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Contents August 22, 2016 • Vol. 94 No. 16 • West
West
National 8 Agent-Broker Organic Growth Slows to 5-Year Low: Reagan Consulting
W1 ‘Star Trek’ Actor’s Family Sues Fiat Chrysler in California over Rollaway Death
10 Public Affairs ‘Ironman’ Kevelighan Takes Helm at Insurance Information Institute
W2 Estimated Cost of Southern California Gas Leak Reaches $717M W2 Dead New Mexico Woman’s Family Sues Bar over Lewd Corndog Contest
W1 ‘STAR TREK’ ACTOR’S FAMILY
SUES FIAT CHRYSLER IN CALIFORNIA OVER ROLLAWAY DEATH
12 Closer Look: Top 10 Things Sharp Brokers Should Consider When Placing Cyber Liability 40 Special Report: 101 Sales, Marketing & Agency Management Ideas
Idea Exchange 38 Is Education the Key to Unlocking the Next Generation of Talent? 47 The Wedge: It’s Not How Much You Make … 48 Minding Your Business: 10 Ways to Be a Competitive Buyer in a Seller’s Market 50 Closing Quote: Is Your Website Accessible for Users with Visual Disabilities?
38 IS EDUCATION THE KEY TO
UNLOCKING THE NEXT GENERATION OF TALENT?
48 10 WAYS TO BE A COMPETITIVE
BUYER IN A SELLER’S MARKET
Departments W4 People 11 Declarations 11 Figures 34 MyNewMarkets 36 Business Moves
4 | INSURANCE JOURNAL | WEST AUGUST 22, 2016
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OPENING NOTE
Write the Editor: awells@insurancejournal.com
Small Business Satisfaction
N
Publisher Mark Wells mwells@wellsmedia.com
EDITORIAL
SALES
Editor-in-Chief Andrea Wells awells@insurancejournal.com
West Sales Dena Kaplan (800) 897-9965 X115 dkaplan@insurancejournal.com
East Editor Elizabeth Blosfield eblosfield@insurancejournal.com
Romeo Valdez (800) 897-9965 X172 rvaldez@insurancejournal.com
Chief Content Officer Andrew Simpson asimpson@insurancejournal.com
Southeast Editor/MyNewMarkets 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 L.S. Howard lhoward@insurancejournal.com
Chief Marketing Officer Julie Tinney (800) 897-9965 X148 jtinney@insurancejournal.com
South Central Sales Mindy Trammell (800) 897-9965 X149 mtrammell@insurancejournal.com Southeast and East Sales (except for NY, PA and CT) Howard Simkin (800) 897-9965 X162 hsimkin@insurancejournal.com Midwest Sales Lisa Whalen (800) 897-9965 X180 lwhalen@insurancejournal.com East Sales (NY, PA and CT only) Dave Molchan (800) 897-9965 X145 dmolchan@insurancejournal.com
Columnists Randy Schwantz
Advertising Coordinator Erin Burns (619) 584-1100 X120 eburns@insurancejournal.com
Contributing Writers Mark Brault, David Coons, Rob Rosenzweig
Insurance Markets Manager Kristine Honey (619) 584-1100 X132 khoney@insurancejournal.com
IJ ACADEMY OF INSURANCE V.P. of Education Chris Boggs cboggs@ijacademy.com
Social Media Manager Ly Short (619) 890-7735 Lshort@insurancejournal.com
Online Training Coordinator Barbara Whiffen bwhiffen@ijacademy.com
ADMINISTRATION
Chief Financial Officer Mark Wooster mwooster@wellsmedia.com
MARKETING
Marketing Director Derence Walk dwalk@insurancejournal.com Marketing Administrator Gayle Wells gwells@insurancejournal.com
NEW MEDIA
Classifieds, Jobs, Agencies Wanted/For Sale Sr. Sales & Marketing Coordinator Kelly De La Mora (800) 897-9965 X125 kdelamora@insurancejournal.com
DESIGN/WEB
Chief Technology Officer/ Chief Innovation Officer Joshua Carlson jcarlson@insurancejournal.com V.P. of Design Guy Boccia gboccia@insurancejournal.com Senior Web Developer Chris Thompson cthompson@insurancejournal.com
New Media Producer Bobbie Dodge bdodge@insurancejournal.com
Web Developer Jeff Cardrant jcardrant@insurancejournal.com
Videographer/Editor Ashley Waldrop awaldrop@insurancejournal.com
Web Developer Tim Layer tlayer@wellsmedia.com
CIRCULATION
Circulation Manager Elizabeth Duffy eduffy@wellsmedia.com
6 | INSURANCE JOURNAL | NATIONAL AUGUST 22, 2016
o longer able to compete primarily on price, insurers are now focusing their efforts on pleasing customers, with the payoff being a significant increase in satisfaction among their small business commercial customers, according to the recently released J.D. Power 2016 U.S. Small Commercial Insurance Study. With insurance rates steadily declining for the past three years carriers are looking at other ways to differentiate themselves in a competitive market. Turning their attention to customer interactions and policy offerings has led to a 30-point improvement in overall satisfaction in 2016, to 823 on a 1,000-point scale, up from 793 in 2015. “With few exceptions, insurers are dropping prices, so the best way for them to compete in a soft market is on customer satisfaction,” said Greg Hoeg, vice president of U.S. insurance operations at J.D. Power. “Small business owners are the beneficiaries of being in an attractive market segment of insurance where satisfaction is the key differentiator.” The study, now in its fourth year, examines overall customer satisfaction and insurance shopping and purchasing behavior among 3,396 insurance decision-makers in businesses with 50 or fewer employees that purchase general liability and/or property insurance. The study was fielded from March through May 2016. Overall satisfaction is comprised of five factors (in order of importance): interaction; policy offerings; price; billing and payment; and claims. This marks the third consecutive year satisfaction has improved, with a 46-point increase since the study launched in 2013. Satisfaction increased across all factors in 2016, with interaction and policy offerings contributing most to the year-over-year gain. The study finds that interaction improves the most among all study factors, increasing 32 index points from 2015. Satisfaction in all three interaction subfactors improves significantly in 2016, with website performance showing the largest jump year over year (+36 points), followed by agent/broker (+34) and call center (+28). While interaction is driving the overall increase in satisfaction, it is having the greatest impact on satisfaction of Gen Y customers. The key reasons for higher satisfaction FOR QUESTIONS among Gen Y customers are largely driven by REGARDING SUBSCRIPTIONS: Call: 855-814-9547 interactions with their agent/broker. Not only Outside the U.S., call 847-400-5951 or you may subscribe or change your address online at: do more Gen Y customers indicate having insurancejournal.com/subscribe at least two interactions on an annual basis, Insurance Journal, The National Property/Casualty Magazine (ISSN: 00204714) is published semi-monthly by Wells Media compared with Gen X and Boomer customers, Group, Inc., 3570 Camino del Rio North, Suite 200, San Diego, CA 92108-1747. Periodicals Postage Paid at San Diego, CA and at additional mailing offices. SUBSCRIPTION RATES: $7.95 per copy, $12.95 but they also have more in-person interactions per special issue copy, $195 per year in the U.S., $295 per year all other countries. DISCLAIMER: While the information in this pubwith their agent/broker. These in-person interlication is derived from sources believed reliable and is subject to reasonable care in preparation and editing, it is not intended actions are more meaningful, the study said, to be legal, accounting, tax, technical or other professional advice. Readers are advised to consult competent professionals for application to their particular situation. Copyright 2016 Wells as agents/brokers are nearly twice as likely Media Group, Inc. All Rights Reserved. Content may not be photocopied, reproduced or redistributed without written permission. to provide advice or recommend changes to Insurance Journal is a publication of Wells Media Group, Inc. POSTMASTER: Send change of address form to Insurance Journal, Gen Y customCirculation Department, PO Box 708, Northbrook, IL 60065-9967 ers when comARTICLE REPRINTS: For reprints of articles in this issue, contact: Kelly De La Mora at 1-800-897-9965 ext. 125 or Editor-in-Chief pared with older kdelamora@wellsmedia.com Visit insurancejournal.com/reprints/ for more information. cohorts.
‘With few exceptions, insurers are dropping prices, so the best way for them to compete in a soft market is on customer satisfaction.’
Andrea Wells
INSURANCEJOURNAL.COM
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National
‘The powerful headwinds of soft commercial lines premium rates and a muddling economy are even stronger in 2016, after blowing for more than a year.’
Agent-Broker Organic Growth Slows to 5-Year Low: Reagan Consult
O
rganic revenue growth in independent insurance agencies and brokerage fell to 4.0 percent for the second quarter of 2016, down sharply from 5.9 percent for the second quarter of 2015, and the lowest rate since 2011, as measured by the latest Reagan Consulting Organic Growth and Profitability (OGP) survey. Reagan Consulting found that commercial lines organic revenue growth slowed to 3.1 percent for the second quarter, down from 5.1 percent for the first quarter of 2016. Employee benefits was the fastest-growing line of business, with organic growth of 6.2 percent, while personal lines grew at 1.7 percent. “The powerful headwinds of soft commercial lines premium rates and a muddling economy are even stronger in 2016, after blowing for more than a year,”
said Jim Campbell, principal of Reagan Consulting, a management consulting and merger-and-acquisition (M&A) advisory firm for the insurance distribution system. Profit margins declined to 23.1 percent for the second quarter, as measured by EBITDA (earnings before interest, taxes, depreciation and amortization). This was the lowest second-quarter pace since 2012 and down from the 24.6 percent margin for second quarter 2015. Commercial property/casualty rates declined 3.7 percent in the first quarter of 2016 (most recent figures available), as measured by the Council of Insurance Agents and Brokers, the largest decrease since the current trend of market softening started in 2014. The U.S. economy grew at merely a 1.2 percent annualized rate during the second quarter of 2016, following a 0.8
8 | INSURANCE JOURNAL | NATIONAL AUGUST 22, 2016
percent rate for the first quarter, according to figures from the U.S. Department of Commerce. Reagan Consulting has conducted its quarterly survey of agency growth and profitability since 2008, using confidential submissions from approximately 140 mid-size and large agencies and brokerage firms. Agents and brokers in the Reagan Consulting OGP survey expressed optimism for full-year profitability, projecting a year-end EBITDA margin of 20.0 percent. “If achieved, that would be generally consistent with the 20.1 percent margin achieved in 2015,” said Campbell. M&A activity among agents and brokers, while not measured by the survey, is on track for the second most-active year on record. INSURANCEJOURNAL.COM
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NATIONAL | News & Markets
Profile: Kevelighan Takes Over at Insurance Information Institute By Andrew G. Simpson
I
n his nearly two decades in government and business, Sean Kevelighan has had his public affairs and communications fitness tested in high-profile situations, most notably working for the Treasury Department and as press secretary for the White House Office of Management and Budget under President George W. Bush. He was also tested as group head of Global Consumer Banking Public Affairs for financial giant Citi during the financial crisis. Most recently he was global head of Public Affairs for Zurich Insurance Group, where he helped set the corporation’s global public policy and corporate responsibility agendas. Now Kevelighan, who competes in Ironman contests and marathons, is facing his biggest fitness test yet. He has committed to being the heavyweight spokesperson for the world’s best known property/ casualty insurance information organization, the Insurance Information Institute (I.I.I.). He is taking over as president and CEO from Dr. Robert Hartwig, an economist who served in the post for 18 years and raised the stature and profile of the organization considerably. Hartwig is heading off into academia. Kevelighan, who is only 43 years old (he’s not the youngest
to lead I.I.I.; Hartwig was 42 when he took the helm) in an industry not known for youth at the top, expects this new adventure to be a marathon after a career with 12 different jobs and promotions in 18 years. “I think you could parcel out my career in two parts, almost. The first part was a lot of time spent in the Washington D.C. area, primarily. What happens often in Washington, D.C., is you spend your time figuring out all the various elements of what I call the public affairs machine,” he told Insurance Journal in an interview a few weeks before he started his new job in August. “You’ve got your government side of it with policymakers and regulators. There’s a business element to it, whether the individual businesses or the trade associations. You’ve also got that ‘relevant expert’ group out there in academia, or think tanks. Then the media is also a big component of it. I spent a lot of time in the first part of my career really trying to understand and work in and work with all those various elements.” There are not too many high-level insurance executives in their early 40’s. For Kevelighan, personally, the time is right to hunker down. “[A]t this stage of my career, I really do want to sink in and
10 | INSURANCE JOURNAL | NATIONAL AUGUST 22, 2016
Sean Kevelighan use all of that expertise and understanding that I learned in the first part of my career, and begin to apply it for more longer-term,” he said. “With my age now and how the I.I.I. operates, I think it’ll be a good match for that, in terms of being able to look at a longer-term view for the industry and this position, as well.” He believes his ability to think strategically and execute tactically is one of his strengths. “One of the things that I try and do is apply everything from a strategic viewpoint and understand what strategy needs to be applied to an organization or a certain campaign and how can you directly, tactically get there, being able to tactically execute whatever the strategy is for the organization, or communications program,” he said. Kevelighan admits that he, like most people, used to view insurance as simply a “grudge purchase,” one that is hard to understand and appreciate.
