2021 December PIA New York by PIA Northeast

December 2021• New York

PAGE 20

Find your agency’s

FOCUS, OPTIMIZATION AND DIRECTION Use your AMS to its full potential

IN THIS ISSUE 4

The digital ecosystem

ISO 2022 HO Program

Streamline renewal process

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DEPARTMENTS 4 December 2021 • New York

In brief

9 Tech 15 Sales 31 Staffing 35

Ask PIA

37 Officers and directors directory 38

Readers’ service and advertising index

COVER STORY 20 Find your agency’s focus, optimization and direction Use your AMS to its full potential

FEATURE 27 Use technology, data and economics What insurance postcards teach us about agency processes

Statements of fact and opinion in PIA Magazine are the responsibility of the authors alone and do not imply an opinion on the part of the officers or the members of the Professional Insurance Agents. Participation in PIA events, activities, and/or publications is available on a nondiscriminatory basis and does not reflect PIA endorsement of the products and/or services. President and CEO Jeff Parmenter, CPCU, ARM; Executive Director Kelly K. Norris, CAE; Communications Director Katherine Morra; Senior Magazine Designer Sue Jacobsen; Editor-In-Chief Jaye Czupryna; Advertising Sales Executive Susan Heath; Communications Department contributors: Athena Cancio, David Cayole, Alexandra Chouinard, Patricia Corlett, Darel Cramer, Roberta Lawrence, Crystal Ringler and Calley Rupp. Postmaster: Send address changes to: Professional Insurance Agents Magazine, 25 Chamberlain St., Glenmont, NY 12077-0997. “Professional Insurance Agents” (USPS 913-400) is published monthly by PIA Management Services Inc., except for a combined July/August issue. Subscription rate for members is $13 per year, which is included in the dues; subscription rate for nonmembers is $25 per year. Professional Insurance Agents, 25 Chamberlain St., P.O. Box 997, Glenmont, NY 12077-0997; (518) 434-3111 or toll-free (800) 424-4244; email pia@pia.org; World Wide Web address: pia.org. Periodical postage paid at Glenmont, N.Y., and additional mailing offices. ©2021 Professional Insurance Agents. All rights reserved. No material within this publication may be reproduced—in whole or in part—without the express written consent of the publisher.

COVER DESIGN Roberta Lawrence Vol. 65, No. 11 December 2021

IN BRIEF

FYI

Understand the digital ecosystem Kitty Ambers, CIC, CPIA, CISR, COO, AVYST

Independent insurance agents strive to deploy technology that offers the promise of providing consumers with a convenient, engaging, and meaningful digital experience. As part of selecting and implementing new technology, it’s critical for agency leaders to consider the impact these solutions may have on the agency’s potential errors-andomissions exposure.

continuing to educate our clients. In turn, this should lead to referrals so the process can start again. There is a myriad of technology at every one of these touchpoints. That’s when the average agent can get a bit stuck. For each area, there are numerous vendors or partners that might be able to offer a solution that fits with your agency’s business strategy. It’s a lot to think about!

There are a variety of operational elements to consider as part of any technology selection and implementation process. These elements include: understanding the digital ecosystem and consumer expectations; considering InsurTech and its impact on E&O; digitization of sales and service touchpoints; and methods for protecting the investment in your agency.

Consumers expect technology to deliver better customer experiences As consumers, we’ve been conditioned to expect a lot from technology. As we ponder and create our digital ecosystem, we must remember that our clients really aren’t any different from us when it comes to being consumers.

