2017 IIABO Annual Convention Photo Recap
If You’re a Lawyer You Don’t Need to Read This How Stupid Agents Are Ruining Insurance for Everyone The Independent Insurance Agent System
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OREGON
Agent
CONTENTS
Fall 2017
IIABO Office 6 Centerpointe Drive, #430 Lake Oswego, OR 97035 Phone: 503-274-4000 Fax: 503-274-0062 Toll Free: 866-774-4226
IIABO Staff Directory
Sr. Vice President Marketing & Communications Barb Demings barbd@insureoregon.org Vice President Education & Finance Tyra Dressel tyra@insureoregon.org Asst. Vice President Agency Products & Services Abby Kahl abbyk@insureoregon.org IIABO Lobbyist Roger Beyer roger@rwbeyer.com
The Oregon Agent is a publication of the Independent Insurance Agents and Brokers of Oregon and is published quarterly by Blue Water Publishers, LLC. IIABO reserves the right in its sole discretion to reject advertising that does not meet IIABO qualifications or which may detract from its business, professional or ethical standards. IIABO and Blue Water Publishers, LLC do not necessarily endorse any of the companies advertising in the publication or the views of its writers. The publisher cannot assume responsibility for claims made by advertisers, content provided by the editor, or for the opinions expressed by contributing authors.
For more information on advertising, contact : Eric Johnson Blue Water Publishers, LLC phone: 414.708.2059 fax: 414.354.5317 eric@bluewaterpublishers.com
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The Oregon Agent • Fall 2017
Page 22
Page 14
Page 24
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A Letter from the New IIABO President, Brett Slater
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A Message from Jim Perucca, IIABO Executive Vice President
10 IIABO Leadership – 2017-2018 12 If You’re a Lawyer, You Don’t Need to Read This 14 Conference Wrap-Up 16 How Stupid Agents Are Ruining Insurance for Everyone 20 The Independent Insurance Agent 22 The Biggest Mistakes Agents Make 24 Risky Business: Insuring the Marijuana Industry ADVERTISER INDEX
Executive Vice President Jim Perucca jimp@insureoregon.org
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AmTrust North America
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Anderson and Murison
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Insurance Agency Network
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Berkshire Hathaway Guard
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Liberty Mutual
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Burns & Wilcox
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Mutual of Enumclaw
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EMC Insurance
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FROM THE IIABO PRESIDENT
Brett Slater
President, Slater & Associates Insurance, Inc.
I
It is a great honor to be elected to serve as IIABO President. It was special to be sworn in by our National Chairman, Spencer Houldin, at the 89th annual convention in Eagle Crest last month. Before I comment on the future, I would be remiss if I didn’t comment on the convention. It was wonderful to see a record number of agent attendees! This was the largest event in many ways – total attendees, number of golfers and a great influx of young agents. It is hard to find words to describe the after-dinner entertainment, but everyone agreed it was energetic, creative and really funny. As always, the IIABO staff did another remarkable job of creating and administering a great program and making it run “effortlessly.” We are excited to see the energy flowing from the leadership of the Young Agents group. Lyndsay Kooistra and her team are building a great program that continues to grow. During the convention over 60 “golfers” participated in the Young Agent competition held at the unique Eagle Crest putting course. At our last board meeting, the IIABO bylaws were changed to add both the Young Agent chair and past chair as full, voting members.
It is critical that we develop and nurture this next generation of producers who will evolve into the owners and managers of the future. The Young Agents will be holding events quarterly that will include a mix of continuing education, sales training and networking. Watch your mail and spread the word! This is a great business and we perform services critical to industry and commerce. Our products provide indemnity and coverage to rebuild after a loss. Be proud of what we do and strive to communicate how insurance serves and facilitates commerce. I’d love to hear from you this upcoming year. Tell me how we can build a better association and bring more value to our members. If you would like to get involved, give me a call. Brett Slater President IIABO President, Slater & Associates Insurance, Inc.
