oregon Over Leering Customer

10 AIG Sees Opportunity in ACE Chubb Deal

W4 Report: California Workers’ Comp Premiums Growing at Double Digit Rates

30 Special Report: 101 Sales, Marketing & Management Ideas 38 Spotlight: 10 Things to Know About Hospitals

W6 Court Decision May Impact Workers’ Comp Side Agreements in California

39 Growing Your P&C Agency: Alan Shulman Beware of Setting Too Many Goals 42 Closing Quote: Jeff Chesky, Insuritas Independent Agencies and What Customers Expect

W8 California Court Hands Down $55M in Decision Against Three AIG Companies

DEPARTMENTS 8 26 26 28 40

6 | INSURANCE JOURNAL-WEST August 17, 2015

Opening Note Declarations Figures Business Moves MyNewMarkets

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Opening Note

Publisher Mark Wells | mwells@wellsmedia.com

Marketing on the Brain

he 101 Sales, Marketing and Management Ideas featured in this issue came from agents, managers, columnists, consultants, researchers, techies, editors and others. We cast a wide net. Even Steve Jobs and Teddy Roosevelt contributed (although we didn’t tell them). With so many contributing, we didn’t think to ask the neighborhood neuroscientist but maybe we should have. As we all know, marketers would love to get inside consumers’ heads. Now it appears they can. Researchers at the University of California at Berkeley’s Haas School of Business are using functional magnetic resonance imaging (fMRI is an upgraded MRI machine for the brain) to see if what people say about brands matches what they are actually thinking. The academics are testing the classic marketing proposition that consumers associate human-like characteristics with brands. This is sometimes called brand personality. Their paper, “From ‘Where’ to ‘What’: Distributed Representations of Brand Associations in the Human Brain,” published in the Journal of Marketing Research (August 2015), was authored by Ming Hsu and Leif Nelson, BerkeleyHaas marketing professors, and Yu-Ping Chen, Ph.D. The study’s participants have their brains scanned An MRI of a customer’s brain while they view logos of reveals a brand’s personality. well-known brands including Apple, Disney, Ikea, BMW and Nestle. After they finish the scan, the participants then take a survey that asks about the characteristics that they associated with each brand. Next, using a set of data mining algorithms, the researchers use the participants’ brain activity to predict the survey responses. “We were able to predict participants’ survey responses solely from their brain activity,” says Chen. “That is, rather than taking participants’ word at face value, we can look to their neural signatures for validation.” The authors say the results provide marketers with a rigorous method that they can potentially use to verify core customer insights. So long focus groups. “Surveys and focus groups are the workhorses for generating customer insights. They are fast, inexpensive, and offer tremendous value for marketers,” said Hsu, senior author of the study, “However, the inherent subjectivity of these measures can sometimes generate skepticism and confusion within companies, often leading to difficult conversations between managers within marketing and those outside.” MRI machines can be bought for as little as $150,000 these days but an fMRI is another story, with prices starting at $1 million. Thus we suspect it’s going be a while before the boss will pay for an fMRI machine for the marketing department. However, the next time someone scoffs that marketing isn’t brain surgery, ask them if they are sure about that.

Andrea Wells Editor-in-Chief

8 | INSURANCE JOURNAL-NATIONAL August 17, 2015

EDITORIAL Chief Content Officer Andrew Simpson | asimpson@insurancejournal.com Editor-in-Chief Andrea Wells | awells@insurancejournal.com East Editor Young Ha | yha@insurancejournal.com Southeast Editor Amy O’Connor | aoconnor@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 Senior Editor Susanne Sclafane | ssclafane@insurancejournal.com ClaimsJournal.com Editor Denise Johnson | djohnson@claimsjournal.com Columnists Curtis Pearsall, Alan Shulman Contributing Writers Jeff Chesky, Tim Talley SALES Chief Marketing Officer Julie Tinney (800) 897-9965 x148 | jtinney@insurancejournal.com Sales Manager Lauren Knapp (800) 897-9965 x161 | lknapp@insurancejournal.com West Dena Kaplan (800) 897-9965 x115 | dkaplan@insurancejournal.com Allison Steinkamp (800) 897-9965 x172 | asteinkamp@insurancejournal.com Midwest Lisa Whalen (800) 897-9965 x180 | lwhalen@insurancejournal.com South Central Mindy Trammell (800) 897-9965 x149 | mtrammell@insurancejournal.com East (NY, PA and CT only) Dave Molchan (800) 897-9965 x145 | dmolchan@insurancejournal.com Southeast & East (except for NY, PA and CT) Howard Simkin (800) 897-9965 x162 | hsimkin@insurancejournal.com New Markets Sales Manager Kristine Honey | khoney@insurancejournal.com Classifieds, Jobs, Agencies Wanted/For Sale Kelly De La Mora (800) 897-9965 x125 | kdelamora@insurancejournal.com MARKETING/NEW MEDIA Marketing Administrator Gayle Wells | gwells@insurancejournal.com Advertising Coordinator Erin Burns (619) 584-1100 x120 | eburns@insurancejournal.com New Media Producer Bobbie Dodge | bdodge@insurancejournal.com DESIGN/WEB Chief Technology Officer/Chief Innovation Officer Joshua Carlson | jcarlson@insurancejournal.com V.P. of Design Guy Boccia | gboccia@insurancejournal.com Audience Development Elizabeth Duffy | eduffy@wellsmedia.com Marketing Director Derence Walk | dwalk@insurancejournal.com Web Developer Jeff Cardrant | jcardrant@insurancejournal.com Web Developer Tim Layer | tlayer@wellsmedia.com IJ ACADEMY OF INSURANCE V.P. of Education Chris Boggs | cboggs@ijacademy.com Sales Executive Romeo Valdez | rvaldez@ijacademy.com Online Training Coordinator Barbara Whiffen | bwhiffen@ijacademy.com ADMINISTRATION Chief Executive Officer Mitch Dunford | mdunford@wellsmedia.com Chief Financial Officer Mark Wooster | mwooster@wellsmedia.com

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News & Markets Independent Agencies Growing Organically

ndependent agencies are enjoying a period of high profitability boosted by healthy organic growth despite continued soft pricing in commercial lines. Independent insurance agents/brokers posted median organic growth of 5.9 percent for the second quarter of 2015, slightly higher than 5.8 percent recorded in the first quarter of 2015 and second quarter of 2014, as measured by the Reagan Consulting Organic Growth and Profitability (OGP) quarterly survey. “Industry organic growth has now been in a relatively tight band of five percent to seven percent for 14 consecutive quarters,” said Kevin Stipe, president of Reagan Consulting, an Atlanta-based management consulting and merger-and-acquisition advisory firm for the insurance distribution sys-

tem. “Times are good for insurance brokers.” Continued strong organic growth boosted profitability to 24.6 percent in Q2 2015, the highest second-quarter performance since the survey launched in 2008. Benefits Growth The second quarter also marked the first time in four years that group benefits -with a 6.8 percent rate -- “outgrew” commercial lines (5.4 percent). Softening pricing in commercial lines affected that line for the second straight year, Reagan reported. Reagan expects “more and potentially deeper softening” in commercial property/ casualty pricing going forward. “If this happens, commercial lines growth will likely decelerate further and pull agency-wide organic growth down,” Stipe said.

Incoming, Outgoing Travelers CEOs Talk Transition, M&As

eparting Travelers Insurance CEO Jay Fishman and his successor, Alan Schnitzer, insist that the property/casualty insurance giant will experience a smooth transition. The Travelers Companies announced on Aug. 4 that Fishman would give up his role as CEO due to a neurodegenerative condition that appears to be a form of ALS. Schnitzer, currently CEO of Travelers’ Business and International Insurance Segment, will replace Fishman on Dec. 1, and Fishman will become executive chairman at that point. They said Travelers has always evolved and will continue to do so as it gains a new CEO. “This is really an institutional strategy that we have and we’ve been executing on. It’s not of the moment. It’s over many years,” Schnitzer said during an investor call. “We’ll be bold and creative and thoughtful and continue to take on the challenges of the marketplace in all the ways you would expect a great leadership team to do that.” 10 | INSURANCE JOURNAL-NATIONAL August 17, 2015

Fishman said a large-scale acquisition is probably not in Travelers’ immediate future. “I have always said that we look at anything and everything, and if there’s a rumor around that we’re looking at it, it’s probably a good assumption that we are,” he said. Jay Fishman Any M&A deal must add value to the company, Fishman added. “We couldn’t care less about being bigger for bigger sake,” he said. “We’d like to be bigger if it changes either our growth trajectory or our return opportunity, or if the return volatility gets lower. But just to do a transaction to do a transaction [creates] way too much risk with our shareholders’ money, and I’ve got to make sense out of it and make everyone understand why it makes sense.”

The quarterly survey also found that personal lines growth slipped to 1.8 percent versus 2.2 percent in Q2 2014. Agents and brokers project a 20.0 percent EBITDA margin and a 6.7 percent organic growth rate for the full year. For the survey, Reagan Consulting used data from 130 mid-size and large agencies and brokerage firms with median revenue of $17 million.