But now he has a loftier view. “What’s there and what’s happening is allowing individuals, companies and organizations to actually live more freely in the world and in the economy,” he said. Where did the Ironman gain this passion? After 9/11 he was in Washington working on the Terrorism Risk Insurance Act and saw New York’s construction industry shut down almost immediately because insurance was not available. “In a place like New York, where construction is everywhere, the dramatic impact of not having insurance on one of the most major cities in the world was striking to me. I think I understood that it’s not necessarily just this grudge purchase. It’s actually making an economy work.”
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Figures
Declarations
148
Star Trek Tragedy
“In spite of our unbelievable grief, we decided to come here to prevent other families from the same tragedy.” — Victor Yelchin, father of “Star Trek” movie actor Anton Yelchin, and his family sued Fiat Chrysler Automobiles NV for negligence and product liability over the rollaway crash of a Jeep Grand Cherokee that killed their son.
The number of fires that were set in vacant buildings in St. Louis, Mo., from January through the end of July, according to the city’s fire department. The city says fires in its 7,000 vacant and abandoned buildings this year have increased.
15
The number of people killed in a July 30 crash in Central Texas of a hot air balloon operated by Heart of Texas Hot Air Balloon Rides. The balloon’s pilot, Alfred “Skip” Nichols, had at least four previous drunken-driving convictions, two prison stays and more than 40 customer complaints in his past, records show. Investigators said the balloon hit high-tension power lines before crashing into a pasture near Lockhart.
30
The number of years an Alabama man has been sentenced to prison after a 2014 high-speed crash that killed one of his passengers. Tyler L. Reynolds was going more than 100 miles per hour at 1:15 am on June 1, 2014, when his vehicle left the roadway, hit multiple trees and rolled several times. Witnesses said after the crash Reynolds went home, took a shower, and went to bed without reporting the wreck. INSURANCEJOURNAL.COM
$3.8 MILLION
Crop Abandonment
“Some farmers are abandoning crops because it’s not worth the financial risk of harvesting them.”
— Katie Campbell-Nelson, a vegetable production specialist with the UMass Extension, comments on the drought that swept the Northeastern U.S. this summer. Massachusetts was one of the hardest hit states, with more than 74 percent of the state experiencing some degree of drought, according to the United States Drought Monitor.
Consumer Complaints
“2016 is again shaping up to be a busy year as our team responds to consumer complaints and works diligently to advocate for Tennessee consumers from all walks of life.”
— Tennessee Department of Commerce and Insurance’s Assistant Commissioner of the Insurance Division Michael Humphreys. The department reported it has returned $1.5 million in insurance restitution for Tennessee consumers during the first six months of the year.
Coastal Crisis
“Our coast is in crisis.”
The amount of a jury verdict affirmed by the Idaho Supreme Court against a southwest Idaho doctor following the death of a woman who underwent a liposuction procedure. The court ruled in the wrongful death and medical malpractice case against Silk Touch Laser and its owner, anesthesiologist Brian Kerr.
5,000
— Louisiana Gov. John Bel Edwards, in a letter to oil executives after a meeting in May, pushing for pre-trial settlement to resolve claims that the oil industry is at least partly to blame for the destruction of the state’s coastline. Edwards has now joined a campaign by local governments suing the industry. Louisiana has lost 1,900 square miles of coast since the 1930s.
Axle Design
“Standard Steel admits that it knew its axles would be used on railcars, but denies that any of its axles were improperly designed or manufactured.”
— Elizabeth Sorenson Brotten, an attorney for Pennsylvaniabased Standard Steel, which has been named in a lawsuit over a fiery oil tanker train derailment near Casselton, N.D., in 2013. The lawsuit alleges a defective axle made by Standard Steel contributed to the crash.
InsuranceJournal.com
Poll
The number of Zipcar Inc. members charged with vehicle damage fees from 2011 to 2015. Investigators say Zipcar didn’t notify consumers before charging fees that ranged up to $1,000, while New York law requires giving consumers an opportunity to dispute damage fees before they’re assessed. Zipcar agreed to refund charges assessed against customers who contested their responsibility, pay $35,000 to the attorney general’s office and comply with N.Y. law.
If an insurer’s financial strength is rated “A-” by A.M. Best, how does this compare to a rating from Fitch? 19.48% (52 votes) Roughly equivalent to a BB rating from Fitch 21.72% (58 votes) Roughly equivalent to an A rating from Fitch 27.34% (73 votes) Roughly equivalent to a BBB rating from Fitch 31.09% (83 votes) They do not compare at all 0.37% (1 votes) Other: Total Votes: 267
AUGUST 22, 2016 INSURANCE JOURNAL | NATIONAL | 11
NATIONAL | Closer Look | Technology here are 10 tips to consider to evaluate coverage.
Prior Acts Coverage
The Top 10 Things Sharp Brokers Should Consider When Placing Cyber Liability
By Rob Rosenzweig
T
he insurance marketplace for cyber liability is constantly evolving. Technology is always improving, the level of data security and awareness is escalating and the tools used by the criminals and the bad actors are becoming more sophisticated. Additionally, the individuals and groups behind these data breaches have varied motivations ranging from
embarrassing organizations, to monetizing personal information, to simply wreaking havoc. This coupled with increased regulatory scrutiny and media attention creates a challenging environment for businesses grappling with data security issues. Unfortunately, the insurance industry does not make it any easier for potential insureds. Policy forms are frequently being updated to keep up with the changing exposures and increasing historical claims data. Market penetration for cyber liability with middle-market and small businesses is below 20 percent by most estimates, while connected devices are expected to triple to 15 billion by 2020, fueling demand for cyber liability insurance and experts who can effectively advise clients in uncharted waters. With that in mind,
12 | INSURANCE JOURNAL | NATIONAL AUGUST 22, 2016
Historically, cyber insurance — similar to professional liability insurance — has been written with a retroactive date that corresponds to the inception date of the first purchase, so the insurer would not be responsible for any claim arising out of a breach or wrongful act alleged to have occurred prior to that date. The challenge for insureds with cyber liability is that most businesses do not know that they have been breached for months. It’s conceivable that an insured could answer a warranty question on an application truthfully without realizing they have already been breached. In theory, an insurer would likely need to provide coverage for the forensic analysis, but if it was determined that the breach pre-dated the inception of coverage, they could certainly deny coverage for any further expense. Many insurers recognize this and are beginning to offer a limited window of prior acts coverage under cyber liability policies, or full prior acts coverage in somce cases.
Choice of Vendors/ Counsel This can be an
issue for insureds of any financial size. Every insurer has a different philosophy about claims handling. Some insurers require utilizing both their preferred breach response vendors as well as their panel law firms if there is a third-party action; some insurers incentivize to use their preferred vendors but still give the insured flexibility and other insurers do not put any restrictions whatsoever on the insured. There is no right or wrong answer, though it is important to understand the client’s preference and make sure that it is aligned with the policy terms and conditions.
Outsourced Service Providers More and more businesses are outsourcing various elements of their business to consultants, technology service providers, and cloud providers due to cost and the ability to maintain a higher level of network security. While one can outsource the storage and processing of information, they cannot outsource liability. It is important to ensure that the policy will provide the same coverage even if the breach does not occur on the insured’s premises if personally identifiable information in their care, custody, or control has been potentially compromised.
Bodily Injury Property Damage
Increasingly general liability/
continued on page 14 INSURANCEJOURNAL.COM
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NATIONAL | Closer Look | Technology continued from page 12
property coverage and cyber liability are intersecting due to the Internet of Things and wearable devices. Additionally, systems that control transportation, utilities, and critical infrastructure are connected. It’s a real possibility that someone could hack into a network simply to cause physical injury and damage property. This can be seen on an even more basic level with people being injured while playing Pokémon Go. Cyber liability policies have historically excluded bodily injury and property damage and many property/general liability policies exclude losses arising out of cyber-related perils. If an insured has any potential exposure in this area, it’s important to find coverage certainty.
Network Interruption System Failure Coverage & Contingent Network Interruption One coverage available under cyber liability policies is network interruption coverage. Network interruption is not dissimilar from business interruption coverage under a property policy with the exception that the trigger is a cyber peril vs. a traditional property peril. The majority of cyber liability policies on the marketplace limit the trigger for network interruption to a malicious network attack while other policies will respond to technology simply malfunctioning. Certain insurers will offer some level of coverage if a contingent service provider has a loss that would have been covered under an insured’s policy. It’s important to analyze an insured’s reliance on systems to conduct business and what supply chain risk
Breach of Contract
they may have when determining network interruption coverage.
Value-Added Services
Many insurers have started to realize it’s in their best interest to provide risk management services to insureds to help make them a better risk. Some of these services are complimentary in nature and others come at a cost. This can be a compelling reason to bind insurance with one insurer versus another and should be a point of conversation depending on an insured’s need for risk management services.