Your association staff: Executive VP
Jim Perucca
503-274-0583
Sr. Vice President
Barb Demings
503-274-4000 ext. 126 barbd@insureoregon.org
Vice President
Tyra Dressel
503-274-4000 ext. 131 tyra@insureoregon.org
Asst. Vice President
Abby Kahl
503-274-4000 ext. 123 abbyk@insureoregon.org
Toll Free Numbers:
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The Oregon Agent • Fall 2017
1-866-77-IIABO or 1-866-774-4226
jimp@insureoregon.org
A MESSAGE FROM
Jim Perucca
I
To all my friends and colleagues,
A year has now passed since the tragic events unfolded on August 28, 2016 in which both my mother-in-law and my wife were killed in a traffic accident. As has been said, time does help heal the wounds of loss, but never brings a complete cure to the hole created in your life. I’ve been terribly remiss in not acknowledging the outpouring of love, prayers and well wishes that came my way in those difficult days following the accident. Thank you! The response was overwhelming, and I was not in condition to respond. The combination of both physical and emotional trauma, rendered me almost helpless for over a month. One never truly knows how many lives he has touched until something like this transpires.
So, if you are one of the hundreds who sent a card, letter, flowers or prayers my way I want you to know how much it meant to both me and my two daughters. I apologize for not personally responding to each and every one, but even now as I continue to improve, that project appears daunting. Maybe this letter is just an easy way out for me, but I couldn’t allow more time to pass without telling everybody how much it means to me to have such support and come to the realization that so many people care. Again, thank you! Hug those close to you and tell them how much they are loved. Things can change in an instant. Don’t regret not having expressed your feelings. Jim Perucca, Executive VP IIABO
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The Oregon Agent • Fall 2017
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2017 - 2018 IIABO LEADERSHIP The IIABO Board of Directors is a diverse group of insurance professionals representing the varied interests of agents throughout the State of Oregon. We would like you to learn more about these volunteer leaders and the years of experience they bring to the association.
10
Brett Slater President, IIABO Chief Operating Officer, Slater & Assoc. Insurance, Inc. Tualatin, Oregon - 26 years
Steve Smelley President-Elect, IIABO Chief Operations Officer, PayneWest Insurance Beaverton, Oregon - 25 years
Debbie Flores Vice President KPD Insurance, Inc. Springfield, OR - 29 years
Kay Hunkapillar Past President, IIABO President, Wheatland Ins. Ctr., Inc. Pendleton, Oregon - 46 years
TJ Sullivan Legislative Chair, IIABO Huggins Insurance Services Salem, Oregon - 18 years
Keith Blackerby Finance Chair, IIABO Chief Operating Officer, Bisnett Insurance Offices throughout Oregon - 28 years
Ed Davis National Director, IIABO Maps Insurance Services Salem, Oregon - 49 years
Lyndsay Kooistra Young Agents Chair, IIABO LaPorte Insurance Portland, Oregon - 14 years
Mark Atkinson Board Member President, Atkinson Insurance Group Portland, Oregon - 25 years
The Oregon Agent • Fall 2017
Trish Fulwiler Board Member, IIABO President, J.D. Fulwiler & Co. Portland, Oregon - 24 years
Gary Githens Board Member Data Breach Specialist Brown & Brown NW Bend/Portland, Oregon - 35 years
Greg Horner Board Member Commercial Lines Producer, Insurance Partners, LLC Portland, Oregon - 20 years
Joe Hubbard Board Member Managing Partner, The Protectors Insurance Medford, Oregon - 31 years
Marty Kantola Board Member Owner, Chet Hill Insurance Portland, Oregon - 30 years
Debbie Krambeal Board Member President, CAL/OR Insurance Specialists, Inc. Brookings, Oregon - 32 years
Matthew Pidcock Board Member Co-Owner, Valley Insurance LaGrande, Oregon - 17 years
John Timm Board Member President, Timmco Insurance, Inc. Portland, Oregon - 39 years
Brian Wilbur Board Member Owner, Pacific Insurance Partners Forest Grove, Oregon - 21 years
Insurance carriers and service providers do not serve on the IIABO board of directors, but support the association as Associate Members, Sponsors and Exhibitors. If you want to learn more about the IIABO, or if you would like to get involved, please contact any of these individuals. If you are not a member, please email Jim Perucca, jimp@ insureoregon.org for information on membership.