AIG Sees Opportunity in ACE-Chubb Marriage

CE Limited’s acquisition of Chubb Insurance could create opportunity for American International Group (AIG), which is already a major player in the high net worth market along with both ACE and Chubb. Asked during an analysts’ call about the ACE-Chubb merger, AIG CEO Peter Hancock said the deal has no direct effect on AIG’s strategy but opens up possibilities. “It does create opportunity in terms of customers, talent and a slight shift in the balance of power between carriers and brokers” given there will be fewer carriers in the market, he said. AIG’s Private Client Group serves the high-end personal lines market that is also targeted by both Chubb and ACE, which strengthened its position last year when it took over the high net worth business of the other major carrier in the space, Fireman’s Fund. Thus the number of larger insurers serving this market will be down to two. He said AIG is not interested in a large acquisition at this time as it is still merging two of its Japanese units, AIU and Fuji Fire & Marine, a process the company said is taking somewhat longer than anticipated. Hancock did say AIG may be making “modest” acquisitions. www.insurancejournal.com

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News & Markets Washington City Sues Monsanto Over River Contamination

he city of Spokane is suing the international agrochemical giant Monsanto, which it blames for pollution in the Spokane River in Washington. The lawsuit, filed earlier this month in U.S. District Court in Spokane, alleges that the company sold chemicals that it knew for decades were a danger to people and the environment. The suit doesn’t specify the damages being sought. But Marlene Feist, the city’s utilities spokeswoman, noted the city will spend $300 million in the coming years to keep polychlorinated biphenyls and other pollutants from entering the river. “Monsanto knew that PCBs would contaminate water supplies, would degrade marine habitats, would kill fish species, and would endanger birds and animals,” the complaint says. “In addition, Monsanto knew PCBs are associated with serious illnesses and cancers in humans and that humans may be exposed to PCBs” through eating or touching fish. Monsanto was the sole producer of PCBs between 1935 and 1979, when Congress banned them. The chemicals, developed by

Monsanto as a coolant in electrical transformers and capacitors, were used in many products, including paint, hydraulic fluids, sealants and ink. According to the lawsuit, Monsanto learned by the 1930s that the chemicals were toxic, but it continued making them and concealed the danger from government officials. Monsanto said in a written statement that a previous incarnation of the company produced the PCBs, which it said “served an important fire protection and safety purpose.” The former Monsanto was spun off into three companies, all of which are named as defendants in the lawsuit: Monsanto, which handles its agricultural products business; Solutia, which operates its chemical products business; and Pharmacia, which took over pharmaceuticals and is now owned by Pfizer Inc. “PCBs sold at the time were a lawful and useful product that was then incorporated by third parties into other useful products,” Charla Lord, a company spokeswoman, wrote. “If improper disposal or

Former Worker Sues Safeway in Oregon Over Leering Customer

former employee of a Safeway in Oregon has filed a lawsuit against the grocery store chain saying she was forced to quit because a customer repeatedly stared at her breasts and made vulgar comments. The Oregonian reported that 44-year-old Daphne Lannan says in a lawsuit filed last week in Multnomah County Circuit Court that she asked managers at the Lebanon Safeway to stop the W2 | INSURANCE JOURNAL-WEST August 17, 2015

customer but they did not. A Safeway spokeswoman declined to comment about Lannan’s lawsuit, citing the pending litigation. According to the lawsuit, Lannan began working at the deli counter in November 2013. She says a male customer began to comment about the size of her breasts, saying he wanted to touch them. Lannan’s attorney says the law allows employees to sue their employers for sexual harassment by non-employees. Copyright 2015 Associated Press.

other improper uses created the necessity for clean-up costs, then these other third parties would bear responsibility for these costs.” Other cities have similarly sought damages from Monsanto over PCB pollution, including San Diego and San Jose, California, and Westport, Massachusetts. The Spokane River has elevated levels of PCBs, which have been found in its water, sediments, fish and wildlife. The PCBs enter the river, in part, through the city’s storm water discharges. Spokane faces a 2017 federal deadline to stop pollution from entering the river. Copyright 2015 Associated Press.

California, Pacific Northwest Schools Get $4M for Earthquake Early Warning Systems

he U.S. Geological Survey has awarded $4 million to four universities in the Pacific Northwest and California to boost the development of earthquake early warning systems. The University of Washington, the University of Oregon, the California Institute of Technology and the University of California, Berkeley, received the awards, which were announced this month. The goal is to improve and test a coast-wide system designed to detect potentially damaging earthquakes and alert people seconds before severe ground shaking takes place. The USGS also spent an additional $1 million on 150 new and upgraded sensors to improve the speed and reliability of the warnings. The ShakeAlert demonstration system is currently sending alerts to test users in California, Oregon and Washington. Copyright 2015 Associated Press. www.insurancejournal.com

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News & Markets Report: California Workers’ Comp Premiums Growing at Double-Digit Rates By Don Jergler

orkers’ compensation premiums in California continue to grow at double-digit rates, according to the Workers’ Compensation Insurance Rating Bureau. The WCIRB in July released its “State of the California Worker’s Compensation Report, which would perhaps be best described as a “mixed bag” of positive and negative trends, as well as a result of the impact that the Senate Bill 863 workers’ comp reforms passed in 2012. If nothing else, the report shows the magnitude of California workers’ comp system. The state’s workers’ comp written premium accounts for more than a quarter of the U.S. total, according to the report. The report shows the rising premiums in California are due to higher premium rates and to growth in insured payroll resulting from economic expansion and wage level increases. It also shows California has the highest premium rates in the country. While California employers are paying ever higher rates per $100 of payroll since 2009, workers’ comp rates are less than half what they were before the 2003 reforms, the report shows. “What it shows is there’s a mix of news,” said Dave Bellusci, the WCIRB’s executive vice president, chief operations officer and chief actuary. The good news is rates aren’t much higher than nearly 40 years ago; the bad is that rates are on the rise. Worse yet, the state compares poorly with the rest of the nation, he said. The authors referred to the annual 2014 Oregon Workers’ Compensation Premium Rate Ranking Summary, which differs slightly from the WCIRB figures, showing California’s workers’ comp premium rates were $3.48 last year. Why are California’s workers’ comp premiums so high? The report cites three principal factors as answers to that question: California has the highest permanent disability claims frequency in the nation, the state has among the W4 | INSURANCE JOURNAL-WEST August 17, 2015

California’s $3.07 average rate per $100 of payroll easily tops other U.S. states, and have been climbing slowly since 2009, according to a report from the Workers’ Compensation Insurance Rating Bureau.

highest claims in terms of medical costs and it has a high cost of delivering benefits. According to Tony Milano, the WCIRB’s vice president and chief actuary, the state’s claims frequency is being driven up by claims from Southern California, particularly the Los Angeles area. This increase goes against a nationwide trend of falling claims frequency. “In the Los Angeles area we see an aberration in claims frequency,” he said. “Take L.A. out of California’s claims frequency and it’s pretty similar to the rest of the country.” In California there are on average 14.5 claims per 1,000 employees, putting it roughly 50 percent greater than the national median. Partial permanent disability claims is 704 per 100,000 employees in California, more than twice the national median of 327. This is despite the state’s hazard level being considered below that of the typical state, with on average fewer manufacturing and other potentially dangerous jobs. Another driver of California’s higher premiums is the state’s medical treatment costs, largely due to prolonged medical treatments. Nearly 20 percent of indemnity claims in California were open after five years, nearly four times the national median, the report shows.

The report also offers a take on the effectiveness of SB 863: “Senate Bill No. 863 impacts have generally been emerging consistent with initial WCIRB projections with potentially greater-than-projected savings in medical cost reductions offset in part by less-than-projected savings in reduced frictional costs.” The allocated loss adjustment expense cost per indemnity claim are growing, they are not shrinking, as would be expected following the passage of SB 863. “California has the highest ratio of loss adjustment expenses to losses in the country,” the report states. The figure has been on the rise since 2011. SB 863 was intended to minimize litigation costs, but continued expedited hearings and a higher volume than expected of Independent Medical Reviews being conducted may have driven that up, the authors said. There was some interesting news for insurers. In recent years, California workers’ compensation combined ratios have generally been higher and returns on net worth lower than countrywide averages, however the combined ratios have been falling since 2010. The report shows that many of the intended changes made by SB 863 are also having a positive impact. www.insurancejournal.com

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News & Markets

Court Decision May Impact Workers’ Comp Side Agreements in California By Don Jergler

recent court decision may have the potential to change the practice of side agreements in workers’ compensation policies California, a practice that some say often goes on under the regulatory radar. Zurich American Insurance Co. and American Zurich Insurance Co. had such a side agreement with Los Angeles, Calif.-based Country Villa Service Corp. Sometimes also called “deductible agreements,” or “program agreements,” they can retroactively alter an existing policy. The agreement between Zurich and Country Villa altered the deductible structure, among other things, in the policy. However, Zurich did not file it with the Workers’ Compensation Insurance Rating Bureau as required by California law. A dispute arose and Country Villa challenged under a case known as Zurich American Insurance Company v. Country Villa Service Corp. It went to the U.S. District Court for Central California, which ruled in W6 | INSURANCE JOURNAL-WEST August 17, 2015

favor of Country Villa on July 9 by granting the company partial summary judgment. Jeff Pettegrew, the former head of the California Self Insurers’ Security Fund and someone who is familiar with these types of workers’ comp agreements, said the ruling could be a “wake up” call for other insurers that use these agreements and that it has the potential to put millions of dollars back into the pockets of businesses. “We’re talking about millions and millions of dollars that have been absconded by insurance companies,” said Pettegrew, who is now the chief imagination officer with Insurance Thought Leadership, a digital provider of information on insurance subjects. These side agreements can be complex and often include claims administration expenses such as medical bill and utilization review costs, pharmacy benefit management, vocational rehab, Medicare set aside agreements, sub rosa investigations and other “inside expenses.” Pettegrew feels they are not as transpar-

ent as they should be. “These expenses should all be teed up before you buy the policy,” he said. Under a typical worker’s comp side agreement an insured is required to post sufficient collateral to meet expected, or incurred, losses and expenses before such expenses are actually paid. Policyholders are refunded any remaining insured money posted once all of the workers’ comp claims within a given policy year are all closed. This could take decades if there are injured employees with lifetime medical care or related benefits, according to Pettegrew. Companies are attracted to incurred loss retro agreements because of the potential to save money, but if there are serious indemnity claims it can prove more costly over time, he said, adding, “They come at you with a lower premium.” Insurers have long chosen to adjust or redefine individual insurance policy coverage via side agreements based upon on going profit-loss factors arising from the coverage terms, claim experience or other dictates of the insurer, he said. However, the Zurich v. Country Villa decision will force insurers to file any side agreements before a policy is issued, which Pettegrew believes will enable greater transparency for insureds in picking their carriers and in estimating costs included in the deductible. And he believes that will be better for carriers and the businesses they insure. “In my opinion, this kind of insurance practice has driven more insureds to self-insurance or even to workers’ comp opt-out options in states like Texas and Oklahoma,” he said. Zurich was forced into a settlement in 2013 with the California Department of Insurance over a similar side agreement conflict. CDI eventually agreed to drop its prosecution over the “non-filing of Deductible Agreements” with the WCIRB and CDI, a settlement agreement shows. In that settlement Zurich admitted no liability or wrongdoing, but agreed to make the filings and agreed not to enter into or amend a deductible agreement with a www.insurancejournal.com