Unencrypted Device Exclusions Encryption of all devices on a network is certainly a best practice, but there are few businesses that achieve 100 percent success. Certain insurers understandably would prefer to exclude coverage from all claims arising out of an unencrypted device.
14 | INSURANCE JOURNAL | NATIONAL AUGUST 22, 2016
Loss of Tech Support Exclusions As certain software and hardware is no longer supported by the vendor and there are no longer patches being supplied, they become more vulnerable to an attack. If an insured is still using end-of-life technologies like Windows 7, an insurer may seek to limit any claims arising out of that technology.
Cyber Terrorism
Cyber liability policies have historically included a terrorism exclusion similar to all other insurance policies to prevent coverage from being triggered by attacks perpetrated by religiously motivated or state-sponsored groups unless the Secretary of State declares an act of terrorism. Given the inability to trace the origins of some of these attacks and the possibility that some of these attacks have been funded by rogue states, it’s important to find insurers willing to provide coverage for cyber terrorism.
While most insurance policies contain breach-of-contract exclusions to preclude coverage in instances where liability would not have existed in the absence of a contract, it’s important that these exclusions be removed or modified in cyber liability policies. It’s likely that an insured has non-personal identifiable information that they have a contractual obligation to keep confidential and there are contractual penalties that can be levied by the payment card industry when payment card data has been compromised. Unlike other lines of business that have ISO forms and some standardization from insurer to insurer, it is apparent that all cyber liability policies are not equal. While there will always be new, relevant issues as exposure and products continue to develop, these are the big issues of focus for sophisticated buyers. It’s critical to understand each insured’s unique business and exposures. Armed with these tips you will be better able to negotiate a best in class cyber liability policy for your clients.
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Rosenzweig, RPLU is the national cyber risk practice leader at Risk Strategies Co. He is responsible for coordinating and growing the cyber liability business. He also works on comprehensive and customized coverage for data security, privacy and E&O exposures. INSURANCEJOURNAL.COM
West
‘Star Trek’ Actor’s Family Sues Fiat Chrysler in California over Rollaway Death
T
he parents of the late “Star Trek” movie actor Anton Yelchin sued Fiat Chrysler Automobiles NV for negligence and product liability in early August over the rollaway crash of a Jeep Grand Cherokee that killed their son. The lawsuit, filed in Los Angeles County Superior Court, is believed to be the first wrongful death complaint linked to the Fiat Chrysler recall in April of more than 1.1 million cars and SUVs because of vehicles that roll away after drivers exit them. Yelchin, 27, was killed on June 19 when his 2015 Grand Cherokee, which was covered under the recall, rolled backward in the steep driveway of his Los Angeles home and crushed the actor against a brick wall and fence. The 18-page lawsuit points to a transmission gear-selector design it describes as “defective” as being the cause of numerous driverless rollaway mishaps like the one that killed Yelchin. Gary Dordick, the attorney representing Yelchin’s parents, said Fiat Chrysler had INSURANCEJOURNAL.COM
sent a recall letter to the actor that was received seven days after his death. The undated letter addressed to Yelchin was displayed at the news conference and said “your vehicle may roll away, striking and injuring you, your passengers, or bystanders, if the vehicle’s engine is left running, the parking brake is not engaged, and the transmission is not in the “PARK” position before exiting the vehicle.” Dordick said Yelchin had returned to his home on the evening of June 19 to pick up something he had forgotten and exited the car, “believing the vehicle to be in park.” The Russian-born actor, whose parents were both celebrated figure skaters in the former Soviet Union, was best known for playing the young starship navigator Pavel Chekov in the movie reboot of “Star Trek.” “In spite of our unbelievable grief, we decided to come here to prevent other families from the same tragedy,” his father, Victor Yelchin, said in tearful remarks to reporters. The automaker expressed its “sympa-
thies to the Yelchin family for their tragic loss.” The U.S. National Highway Traffic Safety Administration has said that the gear selectors in question clearly pose a safety issue that has led to hundreds of crashes and dozens of injuries. The problem has been tied to at least 68 injuries, 266 crashes and 308 reports of property damage. Yelchin’s death marked the first known fatality linked to the issue. The recall applies to 811,000 vehicles in the United States, covering the 2014-2015 model years of the Jeep Grand Cherokee sport utility vehicle and 2012-2014 Dodge Charger and Chrysler 300 sedans. Fiat Chrysler announced in June that it would soon furnish software upgrades to address the problem in all recalled vehicles. (Additional reporting by David Shepardson in Traverse City, Mich.; Writing by Steve Gorman; Editing by Grant McCool and Jonathan Oatis) Copyright 2016 Associated Press. AUGUST 22, 2016 INSURANCE JOURNAL | WEST | W1
WEST | News & Markets
Mysterious Liquid Goop in Oregon Estimated Cost of Southern Parking Garage Behind Lawsuit California Gas Leak Reaches $717M
A
Portland, Ore., woman has filed a $10,000 lawsuit against a parking garage owner after alleging that a mysterious liquid dropped onto her forearm while standing next to her parked car. According to the lawsuit filed in early August, Shoshanna Doty says that the liquid landed on her right arm after parking her car in a Portland parking garage last year. Doty argues that the liquid later resulted in
unexplained injuries, such as muscle spasms, swelling and numbness. Doty’s Portland attorney, Mark Ginsberg, said that the Bill Naito Co. has not identified the source of the liquid. Instead, Ginsberg says that the parking garage owner admitted that they had been paying claims for a liquid that had been damaging people’s cars. Bill Naito Company did not return requests for comment. Doty is seeking nearly $400 in lost income and more than $8,000 for pain and suffering. Her suit also seeks attorney’s fees. Copyright 2016 Associated Press.
S
outhern California Gas Co. reported that costs related to the massive leak of natural gas from its Aliso Canyon storage facility near Los Angeles have risen to $717 million. The new estimate is contained in the release of second-quarter earnings earlier this month by San Diego-based parent Sempra Energy. The previous estimate in May was $665 million. The gas leak reported Oct. 23 at Aliso Canyon spewed an estimated 107,000 tons of methane over 16 weeks. Some 8,000 families were
uprooted from nearby suburbs as foul-smelling gas wafted over neighborhoods, triggering complaints of headaches, nausea, nosebleeds and other symptoms. Scientists say it was the largest-known release of climate-changing methane in U.S. history. Area residents have met with Gov. Jerry Brown’s staff in a campaign to permanently shut down the Aliso Canyon facility. Copyright 2016 Associated Press.
Oregon University Confidently Dead New Mexico Woman’s Family Building $50M Center in Tsunami Zone Sues Bar over Lewd Corndog Contest
O
regon State University is moving ahead with plans to build a $50 million expansion to house its marine science initiative in a tsunami inundation zone in Newport despite warnings from a state geologist that the site could make it vulnerable to a major earthquake and put it in the path of a subsequent tsunami. President Ed Ray, the dean of Oregon public university presidents, believes the 100,000 square foot expansion at the mouth of the Yaquina Bay will be a “national and global showcase” for
A
seismic design standards. OSU’s Hatfield Marine Science Center sits at about 15 to 18 feet above sea level. The school needs final approval from the City of Newport to start construction, which could begin next year. Copyright 2016 Associated Press.
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New Mexico family is suing the owners of a shuttered Albuquerque night club, their former landlord and a liquor license-holder after a woman choked during a corndog eating contest and suffered fatal brain damage. The mother, husband and daughter of 56-year-old Debra Harbeck argue in the wrongful death lawsuit that Fire and Ice staff served her multiple shots of gin the night she was rushed to the hospital in January, and allowed her to participate in the risky contest despite her level of intoxication.
The family says the contest called for female contestants to get on their knees in front of a male teammate who stood as he held the corndog in front of the woman to eat. Harbeck was out celebrating her daughter’s 22nd birthday. Harbeck died several days later at a hospital. Copyright 2016 Associated Press.
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WEST | PEOPLE Westlake Village, Calif.-based Aptus Risk Solutions Inc. has named Gary Evans vice president of sales
Gary Evans
Susan Etter
Shannon Borges
Sean Reardon
and business development. Evans has 20 years of experience in sales and client service with various risk consulting and technology firms. He previously was with Riskonnect Inc. as region sales director. He was senior vice president with CS STARS (now Marsh ClearSight) before that. Aptus is a national workers’ compensation consulting firm focusing on medical cost containment and litigation management.
Professional Program Insurance Brokerage of Novato, Calif., has named Susan Etter vice president of underwriting. Etter has been with PPIB for six years managing the underwriting and sales staff. She will continue to oversee the various contracts and programs at PPIB. PPIB provides insurance for specialty and service industries. Shannon Borges has been named a director at Crystal & Co. Borges is based in Newport Beach, Calif. He specializes in employer benefits and executive management insurance coverage. Borges has more than 23 years of experience in insurance. He was a co-founder and principal of EHR Support Services prior to joining Crystal & Co. He previously was the regional vice president of commercial sales for Health Net Inc. Crystal & Co. is a New York-based risk and insurance advisor. Western Growers appointed Sean Reardon as sales executive. Reardon will join the property/casualty insurance team, with a focus on Western Growers’ client base in Southern California. Reardon has more than 12 years of experience. He most recently worked for a brokerage firm, where he designed risk management programs. Western Growers represents local and regional family farmers growing produce in Arizona, California and Colorado. Alliant Insurance Services Inc. has named Doug Fyfe first vice president in its Alliant Americas division. Fyfe will work in the Thousand Oaks, Calif., office.
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Fyfe was regional vice president in the insurance division of a professional services company prior to Alliant. He also has experience as managing co-owner of an insurance brokerage firm. Alliant has also named Julie Beacock first vice president within its Newport Beach, Calif., office. Beacock will be part of Alliant’s West Coast employee benefits team. Beacock is a benefits consultant with more than 20 years of industry experience. She was senior vice president and national growth leader with a U.S. insurance brokerage firm prior to joining Alliant. Newport Beach, Calif.-based Alliant provides property/casualty, workers’ compensation, employee benefits, surety and financial products and services. Ironshore Inc. has named Andrew M. Stephens as branch executive of San Francisco for the West region. He will be responsible for distribution marketing and product development of commercial lines. Stephens assumes branch leadership responsibilities from Jeremy Frumkin, who will return to the professional lines unit of Ironshore. Stephens previously was a West Coast director for Aon Benfield. Ironshore’s West Region covers Northwest and West coast states with offices located in Los Angeles, San Francisco, Denver and Seattle. Woodruff-Sawyer & Co. has named Patrick Diebel an account executive in surety in the firm’s San Francisco, Calif., office. Among Diebel’s duties will be to consult on client and surety credit relationships. Diebel was most recently an underwriting director at CNA Surety. Woodruff-Sawyer has offices throughout California, and in Oregon, Washington, Colorado, Hawaii and New England. Utah Insurance Commissioner Todd E. Kiser has named Travis Wegkamp new director of the captive division. He replaces David J. Snowball, who is retiring this month. Wegkamp joined the captive division in 2011 as an audit manager. Wegkamp spent nearly a decade providing accounting and auditing services before joining the captive division. 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. Julie Tinney Chief Marketing Officer, Wells Media Group Inc. jtinney@wellsmedia.com
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AUGUST 22, 2016 INSURANCE JOURNAL | NATIONAL | 15
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ƚŽ ƚŚĞ ŝŶƐƵƌĂŶĐĞ ŝŶĚƵƐƚƌLJ Ÿ YƵŝĐŬ͕ ƌĞƐƉŽŶƐŝǀĞ ĂŶĚ ƐƚƌĞĂŵůŝŶĞĚ ƉƌŽĐĞƐƐ Ÿ ĂŝůLJ ƐǁĞĞƉ ŽĨ ĞdžĐĞƐƐ ĐĂƐŚ Ÿ ŽŵƉĞƟƟǀĞ ŝŶƚĞƌĞƐƚ ƌĂƚĞƐ ĂŶĚ ĨĞĞƐ Ÿ ĞĚŝĐĂƚĞĚ ĂĐĐŽƵŶƚ ŵĂŶĂŐĞƌ Ÿ EŽ ĂƉƉůŝĐĂƟŽŶ ĨĞĞƐ͊
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When it’s grim, you need Great
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Everything he has worked for is at risk. When a lawsuit puts your client’s name in the headlines, the last thing you should be worrying about is whether the carrier you recommended has less than stellar claims service. Great American’s strength of specialization gives us the ability to see risks, write coverage and handle claims in a way that gives your clients greater satisfaction. Don’t settle for less. Turn grim to great with Great American.