Fall 2017 • The Oregon Agent
11
IF YOU’RE A LAWYER, YOU DON’T NEED TO READ THIS But if not, please read this carefully
I
By Richard F. Lund, J.D., Vice President, Senior Underwriter, Swiss Re Corporate Solutions*
nsurance agents and brokers should be wary of commercial insurance customers trying to impose unreasonable and potentially illegal heightened duties on them. Improvements to state laws have limited the ability for customers to ask agents to make changes to the standard ACORD 24 and 25 Certificate of Insurance forms. Instead, many commercial insurance customers are seeking “guarantees” from their agents and brokers that their insurance policies comply with insurance provisions of their contracts with third parties. These customers are looking to hold their agents responsible if a loss occurs that is not covered by those policies, regardless of whether the agent had any existing duty under state law.
Case in point: We have seen a recent trend of commercial insurance customers requiring that their agent sign a document stating that should any insurance policies procured by the agency not comply with insurance provisions of a contract to which the customer is a party, then the agent would be liable for any uncovered losses. While this may appear to be straightforward, it actually requires that the agent act as a lawyer without the benefit of having attended law school or passing the bar exam. Consider the following statement contained in a document that was recently presented to a Swiss Re Corporate Solutions E&O insured for them to sign: 12
The Oregon Agent • Fall 2017
”I agree that the above referenced policy/ policies meet or exceed the insurance requirements set forth in the contract provided by (name of commercial insurance customer). In addition, I agree to provide written notice if and when the policy/policies ever change to the extent that it no longer meets your insurance requirements.” The first sentence requires that the agent: 1. review a written contract (the insurance policy/policies), 2. compare it to the contract between the customer and the third party, and 3. provide a legal opinion that the insurance meets all of the criteria set forth in the contract. In baseball terms, three strikes and you’re out!
Unless the agent is also a licensed attorney, they would not have the capacity to provide this legal opinion and, if they nonetheless attempt to do so, they could be subject to penalties for practicing law without a license. The second sentence requires: 1. notice that is not required by an insurance policy, and 2. That the agent stay in constant contact with the customer to determine if any changes have taken place that would necessitate changes in the policies. This sentence is attempting to take the place of the ACORD Certificate of Insurance, and imposes duties that are not found on those certificates. If the customer attempted to require
that they make the change to the certificate, they could be in violation of state law. The sentence is creating legal duties for the agent that they would not otherwise have. So what should you do if you are presented with this or any similar type of document? If your customer presents you with a written contract that includes insurance provisions setting forth the types of coverages they are to obtain, you should review them with the customer, clarify any ambiguities, and attempt to obtain the coverages. The general obligation of agents is to provide those insurance coverages requested by their customer, or to notify them if they are unable to do so. While individual state laws may create greater or lesser duties, this is the agent’s primary obligation. If you are unable to provide the coverages, you
must notify them immediately so that they can take appropriate action as they are required under their contract. Remember, you are NOT a party to the contract between the customer and the third party. Your only obligation is to obtain those coverages that your customer has requested, except as otherwise required by state law. In no event should you ever agree to sign any document that would require you to make any legal interpretation about whether or not an insurance policy meets or exceeds a contractual provision. This article is intended to be used for general informational purposes only and is not to be relied upon or used for any particular purpose. Swiss Re shall not be held responsible in any way for, and specifically disclaims any liability arising out of or in any way connected to, reliance on or use of any of the
What’s New?