California employer unless it has been submitted to the WCIRB and CDI for review. The court in Zurich v. Country Villa cited that settlement, as well as a case in New York, Monarch Consulting, Inc. v. Nat’l Union Fire Ins. Co. of Pittsburg, in which the New York Supreme Court Appellate Division ruled in 2014 that arbitration clauses in side agreements with an insurance carrier were unenforceable. That case is now headed for New York’s highest appellate court. When contacted for comment CDI spokeswoman Madison Voss provided a statement that applauded the decision: “The Court correctly determined that insurers may not use ancillary agreements that modify the obligations of the parties unless they are filed in accordance with California law. We laud the Court’s refusal to enforce an illegal agreement that, as noted by the Court, would circumvent the statutory structure and allow an insurer to enforce contract terms that bypass the governmental review process.” Voss said CDI wouldn’t comment on this specific case or other specific enforcement activities, but that CDI “continues to monitor” these decisions. “In appropriate circumstances, and when an unfiled agreement modifies the obligations of the parties, the Department will take all necessary action against those insurers that fail to comply with California law,” the CDI statement concludes. Robyn Ziegler, Zurich North America’s manager of media and public relations, declined to offer a detailed comment. “It is Zurich’s policy not to comment on pending litigation,” Ziegler wrote an email reply to a request for comment. The attorney who represented Country Villa, believes the case will have a long-lasting impact on how side agreements are handled in California. “This now has huge repercussions that says to all policyholders in California: ‘Those programs were illegal,’” said Nicholas P. Roxborough, a partner in Roxborough Pomerance Nye & Adreani in Woodland Hills, Calif. Unlike the side agreement, the dispute www.insurancejournal.com

can happen, but you’ve got to file,” he has been fairly straightforward in how it added. has unfolded. The legal wrangling began when Zurich For seven years Zurich provided workers’ filed an action against Country Villa on May comp to Country Villa, which is in the busi16, 2014, claiming breach of contract under ness of managing skilled nursing care facilifor Country Villa’s alleged breach of insurties in California. Zurich was the company’s ance policies, related contracts, and a promcarrier for workers’ comp beginning on Jan. issory note, according to court documents. 31, 2004, and ending Jan. 31, 2011. According to Roxborough, the rift was Zurich and Country Villa entered into over the loss reimbursement fund, which he separate insurance policy contracts for each of those seven policy years, court docusaid already held roughly $4.5 million to pay ments show. Country Villa’s workers’ comp claims. Each policy included an attached large The adjusters on the claims believed deductible endorsement, under which that they did not need that much money Country Villa agreed to reimburse Zurich because their reserves on all open claims the deductible amount, the sum of all covwas roughly $1.4 million less than what ered benefits and damages Zurich paid for Zurich was holding to pay Country Villa’s. an injured workers’ benefit, all allocated Therefore Country Villa wanted some loss adjustment expense and all assessmoney back, yet Zurich wanted an addiments incurred by Zurich related to the tional $1.4 million, Roxborough said. deductible amount, according to court doc Zurich sued Country Villa seeking $1.4 uments. million. On July 1, 2014, Country Villa filed a Zurich and Country Villa entered into an counterclaim against Zurich for contract-reincurred deductible agreement in 2004 and lated claims and declaratory relief. 2005, with the 2005 incurred deductible Country Villa filed a motion for partial agreement continuing such that the parties summary judgment on April 6, which is entered into separate specifications to the what the court ruled on last month. 2005 IDA each Among its findings subsequent policy ‘In my opinion, this kind the court stated: “If the year, court docunotifies the of insurance practice has commissioner ments state. insurer that the filed form driven more insureds to The specificaor endorsement does not tions were retroself-insurance or even to comply with the requireactively effective ments of law, specifying workers’ comp opt-out on the start date reasons for his or her options in states like Texas the of the related opinion, it is unlawful for and Oklahoma.’ policy and they the insurer to issue any superseded any policy or endorsement in endorsements to the policies. The IDA that form.” included terms such as “ALAE, “aggregate The court ruled that IDAs are endorsedeductible,” “aggregate deductible charge,” ments to the policies between the parties “claim administration expenses,” “deductible for purposes of the California insurance code and are “collateral agreements modiamount,” “excess premium” and “incurred fying the obligation of either the insured or loss.” the insurer.” The IDA also set up a loss reimbursement In the court ruling it was stated that the fund, a noninterest bearing account in IDAs between Zurich and Country Villa which funds are held to provide for the payare “illegal, void, and unenforceable in their ment of obligations within the deductible. entirety.” Such terms aren’t rare, but often these It’s unknown if Zurich will appeal the side agreements are not filed with the decision or take further action since the carWCIRB or CDI, according to Roxborough. rier isn’t commenting on the decision. “Frankly, the process still happens and August 17, 2015 INSURANCE JOURNAL-WEST | W7

WEST COVERAGE

News & Markets California Court Hands Down $55M in Decision Against Three AIG Companies

6 Sentenced in Large Cellphone Insurance Scam in California

n Alameda County, Calif., jury has awarded Pennsylvania-based Victaulic Co., $55.3 in damages against three AIG companies. The trial in Victaulic Co. v. American Home Assurance Co. et al., in Alameda County Superior Court spanned six weeks before Judge Frank Roesch. The verdict, which includes $9.3 million in compensation for breach of contract and bad faith and $46 million in punitive damages, is reportedly the largest verdict in the Superior Court of California, County of Alameda in nearly the last 10 years. Victaulic was represented by Pillsbury Winthrop Shaw Pittman LLP. The trial attorneys were insurance recovery and advisory partners Joseph D. Jean and Colin T. Kemp and counsel Jeffrey A. Kiburtz.

The case concerns more than 10 years of commercial general liability insurance the three AIG companies — American Home Assurance Co., National Union Fire Insurance Co. and Insurance Company of the State of Pennsylvania — issued to Victaulic from 2001 to 2012. Victaulic is a large producer of mechanical pipe-joining solutions and grooved pipe-joining systems. The California jury found: AIG breached the insurance policies; those breaches were made in bad faith; Victaulic is entitled to over $9.3 million in compensatory damages and attorneys’ fees; AIG acted with malice, oppression or fraud; an AIG must pay Victaulic an additional $46 million in punitive damages.

California Law Agencies Get $34.9M to Fight Workers’ Comp Fraud

nsurance Commissioner Dave Jones has awarded $34.9 million in grants to 37 district attorney offices representing 42 counties in California to combat workers’ compensation insurance fraud. The grants are funded through employer assessments, and they support law enforcement efforts in investigating and prosecuting workers’ comp fraud. “These grants will assist district attorneys across the state in uncovering workers’ compensation fraud schemes and prosecuting those who take advantage of the system,” Jones said in a statement. Workers’ comp insurance fraud includes medical provider fraud, employer premium W8 | INSURANCE JOURNAL-WEST August 17, 2015

fraud, employer defrauding employee, insider fraud, claimant fraud and the willfully uninsured operating within the underground economy. Grant funding is based on assessments from California employers. California District Attorneys apply for workers’ comp fraud grant funds. The commissioner’s grant review panel reviews the applications and makes funding recommendations to the Jones based on multiple criteria, including past performance, the county’s problem statement and their program strategy for the upcoming year.

ix people involved in a mobile phone insurance scam in California have been sentenced on felony fraud charges after filing more than 1,300 claims for stolen and damaged phones totaling more than $500,000. The convicted scammers, including some Verizon Wireless employees, were arrested by California Department of Insurance detectives and Los Angeles Police Department officers in May 2013. Through the course of the investigation, detectives discovered at least three Verizon employees accessed consumer account information to identify customers with high-end cellphones and file insurance claims for what they claimed were damaged or stolen phones. The replacement phones were reportedly shipped to the conspirators’ homes. Three additional co-conspirators had phones sent to their homes and hotels. Detectives identified Louis Lovett, 31, of Sacramento, as the mastermind behind the scheme. Lovett was ordered to repay the entire fraud loss amount, but all individuals are held responsible for ensuring the restitution is paid. In effect, the remaining five suspects were ordered restitution based on the agreed upon amount of their apportioned responsibility. The fraudulent claims totaled roughly $636,000. According to detectives, there is no indication that consumer identities or personal account information was stolen or used by suspects. The court ordered restitution of $636,265 to be paid to Asurion, the mobile protection insurance company that was defrauded. The case was prosecuted by the Sacramento District Attorney’s Office. All six individuals pleaded no contest to multiple felony counts of insurance fraud. www.insurancejournal.com

Dear Readers: Every business has a story to tell. For many corporations, small and large, that story ties closely to the personal lives of their founders. Throughout Insurance Journal’s history, we have come to know and appreciate many of the unique stories in our industry. And year after year, we have watched as our advertisers’ and readers’ companies have grown and changed. As a leading industry news and information source, we are not able to profile all of the corporations that cross our path. Our position as journalists sometimes makes it difficult as well. Consequently, we have created this special supplement to allow our clients, and some of the corporations you may work with on a daily basis, to tell their story ... in their own words. We hope you find this supplement interesting and informative. Best wishes from all of us at Insurance Journal. Mitch Dunford CEO, Insurance Journal mdunford@insurancejournal.com www.insurancejournal.com

August 17, 2015 INSURANCE JOURNAL-NATIONAL | 11

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NATIONAL COVERAGE

FIGURES

DECLARATIONS

200

$920,000

The number of DUI cases that need to be reviewed after a breath test operator in Kentucky was suspended for lying on a court report and in a testimony under oath. A video recording from the jail showed the operator falsely claimed that a suspect refused to take a breath test for which his license was automatically suspended. However, court records say the recording showed the defendant did agree to the test. The same operator was a witness to approximately 200 other DUI cases.

The amount a jury in western Nebraska awarded to a man who was injured at a Union Pacific facility when a chair he was sitting on broke. Dan Anderson filed the lawsuit against the railroad company in March 2010. He was 55 and working as a control operator at the time of the accident. His attorney says Anderson lost 61 days of work and had to undergo back surgery as a result of the accident.