The goal of this article, and upcoming articles—which will be posted on PIA Northeast News & Media—is to provide practical ideas that will help empower you and your team to meet and exceed the standard of care owed to your clients. The digital ecosystem A digital ecosystem is a group of interconnected information technology resources that can function as a unit. Technology shapes consumer expectations for how agents operate and creates a high-tech, yet high-touch customer experience, which is vital to help agents compete. Agents must pull all customer touchpoints together with seamless integration and data transfer between industry players and provide an excellent 24/7 customer experience. At the heart of a digital ecosystem is the concept of interconnectedness. The goal in insurance agencies is to create a customer experience that reflects high-tech capabilities, yet it should be high-touch when it comes to the customer relationship. To do this, we must be able to integrate all the touchpoints seamlessly, and transfer data between the various systems in play accurately and securely. By mindfully creating an effective digital ecosystem for your agency, you are setting it up to compete at a new level. To summarize, in a complete digital ecosystem, insurance agents can source, quote, bind, support and communicate with customers instantly, automatically and securely. In a simplified look at the insurance ecosystem from the agency perspective, we find prospects, we prepare and present coverage options. We land the account, which means we provide service to the account, and we (hopefully) are managing the relationship proactively by

Let’s look at some data regarding consumer expectations regarding technology. In the 2019 State of the Connected Customer report from Salesforce, 75% of customers who responded to the survey expect companies to use new technologies (e.g., artificial intelligence and the Internet of Things) to create better experiences; and 74% of those respondents expect companies to use existing technologies in new ways to create better experiences. By understanding expectations and continuously considering ways to connect across the ecosystem, you are better able to position your agency to meet and exceed evolving consumer expectations successfully. Often, system updates incorporate newer technologies automatically, so it’s important to stay abreast of what is included in system upgrades. The Salesforce study also highlights what methods customers prefer to use when communicating with the firms with which they do business. These methods vary and include both online and offline tools and platforms. The results from the Salesforce study indicate preferences by generation (millennials and Generation Z—born since 1980, who are under 40 years old; Generation X—born between 1965-1979, who are between 40 and 55 years old; and baby boomer and the silent generation, born between 1946-1964, and anyone over 76 years old, respectively). Some of these results may seem surprising—like the use of email, in-person, and telephone interactions. A common assumption is that millennials want to do everything on their smartphones. The study seems to contradict this assumption slightly as 59% of the millennials and Generation Z who were surveyed seem interested in taking part in an in-person meeting.

PROFESSIONAL INSURANCE AGENTS MAGAZINE

(continued on page 6.)

BY THE NUMBERS

’Tis the season ... to get to know PIA staff

It’s that time of year, when people often take stock of what they have, where they’d like to go, and with whom they’d like to spend time. Here is a look at how your PIA Northeast staff members will be spending their holiday season.

Celebrated Holidays THANKSGIVING (95%)

MARTIN LUTHER KING JR. DAY (15%)

43%

said that Christmas is their favorite holiday

WINTER SOLSTICE (10%)

CHRISTMAS EVE/CHRISTMAS (95%)

What is Sinterklaas?

HANUKKAH (7.5%)

NEW YEAR’S EVE/ NEW YEAR’S DAY (80%)

It’s a traditional Dutch custom in which children— and some adults—leave their shoes outside their houses on Dec. 5, and Sinterklaas, or Saint Nicholas, fills them with candies and gifts.

SINTERKLAAS (2.5%)

Present-Buying Strategies 7%

When do you start buying presents for the holiday season?

When buying presents, what is your strategy?

IF I CAN’T GET IT DONE ON CYBER MONDAY,

Gather the family/friends together and PICK NAMES

10%

it will never get done.

THE DAY BEFORE THE HOLIDAY.

How late is the mall open? I’M DONE. I finished before Thanksgiving.

82%

OUT OF A HAT. SET A PRE-APPROVED LIST with a select group of family and friends.

BUY GIFTS FOR EVERYONE I KNOW, and a few extra in

I DON’T START THINKING ABOUT GIVING GIFTS

case I forget someone.

before Thanksgiving.

60%

Big Holiday Traditions Most holiday traditions for PIA Northeast staff members focused on family, friends, food and fun, a quick breakdown of

How will you celebrate the new year?

the traditions focused on the following:

Getting some MUCH-NEEDED REST Traditions with TREES

20%

Traditions with PRESENT OPENING (OTHER: 3%)

Cultural food celebrations:

15% 18

PLAYING GAMES with friends/family. Zzzzz

Traditions with FAMILY

18%

on one of the major networks.