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Great American Insurance Group, 301 E. Fourth St., Cincinnati, OH 45202. Policies are underwritten by Great American Insurance Company, an authorized insurer in all 50 states and the DC. © 2014-2016 Great American Insurance Company. All rights reserved. 2608-CO (7/16)
Liars Lie. Can you handle the truth? Liars will leave as soon as the claim is made and jump to the next insurance carrier. Don’t be that carrier. Combine analytics with hard evidence, like vehicle sightings, and you have the recipe for the truth. Know before you write the policy with vehicle sightings. Policy Address
Address Based on Vehicle Sightings
See for yourself. Contact Alex today. www.DRNdata.com • ayoung@DRNdata.com • 508-353-3787
It’s Time to Pull Your Head Out of the Sand Carriers ignoring the “victimless crime” of garaging fraud do so at their own risk. Studies show a 20% profit loss for every one percent of a rating error left uncorrected. And now, the industry faces $2 billion in annual premium leakage. Yet, shockingly carriers continue to keep the crooks on their books. Afraid to chase the premium, they rationalize that perhaps it’s better to keep the premium that they can get, while they can get it. But, we have to ask, “Have you also thrown common sense out the window?” We’ve often heard it said, “When someone shows you who they are, believe them.” Yet, time after time policyholders show a propensity to lie about their garaging address, and carriers let them get away with it.
Vehicle Sightings Point to Garaging Fraud Garaging Address: Roanoke, VA with a $574 premium No vehicle sightings outside of New Jersey. 130+ sightings: December 2014 - February 2016 $1,967 annual premium leakage $2,450 premium leakage to date
Over 450 Miles from Garaging Address
We believe: Liars Lie. And someone that is willing to lie about their garaging address may be more likely to lie about a claim down the line. So now, carriers lose money on the premium, and stand to lose on the claim. Carriers that relied on reserves to keep prices down are now raising rates as they see their reserves dissolve. It’s all too easy for people scared by higher rates to shop for rates and as a result, carriers sell out to the bad risks, and alienate the good risks. Get the Crooks Off Your Books Rising prices create more liars and those liars add up to more risk. Carriers ready to get the crooks off their books need alternatives to telematics. One proven alternative is DRN’s vehicle location intelligence gathered from over 4 billion nationwide license plate sightings, plus 140 million more added monthly. Data access is secure and privacy is protected by the Drivers Privacy Protection Act (DPPA).
Selected sighting Vehicle in top 10% of all vehicles seen at location Vehicle in top 11% to 20% of all vehicles seen at location Vehicle not in top 20% of all vehicles seen at location
Vehicle Data: VIRGINIA
ABC 123 Plate Image
DRN’s data, combined with exclusive analytics helps to answer the question, “Is there a pattern of the insured’s vehicle parked at a location other than the reported address?” Studies with carriers show tens of millions of dollars in premium leakage alone. And that’s just the premium end of the equation, what are these crooks costing carriers down the line when they inflate claims or submit fraudulent claims?
Alex Young, ayoung@DRNdata.com DRN Vice President of Risk Solutions
Scan Data: Plate: ABC 123 Date: 11-18-2015 Longitude: -74.1864XXXXXX Latitude: 40.7201XXXXXX
Vehicle Image
Unknown Location: 45 Vehicle Sightings St. Newark, NJ 07114, USA
Carriers looking for a fast, proven alternative to telematics are using our vehicle location intelligence to get the crooks off their books and avoid price increases for good risks. And that strategy is paying off. See for yourself.
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NATIONAL | MyNewMarkets cer, electronic security-alarm, investigation and background screening industries. Available limits: As needed Carrier: Unable to disclose, admitted States: All states Contact: Marc Katz at 800214-0207 or email: mkatz@ mechanicgroup.com
Wind Deductible Buy-Back
Market Detail: R-T Specialty,
Clinical Research Organizations Market Detail: Swett &
Crawford (www.swett.com) offers professional liability — both errors and omissions, and medical malpractice if needed for a second medical opinion (SMO) — as well as general liability for clinical research organizations (CRO) and SMO accounts related to work for pharmaceutical sponsors. Available limits: Minimum $1 million, maximum $3 million Carrier: Unable to disclose, nonadmitted States: All states Contact: Regional Swett & Crawford Office
Artisan Contractor
Market Detail: Continental
Risk Insurance Services (www. GL, errors and omissions, inland marine, excess, property, auto and pollution for contractors with a minimum premium starting at $500. Desired classes include work in: carpentry; concrete; electrical; excavation; floor; glass and glazing; highway and street constructionl installation or erection of building; landscaping; lawn and garden; masonry; ornamental shrub; painting
and paper hanging; plastering, drywall, acoustical, insulation; plumbing/HVAC; special trade; terrazzo, tile, marble, and mosaic; water well drilling; and highway construction. Available limits: Minimum $1 million, maximum $25 million Carrier: Unable to disclose, admitted States: All states Contact: Ed Bordenave at 866699-2747 or email: ed@ continentalriskins.com
Commercial Real Estate Program
Market Detail: Core Programs
(www.core-programs.com) covers apartment buildings; garden apartments; condominiums; cooperative apartments and apartments with mercantile; planned unit developments; office buildings; shopping centers; mercantile buildings; hotel/motel and other lessors risk in commercial real estate. Coverage includes property, general liability (GL) and crime (lessors risk only). Property limits of up to $20 million per location including building, contents, time element coverages, and ordinance or law. Special form, agreed amount, and replacement cost
34 | INSURANCE JOURNAL | NATIONAL AUGUST 22, 2016
are available. Deductibles start at $2,500. Equipment breakdown is available. Wind exclusion applies for Texas to Maine Tier 1 and Tier 2 counties. GL limits of $1 million/$2 million are available. Per location limit is available. No deductible. Employee benefits liability, hired nonowned auto and stopgap coverage are available. Crime limits up to $500,000 cover employee dishonesty. Limits up to $250,000 for forgery and alteration; theft disappearance and destruction; robbery and safe burglary; premises burglary. Endorsements available. No age/construction class restrictions. Available limits: Minimum $500,000, maximum $3 million Carrier: Unable to disclose, nonadmitted States: All states except Alaska, D.C., and Hawaii Contact: Laura Acquadro at 973-946-5085 or email: lacquadro@core-programs.com
Care Custody/Control Liability (P.D.) Market Detail: The Mechanic
Group Inc. (www.mechanic group.com) has insurance programs, brokerage and risk management for the security offi-
LLC (www.rtspecialty.com) covers hard-to-place property risks. Available limits: As needed Carrier: Unable to Disclose States: All states Contact: Customer service at 888-884-1900
Miscellaneous Professional Liability
Market Detail: Sullivan Brokers Wholesale Insurance Solutions (www.sbwis.com) offers over 150 miscellaneous classes including insurance agents, real estate agents and many other professional services. Available limits: Minimum $1 million, maximum $10 million Carrier: Unable to disclose, admitted and nonadmitted available States: All states Contact: Clancy Johannsen at 213-833-6159 or e-mail: clancy. johannsen@sbwis.com
This section brought to you by Insurance Journal’s sister website: www.mynewmarkets.com
Need a Market? Find it. FAST INSURANCEJOURNAL.COM
NATIONAL | Business Moves Fla., the business will merge into THG of Florida’s Orlando office. Prior to opening his agency in 1998, Carrier was a producer for one of THG of Florida’s legacy agencies, Newman Crane and Associates. THG is a middle-market insurance agency headquartered in Richmond, Va., and is a portfolio company of Bostonbased private equity firm, ABRY Partners.
NSM Insurance, ABRY Partners, AIG U.S. Risk, Kohlberg & Co.
Dallas-based international specialty lines underwriting manager and wholesale broker U.S. Risk Insurance Group Inc. has agreed to partner with the private equity firm Kohlberg & Co. With capital and two board members from Kohlberg, U.S. Risk plans to expand by acquiring other firms and individual brokers in the U.S. and abroad. The transaction is expected to be completed during the third quarter of 2016. Terms were not disclosed. Through its $1.6 billion private equity fund, Kohlberg will make a significant equity investment in U.S. Risk and reserve substantial additional equity capital to support the company’s growth initiatives. U.S. Risk Founder, chairman and CEO Randall Goss will remain in his position following the transaction and will continue to be the company’s largest individual stockholder. Kohlberg & Co.’s financial services operating partner Scott M. Birnbaum and insurance industry veteran Roger E. Egan will join U.S. Risk’s board.
Ascend Insurance Brokerage
Dallas-based Ascend Insurance Brokerage President and CEO Paul Bassman has closed on the acquisition of the company, purchasing the business from James Chippendale, who founded Ascend in 2001. Ascend specializes in the entertainment business. Bassman is experienced in entertainment insurance and the risk management services industry, and previously worked in the music industry as a manager of platinum artists, artists and repertoire for Capitol Records, concert promoter, and label owner. The executive staff of Ascend that was in place prior to the acquisition will remain the company’s key management.
The Hilb Group, Carrier Insurance Agency
The Hilb Group LLC (THG) has acquired Florida-based Carrier Insurance Agency Inc. Carrier Insurance has been serving central Florida for the past 30 years with Leo Carrier as owner and president. Headquartered in Fern Park,
36 | INSURANCE JOURNAL | NATIONAL AUGUST 22, 2016
NSM Insurance Group has entered a joint venture with ABRY Partners and AIG. NSM is a Pa.-based insurance program administrator. AIG will contribute its controlling equity ownership of NSM, acquired last year, into this joint venture, which will be majority owned by ABRY. NSM aims to quickly grow and diversify in the niche specialty insurance business through the partnership. ABRY Partners is a Bostonbased private equity investment firm that focuses on media investments.