information contained or referenced in this article. The information contained or referenced in this article is not intended to constitute and should not be considered legal, accounting or professional advice, nor shall it serve as a substitute for the recipient obtaining such advice. The views expressed in this article do not necessarily represent the views of the Swiss Re Group (“Swiss Re”) and/or its subsidiaries and/or management and/ or shareholders. *Richard F. Lund, JD, is a Vice President and Senior Underwriter of Swiss Re Corporate Solutions, underwriting insurance agents errors and omissions coverage. He has also been an insurance agents E&O claims counsel and has written and presented numerous E&O risk management/ loss control seminars, mock trials and articles nationwide since 1992. Copyright 2016 Swiss Re
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13
Conference Wrap-Up t - Left to Right, Lyndsay Sunday Golf Tournamen , er Cook, Michelle Gallardo Kooistra, Ty Lockard, Tyl ata Iw ve Da rg, Marty Kantola, Jason Kantola, Joel Nybe
Spencer Houlden – IIABA
Sunday Buffet
Young Agen t Putting To urnament – to Right, Lau Left ren Fortin, Le eAnn Sterne s
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The Oregon Agent • Fall 2017
Chairman
, “Beer & Bones”
Putting Course
Monday Banque t – Left to Righ t, Carlye Irwin, Dallas Ross, Ty ler Ross, Jennie Weiland, Steve Smelley, Amie Th omas, LeeAnn Sm elley, Paul Spai n
Monday Banquet
Left to Right, Randy Far less, Bob Horn, Jim Peruc ca, Kent Bergstedt, Jerry Ke lly
ft to Right, arity Raffle – Le Exhibit Hall Ch art r, Brandon Stew Timothy Richte Fall 2017 • The Oregon Agent
15
How STUPID AGENTS Are RUINING INSURANCE for Everyone By Chris Burand Here’s a true story: A close friend asked me about her auto insurance. Her daughter, who does not live with her, was still on her auto policy. Her daughter’s car was on her policy too. She had no insurable interest on her daughter’s car. Moreover, her daughter is married and she is not a driver on her husband’s auto policy, even though she has an insurable interest on her husband’s auto. My friend’s agent advised it was just easier to leave her daughter on her policy.
W
hen I explained the issues involved and the simple solution, my friend asked, “But will it cost more?” Cost more than what? Currently she’s paying for partial coverage and all kinds of headaches in the event of a claim involving her daughter. What is a few dollars more or less for real coverage? What is the difference between a fake policy and a real policy? No price comparison exists. It is not even apples to oranges. It’s dog food to caviar. The insured is a smart, well-educated person. She trusted her either stupid/imbecilic or cheating agent to take care of her insurance. She trusted because like 99 percent of consumers, she is not educated in insurance. The dreariness of reading an insurance policy dissuaded her from wanting to learn more. While this cluster wreck is especially egregious, such incompetency is not uncommon. It happens so often that some company underwriting offices probably have weekly contests for the stupidest agents. Sometimes they probably have the equivalent of photo finishes. If potential E&O claims or actual claims could be published, the title might be (think Jeff Foxworthy “You might be a redneck…”), “You might need your license revoked if you’ve done…”
16
The Oregon Agent • Fall 2017
I am not throwing all agents under the bus by any means. The industry has many excellent agents. I am only throwing the idiots under the bus. Readers up to this point likely fall into one of three categories. The first will not believe other agents can be that stupid/lazy/incompetent. Another category is upset with me and their fellow agents. They are upset that I’m writing about the problem and they’re upset with their fellow agents for being so poor at their jobs. The third group has not a clue that I’m pointing out their incompetency. Their incompetency ruins lives so I have no problem being direct. They ruin lives when insureds need coverage but do not have the right coverage because the agent was too stupid/deceitful to even offer the right coverage. I am not writing about some unusual gap or even the occasional mistake. I am writing about the obvious and continuous. These agents ruin it for the good agents because they’re the epitome of one bad apple. One reason commoditization occurs is the public begins believing all agents/insurance companies are incompetent. What is the price difference between one bad policy and another bad policy is really what my friend was asking. Continued on page 18 >>
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<< Continued from page 17 The solution: The good agents need to find a stronger voice to point out the mistakes of the incompetent. Quit asking for decs to compare prices. Instead, understand the client’s exposures and build an insurance policy that is specific to that family/business. A coverage checklist is a foundational rock upon which to build the exact and correct coverages each individual needs. Even better though, use the coverage checklist in the exposure language. People care and understand about exposures. They do not care about coverages. In other words, coverages are the insurance industry’s language. Translate the coverages into exposures because exposures are the language of all but the most sophisticated consumers.
UNFORTUNATELY, I SEE MOST AGENCIES LOOKING AT THE RULINGS AND FEELING SORRY FOR THEMSELVES RATHER THAN RECOGNIZING THE ADVANTAGE BEING HANDED TO THEM.