33%

Traditions with FOOD

WATCHING THE BALL DROP

ITALY: Traditional seven fishes POLAND: Wigilia, a traditional meatless

meal with pierogi and nalesniki

SWEDEN: Swedish tea ring, a prune ring TURKEY: Baklava (everyone loves Baklava!) PIA.ORG

33%

31%

Watching my favorite

TV/MOVIE MARATHON. I’LL BE IN BED BEFORE MIDNIGHT. I’ll celebrate the new year on Jan. 1.

In addition to playing board games, some staffers will ring in the new year by going outside at midnight to bang

pots and yell “Happy New Year!”

FYI

(continued from page 4.)

It’s not really surprising that online, mobile and socialmedia options are not a favorite of the baby boomers as less than 30% of respondents are interested in using any online or mobile communication; and only 15% of those surveyed want to communicate through social media. I do think the study provides insurance agents with a few takeaways to consider: 1. We need to be agile and able to conduct business on a wide range of technology platforms to effectively reach the five different generations. 2. We need to be strategic—as leaders—to ensure our business model, communication strategy, agency operations, trading partners and vendors are all aligned. Who is driving expectations of your agency’s customer experience? Another point from the State of the Connected Customer report to highlight is that 73% of the customers who responded to the survey say one extraordinary experience raises their expectations of other companies. We used to hold up Neiman Marcus as the epitome of customer service. However, today we must think about Amazon and Zappos. This highlights a tricky reality for agents: Today, you are in competition with every other company, regardless of industry. So, what does this say about customer expectations and how we need to think about our insurance agency marketing and sales strategy? Basically, we need to consider the end-to-end customer experience we offer and find ways to embrace digital transformation. In our agencies, we used to think of the use of automation as focused primarily on back-office functions. However, with the InsurTech environment, technology is becoming increasingly customer-facing. Customers expect relevant content in relation to what they’re doing anytime, anywhere and in the format and on the device of their choosing. Customers expect ‘connectedness’ Here’s something to keep in mind as you think about your agency technology strategy and approach to a digital ecosystem. The research says that personalizing a single customer experience doesn’t go far enough. Experiences across the entire customer journey—from the first ad a prospect sees to post-sales customer service interactions like policy change requests, claims and renewals—need to be connected and put into context. According to the Salesforce survey, 78% of the customers who were surveyed expect connected experiences and 6

consistent interactions (i.e., when their preferences are known across touchpoints and any required information can be accessed quickly). Yet, 59% of customers reported that their experiences are disconnected, and it feels like they are communicating with separate entities rather than one company. Because insurance agents work with such a broad array of vendors and trading partners, this is something we must take to heart as we explore how we make our various tools talk to each other. The insurance industry’s ecosystem Consider when your clients visit your website, is it attractive enough to keep them? Does it provide them with a way to reach out and contact the agency 24/7? Does the contact form submitted provide good direction and next steps? Do the leads get queued up for someone to act on promptly in the manner the prospect wishes to be contacted? Has enough information been collected to have a meaningful first conversation or interaction? Now consider your client’s claim experience. Was the client educated when he or she was onboarded with your agency to know what to do in case of a claim? If the client is directed to the claim’s hotline of the carrier, does the carrier support 24/7 access? Is the agency quickly notified of the claim through claims download or an alert? What is the agency’s process for following up and tracking the claim activity? At renewal time, you shouldn’t have to ask if there has been any claim activity in the past year—you should have the details already and the claim status in your systems. Well-planned and implemented technology can make these kinds of scenarios a positive experience for your clients and your agency. For more information about this topic and upcoming additional articles in this series, see the related article Insurance technology and E&O claims: What’s the connection? Part 1: Understanding the digital ecosystem on PIA Northeast News & Media (blog.pia.org). Ambers is a third-generation insurance agent. She has worn many hats including that of CEO at the Network of Vertafore Users. She also served as executive director of the American Insurance Marketing and Sales (AIMS) Society. She has been a facilitator for several insurance-industry professional development programs (CIC, CISR, CPIA) in the areas of agency management, marketing, and sales skill development. Don’t forget PIA Northeast members receive free access to AVYST eForms Wizard bronze level as part of their membership (https://avyst.com/partnerships/pianortheast/).