AmWINS, Private Client Group AmWINS Group Inc. has completed its acquisition of Private Client Insurance Group (PCIG), a Palm Beach Gardens, Fla.-based wholesale broker specializing in personal lines insurance for high-net worth individuals. PCIG will join the firm’s small accounts division, AmWINS Access, and is part of the plan to make “significant investments” in this platform, according to M. Steven DeCarlo, CEO of AmWINS.
PCIG, under owner Ray Celedinas, has forged national appointments with carriers, including ACE Private Risk, AIG Private Client Group, Chubb and Fireman’s Fund, as well as with excess and surplus lines carriers with expertise in the luxury market. PCIG offers retail agencies expertise across multiple lines of business, including high-value homeowners, luxury and antique automobiles, yacht and marine, and private collections. Terms of the deal were not disclosed.
Sandy Spring Insurance Corp., The Advantage Group Sandy Spring Insurance Corp. has acquired The Advantage Group Inc. The Advantage Group will operate under its current name immediately following the acquisition, but will eventually rebrand to Sandy Spring Insurance. No changes will be made to the company’s agents or client policies. Sandy Spring Insurance is an independent agency and subsidiary of Maryland-based Sandy Spring Bancorp Inc. The Advantage Group is a Md.-based agency with a focus on contractor insurance.
Element Risk, Singleton Insurance
Element Risk Management has finalized its acquisition of Singleton Insurance. Singleton’s staff will remain in place following the acquisition, which expands Element Risk’s footprint throughout Pennsylvania. Element Risk is based in Westchester, Pa., and Singleton is based in Ickesburg, Pa. INSURANCEJOURNAL.COM
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Idea Exchange
Human Resources
Is Education the Key to Unlocking the Next Generation of Talent? ity is that less than 5 percent of millennials are interested in working in insurance. With an industry career rarely top of mind among today’s graduates, what can insurance organizations do to engage this potential generation of professionals?
Building Awareness Through Education
By David E. Coons
T
he insurance talent crisis is here. Thanks to an aging workforce, an impending wave of retirements and an increasingly shallow talent pool, the industry is now coming face-to-face with a growing labor gap. The past 10 years have seen the number of insurance professionals ages 55 and older increase by 74 percent. Today, the total number of industry employees ages 55 and older is nearly 30 percent higher than the rest of the economy. As a result, nearly half of all insurance employees will be retired or on the verge of retirement within 15 years. A lack of incumbent young talent is compounding the growing skills gap. Only 27 percent of insurance employees are under the age of 35. The industry has an acute need for a major influx of talented young professionals to help fill the gap of near-term retirees. Experts predict the industry needs to add 400,000 open positions by 2020 to remain fully staffed. The millennial generation is the logical source for qualified, bright talent to fill the growing demand. Already 77 million strong, and accounting for more than 25 percent of the total U.S. workforce, millennials are poised to offset the talent gap within insurance. Unfortunately, graduates from risk and insurance programs currently meet only 10 percent to 15 percent of this growing need. In fact, the real-
To successfully weather the impending exodus of institutional knowledge and skills from the industry, insurance organizations must focus on nurturing their young professionals and recruiting the next generation of talent. However, a career in insurance is not one that most young people actively seek. According to a survey by The Griffith Insurance Education Foundation and The Institutes, less than one in 10 young professionals are interested in working in the insurance industry. They believe insurance is “boring” and “uninteresting,” and they do not want a career selling insurance. Today’s millennials are unaware of the
38 | INSURANCE JOURNAL | NATIONAL AUGUST 22, 2016
multitude of career opportunities within the industry. Just 2 percent of graduates surveyed reported that they are familiar with the insurance industry. Many millennials mistakenly view an insurance career as limited to working as an agent or in claims, because they have not been exposed to the wealth of other job opportunities available. They are not aware that their degrees in computer science, marketing or business administration are transferable to a number of exciting and available positions within the industry. Within insurance, these young professionals can work in product analysis, information technology, underwriting, customer service and more. Nowhere is this lack of understanding regarding the insurance career path more clear than when one delves into millennial job “wants.” More than 60 percent of millennials report that they personally would like a job that includes analyzing risk and recommending solutions — a main com-
INSURANCEJOURNAL.COM
ponent of many industry roles — yet they are not interested in working in insurance before or immediately after graduation.
Education is key to informing today’s young professionals of the wide range of unique and exciting job opportunities available within the insurance industry. Education is key to informing today’s young professionals of the wide range of unique and exciting job opportunities available within the insurance industry. Insurance offers great opportunities to work in corporate communications, marketing, finance, data analytics, information technology and more. Today’s young professionals just don’t know that. It is the industry’s responsibility to educate the next generation on how their degrees and interests can translate into a successful and fulfilling insurance career.
Fostering Employee Ambassadorship
accounts help to lend credibility and combat negative perceptions among potential candidates. This can be as simple as sharing their story in marketing videos or providing quotes for recruitment collateral. Ensure that recent graduates are included in recruitment events and allowed to engage with students. Make sure to provide “real-life” testaments to what it means to work at your organization. The
voices of your current millennial professionals are invaluable in reaching the next generation and must not be overlooked. Already, a number of industry organizations have joined together through the Insurance Careers Movement (ICM) to build a network of millennial champions. ICM is leading the charge to engage millennial professionals and encourage them to share their experiences, participate in social media and educate their peers on the opportunities the industry has to offer. The war for talent is raging. As the recruitment climate within the industry continues to become more and more challenging, the stakes for engaging the next generation will only increase. Insurance organizations must look at ways to educate and engage millennial professionals to bring them into the industry fold.
Share this article with a friend. IJMAG.COM/822AT Coons is senior vice president of The Jacobson Group, a global provider of talent to the insurance industry. Phone: 800-466-1578. Email: dcoons@ jacobsononline.com.
Millennials place a large amount of emphasis on the opinions and experiences of their professional and personal networks. There is instant credibility given to suggestions and reviews from members of their peer groups. As a result, insurance firms looking to attract this next generation should embrace the power of “word-of-mouth” and consider implementing an employee ambassadorship program. Millennial professionals are more likely to connect with your organization’s young employees who are more closely aligned with their outlook and worldview. Insurance firms should encourage their millennial employees to share their experiences and provide endorsements of both their organization and the industry as a whole. These firsthand ENERGI001.indd 1
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6. KASH. Train agents using the KASH for-
mula, (Knowledge, Attitude, Skills, Habits). Acquire the knowledge, develop the skills, form good work habits, always keep a positive attitude = KASH! — Richard Cartwright 7. Take Charge. Be proactive instead of reactive to your customers. Don’t wait for the phone to ring with an irate customer asking why their premiums went up. Have the tools to allow you to reach out before they call. 8. Lunch Time. Save your lunches for prospects or current clients. An hour spent with a prospect can be much more valuable than with a vendor or someone networking you. Meet those people for coffee. 9. Time Management Everyone complains about how there’s not enough time in the day. This is because you’re not spending time on managing your time. Plan your time for renewals, meetings, prospecting, suspecting and follow-ups ahead of time. —
Nick Kormos, MarshBerry 10. Respond. One of the most important
1. Emotional Connections. Great brands
avoid selling products. Great salespeople cultivate emotional connections with customers. — Harvard Business Review, August
2016 2. How to Increase Sales. Discuss all coverages applicable rather than just the ones the producer/CSR thinks the client will purchase. As an additional bonus, the agency’s E&O exposure decreases. —
Chris Burand, Burand & Associates 3. Walk Away. You can’t
satisfy every customer, no matter what you do. Sure, there are those who push you to see how far they can get — even though it’s never enough. Don’t take the bait; it’s time to walk away. — John Graham, GrahamComm 4. Plan, Plan, Plan. Without knowing the fundamental issues facing your prospect,
it will be hard to truly challenge the status quo and induce your clients to embark on a new relationship with you. Identifying their true needs and providing direct solutions will arm you with a competitive edge and a knowledgeable reputation. But always keep in mind that even with the best plan, genuineness, humility, and the ability to gain trust will be the deciding factor. —
Yiana Stavrakis, Specialty Program Group, A Division of Hub International 5. Inspire People. Be a Dreamer. Try to think of
things that have never been done before, but can greatly benefit or excite your customers. Then, actually have the guts to try them! Great things start with “what if...?” If you can’t name three things that your agency does that are truly different in the marketplace, you better get to thinking! — Juan Adame, BTIS
40 | INSURANCE JOURNAL | NATIONAL AUGUST 22, 2016
things you can do for your clients is be responsive. Your prompt return of a call to answer any questions or just to check in speaks volumes about your respect for their time and interest in their business. —
Sandy Latta, Aartrijk 11. Don’t Be Sales-y. Your goal with blogs should not be self-promotion. It should be to help your readers and build trust. —
Becky Schroeder, ITC 12. If You Feel It, Say It. Too often we try
too hard to be elegant, politically correct, nice, agreeable and sometimes that leads to disaster. Prospects are tough … so sometimes “if you feel it, say it.” This gets the truth on the table and can really change things to your benefit. You just have to be brave enough to do it. — Randy Schwantz,
The Wedge Group 13. Email Signatures Matter. Utilize the
signature block of your email to help improve your email communication automatically. You could include a link to your referral program, a video, or links to your social media sites. Your signature block is valuable real estate; don’t ignore it. — Mike Demko, My
Insurance Videos INSURANCEJOURNAL.COM
101 SALES, MARKETING & AGENCY MANAGEMENT IDEAS 14. Thank Customers. Find a way to thank
your customers, for things like leaving a positive review, treating a sales rep well, making a large purchase, referring a friend. — Andrei Utkin, Insureon 15. Phone Books. Retain old residential White Pages and business Yellow Pages because they are a great resource for information about your prospective client such as duration of residency or years in business.— Thomas Camiolo, Greece Agency Inc. 16. Helping Others. Follow up is critical, but also track, monitor and calculate your sales. Push until you get what you want. And be passionate about helping others. If your intention is to help, then you’ll make the right decisions. — Jennifer Baca, Farmers
Insurance District 58 17. Offer Choices. Customers worry about what they buy. They don’t want to make a mistake. So, give them options. This will give them confidence that they’ve made the right choice. Three is the magic number, neither too few, nor too many. — John
Graham, GrahamComm 18. Be Yourself. When you brag, you blow it. — John Graham, GrahamComm 19. Content Marketing, Defined. It’s
“delivering the content your audience is seeking in all the places they are searching for it,” according to Michael Brenner. By another definition, it’s creating and publishing information relevant and interesting to customers, so they find you and your firm and pay attention. — Charles Wasilewski, Aartrijk.
com 20. Stop Using the Word Referral.