If you must ask for the expiring dec, point out the mistakes and errors boldly. However, point them out in the language of exposures rather than coverages. While I appreciate why anti-disparagement rules exist, these rules are now dampening the good agents and good carriers’ voices. The fear of being sued for simply pointing out incompetency is usually overblown, but stick to the facts and not conjecture when pointing out errors and omissions. The maleficent companies and agencies take advantage of the better agents/companies’ fears. Disparagement only applies as I understand it, and I’m not an attorney, to opinions versus fact. Be factual. Incompetence is usually easier to diagnose factually anyway. Another option, one that I encourage, is to push for tougher licensing especially if combined with more realistic disparagement laws in some states. Clearly the CE requirements to maintain licenses is being used and abused through online programs. Taking a three-hour online course while doing something else the entire time, does not improve one’s insurance education. Commoditization and incompetence hurts the best agencies the most because the value of their brand is diluted unless a bright line of differentiation is drawn. The 18
The Oregon Agent • Fall 2017
industry and regulators are not going to draw this for you. Some courts are helping draw this line but most agencies are seeing this advantage as a disadvantage. Some courts are truly differentiating through the standards of care the difference between peddlers and professionals. Unfortunately, I see most agencies looking at the rulings and feeling sorry for themselves rather than recognizing the advantage being handed to them. These courts are saying, publicly, that some agents are incompetent. The courts are classifying these agents and they are clearly stating these peddlers’ standard of care is low. They are telling consumers, caveat emptor because these agents are so bad, the consumer better beware. Sadly, better agents see this and always ask the same question, “Why do those agents get the advantage of having such a low standard of care?” BECAUSE those agents are so bad! You too can join the race for the bottom if you choose. Alternatively, the bright line these courts are providing can be an excellent marketing tool if you will fully accept a higher standard of care (odds are if you are an independent agent you are going to be held to the higher standard or an effort will be made to hold you to the higher standard anyway so why fight it?). By accepting the higher standard of care and advertising it, you get the opportunity of proving to consumers/businesses that you are a professional per the courts and therefore, you are worth more than a peddler. My clients that use this to their advantage fully often make 20 percent more than their peers. The only way to beat incompetence in this market in today’s environment is to advertise your competency and professionalism, then be the absolutely most competent and professional agent you can be. It is your brand, your value, and your livelihood. I can put my hand on a bible and testify that my clients who sell professionalism this way enjoy better client relationships, enjoy more referrals, and take better vacations. Most importantly though, they go to bed each night knowing their clients’ lives and livelihoods are much better protected. For those readers with a strong conscience, this is the greatest reward. Chris Burand is president of Burand & Associates, LLC, an insurance agency consulting firm. Readers may contact Chris at (719) 485-3868 or by e-mail at chris@burand-associates. com. NOTE: None of the materials in this article should be construed as offering legal advice, and the specific advice of legal counsel is recommended before acting on any matter discussed in this article. Regulated individuals/entities should also ensure that they comply with all applicable laws, rules, and regulations.
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By Chris Burand The independent insurance agent (IA) system is pretty darn basic. It is fundamentally about selling insurance. IT IS NOT ABOUT: •
Joining an aggregator to make more commission without selling more insurance.
•
Joining aggregators/clusters to have access to more companies.
•
Divining coverages.
•
Running agency management systems better.
•
And for most, it is not even about marketing (niche programs are the possible exception).
The IA system is about selling, period. The other items are secondary. A long, long time ago when horses and buggies were still prevalent, insurance distribution was born. At that genesis, where it was determined insurance would be sold by agents, a fork in the road was created. One fork was for captive agents. That fork promised the carriers would be effective marketers, the agents would assist but mostly clients would come to them or the agents would call using the carriers’ brands to gain an opportunity to quote. In return, those agents were paid less and had fewer options to offer clients. The other fork stipulated agents do their own marketing and selling. Because these agents were too small to effectively market, the end result was these agents had to sell and the brand they were selling was them, personally. No one recognized the carriers they represented and the carriers did not do much advertising or marketing. In return, these agents were paid well, gained ownership of valuable assets (their books of business), and had access to many carriers 20
The Oregon Agent • Fall 2017
enabling them to offer their clients many more choices. They could also service a much wider range of customers. These are obviously the IAs.
THE IAS FUNDAMENTALLY ARE ABOUT MAKING SALES, ONE SALE AT A TIME. PERIOD. The IAs fundamentally are about making sales, one sale at a time. Period. Otherwise, IAs are not necessary. The entire model is based on an agent building one trusting relationship and then one sale at a time. The model is not designed to cause dozens of prospects to call the agency every day or ask for web-based quotes. No trust exists in either of those scenarios and the IA system requires the client trust the agent and the agent trust the client to thrive. To leave that core strength is to endanger the entire
model because captives, direct, and the web can all make sales without trust far more cheaply and effectively than independent agents can ever hope to do.
learn about their companies with them. A good salesperson will not abandon this market. It is large. It is lucrative. It has higher profit margins and higher retention if managed well.