Harpers Ferry Fire

“I am totally grief-stricken for our community and for the shop and property owners affected by this terrible tragedy. I am, however, thankful that no one was injured.”

—Harpers Ferry, W. Va., Mayor Gregory Vaughn after a July 23 fire devastated a historic commercial building built in the 1800s. At least a half dozen businesses were taken out by the blaze. The cause is under investigation.

Fire Bag Ban

“There is something inherently wrong in lighting a candle and setting it airborne and not having any control over where it will come down.”

— Bill Moody, chief fire inspector for Lincoln, Neb., comments on a proposal before the city council that would ban flying lanterns — or what Public Safety Director Tom Casady calls “flying bags of fire.”

1,710

$4 Million The amount the U.S. Geological Survey awarded to four universities in the Pacific Northwest and California to boost the development of earthquake early warning systems. The University of Washington, the University of Oregon, the California Institute of Technology and the University of California, Berkeley, received the awards.

The number of commercial motor vehicles pulled out of service by the Texas Department of Public Safety (DPS) during its annual inspection. The number of vehicles taken out for various safety violations represents about 21.7 percent of the 7,865 the 18-wheelers, buses and other commercial vehicles inspected in June. The DPS also issued 1,947 citations and more than 21,312 warnings, and placed 212 drivers out of service.

— U.S. Sen. Harry Reid, D-Nev., applauded a $4.3 million settlement agreement with the Moapa Band of Paiute Indians and owners of a coal-fired power plant outside Las Vegas, Nev., who also have agreed to clean up contamination that neighboring Native Americans blame for health problems and water pollution.

Dangerous Trenches

“For more than 2,500 years, man has known how to prevent deadly trench collapses. It is absolutely unacceptable that employers continue to endanger the lives of workers in trenches.” — Assistant Secretary of

$137.8 Million The approximate amount that the New York City government paid out in settlements relating to potholes and defective roadways in the city during fiscal years 2010 – 2015, according to a report by New York City Comptroller Scott Stringer. During the sixyear period, the city settled 2,681 personal injury defective roadway claims (mainly trip-and-fall claims on city roads) and 1,549 property damage defective roadway claims (pothole claims, generally affecting automobiles).

26 | INSURANCE JOURNAL-NATIONAL August 17, 2015

Pollution Settlement

“While the settlement will provide relief and help make the tribe’s home healthier and safer, no amount of money can pay for the sickness caused by a half-century of pollution from the coal plant.”

Labor for Occupational Safety and Health Dr. David Michaels speaks to the failure of Hassell Construction Co. Inc. to protect an employee from a trench collapse at an excavation site in Richmond, Texas. OSHA cited Hassell Construction for 16 safety violations and assessed penalties totaling $423,900. The employee survived but sustained serious injuries.

FEMA Denial

“I am disgusted and outraged.”

— Maryland Gov. Larry Hogan (R) on FEMA decision to deny Maryland federal aid to help cover the cost of Baltimore riots in April. A declaration would have allowed Baltimore to recover millions of dollars in riot-related costs.

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Business Moves

Regions, Holehouse Agency Regions Insurance Inc., an affiliate of Regions Bank, has entered into an agreement with the Ronald F. Holehouse Agency to obtain the firm’s personnel and accounts. Agency founder Ron Holehouse, along with Jake Holehouse and the 11-person agency team, will join Regions Insurance. The agency specializes in flood insurance, high-value homeowners, condo association master policies and restaurants. It is one of a few select providers of Lloyd’s private placement flood products in Florida. Alliant, Garibaldi Alliant Insurance Services has acquired Todd Garibaldi Insurance Agency Inc. in Lodi, Calif. Terms were not disclosed. Garibaldi will join Alliant as senior vice president in agribusiness and food services. The agency will becme a division of Alliant Insurance Services Inc. Todd Garibaldi Insurance Agency’s clientele include farmers, wineries, and restaurants, as well as fruit and vegetable growers, packagers and processors. TGI is the second agribusiness-focused agency Alliant has acquired this year. OneBeacon, Amtrust OneBeacon Insurance Group is exiting the crop insurance business. The Bermuda28 | INSURANCE JOURNAL-NATIONAL August 17, 2015

domiciled insurance holding company made it official with the sale of its exclusive managing general agency – Climate Crop Insurance Agency – to AmTrust Financial Services. As part of that transaction, OneBeacon said it has transferred its existing crop insurance business to AmTrust, including policyholder servicing. AmWINS Group, The III Group Wholesale broker AmWINS Group Inc. has acquired The III Group, a managing general agent and wholesale broker based in Glenside, Pa. The III Group’s divisions consist of Insurance Innovators Inc., III of Maryland, Inc., Insurance Innovators of New Jersey Inc., Innovators of New York Inc. and Insurance Innovators of New England Inc. The III Group specializes in general liability, professional lines, commercial auto, property, contractors and personal lines. The III Group will become part of AmWINS Access, the small business unit. NFP, BWD Group NFP, a New York City-based provider of employee benefits, property/casualty insurance, retirement and wealth management services, has acquired BWD Group LLC in Plainview, N.Y. BWD offers property/casualty insurance and employee proprietary programs and specialties in the sports, entertainment and publishing industries. BWD has approximately 200 employees. BWD’s principals will join NFP’s leadership team as managing directors. Roger and Marc Blumencranz and Stuart Wilkins will each become managing director, NFP Property & Casualty, New York Metro. Eric Blumencranz will become managing director, NFP Corporate Services (New York). BWD’s management will supervise NFP’s combined New York P&C presence, and the collective New York P&C operation will report to Terrence Scali, chief executive officer, NFP Property & Casualty. The

combined New York benefits operation will report to William Austin, managing director, NFP Corporate Services (New York). Confie; Schunke, Reynolds & Reynolds National personal lines agency Confie Seguros has acquired Schunke Insurance Agency Inc. in West Seneca, N.Y., and Reynolds & Reynolds Agency Inc. in Bellport, N.Y. Terms were not disclosed. The owner Richard P. Schunke and his son Rick Schunke, Jr. will continue with Confie to manage the operation. Reynolds & Reynolds Agency represents Confie’s first agency in New York’s Long Island region. Confie currently has 670 retail locations. Confie is a portfolio company of Bostonbased private equity firm ABRY Partners. Smith Brother; Carillo & Howland Smith Brothers Insurance LLC, an independent agency based in Glastonbury, Conn., has acquired the assets of Carillo & Howland Inc., an agency with locations in Windsor Locks and Somers, Conn. Terms of the transaction were not disclosed. Smith Brothers said Carillo & Howland will maintain its offices and staff at the Windsor Locks and Somers locations, and will operate as a branch of Smith Brothers. Jared Carillo and Chris Howland, the two principals from Carillo & Howland, will become principals at Smith Brothers. MMA, Cline Wood Agency Marsh & McLennan Agency (MMA) has acquired Cline Wood Agency, a Kansas Citybased independent specialty agency. Founded in 1984, Cline Wood specializes in the commercial transportation and agribusiness industries. It generates $15 million in annual revenues and has 73 employees who operate out of three offices in Leawood, Kan.; Arlington, Texas; and St. Louis, Mo. All of Cline Wood’s employees and leadership, including founders John Cline and Mike Wood and CEO Carol Barnett, are joining MMA’s upper Midwest region, which is under the leadership of regional CEO Bill Jeatran. www.insurancejournal.com

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SPECIAL REPORT

Fellow agents, Insurance Journal readers, experts, educators, marketing professionals, along with Theodore Roosevelt, Steve Jobs, Zig Ziglar, CNBC’s Kelly Evans, Harvard Business Review and Fortune magazine have been tapped for advice for this year’s list. There are big ideas and small ideas. The best idea is to find those that are right for your agency and try them. Enjoy and prosper. 1 Companies don’t buy, people do: Sales is not all about rational thinking and having the best value proposition. You also need to understand the psychological needs of your prospects. You want them to understand not only how your product will benefit their company but also how they will benefit, how it reinforces their own self-image. Will your brand boost their pride or help them win respect? — Harvard Business Review, June 2015, by CEB Marketing’s Brent Adamson, managing director of advisory services; Karl Schmidt, practice manager; and Anna Bird, director of strategic research 2 Former and failed: Get commercial referrals from former insureds and failed quotes. Ask for a “consolation prize” whenever a quality insured leaves you or a prospect turns down your proposal for valid business 30 | INSURANCE JOURNAL-NATIONAL August 17, 2015

reasons. This request is an unexpected compliment to the non-buyer’s judgment and helps to keep the door open for next year. — Alan Shulman, www.agencyideas.com 3 Brand gap analysis: Ask if your brand the same and the perception of your brand the same in the C-suite through the rank-andfile employees and through the sales channel? — Jim Flynn, president, Hult Marketing, at IMCA 2015 Conference 4 Digital leader: The digital world is here to stay! Fight it and your agency will be left in the dust. Assign a digital leader in your orga-

nization. Be certain this person is a savvy communicator using digits tools and has digital experience. If you don’t have someone internally, then outsource. — Kim Fricke, Professional Concepts Insurance Agency 5 Inbound marketing: Have customers find you rather than you seeking out customers. Inbound marketing is a data-driven, holistic approach of taking total strangers and moving them to long-term customers who love your brand. — Dan Tyre, HubSpot, at IMCA 2015 Conference 6 Outbound engine: To help build current client relationships and generate new leads, we use a program called Outbound Engine. Outbound Engine sends out automated emails containing professional and relevant content, automates social media posts, and generates new leads through a referral program. — Mikelle Furman, Pinnacle Insurance Group 7 Stick to the plan: Every year we create business plans with much thought, research, and good intentions. However, throughout the course of the year it’s easy to get distracted with new leads and forget about executing the plan. Over a decade of experience proves that sticking to my plan produces success and enables me to accomplish the desired objectives. — Matt Hammer, Baldwin Krystyn Sherman Partners 8 Urgency with prospects: Get back to all potential customers who have contacted you within an hour of receiving their query. Firms that did this are nearly seven times as likely to qualify the lead as those that tried to contact the customer even an hour later—and more than 60 times as likely as companies that waited 24 hours or longer. — Harvard Business Review, March 2011 9 Take a risk: “Whenever you are asked if you can do a job, tell ‘em, ‘Certainly I can!’ Then get busy and find out how to do it.” — Theodore Roosevelt 10 Simplify commercial: Simplify your commercial lines proposals. Pare your proposal document down to its most basic content. Customize it as much as reasonably possible so that it doesn’t look “canned.” Never fatten it up with meaningless content that distracts from the sale. Prominently feature www.insurancejournal.com