The definition is simple, to point someone in a direction for aid or help. Lawyers refer other lawyers when they can’t help someone. Sales trainers took this concept and screwed it up. Stop asking for referrals and start asking your client to introduce you. Your client will feel much more INSURANCEJOURNAL.COM
comfortable doing it. — Randy Schwantz,
26. Use the ABCs. After 48 years I’ve con-
The Wedge Group 21. Be the Customer. The moment you
stop thinking of yourself as your customers’ vendor and more like their business partner, the sooner you’ll find yourself better supporting them in preventing and mitigating loss. Think of their failures as your own, and you’re sure to start creating more successes. — Mary Ann Cook, The Institutes 22. Reason to Come. Don’t forget that to get in the door, one has to give a prospect a reason to first open the door. What reasons are you giving prospects to open the door for you? How many reasons are you giving? How far out are you working (better accounts may require three years of working). — Chris Burand, Burand & Associates 23. Be Accurate. Exaggerate or misrepresent at your peril. There’s no place to hide; sooner or later customers figure it out and that’s the end. Be scrupulously accurate and back up what you say. — John Graham,
GrahamComm 24. For What or Whom Are You Motivated. As a producer, you may be
motivated to grow a million-dollar book. But if asked, “For What are You Motivated or for Whom,” the answer becomes “I want to provide for my family in a special way, that’s why I need a million-dollar book.” The “for what” or “for whom” you are motivated makes it personal and gets to the root cause of your motivation. — Randy
Schwantz, The Wedge Group 25. Using Social Media. It’s
important to make sure content is appropriate to the channel. For example, content that might be acceptable and viewed positively on a Facebook post could be deemed unprofessional on a LinkedIn post. Social media is a great tool, but as with any form of communication/ marketing, the target market/ audience should be kept in mind.
— SIAA
cluded this is really a simple business. ABC - Always Be Selling! — John Carmody, The
Advantage Group LLC 27. Better Than. In the insurance industry,
the majority of prospects are “happy” with their current broker. Good sales professionals have the ability to position themselves as different and better than the competition, so delivering the right message is key. — Sandra Usleman, USI Insurance Services 28. Know the Client. Understanding the prospect’s business through the identification of issues and challenges they face, aligning those with well thought out solutions, demonstrating how those solutions can provide financial/economic impact with data and analytics, and finally putting it all together with meaningful case studies establishes credibility, which can convert that prospect into a long-term client. — Sandra
Usleman, USI Insurance Services 29. Handwrite It. If you’re going to send a thank you note, the best approach is to send a handwritten, well thought-out thank you note. Believe it or not, I have received a ton of positive feedback from clients, as a handwritten note tends to leave a lasting impression. Several of my clients actually told me they keep the notes posted up on a bulletin board. — Jeremy Hermsmeyer,
Networked Insurance Agents LLC 30. Happy Birthdays. Create
a birthday video from your agency, then post it to your friends’ Facebook wall on their birthday. This is a simple way to celebrate
continued on page 42
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101 SALES, MARKETING & AGENCY MANAGEMENT IDEAS continued from page 41
your valued clients ... and your friends that aren’t yet your clients. The video can be the same. ... Just, “From all of us at the Agency, we want to wish you a very Happy Birthday!” It’s free to create the video and free to post. — Mike Demko, My Insurance
Videos 31. Ask the Customer. What worked best
for me was to ask my customer: “What do you want this policy to do for you?” Once I knew that answer, I could tailor my conversation to meet their needs. Follow-up with further questions. — Linda Gerke 32. Missed Opportunity. You miss every opportunity you don’t take, whether you’re asking for referrals or asking for the sale. If you don’t ask for the referral or the order, you are guaranteed not to get it. — Ron
Devers, PSI Insurance Agency 33. Stay in Touch. Not only do customers want to hear from you, staying in touch lets them know you care. If you’re emailing, make sure the content is interesting, helpful, and useful, and not a sales pitch.
— John Graham, GrahamComm 34. Write It Down. Following discussion
and enthusiastic consensus from owners and employees, create a written brand strategy for your firm that at least covers mission (what your agency does), vision (why your agency does what it does), and core values (how your employees should behave). Marketing tactics should come after that. — Peter van Aartrijk, Aartrijk.com 35. Blog. Today, it’s all about connecting with customers and prospects. And sharing your experiences, knowledge and ideas is the best way to do it. Let them know how your knowledge and experience can benefit them. — John Graham, GrahamComm 36. Omnichannel Marketing. What does that mean for insurance agencies? Create
a consistent brand experience for clients and prospects — whether they engage in person, by phone, mobile app, tablet, desktop, website or social media — on their entire journey through research, consideration and purchase phases of that experience. That’s the long version. Simplified: Consistently good experience through any means of communication, from start to finish. — Kim Bellavia, Tompkins Insurance
Agencies Inc. 37. Bring the Pizza. Whether it’s pizza and beer, or sushi and sake, keep thinking of innovative, flexible ways to motivate and encourage your team. Sometimes, even a heartfelt “thank you” at a critical time can make the difference. — Mary Ann Cook, The
Institutes 38. Relationships. Focus on building deep, life-long relationships. Instead of looking at the margin on an individual sale, think about the value of your long-term relationship with that customer. All insurance is local. As we evaluate partner agencies to invest in, we look for strong customer loyalty to the agency and its principals. Nothing beats trusted client relationships for long-term sales success. — Rick
42. Mobile Billboards. In a busy, commuter heavy environment, we have found our wrapped/branded SmartCars catch the eyes of customers — current and potential. Whether parked at a customer location, stuck in traffic, or parked outside the office, they are distinctive and generate conversation. People constantly tell me they saw one of our cars out and about. —
Craig Most, Most Insurance 43. Drip Marketing. The goal of a drip
Everyone is focused on customer service — or should be. But what are you doing beyond the established standard to create magic? Try to come up with your own Disney differentiator by creating an experience so special, so memorable that your clients will refer you and never leave you for price alone. — Mary
campaign is to drip content to your readers. Don’t go straight for the sale. Your approach should be gradual. Your emails should slowly lead your contacts toward your main goal for the campaign. This means spreading your message throughout several emails over time. 44. Practice. Great bloggers are not born in a single blog post. It takes time and practice. —Becky Schroeder, ITC 45. Reverse Engineer Your Goals. Figure out how much money you want to save in order to fund your retirement and the kids then determine how much you need to save every year. In order to save that much, how big does your book need to be. In order to grow a book that big, how much new business do you need to write. That should be your new business commission goal and nothing less. If you care about your family, this will fuel your passion to drive hard when the going gets tough. —
Ann Cook, The Institutes 41. Little Bits. Incremental com-
Randy Schwantz, The Wedge Group 46. Traffic. There are two ways you get
Miley, BroadStreet Partners 39. Use Facebook Live. Facebook will
give it preference in their algorithm and it will show higher in the newsfeed. Talk to your clients about drone coverage or just show them how cute bring your dog to the office day is.
40. Create a Magical Moment.
mitments can convince prospects to change, which is vital in selling new products or services. — Harvard Business
Review, July 2016 42 | INSURANCE JOURNAL | NATIONAL AUGUST 22, 2016
traffic to your insurance agency website. You either pay for it (advertising), or you earn it (blogging and social media). Both have a cost. — Becky Schroeder, ITC INSURANCEJOURNAL.COM
101 SALES, MARKETING & AGENCY MANAGEMENT IDEAS 47. Communicate with Style. Improve
the consistency and quality of your firm’s image in print and digital media by creating a short editorial style guide that specifies: the correct presentation, both formal and informal, of your firm’s name; format for phone number and address; letterhead and document style; a description of your firm’s voice and examples of its tone; and other common choices employees must make when communicating on behalf of your organization. — Ronimarie Acord,
Aartrijk.com 48. Analyze. Look at your analytics on
social media. What content had more reach and got more engagement? Start doing more of that type. — Becky Schroeder, ITC 49. Bring the Specialists Along. Our agents bring the agency’s safety and loss control specialist, John East, and our claims advocate, Trent Phillips, with them on sales calls. They play a big role in our sales process. — Bill Bridges, DFB Insurance
Group LLC 50. Share. For trending articles to share
on your own social media pages, regularly check “Most Popular” in the side column at www.insurancejournal.com. — Julie
Tinney, Insurance Journal 51. Double Up. Pair your salesforce with analysts and have them each other. —
learn from
Andrei Utkin, Insureon 52. Seek Out and Embrace Objections.
If you don’t create an opportunity for the prospect to verbalize objections, you can’t respond to them and the prospect is left to make up the answers themselves. That could leave you out in the cold. — Bruce Cochrane,
Renaissance Alliance 53. Align Compensation with Organizational Goals So much of a firm’s
success is dependent on an effective compensation programs. Are you aligned? —
Tommy McDonald, MarshBerry 54. Total Protection. We want all of our
customers to enjoy peace of mind knowing everything they’ve ever worked for and everything they will ever work for is INSURANCEJOURNAL.COM
properly protected. To do this, we recommend producers use a form exclusive to Brightway that helps them walk customers through other lines of coverage that they may not have been thinking about but should consider. — Mike Gleghorn, Brightway
Insurance 55. Sales Vehicles. Use your web site as
a sales vehicle, as well as an educational hub that attracts your target audience for purchases and information. — Andrei Utkin,
Insureon 56. Stop Avoiding Sales Technology. Just
because your agency management system doesn’t have functionality for effective pipeline management, proactive sales management, lead information and marketing automation isn’t an excuse to avoid it all together. Spend the time researching cost-effective sales technology that can support your producers, limit data entry, and help the agency build infrastructure.
— Tommy McDonald, MarshBerry 57. Schedule. Schedule your posts, but
don’t forget to engage! If you never engage, your followers will stop paying attention to you. —Becky Schroeder, ITC 58. Celebrate Your Customers. Tell others their story. Shoot a video and feature them on your site. Celebrate non-customers. Create an award for noteworthy people or businesses in your community or vertical. —
61. Build Knowledge through Mentoring.
Tap and support mentoring as a way to boost staff knowledge and interaction. Mentoring is going on in the workplace, whether agency leaders realize it or not and whether or not it’s formally sanctioned. And mentoring doesn’t go just one way; t works both for the seasoned worker and the newer professional. — Sharon Emek, Ph.D., Work At Home
Vintage Experts (WAHVE.com) 62. Do Your Prospect Meetings Have an Agenda? Start every prospect meeting by
discussing the agenda with the prospect, make it clear what you hope to accomplish, and get their ideas. End them with a clear and concise timeline of next steps and what each of your roles are in those next steps. — Nick Kormos, MarshBerry 63. Don’t Fear the Cyber. Demand for cyber expertise is growing exponentially and has earned a spot at the strategic business risk table. No longer can you ignore it or delegate responsibility elsewhere — and neither can your customers. — Mary Ann
Cook, The Institutes
Andrei Utkin, Insureon 59. Built-In Customer Experience. Rather than
focusing on the customer experience as one aspect of the job, organizations must make customer experience goals central to their service standards, employee performance plans and internal marketing. Those that do will have a head start not only on what customers want, but also in creating a culture driven by the customer experience that will match the expectations of today’s consumers. —
Ona Kolosky, Senior Operations Consultant, ReSource Pro 60. Gain Insights from Big Data.