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ISO 2022 HO Program: Enhancements and limits Another decade has passed since the Insurance Services Office Inc. 2011 HO Program debuted. Prior to that, it was the 2000 HO Program. Now comes the 2022 HO Program, and I am more than a little excited about it. There are many interesting enhancements and limitations, and many coverage holes that have been plugged. There are 13 new forms, 130 revised forms and 11 withdrawn forms in this filing. The new program is proposed to be effective March 1, 2022.

Broadenings of the HO policy Host liquor liability. The 2000 (and later) edition of the ISO HO policy forms thoroughly closed the door to liability coverage for a loss involving the

TECH

DAN CORBIN, CPCU, CIC, LUTC Director of research, PIA Northeast

use of a motor vehicle, regardless of who is operating it. Consequently, no standard HO or personal auto policy covered a homeowner’s host liquor liability that results from serving alcohol to guests who cause auto accidents when they leave the homeowner’s house. The 2022 HO policy has been enhanced to cover this exposure by changing the definition of “motor vehicle liability” to read [emphasis added]:

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(2) Maintenance, occupancy, operation, use, loading or unloading of: (a) An aircraft, hovercraft, or watercraft by any person; or (b) A motor vehicle by an “ insured”; By isolating motor vehicle use by “an insured,” as opposed to “any” person, liability for someone other than the insured operating a vehicle is no longer excluded as “motor vehicle liability” in the HO policy. Business income threshold. In the 2000 edition of the HO policy, an exception to the business exclusion was introduced for part-time activities that included income from such businesses as garage sales, babysitting, mowing lawns and delivering newspapers. A threshold of $2,000 in total compensation for the 12 months prior the inception date of the policy was established. The 2022 HO policy will increase this threshold to $5,000 to accommodate more part-time activities.

Category Personal property at other residences Personal property located in a self-storage facility Money, etc. Securities, etc. Watercraft, etc. Trailers, etc. Theft of jewelry, etc. Theft of firearms, etc. Theft of silverware, etc. Business property on the residence premises Portable electronic equipment in or upon a motor vehicle Antennas, tapes, wires, records, disks or other media Debris removal, tree removal Trees, shrubs and other plants Section I–Loss assessment Landlord’s furnishings Section II–Damage to property of others Section II–Loss assessment

Special limits. Nearly all special limits in the policy are increased due to inflation. Only the “business property away from the residence premises” and the “fire department service charge” limits remain unchanged. However, the “credit card, electronic fund transfer card or access device, forgery and counterfeit money” limit and its coverage is removed, but it may be added by endorsement. Below are the revised limits:

Current limit 10% or $1,000, whichever is greater 10% or $1,000, whichever is greater $200 $1,500 $1,500 $1,500 $1,500 $2,500 $2,500 $2,500

New limit 10% or $1,500, whichever is greater 10% or $1,500, whichever is greater $300 $2,000 $2,000 $2,000 $2,000 $3,000 $3,000 $3,000

$1,500

$2,000

$250

$300

$1,000 total; $500 per tree 5%, but no more than $500 for any one tree $1,000 $2,500 $1,000

$3,000 total; $1,500 per tree 5%, but no more than $1,500 for any one tree $2,000 $3,000 $5,000

$1,000

$2,000

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In addition to the increase in the watercraft limit from $1,500 to $2,000, a new option is introduced to purchase an increase in the limit up to $5,000 by endorsement. Vehicle parts. Prior to the 2011 edition of the HO policy, vehicle parts were covered while not in or upon a motor vehicle. This included accessories, equipment or parts (think snow tires and rooftop cargo carrier) that were lying around in the garage. In 2011, ISO inadvertently changed this wording to exclude a motor vehicle’s equipment and parts without the restriction to be in or upon the motor vehicle. PIA Northeast brought this inadvertent change to ISO’s attention, and the 2022 edition now restores coverage for vehicles parts not in or on a motor vehicle.