selected proposal elements that add sales value, such as explanatory graphs, policy comparison tables, and brief, relevant testimonials. — Alan Shulman, www.agencyideas. com 11 Down with elevator speech: Drop the “elevator speech.” There’s nothing as deadly for killing sales than the vaunted “Elevator speech.” When we talk about what we do, we’re the only ones who care. It’s a turn off for others. — John Graham, GrahamComm 12 Stay small, go virtual: If a small, personal lines agency is what you want, embrace the newest technologies and operate without a physical office. If you have employees, have them work from their home. Or go it alone. Target a promising niche, trust technology, and keep overhead (and expectations) under control. 13 Structured sales effort: Highperforming sales teams use structured rather than informal systems, are not afraid to stet “stretch” goals. They monitor and hold people accountable for results. — Harvard Business Review, July 2015, by Steve Martin, University of California Marshall School of Business 14 Adjacent products: Go beyond insurance by offering home security service, ID theft service, safe driving classes, webinars on work safety, dog training seminar, etc. 15 Treat every customer as an individual: Fight the commoditization of insurance products by tailoring coverages. 16 Wow your customers: In every interaction and transaction, big or small, exceed your customer’s expectations. 17 Be uncomfortable: Never get comfortable. Many salespeople get to the point where they feel they’ve “paid their dues” and have a right to such rewards as more pay with less work, access to prestigious accounts, little or no prospecting, and, of course, some sort of “special treatment.” Translated, this comes down to “the right to be comfortable” or “the right to coast.” — John Graham, GrahamComm 18 Content marketing buzz: Learn about content marketing. Visit redbull.com, the “World of Red Bull.” You’d be hard pressed to find anything about the energy drink. This is content marketing at its best. It’s so good, the company even separately licenses and makes money off its content marketing. — Kevin Brandt, director of operations, Trusted Choice, at IMCA 2015 Conference 19 Prospect with Twitter: Search Twitter for individuals and businesses you want to www.insurancejournal.com

insure. If they have active Twitter accounts, see whom they follow and who follows them. Their associations can be revealing. This information, along with their tweets and retweets may help you to determine if further pursuit is worthwhile. — Alan Shulman, www.agencyideas.com 20 Loyalty appreciation program: Go out of your way to thank customers who have been loyal with event invitations, birthday and holiday greetings, gift certificates, recognition in agency newsletter, etc. 21 Customer-centric: “Customers are looking for an understanding of their personal situation when they’re having an event, and they’re looking for people to help them cope with it. They’re looking for that from their retailers, from their airlines, and from their insurers. They expect all of those people they have relationships with to be able to respond in the same way.” —Lynn Kesterson Townes, Worldwide Commerce Marketing Leader, IBM, at IMCA 2015 Conference 22 Choose the right agency: Producers who are committed to a career in insurance sales should be very careful where they build their book of business. Non-compete/ non-solicitation agreements make it difficult for a producer to leave and start over. My advice: Chose a firm that has integrity, reputation, resources, support, and a compensation plan that will work for you 10 years from now and beyond. — Ed Kushlis Insurance Associates Inc. 23 Pick up the phone: Call clients just to say hello and thank them for their business, not to sell them anything. They will be awed. 24 Be a blogger: Content on your website is key to attracting people who are interested in what you are blogging about. If you or your staff can’t do it, get professional help. — Dan Tyre, HubSpot, at IMCA Annual Conference 25 Don’t be arrogant: Telling a customer, or an investor, that only you can do what you do or you don’t have any competitors is a red flag signaling that you really do not understand today’s business world. It implies there is no market for what you do. It says you think only you have the knowledge and skills needed, which is foolish. —Fortune magazine, August, 2015 Marty Zwilling, CEO & Founder of Startup Professionals Inc.

26 Social media photos: Include photos in social media posts to help increase engagement and tell your story. Here’s a handy cheat sheet to help with sizes: http://blogs. constantcontact.com/social-media-image-sizes 27 LinkedIn: Take advantage of LinkedIn’s publishing platform. It’s a great opportunity to expand your reach and gives analytics on views. Become a source to your industry and avoid pitching products or being “salesy.” 28 Learn why: Learn why a business contacted you for a quote. Check various sources in addition to directly asking the prospect. Ask fellow producers and search your agency’s management system and prospect database for the risk. Your office may have insured it years ago, perhaps under a different name or location. Also ask your carriers as your marketing reps or underwriters may be familiar with the firm. They may be contacting agents all over town or perhaps they’re habitual price shoppers. — Alan Shulman, www.agencyideas.com 29 Home inventory: Offer an online home and personal inventory service for customers. 30 Recordkeeping: Offer an online portal and app giving insureds access to all of their all insurance records, whether placed through your agency or others. 31 Guarding valuables: Arrange for storage units and deposit boxes for clients with high-valued items and/or who will be away from home for a period and want to keep valuables safe. 32 Offerpop: Our agency utilizes Offerpop, an engagement marketing platform that runs social media campaigns and/or contests. Our most successful engagement was a Halloween Pet Costume contest. — Mikelle Furman, Pinnacle Insurance Group 33 Comparative rating: If you haven’t already done so, sign up for a personal lines comparative rating service that allows you to provide multiple comparative quotes to customers in minutes. This is really what customers expect and what the independent agency promise is all about: choice. 34 Music maker: Create your own agency jingle for radio, TV and web ads. 35 Shut up and listen: A salesperson’s task is listening to someone else’s story. A much more effective approach is to say, “Hi, I’m Robert Gresham. What do you do?” We all continued on page 32 August 17, 2015 INSURANCE JOURNAL-NATIONAL | 31

SPECIAL REPORT continued from page 31 like to talk about ourselves, so get the other person talking. You’ll have a willing listener— learn something that can be helpful in turning the person into a prospect. — John Graham, GrahamComm 36 Logomania: Have some fun. Have your company name and logo painted on your cars and/or on your body. Use our logo everywhere—you paid for it, so use it. 37 Expert network: Create or join a network of agencies focused on a particular niche market such as technology, marijuana, hospitality or other industry. Share expertise, markets, marketing and success. 38 Send a letter: Mail a unique and personalized letter so eye-catching you would open it. When crafting it, keep in mind most people are flooded with junk mail. Make it memorable. Take the time to write a brief message in pen at the bottom of all letters. People tend to read a hand-written P.S. note, and often times only read their name and the P.S. first, before reading the letter. — Michelle Couture, Baldwin Krystyn Sherman Partners 39 Treat clients like friends: Try to treat every customer as a friend and explain insurance terms in simple language. Not only are they comfortable and grateful, they will refer another friend and word-of-mouth is the best advertising you could ask for. — Brenda Ripple, Ripple and Associates 40 Mail testing: Don’t settle for just one marketing piece; try different versions. Tweak the offer, change the headlines, switch the colors, vary the times you send it. Track the response rates for each version. Try this when doing direct mail or email. 41 Testimonials: Display testimonials from firms that switched to you. Provide testimonials in written form or digital format to potential buyers. Add a cover note or email message that says something like, “Here’s what area firms wrote [said] to us after they moved their insurance to our office. You are invited to contact them directly to learn more about their experiences.” Get each client’s permission beforehand, of course. — Alan Shulman, www.agencyideas.com 42 Profiling top customers—Profile your top 10 best customers. Google 32 | INSURANCE JOURNAL-NATIONAL August 17, 2015

them, check their LinkedIn page, check their web page, ask friends what they know. Find out everything you can about them. How they are similar? What traits do they have in common. Then go target prospects who share those traits. 43 Problem solver: Start by figuring out the problem. When a customer asks, “What can you do for us?” too many salespeople launch into a presentation about their company and how it solves problems. And that’s their mistake. “Right now, I don’t know, but I intend to explore your situation and determine the best way we can help” are the words that make the most sense to customers. — John Graham, GrahamComm 44 Ad audit: Have publications conduct an ad measurement study of your advertisements similar to what Insurance Journal has Signet Research do for its advertisers. 45 Print’s not dead: Local newspapers or magazines and trade publications are still important. Get to know the local and industry journalists who cover your company or your space. — CNBC’s Kelly Evans, CNBC, at IMCA 2015 Conference 46 Pizza and beer: Bring in pizza and beer for the agency staff every Friday afternoon. Or coffee and pastry every Monday morning. Share with customers, too, but don’t talk with your mouth full. 47 Competitive research: Google your competitors. Check out their websites. Read their employees’ bios. Note their list of carriers. Check out their advertising. See what they are doing in the community. Understanding your competitors can help you better position yourself to keep clients and win over new ones. 48 Skeptical consumers: Today’s customers are skeptics. They’ve learned from experience that many “solutions” are often overly simplistic, miss the mark, or are poorly conceived and fail to deliver on their promises. Don’t reinforce their skepticism. Prepare. — John Graham, GrahamComm

49 Be passionate: If you aren’t passionate about your agency, its work and its future, perhaps it’s time to do something else. To quote the late Steve Jobs, founder of Apple: “The only way to do great work is to love what you do... Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle.” 50 Personal touch, mechanical efficiency: Insurance is a people business. It’s full of good people who have the best interests of clients in mind. But it’s also a business with repeated processes — and for greater operational efficiency, these processes can be tracked and measured. In the world of operations management, there is a series of five steps to improve processes that are known by the acronym “DMAIC”— Define; Measure; Analyze; Improve; and Control. Once you define your processes, you can open your organization up to making them more efficient.— Sudhir Achar, Vantage Agora (VantageAgora.com) 51 People as brand: Remember that your employees are your brand. How they represent you determines your customer’s experience. They are more than your logo, or motto, or advertising, products or pricing. They have to believe in the brand. “We can develop the best campaigns in the world, but at the end of the day, they’re delivered by people.” — Jim Flynn, president, Hult Marketing, at IMCA 2015 Conference 52 Make it easy: Ask customers how you could make it easier for them to work with you. Even when you have a good working relationship with a customer, there still may be something that bothers them. Uncover any issues before they become problems. — John Graham, GrahamComm 53 Sundown rule: Implement a sundown rule where your employees always get back to clients the same day. — Laura Sherman, Baldwin Krystyn Sherman Partners 54 Profit sharing: Initiate a profit sharing program involving all employees, no matter how modest. It’s a motivator for many and an educational tool for everyone. Gets everyone thinking about revenues and expenses. www.insurancejournal.com