Understand it, use it, and leverage its benefits for your customers. — Mary Ann Cook,
The Institutes
64. Overinvest in Web and Phone Analytics. Understand
why buyers buy and why others don’t. Change your experience to covert new segments of non-purchasers. — Andrei Utkin,
Insureon 65. Build Bridges, Don’t Burn Them. In an industry where mergers and acquisitions
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101 SALES, MARKETING & AGENCY MANAGEMENT IDEAS continued from page 43 (M&A) is racing ahead, “business as usual” means that those who were rivals are now friends and colleagues. Everyone can win in an M&A play. It’s up to you to decide if you’ll be one of them who does. — Mary Ann Cook, The
Institutes 66. Jack of All Trades and Master of None. Specialization cre-
ates an organic growth opportunity. It exists within your book, so capitalize on it. — Tommy McDonald, MarshBerry 67. Back to the Basics. Don’t underestimate the importance of knowing the fundamentals through education and training. — Mary Ann Cook, The Institutes 68. Start on the Right Foot. Plan carefully, making sure you have the right tools in place and the right resources around you — and always do the prep work to properly manage and mitigate risk for your clients. — Mary Ann Cook, The Institutes 69. Help Out. Do something that’s unnecessary or unexpected. Even though a customer has a problem unrelated to you, don’t ignore it. See it as an opportunity to offer suggestions. There are also times when making the right referral will be appreciated, so pass it along. — John
Graham, GrahamComm 70. Consider the Niche Play. Find your
niche and learn it inside and out. It’s important to understand the bigger context of your market. Becoming a specialist may be the best way to go — and grow. —
Mary Ann Cook, The Institutes 71. Branding Your Agency. Branding is
more than advertising. Branding is what you do to communicate your agency brand like advertising and your insurance website. But it also includes how you answer the phone, respond to emails, handle walkins, etc. — Becky Schroeder, ITC 72. The Five Whys. Don’t ask just one question and stop there. Keep probing. Go deeper. After each response, ask why, again, up to five times, to get to the heart of your clients’ needs. That’s where real enlightenment and insight dwells. — Mary
Ann Cook, The Institutes 73. Network with Neighbors. Curate a
“Best Of” list in your area, congratulate the
winners personally, and distribute the list to your customers. People love to be complimented, and this grassroots marketing tactic is a useful way to build leads. — Mary
Ann Cook, The Institutes 74. Be Your Customers’ Concierge. Are
you your customers’ solution for high-valued coverage needs in their area of personal lines? If so, identify the value-add services and consulting areas your clients will pay for, and then provide them. —
Mary Ann Cook, The Institutes 75. Bring It to Life. Paint a picture of
what the purchase can mean to the customer, the difference it will make, and the satisfaction it will give them. In other words, bring it to life so it’s real and compelling. — John Graham,
GrahamComm 76. Always Be Testing. Test
every aspect of the value chain. Response to ads, conversion on web sites, repeat purchases, cross-sell: there are ways to improve all of these and testing will reveal how. — Andrei Utkin, Insureon 77. Be an Emerging Topics Sponge. It’s your business to understand our business — and to be able to discern what’s important to customers and what’s not. Use training tools and webinars like those provided by the CPCU Society to help. — Mary Ann
Cook, The Institutes 78. Don’t Just Create — Curate! When
acting socially, don’t focus all efforts on creating original work. Successful content curation shows that your firm is knowledgeable, and is often more cost-effective than original content creation. — Laura
Packard, Aartrijk.com 79. Benefit from Social Media.
Focus on LinkedIn and Facebook. Position yourself as an expert, not a salesperson. Offer helpful and timely information, answers questions, and ask for comments. You’ll create confidence and build relationships. — John Graham,
GrahamComm 80. Incentivize. Create incentives for your sales team. Even small awards will generate excitement and energy. — Andrei Utkin,
Insureon 81. Every Brand Needs an Enforcer. Every
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piece of communication leaving your office, either physically or electronically, leaves an impression on your clients. Ensure your brand’s consistency and integrity by auditing materials routinely, to be certain they align with your brand message. — Laura Packard, Aartrijk.com
82. Talk Without Talking about Yourself.
That’s an approach to social networking and content marketing that can set you and your firm apart. Says Joe Pulizzi, founder of the Content Marketing Institute: “Most insurance companies really focus on features and benefits over building experiences with customers over time.” Try content marketing: Talk about (via blogs, newsletter, videos, and website) the topics of concern to the firm’s target market. —
Charles Wasilewski, Aartrijk.com 83. Your Website Is Not What You Think It Is. Are you measuring activity on your website and social media and if so, how often? Do you know who is looking at them, when, what they’re looking at and how much time they’re spending? Your website is not be read, it is to be used. — Tom Wetzel, insurance marketer and
Insurance Journal columnist 84. Respond Now. Now, not later. Doing
it now makes a powerful impression. Others wait until it’s “convenient,” or they “get around to it” (if they ever do). Does it work? A KIA customer doesn’t stop talking about a dealership service manager who responded to his email in three minutes. Now, that makes a difference. —
John Graham, GrahamComm 85. Look on LinkedIn for Millennials. Put aside the
assumption that millennials only engage on sites and mobile applications such as Snapchat, Twitter and Instagram. Consider connecting with them on LinkedIn, which claims 87 million millennials globally with accounts. — Charles Wasilewski, Aartrijk.com
86. Encouraging Giving; Get a Boost.
Volunteering excites workers, lifts company morale and boosts employee performance. Try a website like Catchafire.org to find volunteer opportunities that are in your team members’ wheelhouse. Then reap the satisfaction of your team’s engageINSURANCEJOURNAL.COM
101 SALES, MARKETING & AGENCY MANAGEMENT IDEAS ment. — Sharon Emek, Ph.D., Work At Home
Vintage Experts (WAHVE.com) 87. 13% Performance Gain. Let work-
ers work wherever they are. “An overwhelming 91 percent of respondents say they’re more productive and believe they ‘get more work done’ when working remotely,” according to a survey from employee engagement firm TINYpulse. The figure is corroborated by a 10-month, 16,000-employee study conducted by Stanford researchers, which reported: “Home working led to a 13 percent performance increase.” — Sharon Emek,
Ph.D., Work At Home Vintage Experts (WAHVE. com) 88. Practice Your Skills. What are you
doing, methodically, to practice your sales and/ or communication skills weekly? — Chris Burand, Burand
& Associates 89. Look for the Demons and Dreams.
Be alert to a customer’s hopes and fears — what they want to gain and what they don’t want to lose. That’s what they care about, not a sales pitch. — John Graham,
GrahamComm 90. Prospecting Best Practices. Whether
making a cold call, reaching out to a strategic relationship or planning a meeting with your largest client, stick to these best practices: Separate research from prospecting; Eliminate noise; Turn off your email; Set your cell phone and offices phones to Do Not Disturb; Shut your office door; Block off the time in your calendar (No less than 1.5 hours and no more than 4 hours); Have a game plan! — Jim
Wochele, MarshBerry 91. Embrace Your Inner Tech Geek. You may not
ever be the one to write code, but to win today’s data wars, you should know the language of analytics. Learn how to leverage data, interpret it, and use it both in your INSURANCEJOURNAL.COM
business and to help your customers. If you don’t, someone else will. — Mary Ann
Cook, The Institutes 92. Keep It Simple. It’s easy to lose sales
by using jargon and trying to impress customers with your knowledge. Although it takes work, pros make their sales messages simple, clear, and easy to grasp. — John
Graham, GrahamComm 93. Look in the Mirror. How does your
website compare with those of your competitors? Do they all look the same? If a prospect did not know you, what would make them look at your website first and not a competitor? — Tom Wetzel,
insurance marketer and Insurance Journal columnist 94. Millennial Retention.
Keep more detailed CRM data for each account to gain the upper hand on millennial retention. Staying up-to-date on financial information such as auto lienholders and third party interests at apartment complexes can serve value at the time of a claim or during renewal. — Kevin Michael Patterson,
American Family Insurance 95. Stay Current.
Whether it’s technology, sales skills, or product knowledge, it doesn’t take long for salespeople to fall behind and get out of sync with their company and their customers — and it shows. — John Graham,
GrahamComm 96. Personal Lines Client Service. Most agencies use some
form of an alpha split to divide up the work between the various account reps. Rather than an alpha split, we have used a carrier split in some of our larger offices where there are
five or more account reps. By dividing the work by the carrier, the account rep gets to know their assigned carriers better and develops a stronger relationship with the carrier underwriter. — Jeff Foy, Foy Insurance 97. Good Understanding. Understanding the prospects business through the identification of issues and challenges they face, aligning those with well thought out solutions, demonstrating how those solutions can provide financial/economic impact with data and analytics, and finally putting it all together with meaningful case studies establishes credibility, which can convert that prospect into a long-term client. —
Sandra Usleman, USI Insurance Services 98. How Does Your Agency Originate Business? Relying solely on producer
driven new business opportunity limits the firm’s ability to maximize growth. Build a business development strategy that expands past the Yellow Pages and a phone. — Tommy McDonald, MarshBerry 99. The Bench Matters. The best firms in the industry have the best service staff. Sales and organic growth performance starts with a strong sales staff but ends with a team that support the growth machine. Look around your non-production staff and ask yourself this question, “Can they visit a large customer without the producer in the room?” — Tommy
McDonald, MarshBerry 100. Celebrate Your Wins. Learn From Your Losses. Knowing the
reasons behind customer decisions, even when they go against you, is crucial to your sales process. You need to provide your prospects a deep insight as to why others have worked with your firm. — Nick Kormos,
MarshBerry 101. Right Places. Cities are where 91
percent of global consumption will take place over the next 15 years — the trick will be knowing which cities, and even which neighborhoods within cities will house the highest-spending consumers. — Harvard
Business Review, July 2016
AUGUST 22, 2016 INSURANCE JOURNAL | NATIONAL | 45
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Idea Exchange
The Wedge
It’s Not How Much You Make…It’s How Much You Save
By Randy Schwantz
“
W
e need to find many, not one, silver bullets to have people save for a life that is going to be closer to 100 years,” Joseph Coughlin, director of MIT’s AgeLab. That came right out of the USA Today, on Aug. 1, oughlin is a pretty smart guy. He was named by Wall Street Journal as one of “12 pioneers inventing the future of retirement…,” and by Fast Company as one of the “100 Most Creative People in Business.” This is the man that is telling us we should be preparing to live to be 100. This gives even greater meaning to the phrase: “It’s not how much you make, it’s how much you save.” But the fact is, it’s hard to save a lot if you’re not making a lot. And it’s hard to make a lot if you’re not writing a lot of new business. Why this subject and why now? It won’t be long before we’ll be creeping up on the end of the year and that brings on the annual goal setting ritual in most agencies.
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Goal setting can be remarkably different from agency to agency. Some leaders have producers set minimum goals that they are guaranteed to hit. Other agencies just assign a new business goal, ranging from $25,000 on the low side to $70,000 as an average. High performing firms average six figures or greater. This all makes sense from a business perspective. Leaders need to have budgets. However from a personal perspective it couldn’t be worse. If you’re projected to live to be 80, 90 or even 100 years old, how are you ever going to save enough money to provide financial security if you’re not killing it every year? How much do you need to save to potentially have financial security?