I meet agency owners and company people regularly who are repelled by the thought of selling. They think selling is an awful, disingenuous manipulation of the consumer regardless of whether the consumer benefits. They truly believe selling is unethical. To sell is to cross the line into unethical territory. These well-meaning folks truly need to find a different career or start believing in the benefits of selling because otherwise, they are a true mismatch.
Furthermore, customizing coverages provides one of the best chances on earth to help protect lives, businesses, and jobs and rebuild lives, businesses, and jobs after a loss. By selling, a producer has a rare opportunity to make a huge difference in their clients’ lives. Hardly any professions exist where such a huge difference can be made and of the ones that do exist, being a selling insurance agent may pay the best. It is a convergence of the best of all worlds. The chance to do good by selling far exceeds any good done by people that want to market because they think selling is dirty.
I meet others who are truly scared of selling. I and probably most people that readily admit we’re in sales get that. Everyone, mostly, has some fear of rejection when selling but some can push through that fear and others cannot. Unfortunately, the anti-sales people are combining more and more with the scared-of-sales people to push IAs into marketing. Marketing, in so many ways, is for sissies. Marketing provides a cover behind which personal accountability can hide. In sales, a person either makes the sale or does not make the sale and everyone knowns whether the sale was made or not. In marketing, if sales don’t happen, there are delays between introducing the marketing and sales (if sales do happen) and marketing campaigns are almost always feel-good group endeavors so personal responsibility is limited. Marketing, when it works, is designed to cause the consumer to call the retailer (or the retailer calling the wholesaler). This makes those in the “sales is unethical” camp feel better about themselves because if the consumer calls the agency, the agency does not have to sell and therefore, does not have to engage in unethical behavior. It is even better if the customer buys insurance on a web-based platform because that is proof the purchase is entirely the client’s initiative and no selling is involved.
For true success and our clients’ best interests, it is imperative for independent agents to stay honest to the IA model. Sell one trusting relationship at a time that customizes coverages and solutions for each individual client. Chris Burand is president of Burand & Associates, LLC, an insurance agency consulting firm. Readers may contact Chris at (719) 485-3868 or by email at chris@burand-associates.com. NOTE: None of the materials in this article should be construed as offering legal advice, and the specific advice of legal counsel is recommended before acting on any matter discussed in this article. Regulated individuals/entities should also ensure that A&M Assoc Ad OR PRINT.pdf 1 10/20/15 12:35 PM they comply with all applicable laws, rules, and regulations.
I am not being cynical or sarcastic. I am simply repeating what these people have told me. The more people who want to rely on marketing whether within the IA footprint or with captives, online distributors, or direct writers, the more opportunity is created for people willing to stay true to the fundamental heart of the IA model and build one trusting relationship at a time. Part of building trusting relationships depends upon the agent working with the consumer to identify that person’s or that company’s individual risks and exposures and building coverages specifically for them. Every policy should be custom built and a large portion of the public wants this. They do not always know enough about insurance to articulate their desires but they truly do want agents to take the time to Fall 2017 • The Oregon Agent
21
The BIGGEST MISTAKES Agents Make By John Chapin MISTAKE #1: Thinking that servicing accounts is more important than selling new ones I once had a coaching client show me a stack of folders and say, “This is why I can’t be out calling on new clients.” When I asked what had to be done, she picked up the first folder and said, “I’m waiting for a number from the State of Rhode Island on this one.” To which I responded, “Really? A producer is sitting in the office waiting for a number from the state of Rhode Island? No one else can handle that?” That is akin to a pilot saying they don’t have time to fly the plane because they are back serving customers drinks. I’ve heard every excuse for servicing accounts from “they’ll only deal with me,” to “I want to make sure it’s done right.” These are simply excuses to avoid the hard work of going out and making calls. Producers are hunters, service people are gathers. Outside of renewals, scheduled service calls, and emergencies, clients should be dealing with CSRs and other support people. Not only are the support people more readily available than the agent, who should be out chasing new business, they also handle