55 Back office matters: Firms that perform with better quality and efficiency in the back office are more likely to build on the important initial relationship with the client. If an agency makes fewer errors in its back-office, that means fewer bad outcomes (policy cancellations, complaints and E&O claims) and a better chance to build the client relationship for the future. — Sudhir Achar, Vantage Agora (VantageAgora.com) 56 Open space: Open your office space to community and neighborhood groups for meetings. 57 Hire a veteran: You won’t regret it. 58 Give sales a Sidekick: Sidekick is a program that tells you when people have opened your emails. That may signal it’s a good time to call that client. — Dan Tyre, HubSpot, at IMCA 2015 Conference 59 Employee training: Don’t skimp on coverage, agency systems or other continuing education for staff; it’ll pay big dividends in customer satisfaction and employee loyalty and help reduce errors and omissions. 60 MeetUp: Check out the online MeetUp. com groups near you. There is a group for every interest you can imagine, from sports and cooking to dog walking and antique cars. Or start one. The point is not to sell but to get to know people with shared interests. Build personal relationships that might be of business value later. 61 Course correction: Have every employee complete a minimum number of educational courses every year. Discourage them from taking courses just to fulfill continuing education requirements. Encourage courses that will challenge them and make a difference in their jobs ad careers. 62 Adopt a park: Many municipalities are strapped for resources and need help maintaining public spaces. Get your mowers, rakes and brooms and get to work. Erect a sign saying, “This Park Maintained by XYZ Agency…Because We Care.” 63 Water management: Every summer, before clients leave for that awesome family vacation, advise them to change their refrigerator water line. This will avoid getting home and finding www.insurancejournal.com

their kitchen flooded. — Joshua Hyde, Farm Bureau Financial Services Agency ManagerCatalina Sunrise Agency Oro Valley , Arizona 64 Smile!: Be friendly, caring and confident and never forget to smile! I keep a mirror on my desk so whenever I answer the phone the first thing I see is my face. If I am not smiling, it reminds me. People on the other end of the phone can hear a smile. — Brandy Andrews, Nu-Trend Construction 65 Volunteer: Get out into the community and volunteer and sponsor events. During events we pass out water bottles that have been branded with our agency label. During our next event, we will hold an Instagram contest for the most likes featuring a picture of our water bottle. — Mikelle Furman, Pinnacle Insurance Group 66 Keep in touch: Contact customers when it isn’t necessary. Check in a week or so after doing a job for them. Don’t just ask for feedback on what your agency has done, but also pass along helpful information that’s not directly related to the customer’s work. It sends the message that you appreciate not only the work, but also the relationship. — John Graham, GrahamComm 67 Diversify staff: Diversity among employees promises new ideas, new energy, better customer and community relations. 68 Google help: Learn how to use Google Analytics and how to improve traffic to your website. While you’re at it, check out Google+ Hangouts for a simple way to use video conferencing. 69 True relationships: Establish a true relationship so clients enjoy working with you. Avoid being seen as “just an insurance salesperson” to clients and prospects. That just makes it easier for them to replace you with one of the other thousand advisors. Never forget people will work with those they genuinely like. — Michelle Couture, Baldwin Krystyn Sherman Partners

70 Cross-training: Not the physical endurance kind; the information-sharing kind. Set aside time each week for two employees to share what they do for their jobs and how they do it and ask each other for ideas on how to do their jobs better. 71 Brainstorming: Don’t leave brainstorming to chance; schedule a regular time for small groups of employees to share ideas. Employees are more likely to implement ideas they originate. 72 Collaborate and debate: By bouncing ideas and theories off those with differing perspectives (based on experience, industry, background), you’ll often times find ways to improve or fine-tune your work. — Delaney O’Brien, Topa Insurance Group 73 Market access: Use one or more online insurance markets like mynewmarkets.com to expand available coverage options. 74 Touch point analysis: Look at where your brand touches a stakeholder, internal or external, throughout the pre-purchase, purchase, or post-purchase cycle. Prioritize those instances and deliver action points around those. This helps build up the organization and get people on the same page. — Jim Flynn, president, Hult Marketing, at IMCA 2015 Conference 75 Be a mentor: Take a new producer under your wing—even if a competitor. 76 Find a mentor: Ask a fellow seasoned insurance professional you respect to be your mentor. 77 Act your part: Always look, dress and act like a successful professional—doing so will help you become and remain one. 78 Learn from rejection: Rejection is not fun but don’t let it ruin your day. Make it a learning opportunity by paying attention to what happened. Take a quick moment after hanging up to analyze the situation. Learn what not to say and when not to call. Find yourself saying, “Well, that didn’t work. What’s a better way to say it?”— Tom Hopkins, Entrepreneur.com 79 Role playing: Have employees enact various sales scenarios to test their customer and product knowledge and practice what to say, how to react, and when to close. continued on page 34 August 17, 2015 INSURANCE JOURNAL-NATIONAL | 33

SPECIAL REPORT continued from page 33 80 Restaurant scoring: Consider taking the local restaurant scores, which are published regularly in many areas, and writing a letter congratulating the highest ranking restaurants you seek to do business with. Follow up with a visit to congratulate in person. — Kevin Landers, Farmers Insurance, trainer and commercial specialist 81 Formal onboarding program: Don’t leave the process of bringing new employees onboard to chance. Employ checklists, technology, other employees, whatever it takes to make sure process is professional and thorough. Avoid misunderstandings around culture, procedures and expectations. 82 Open books: Educate employees on your agency’s financial statements and accounting. The more they know, the better they can contribute. But make sure they know to keep it all confidential. 83 Explore content marketing: Today’s consumers prefer to find content themselves. They’re going to find what they want, when they want it. They’re going to choose when to engage. So your content needs to provide relevance and a payoff for them. — Kevin Brandt, director of operations, Trusted Choice, at IMCA 2015 Conference 84 Admit mistakes: Nobody’s perfect, including you. So fess up to mistakes, do what needs to be done to correct the situation, communicate what you are doing, and move on. Others will respect you for it. 85 Needed coverage: Offer clients the coverages they need rather than only offering the coverages you think they’ll buy. — Chris Burand, Burand & Associates LLC 86 Agency partnerships: Smaller agencies may benefit from joining a cluster, network or other group that can help with markets, marketing and operations. 87 Audit your carriers: Do your carriers’ appetites and expertise align with your needs and strategy? Do you have too many or too few? Which are the good performers and which should you let go? 88 Free advisory services: We hired a safety consultant, allowed him to work, for free, for our current customers and utilized him in our agencies prospecting. After five years of fine-tuning this program, we have structured our agency’s entire sales effort around this value-add. We’ve gone on to add a claims advocate, benefits advisor, HR advisor(s). — Shawn Boyd, DFB Insurance Group 89 Emotional intelligence: Working on 34 | INSURANCE JOURNAL-NATIONAL August 17, 2015

your emotional intelligence will positively impact your performance at work, your physical health, your mental health and all of your relationships. I recommend reading Emotional Intelligence 2.0 and using their action plan as a template to change your life. — Laura Sherman, Baldwin Krystyn Sherman Partners 90 Categorize correctly: Some retailers bring in garments under their own label/ logo. Carriers might categorize them as manufacturers, which would affect their exposure and premiums. Clients might resist the categorization and product liability exposure, however, any claims might be declined by the carrier on a retailer-only policy. To protect their client and E&O, agents need to update their client’s coverage for that additional, and potentially large, exposure. — Warren Wettenstein, Wettenstein Insurance 91 Be responsive: Sometimes all your clients want to know is that they are recognized and being heard. If they email you or call and you can’t get the answer or solution right away, a quick response that you are working on it for them is all they need. Let them know you will get back in touch, and then set an expectation of time in getting back to them. This way they are not left wondering. — Florence Conlan, Baldwin Krystyn Sherman Partners 92 Sales mentality: Everyone in an agency should have a sales mentality. This, as Zig Ziglar explains, is about knowing how to deal with people: “I have always said that everyone is in sales. Maybe you don’t hold the title of salesperson, but if the business you are in requires you to deal with people, you, my friend, are in sales.” 93 Quick to fire: High performing sales teams, in addition to closely monitoring performance and holding people accountable against results, are not afraid to fire low performers. There is rarely any reason to wait longer than four quarters to decide whether to keep a new performer. —Harvard Business Review, July 2015, by Steve Martin, University of California Marshall School of Business 94 Round the account: A coverage checklist is the best account-rounding tool any agency will ever find. — Chris Burand, Burand & Associates LLC

95 Sell pet insurance: Veterinarian services are expensive and you know which clients have pets. Don’t overlook this growing market and the need. 96 Poll the public: Run an online poll to fund out what people are worried about in terms of safety in your community. Share the results with local media. 97 Move beyond geography: Local customers are fine but agencies must reach markets beyond their own neighborhoods to grow. Target business and customers based on interests or membership in affinity groups, etc. across regions or the country. 98 Reputation regulation: Monitor mentions about your company on the Internet. Check social media, public forums and peer review sites like Yelp to correct any misinformation and counter any negative comments about your firm— and to alert your customers should they be the target of online attacks. There are software applications that can help you do this monitoring. 99 Efficiency vs. optimization: Don’t confuse efficiency in sales operations with optimization. Boston Consulting Group says optimization such as targeting high-value customers and deploying sales resources with strategically-appropriate criteria, have more than three times the impact on revenue growth than efficiency initiatives like CRM, training an KPI dashboards. — Harvard Business Review, June 2015, by Frank Cespedes, senior lecturer at Harvard Business School and author of Aligning Strategy and Sales (Harvard Business Review Press), and Steve Maughan, CEO of Cozmix. 100 Informed shoppers: Remember today’s buyers don’t even talk to the seller until they’re ready to make the purchase. They’re going to look at the wealth of information available on the Internet that is published by someone other than the brand. They’ll visit, on average, 10 places online before they make their buying decision. When they make first contact with the seller, their decision to purchase has already been made. — Kevin Brandt, director of operations, Trusted Choice at IMCA 2015 Conference 101 Ask for the sale. — Chris Burand, Burand & Associates LLC www.insurancejournal.com