The 4% Rule
The 4 percent rule was first proposed in 1994 as a “safe withdrawal rate” from a retirement portfolio. It works like this: Withdraw 4 percent of your portfolio in the first year of retirement, then increase the dollar amount that you withdraw each subsequent year to keep up with inflation. If I’m killing you with numbers, let me try and make this real. If you retired
today with $2 million in your account, you could safely withdraw $80,000 (4 percent) annually. Adjust that every year to deal with inflation and with a portfolio invested in 50 percent bonds and 50 percent stocks, they think it will work out for you. If you think having $2 million in your retirement account and you’re only 40 years old is enough, you could be screwed. Here is what I did; I reverse engineered my goals. I started with my retirement date and projected how much money I needed in my investment account. I started that 18 years ago when my oldest was six years old. By the way, I also had a four-year-old, twoyear-old and a newborn at that point. Once you know how much money you need, you can then determine how much you need to save and for how many years. My number was $65,000 after tax dollars for 25 years. Once you know how much you need to save you can then determine how much new business you have to write to get
your book big enough to throw off that much extra income. Any other goal setting process is foolish. On occasion I’ll get asked, “when is enough,
enough”? Obviously, I can’t answer that. It’s simple to me, if you have a $500,000 book, you’re making anywhere from $150,000 to $200,000 in most shops. When Uncle Sam gets through with you, you’re pocketing from $100,000 to $140,000. Is that enough to pay your bills, take a vacation and still save $65,000 a year? In most cases the answer is no. It’s important to cooperate with your agency principal in their goal setting ritual, but please don’t let it stop there. Even if you’re working with a financial planner, you might not be any better off. One of the great things about being a producer is your unlimited ability to make money. So plan your goals, don’t wait for them to be assigned to you. You’re better than that.
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Schwantz is founder of The Wedge Group, and developer of the iWin Agency Growth System. He recently published a new book, “Agency Growth Machine: Transform Producer Potential into Agency Growth & Profit.” Phone: 214-446-3209. Website: www. thewedge.net
AUGUST 22, 2016 INSURANCE JOURNAL | NATIONAL | 47
Idea Exchange
Minding Your Business
10 Ways to Be a Competitive Buyer in a Seller’s Market
By Catherine Oak &
ing to pay is not everything. Sellers have spent decades growing their company and are often emotionally attached to their staff and clients. Owners want to see the firm succeed after the sale. For most firms however, organic growth is always the best way for an agency to grow. However, organic growth often cannot provide the level of growth that is needed for many different reasons. When that is true, these acquisitions of agencies or books can greatly help the agency acquire the volume they feel they need to attain in order to be a larger independent player in the marketplace or with their markets. If the firm is publicly traded they may need to provide more revenue to the owners or stockholders, so they may pay above average prices. The attributes that make most buyers competitive include:
$500 in commission. Grandfathering can be used for this for the existing book and new accounts could fall under the new program.
2.
Allowing producers to refer in new, small commercial lines and personal lines accounts to the agency and receive a first year only commission.
3.
If the seller has more efficient processes, talk to the new employees and see what they do differently before training them on the buyer’s systems and procedures. By doing so, buyers can improve their operating efficiencies.
4. Some sellers won’t sell to an agency that does not have the same automation
1. Be flexible. Allow the practices
William Schoeffler Jr.
M
any agency owners would like to acquire another firm that is compatible with theirs. Agency owners today want to be buyers of agencies with books that might be a great fit with the same type of business the agency already writes. So, what is it that makes buyers more attractive to sellers? In our consulting work matching buyers and sellers, we find that there are certain attributes of buyers that set them apart. This article addresses the attributes that could help buyers win the deal.
of the seller’s producers to remain. For instance, allowing producers to keep their current compensation plan that may be higher than that of the buyer, including paying for accounts at a lower level size of account. This can be a critical deal breaker initially. The buyer can easily change it to their plan over time. For example, paying 25 percent renewal commercial lines commission on accounts under $1,500 in commission, versus 30 percent for accounts over
Today is a seller’s market and that means that buyers must have some flexibility. Remember the price that a buyer is will48 | INSURANCE JOURNAL | NATIONAL AUGUST 22, 2016
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system, especially if the selling agency had a hard transition and the owners are not going to retire. From the start, the buyer should make it clear that they will keep the current system for a period of time and will also not make the seller pay for the change.
5. The buyer needs to be open to allow-
ing the current owners to stay on as producers. Or, even to just have a place to go while they transition their book. Sellers often don’t want to leave for a while. If the seller’s office is a separate location, maybe the seller can also help manage the branch location for a period of time. Going home and being there every day to do the “honey
do” list, often keeps those owners from selling. This is especially true if they don’t have other hobbies, like golf, hiking, traveling, etc.
6. Buyers that will listen to what is
important to the seller and allow them those desires often win. Example: keeping the owner’s perks in place at a reasonable level or giving key employees a chance to shine under someone else’s management, such as a son or daughter.
7.
The terms of the deal can be more important than a high purchase price, especially tax issues. Buyers who will allow an agency owner’s family member, such as a son or brother to remain in the agency if they are capable and productive will win out. If they are in need of some training to be at the level the buyer wants them to be, then giving them that training can also work. Testing can also be done by the buyer before the sale on questionable family members or key employees to see if they have the right characteristics for the roles they are in.
8. Allow the best of both firms to sur-
vive. Learn from the other and don’t assume one’s agency is superior. This could be discussed going into the deal so there is not an attitude of “it is our way or the highway.”
9. Service of the seller’s clients will be
similar or better. This is very important to most independents because a big change can affect clients and if they leave, the earn-out of the seller could be affected and they might earn less money.
10. Sale of a C corporation is a problem
because of the double tax if assets are sold and not the stock. If there are few producers, mainly the owners, then personal goodwill can be used and will save the owners the double tax. Remember today is a seller’s market, which means that buyers must have some flexibility. When an agency is a good “fit” with the buyer, the price can usually work INSURANCEJOURNAL.COM
itself out with willing parties, especially if the attributes in this article are in place or an option. Having a third party to assist also can help. There are key compatibility issues that buyers and sellers need to keep in the forefront when determining if a seller is a good “fit” for a buyer. These will be discussed in an upcoming issue.
Share this article with a friend. IJMAG.COM/822ZG Oak is the founder of the consulting firm, Oak & Associates, based in Northern California. Schoeffler Jr. is a financial analyst for the firm. Oak & Associates specializes in financial and management consulting for independent insurance agencies, including valuations, mergers acquisitions, sales and marketing planning as well as perpetuation planning. Phone: 707-935-6565. Email: catoak@gmail.com.
Advertisers Index
Read, browse, contact, or do product searches on any of our full page advertisers at: www.insurancejournal.com/adshowcase/
Accident Fund www.accidentfund.com SE5 Applied Underwriters www.auw.com 2-3, 52 Burns & Wilcox Ltd. www.burnsandwilcox.com 7 City of Hope www.cityofhope.org 51 Digital Recognition Network www.drndata.com 24-25 Energi Insurance Services, Inc. www.eservicesco.com 39 EZLynx www.ezlynx.com 20-21 Great American Insurance Group www.gaig.com 22-23 K&K Insurance Group www.kandkinsurance.com 35 Monarch E&S Insurance Services www.monarchexcess.com W3 Net Rate Systems www.netrate.com 16-17 PersonalUmbrella.Com www.personalumbrella.com 5 Philadelphia Insurance Companies www.phly.com 9 Providence Bank www.pbagencyfinance.com 18-19 Regions Bank www.regions.com 37 RSI International www.rsimga.com 26-27 SIS Wholesale www.sisinsure.com 30-31 South & Western www.southandwestern.com 28-29 Texas Mutual - Safety Group www.texasmutual.com SC3 The Institutes www.theinstitutes.org 13 Worldwide Facilities www.wwfi.com 32-33
AUGUST 22, 2016 INSURANCE JOURNAL | NATIONAL | 49
Closing Quote Is Your Website Accessible for Users with Visual Disabilities?
By Mark Brault
E
mployers are getting sued under the Americans with Disabilities Act (ADA) because their websites are not accessible for individuals with visual disabilities. Although the deadline for creating accessibility standards under the ADA has been pushed back to 2018, private businesses are now at risk if they have not yet taken measures to ensure that their websites can be accessed by everyone.
What Happened?
This spring, a blind man in California successfully argued that a Colorado-based luggage retailer failed to make its commercial website accessible to the visually impaired, which was in violation of the ADA and a California disability law. In that case — Davis v. BMI/BND Travelware — the court granted judgment to Davis (the plaintiff) finding that he “presented sufficient evidence that he was denied full and equal enjoyment of the goods, services,
privileges, and accommodations offered by Defendant because of his disability.” This decision is noteworthy because in addition to holding that the retailer’s website is subject to accessibility obligations under Title III of the ADA and awarding $4,000 in damages under state law, the court also required the retailer to take specific affirmative steps to modify its website to achieve compliance. The court noted that the retailer had not offered any argument indicating that such modifications would not be feasible. As a side note, Title III covers public accommodations including, but not limited to, retailers, restaurants, hotels, theaters and entertainment venues, medical offices, and other service establishments.
Employment Practice Issues
Some blogs and articles have opined that accessibility of websites also affects employment practices as well. For example, many employers often use online employment applications. If an employer’s online application is inaccessible, that presents an ADA situation because the application process excludes individuals with disabilities from seeking employment. The Department of Labor’s Office of Disability Employment Policy has created a free online tool called “Talent Works” that will provide assistance to employers to ensure that their online applications for employment are accessible for individuals with disabilities.
50 | INSURANCE JOURNAL | NATIONAL AUGUST 22, 2016
The pervasiveness of mobile devices has changed consumer expectations. Looking Ahead
Businesses thought they had until 2018 to comply with the ADA website accessibility standards. Moreover, the Department of Justice has repeatedly delayed the release of proposed guidance/regulations governing the accessibility of online content for places of public accommodation under Title III. That means businesses have little or no direction as to how to proceed with respect to ADA website compliance, nor do businesses know the minimum standards required to achieve accessibility under ADA. All that is presently known is that the final regulations will adopt some or all of what is referred to as the Web Consent Accessibility Guidelines (WCAG). These guidelines are the dominant industry standard for website accessibility and set forth a detailed framework of technical methods to satisfy accessibility criteria for individuals with disabilities.
This means employers who maintain websites have compliance matters they must undertake. The website must meet generally recognized standards of accessibility for individuals with both visual and other types of disabilities. You will want to seek assistance to determine what barriers or obstacles, if any, disabled individuals have with accessing your company website. You will also want to review your web content in conjunction with WCAG guidelines and government regulations when they come out.
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Brault is a compliance advisor and benefits attorney for New Berlin, Wis.-based HNi. This article originally appeared on HNi’s blog, Steal These Ideas, www.hni.com/blog. INSURANCEJOURNAL.COM
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