the day-to-day service items more efficiently and effectively than an agent. As an agent your job is to sell, not service. If you are hiding behind the excuse that your clients will only deal with you, that’s because you’ve trained them to do that. Time for retraining. If you think you are the only one who can do it, you’re wrong, get over yourself. Any time you are servicing, outside of renewals, scheduled calls, and major issues, you are doing yourself, your agency, your client, and your future clients a disservice. It’s what we call lose/lose/lose/lose. Go sell and stop hiding behind service. MISTAKE #2: Majoring in minor things and finding other time wasters I once had a sales manager remark to me, “During the major snow storm last week, when people were confined to their houses, my top agent was calling people at home because he had a captive audience. My other agents were baking cookies and posting pictures on Facebook.” 22
The Oregon Agent • Fall 2017
This along with chatting with friends and colleagues, checking email more than four times a day, taking ten coffee breaks, and, in general, finding things to do other than calling on prospects and customers, are examples of time wasters. Spending two hours looking up prospect information before you call, servicing clients on routine items as in Mistake #1, and spending time practicing your call 400 times before the call, are all examples of majoring in minor things. Your highest priority is to spend time with prospects and “sometimes” your top 20 percent of customers (again, renewals, scheduled calls, and emergencies). You should be talking to, or on your way to talk to, prospects and customers 80 percent of the time during prime calling hours.
YOU HAVE TO BE PREPARED FOR EVERY SALES SITUATION YOU’RE GOING TO ENCOUNTER AND YOU HAVE TO PRACTICE AHEAD OF TIME. MISTAKE #3: Focusing on reactive versus proactive marketing The fastest and best way to build business is by making phone calls and knocking on doors. It is the most effective and only one in which you have almost complete control over. Going to a Chamber of Commerce event, BNI, or some similar networking event, hoping to get a lead is reactive. In those situations you are relying on others, whose first priority is to get business for themselves, to give you business. Worse yet, hanging out on social media or sending blind, unsolicited emails in hopes of getting business. MISTAKE #4: Not being prepared for and not practicing sales situations If you are in leadership, I dare you to walk up to one of your agents who has been with you a while and ask, “What do you say when someone says…” and then give them a common,
everyday objection they get like, “they’re not interested?” I promise you that 9 times out of 10 the first verbal sound out of their mouth will be “Ahhhh.” It happens to me all the time. Just last week at a sales meeting at an insurance agency, I turned to an agent who’s been there 17 years and asked, “Joe (name changed to protect the guilty), what do you say when someone says I can get my insurance cheaper down the street?” The response? You guessed it, “Ahhhh.” Game over. You have to be prepared for every sales situation you’re going to encounter and you have to practice ahead of time. Ideally with another human, but if not, with yourself. Each and every answer has to be scripted and committed to memory so that you know it verbatim and can respond immediately in a reallife sales situation. Mistake #5: No goals, no plan, and no clue how much activity has been done, or needs to be done, in order to be successful Whenever I begin working with someone one of the first questions I ask them is, “How many calls did you make last week on brand-new prospects?” As with the objection above, I am usually met with “Ahhhh.” Usually followed by a guess, like, “Um, I think about four.” “You think four? Is that number too big to count?” The truth is: they didn’t keep track and it
wasn’t four. It may have been two, or even zero. In order to be successful, you have to have annual, monthly, and weekly goals, along with knowing the daily activity necessary to make those goals a reality. Then you have to make the calls. MISTAKE #6: Giving up too soon 81 percent of sales are made after the fourth contact. Roughly 20 percent of agents make it past the fourth contact. Enough said. MISTAKE #7: Not doing the work necessary 99 percent of the time an agent fails it’s due to a lack of activity. Not making enough calls to talk to enough people in order to make enough sales. The other 1 percent of the time, the agent got hit by a bus. Since activity is the primary reason for success or failure, I could have led off with it, but it’s so obvious you probably would have stopped reading. John Chapin is a motivational sales speaker and trainer. For his free newsletter, or to have him speak at your next event, go to: www.completeselling.com John has over 29 years of sales experience as a number one sales rep and is the author of the 2010 sales book of the year: Sales Encyclopedia. You can reprint provided you keep contact information in place. Email: johnchapin@completeselling.com.