IDEA EXCHANGE

Errors & Omissions E&O Insights: How Management Shapes an Agency’s E&O Culture

he phrase “you can’t judge a book by its cover” dates back to the mid-1800s. While that may ring true for the literary world, the opposite is true when it comes to an organization’s errors and omissions (E&O) culture. You can heavily determine its E&O culture by looking at the organization’s management. Sitting down for a By Curtis M. Pearsall discussion with the various levels of management for a few hours would give you a pretty good idea of “the good, the bad and the ugly” of things. It is important to point out that when speaking of management, the reference is not only to the organization’s CEO and COO, although they do play significant role. Management includes all of the various divisions and line-of-business leadership that make up its structure.

standard template with the appropriate disclaimers. • How declined coverages are handled and if the documentation is solely in the agency management system. • The importance of prompt policy checking. • The financial condition of the carriers an agency uses to place business. • The handling of certificates of insurance, which generate upwards of 10 percent of all E&O claims. Effectively (and Frequently) Communicate Expectations It is critical that agency management, including department heads, clearly, consistently and frequently communicates the expectations related to each of the above examples. Expectations should be detailed to ensure everyone knows the expected procedure and be verbally communicated with

the opportunity for staff to ask questions. Meeting with the staff to discuss is a great way to ask for the necessary commitment. Monitor Compliance with the Stated Expectations In the words of President Ronald Reagan, “trust but verify.” While management probably believes expectations were defined and the commitment was clear, this, unfortunately, does not necessarily mean the task will get done how it was intended. As a result, agencies must have an audit process in place where client files are periodically and randomly selected and reviewed to determine the compliance with the stated objective. Failure to do this could very well result in management being surprised when the agency is hit with an E&O claim that could have been prevented. History has shown that not all staff continued on page 36

Belief in the Clause In virtually any organization, top management plays an important role in determining the overall culture. Insurance agencies are no exception, especially when it comes to establishing a strong E&O culture. Management must “walk the walk and talk the talk,” showing that they clearly believe in the E&O cause they profess. How do they do that? Most E&O carriers can identify approximately 20 key issues that will play a significant role in minimizing the potential for E&O claims. No initiatives can totally prevent claims from happening because agencies can be sued for a variety of reasons, whether they were the agent’s fault or not. Some of these issues include: • The effective use of an exposure analysis checklist. • The manner in which coverages are proposed and the need for a www.insurancejournal.com

August 17, 2015 INSURANCE JOURNAL-NATIONAL | 35

IDEA EXCHANGE

Errors & Omissions continued from page 35 members will meet management’s expectations. For example, producers are not always the best for ensuring good quality documentation or for the completion of an exposure analysis checklist. Internal staff may not be following through on the agency’s account-rounding initiative. Performing audits or developing reports that indicate the degree of compliance are fundamental measurements whose importance cannot be overstated. At times, some type of disciplinary action may be in order. Interact with the Staff Virtually all agency staff will comment how much they appreciate when management comes around to see how everything is going. Employees don’t want management that stays in the “ivory tower.” Management must ask questions when interacting with the staff with the intention of getting good, honest answers. Management must listen,

too. Without a doubt, the staff knows the role in establishing the agency’s E&O culissues the agency faces and may have soluture and commitment. Demonstrating they tions worth considering. believe in the cause, clearly Find a way to make the defining and communiManagement plays staff part of the solution. cating the expectations a pivotal role in Management may find a and making sure they have establishing the disconnect in the process the means to determine that requires additional agency’s E&O culture compliance creates a much training or a stronger mesbetter chance of the story and commitment. sage about the initiative’s having a happy ending. importance and benefit. Without all of the above, it would not be unrealistic to expect discord Reward for a Job Well Done among the troops and have the agency When the job is well done and results in struggling to implement vital E&O meathe objectives hoped for, it is the perfect sures. time to celebrate. There are many possible rewards to provide. The important thing Pearsall is president of Pearsall Associates Inc., is that employees will know the results a risk management consulting firm specializing were monitored and that they achieved the helping agents protect themselves. He is also a spedesired result. Providing rewards will lead cial consultant to the Utica National Agents E&O to an increased buy-in for future tasks, too. program. Phone: 315-768- 1534. Email: curtis@pears In summary, management plays a pivotal allassociates.com. Blog: www.agentseotips.com.

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1 36 | NTWIDE001.indd INSURANCE JOURNAL-NATIONAL August 17, 2015

8/3/15 12:31 PM www.insurancejournal.com

A CASE FOR HOPE JONATHAN BEACH CLUB Saturday, October 24 | 5:00 to 9:30 p.m. 850 Palisades Beach Road Santa Monica, CA 90403

Join City of Hopeâ&#x20AC;&#x2122;s National Insurance Industry Council for the annual A Case for Hope event, a benefit to support City of Hopeâ&#x20AC;&#x2122;s mission to transform the future of health. To register, learn more or for general donations, visit cityofhope.org/niic or contact Ariana Castellanos at 866-905-HOPE or acastellanos@coh.org

SPOTLIGHT

10 Things to Know About Hospitals Hospital facilities in urban areas tend to have higher claim severities than those in rural and suburban locations. Zurich Benchmark Study of Hospital Professional Liability Claims, Fall 2014

Hospitals of all types have provided patients with more than $459 billion in uncompensated care — no payment was received from the patient or insurer — since 2000. American Hospital Association, in a January 2015 update

Hospital claims frequency has stabilized in recent years but frequency levels may continue to vary by state or location. “Closed-nopay” (CNP) claims have remained steady since 2007 while average claims severity has increased steadily since 2006. Zurich Benchmark Study of Hospital Professional Liability Claims, Fall 2014

There were 5,686 hospitals registered with the American Hospital Association in 2013, the latest year for which data is available from the AHA. That number includes both AHA members and non-members. American Hospital Association

For 2015, the projected loss rate for hospital professional liability is $2,870 per occupied bed equivalent (OBE). The frequency of claims is projected to be 1.69 percent per OBE and claims severity is expected to be $170,000 per claim. Aon/ASHRM (American Society for Healthcare Risk Management of the American Hospital Association) Hospital Professional Liability Benchmark 2015 The projected loss rate for hospital general liability is $125 per OBE and the average general liability claim is expected to be $38,000 for claims occurring in 2015. Aon/ASHRM Hospital Professional Liability Benchmark 2015

Around 440,000 people die annually due to hospital errors, injuries, accidents and infections. Hospital Safety Score/Leapfrog Group

Hospitals directly employed nearly 5.6 million people in 2013 and are the second largest source of private sector jobs. American Hospital Association

Children’s hospitals and teaching hospitals generally have higher loss severities than the national average. The cost of providing medical care over a child’s lifetime is a possible contributing factor in loss severities of children’s hospital. The higher risk associated with the complex care provided by teaching hospitals can be attributed to loss severities at those facilities. Zurich Benchmark Study of Hospital Professional Liability Claims, Fall 2014 38 | INSURANCE JOURNAL-NATIONAL August 17, 2015

Maine is the state with the highest percentage of A-ranked (safest) hospitals; 61.1 percent, or 11, of the 18 hospitals surveyed in Maine qualified for the A ranking, the best hospital safety score given by the Hospital Safety Score survey. Alaska, District of Columbia and North Dakota tied for last place in terms of the number of hospitals ranked A. No hospitals in those jurisdictions achieved the highest safety ranking. Hospital Safety Score/Leapfrog Group www.insurancejournal.com

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Growing Your Property Casualty Agency Beware of Setting Too Many Goals for Your Agency

he agency business has a love affair with goals. Some focus on sales, while others deal with company volume demands and operational and financial ratios. It’s a lot for any small business to establish and monitor, much less achieve. So, focus first on producer and personal lines representative (CSR) sales-related goals. By Alan Shulman Successfully hit these numbers and many other targets will fall into place. Plus, by concentrating on only a few, you avoid aspirational burnout. Producer Goals For outside producers, goals focus mainly on prospecting and production. These targets are often established for multiple time periods: weekly, monthly, quarterly and annually — but if you go this route, your producers have four sets of goals to achieve, which is far too many. To minimize overload, use calendar quarters as your producers’ interim objective. That’s only four goals a year. Combined, they equal your desired annual total, with target terms long enough to allow for some slow time and short enough to maintain urgency. Goals for each quarter don’t have to be equal. They simply have to add up to your annual amount. Set these numbers with input from your agents and recognize they expect you to provide marketing, sales and tech support. Prospecting Goals These goals represent actions needed to feed and ultimately generate the desired sales. They might feature the frequency and views of social media posts, plus other digital and traditional marketing efforts, including emails. There can also be goals for the resulting contacts made, expiration dates collected and proposals delivered. Sales Production Goals These numbers are fairly straightforwww.insurancejournal.com

ward, as they mainly relate to the number of sales made by the producer, premiums booked, and commissions written or earned. As such, they’re simple to set and track, but not always easy to achieve. CSR Goals Focus primary personal lines goals on cross-selling activities and retention. Others to consider include upselling, new personal lines sales, and prospect identification for commercial lines and financial services. Cross-selling goals are set to achieve the desired number of policies per insured. Not everyone needs every policy, so these have to be flexible. Retention goals are easy to establish and track when one rep is responsible for a specific book of business demarcated by an alphabetical allocation of clients. It’s harder to hold CSRs responsible when the agency follows a “first available” service format. Agencies that compare their own numbers against benchmarks for P/C firms often find their operations wanting. This disparity can motivate improvement. But consider what’s important to you and

your office. If, as agency principal, you want to enjoy more personal time, your numbers may be impacted. Think of benchmarks as guideposts instead of absolutes. If your firm is growing, your agents are hitting their numbers, and your carriers are satisfied with your organic production, you aren’t doing badly, even if some similarly sized agencies are doing better. Shulman, CPCU, is the publisher of Agency Ideas, a subscription-only sales and marketing newsletter. He is also the author of the many tools posted on the Agency Ideas Instant Download Store. Phone: 800-724-1435. Email: alan@agencyideas.com. Website: www.agencyideas.com

Advertisers Index Readers, browse, contact, or do product searches on any of our full page advertisers at: www.insurancejournal.com/adshowcase/

Agency Matrix www.agencymatrix.com 24, 25 Applied Underwriters www.auw.com 4, 5, 44 Burns & Wilcox Ltd. www.burnsandwilcox.com 2 Century National www.cnico.com W5 City of Hope www.cityofhope.org 37 EZLynx www.ezlynx.com 18, 19 Great American Insurance Group www.gaig.com 22, 23 IICF www.iicf.org 41 Insurance Technologies Corp. www.getitc.com 14, 15 Monarch E&S Insurance Services www.monarchexcess.com W1 National General Insurance www.nationalgeneral.com 16, 17 Nationwide www.nationwide.com 36

National Alliance for Insurance Education & Research www.scic.com 27 Pacific Gateway Insurance Services www.pgiainsurance.com W3 PersonalUmbrella.Com www.personalumbrella.com 7 Philadelphia Insurance Companies www.phly.com 43 Providence Bank www.pbagencyfinance.com 12, 13 SIAA www.siaa.net 3 South & Western www.southandwestern.com 20, 21 Texas Mutual www.texasmutual.com SC5 The Hartford www.privatecompanyinsurance.com 9 The Institutes www.theinstitutes.org 29 United Fire Group www.ufgsolutions.com M5

August 17, 2015 INSURANCE JOURNAL-NATIONAL | 39

NATIONAL COVERAGE

MyNewMarkets Allied Healthcare

Mold Liability Insurance

Market Detail: Greenhill Insurance Services (www.grnhll.com) offers coverage through an A.M. Best rated “A” or better carrier. Greenhill’s allied healthcare program includes individual healthcare providers and facilities. Coverage is written on a claims-made basis for PL and claims-made or occurrence for the GL, with prior acts if needed. Primary limits are available up to $2 million per incident and $4 million aggregate. Excess coverage is available on a separate form. Deductibles start at zero with low minimum premiums. Available limits: As needed Carrier: Unable to disclose States: All States Contact: Jay Menna at 832-413-4608 or e-mail: jmenna@grnhll.com

Market Detail: Legends Environmental Insurance Services, LLC (www.legends-enviro.com) has mold insurance programs for all risks that have mold exposures. From building contractors to hotels, Legends has a mold program to cover their mold exposure. Available limits: As needed Carrier: Various, admitted and non-admitted available States: All states Contact: Customer service at 877-627-1244

Motor Vehicle Dealer Surety Bond Market Detail: DBL Surety (www.dblsuretybonds.com) offers a motor vehicle dealer surety bond to protect consumers from fraud and other illicit acts by motor vehicle dealers and their employees. They are typically governed by state statutes and guarantee the payment of fees and taxes along with ensuring the proper representation of a motor vehicle dealer’s products. Available limits: Minimum $1,000, maximum $500,000 Carrier: Unable to disclose, admitted States: Ala., Ga., Fla., Calif., Iowa, La., Miss., S.C., N.Y., Wash., N.J., Md., Texas and Va., Contact: Bart Leek at 386-316-2547 or e-mail: info@dblsurety.com

Wind Buyback (Non-Coastal) Market Detail: U.S. Risk Insurance Group, Inc.’s (www.usrisk. com) coverage focuses on single locations to larger schedules up to five locations for commercial properties. Coverage highlights include: all constructions are eligible; minimum premium $5,000; deductible can be bought down to $10,000 in most cases; available in all 50 states (not restricted to tier 1 & 2); all occupancies considered. Submission requirements include: ACORD application; copy of the quote we are buying down the deductible for; loss runs- 5 years currently valued; and wind application. Available limits: As needed

Special Events Market Detail: Nautilus Insurance Co. Great Divide Insurance Co. (www.nautilusinsgroup.com) write events longer than three days with more than 10,000 in attendance; as well as short term or annual coverage for amusement devices and attractions; boat shows; concerts; fireworks stands; pushcarts; display booths; parades and more. Available limits: As needed Carrier: Nautilus States: All states Contact: Shawnae Bentley at 480-367-5422 or e-mail: sbentley@nautilus-ins.com

Boats, Yachts & Mega Yachts Market Detail: Maritime Program Group (www.maritimepg. com) holds the pen for multiple yacht programs and is the program administrator for New Hampshire Insurance Co. (AIG), and for Vigilant (Chubb) and also has the authority to write for Traveler’s Luxury Yacht and Markel. Additionally, MPG is a wholesaler for large yachts (over $5 million) for AIG Private Client Group and AIG Global Marine. Available limits: As needed Carrier: Various, admitted States: All states Contact: Damon Pesce at 800-366-8086 or dpesce@maritimepg.com 40 | INSURANCE JOURNAL-NATIONAL August 17, 2015

Carrier: Unable to disclose, non-admitted States: All states Contact: Monte Stringer at 214-265-4923 or e-mail: monte@usrisk. com

General and Artisan Contractors Market Detail: Regency Insurance Brokerage Services (www. RegencyInsuranceBrokerage.com) has experience in placing general and artisan contractors coverage. Target classes include: carpenters; debris removal; electricians; fencing; framing; heating/AC; general contractors; paper contractors; irrigation; janitorial; landscaping; masonry; painters; plumbers; and roofers. High-property limits available and frame construction acceptable; low deductible available as well as optional equipment breakdown coverage. Available limits: As needed Carrier: Unable to disclose, non-admitted States: Ala., Fla., Ga., Ky., N.C., S.C., Tenn., Va., and W. Va. Contact: Francis Diana at 754-202-0915 or e-mail: fdiana@regencybrokerage.com. www.insurancejournal.com

IDEA EXCHANGE

Closing Quote Walker, an advisor to my company Insuritas, challenged us to ask then listen. Here’s a quick summary the feedback we get from the thousands of consumers and business owners we talk to every month: “I’d like a single entry point for all things insurance; I’d like an advocate when I need one; I’d like an expert when it’s complicated; I want advice when I need it, and left alone when I don’t; I want a single insurance account; I want to shop, compare and buy online; I want pricing transparency – want to see carriers competing for my business; I want an online account that remembers me and all my data; I want this experience available to me online or on the phone; I want it to be focused on me.”

The Independent Insurance Agent – What Customers EXPECT

W By Jeff Chesky

hether you are the owner of a local agency or the CEO of a large public broker – it feels like there is less and less oxygen in the room. Organic sales growth is tough; merger & acquisition activity in 2014 was near record highs; the competition is relentless; carriers are schizophrenic; technology changes are in hyper-drive; and one article after another is writing about the death of the traditional independent agent. No wonder it’s hard to get fired up for your weekly sales meetings. Is there a roadmap to a vibrant, energized and high growth future for the independent agent? Jay Walker, the founder of Priceline.com and now the CEO of Walker Digital, has a simple retort; “Of course; just give the consumer what they EXPECT.” What a strange turn of a phrase. We’re all thinking, just give the customer what they want – what is all of this about “expect”? In building Priceline.com, Walker had to imagine what a consumer would expect for all things travel. Imagine shopping, comparing and buying across hundreds of airlines and vacation options, with full price transparency, expert advice and having an online account for all things travel. Walker gave us what we expect for all things travel. What does the consumer “expect” with insurance?

42 | INSURANCE JOURNAL-NATIONAL August 17, 2015

Best Positioned Who is best positioned to provide the consumer with what they “expect” for all things insurance? The answer is simple: the independent agent. But you know it’s easier said than done. Independent travel agencies failed, independent realtors have struggled against Zillow, banks are now losing billions in loans to OnDeck and Priceline. Insurance as an industry has dodged and denied the changes that the digital age and the shift to consumer control are forcing on it. As agents we’re quick to lay blame for the state of confusion –at times both fearful and mocking of the disruptive ideas and outside entrants circling our business… telematics, credit underwriting, driverless cars and Google Compare. As a result, distribution is in disarray and outsiders with large amounts of capital are licking their lips in anticipation of eating our lunch. The technology is emerging for independent agents Is there a roadto reimagine their role as map to a vibrant, the omni-channel trusted energized and high resource for the customer. The answer will not come growth future for from carriers, aggregators, independent agents? agency management platforms, lead gen companies, Google or GEICO because none of them have the ability to deliver what customers expect. The independent agency is in the perfect position to give people what they expect. It will take a commitment to putting all of the insurance products a customer expects to need in our stores, and making our stores omni-channel solutions. I am optimistic that the emerging generation of independent agencies will become the delivery system consumers look to for what they expect with all things insurance. Chesky is the president and CEO of the online insurance agency Insuritas, based in Windsor, Conn.

www.insurancejournal.com

HUMAN SERVICES PROTECTION NON - PROFIT/ FOR PROFIT

MILLIONS OF PEOPLE SERVED. 1 SHARED RESPONSE.

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Call 855.411.0797 Or visit ThinkPHLY.com/HumanService Non-Profit /For Profit Human Services I Mental Health I Substance Abuse I Home Health Care I Home Medical Equipment Philadelphia Insurance Companies is the marketing name for the property and casualty insurance operations of Philadelphia Consolidated Holding Corp., a member of Tokio Marine Group. All admitted coverages are written by Philadelphia Indemnity Insurance Company. Coverages are subject to actual policy language.

Expect big things in workersâ&#x20AC;&#x2122; compensation. Expect to save a third of your clients 30% or more. Most classes approved, nationwide. For information call (877) 234-4450 or visit auw.com/us. ÂŠ2015 Applied Underwriters, Inc., a Berkshire Hathaway company. Rated A+ (Superior) by A.M. Best. Insurance plans protected U.S. Patent No. 7,908,157.