Fall 2017 • The Oregon Agent
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RISKY BUSINESS:
By Julie Carter
T
he number of states legalizing the growth, distribution and possession of marijuana, in one form or another, continues to increase. As of this writing, 28 states and the District of Columbia have legalized the use of medical marijuana; eight states and the District of Columbia have legalized the use of recreational marijuana. The cannabis market is a multi-billion dollar industry, with revenue expected to reach $20 billion by 2021. It is important to remember, the fact is that the growth, distribution or possession of marijuana is a crime under federal law. As with any other business, those involved in the industry are seeking insurance coverage for their assets and potential liabilities, and the opportunities for carriers, brokers and agents may seem endless. However, although laws regulating the marijuana industry (as well as the insurance industry) are controlled by individual states, the use, sale or cultivation of marijuana is a still a crime under federal law, as is the aiding and abetting of these acts. While the Obama administration made it clear it did not intend to seek prosecution of marijuana-related activities in states where it has been legalized, Attorney General Jeff Sessions recently stated the current administration intended to â&#x20AC;&#x153;crack downâ&#x20AC;? on such activities. Therefore, any procurement of insurance for cannabis enterprises is extremely risky â&#x20AC;&#x201C; both in the procurement itself and in the coverage minefields that may result in E&O claims against an agent or broker.
There are a few insurance carriers providing coverage to cannabis businesses. These businesses run the gamut from one-man operations to large companies with sophisticated technology and several employees. These insureds are seeking the same types of coverages as many other retail and/or crop enterprises: Commercial General Liability, Business Property, Cyber Liability, Workers’ Compensation, Directors & Officers Liability, Commercial Auto, Products Liability, Pollution, Crop, Employment Practices Liability, etc. Also, most of these businesses have a steady influx of cash on the premises, given the fact that U.S. banks are not allowed to deal with the cannabis industry because of the federal law criminalizing such activity. However, given there is not much guidance or precedence to clarify the validity of such insurance contracts and the enforceability of insurance contracts provided to marijuana businesses, many carriers are refusing to write policies for these potential clients. For example, one major worldwide carrier is not renewing policies with this type of coverage until marijuana use is declared legal under federal law. Much of the concern centers around two issues: 1) is the insuring of an illegal activity under federal law a criminal activity in and of itself, causing the insurance contract to be unenforceable; and, 2) exclusions in many standardform policies may provide illusory coverage for an insured. Regarding the first issue, whether or not a court of law could determine that an insurance contract was void as the result of insuring an illegal activity is definitely a risk for a business and therefore, the insurance agent that procured the policy. In addition, a carrier could potentially deny coverage for certain acts because of the federal law issue, leading to a “failure to procure” E&O claim against an agency. Regarding this issue of “exclusions,” many traditional insurance policies, exclude coverage for “illegal activities,” “criminal acts” and “intentional behavior.” Exposures such as civil RICO claims, money laundering and reputational risk are valid concerns for those involved in the cannabis industry. Whether or not such exposures can, or should, be covered by an insurance policy is a matter of great debate within the insurance community. Given the dichotomy between state and federal laws on the legalization issue, and conflicting court rulings regarding insurers obligations to provide coverage, there is great risk to an agent in procuring this coverage. Policies would likely not be standard ISO forms given the unique risks to these insureds and the numerous regulations the states place
upon such operations. Marijuana growers and distributors are required to be licensed. The particular licenses and permits that are required depend on where the businesses are located. For example, in California, 20 types of licenses are required, including permits for farmers, delivery services, testing labs, distributors, dispensary operators, etc. An in-depth knowledge of all applicable licensing issues would be required by any insurance provider. It is important to remember the fact is that the growth, distribution or possession of marijuana is a crime under federal law. This issue alone should weigh heavily into all other considerations for an agency tempted to enter this area of the insurance arena. The law and the insurance industry will continue to evolve. However, for the prudent insurance agent, it is likely best to wait until the smoke clears before considering procuring insurance for a client in this field in order to avoid a potentially problematic E&O claim. Julie Carter is an assistant vice president, claims specialist with Swiss Re Corporate Solutions and works out of the office in Overland Park, Kansas. Insurance products underwritten by Westport Insurance Corporation, Overland Park, Kansas, a member of Swiss Re Corporate Solutions.
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