less than $2,500, then the loss will be settled at replacement cost, “whether or not the actual repair or replacement is complete.” This threshold has been increased to $5,000. Service vehicles. The 2000 edition of the HO policy revised the motor vehicle exclusion by broadening the exception for the sole service of an insured’s residence to include “any” residence. The 2022 policy goes a step further by making an exception for: “A riding lawn mower that, at the time of the ‘occurrence,’ is being used to mow a lawn.” This now grants coverage while mowing a vacant lot or assisting a nonprofit entity (e.g., a church).

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Additional living expense. The current policy covers only additional living expense incurred by the named insured and resident spouse. There may be times when other resident family members may incur the expense (e.g., after the death of the named insured). The 2022 policy now includes other household members. Vacancy. As you know, vacancy of the house can affect vandalism and glass coverage. PIA Northeast has been concerned that the “constructed” exception appeared to be limited to ground-up construction. Now, in addition to an exception for a dwelling being constructed, the 2022 policy includes a dwelling being remodeled, renovated or repaired. Replacement cost threshold. The loss settlement provision in the current policy stipulates that if the repair or replacement cost is less than 5% of the amount of insurance on the dwelling or other structure, and

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Watercraft. If you are preparing to take the state insurance exam, you are going to love this revision. When determining watercraft coverage, instead of going through a maze of horsepower, ownership and configuration of the watercraft, you now need only consider the following exceptions to the exclusion: • Owned sailing vessels less than 26 feet in length, with or without auxiliary power; • Non-owned sailing vessels 26 feet or more in length, with or without auxiliary power;

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• Owned watercrafts that are not sailing vessels with engines or motors of 25 horsepower or less; • Non-owned watercrafts that are not sailing vessels with engines or motors of more than 25 horsepower; and • Newly acquired watercrafts that have outboard engines or motors with 25 horsepower or more, so long as such engines or motors are reported to the insurer within the reporting requirements contained in the policy. PIA Magazine’s next Tech article will examine 2022 reductions in coverage, new endorsement options and endorsement withdrawals.

Montauk lighthouse © Getty Images 117078 621

Corbin is PIA Northeast’s director of research.

Learn more: www.pia.org/AAC 12

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Includes copyrighted material of Insurance Services Office Inc. with its permission. Copyright, Insurance Services Office Inc. 2021.

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Ideas to keep in mind when closing sales Without a closing, nothing happens: Products aren’t manufactured, trucks don’t move, people don’t work, and money doesn’t change hands. If there is no closing, there will be no business. So, arguably closing is the most important part of the sale. However, if you have a great presentation, but you present it to the wrong prospective client, the best closing skills in the universe won’t bail you out. In this article, I’m going to assume you’ve done everything else right. In other words, you have a qualified prospect, you have a good presentation, you’ve sufficiently matched your solution with your prospect’s needs and desires, and the only thing left to do is close the sale. In that case, here are some ideas that will help you.

Closing rules No. 1: Do it. The most important part of closing is to do it. Closing doesn’t always mean getting a sale, it may mean closing on the follow-up appointment, or whatever the next step in the process may be. Either way, you must close on every call. It’s amazing how many salespeople do not actually do this.

SALES

JOHN CHAPIN President, Complete Selling

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To learn more about our products and risk management services, visit our website at berkleyluxurygroup.com

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Many sales situations go something like this: The salesperson goes through the entire presentation, arrives at the end, and says something like, “So, what do you think?,” which of course is not a closing question. The prospect responds, “Well, it looks pretty good. Call me in about a week.” The salesperson says, “Okay,” packs up his materials, says goodbye, and leaves. In this case, the prospect was the only one who closed. He closed the salesperson on buying his excuse for not moving forward. If you don’t close, most prospects will be happy to exchange pleasantries with you and not buy today, even though they may have been perfectly willing to purchase the insurance policy at the beginning of the conversation.

• Look and listen for indications that it’s time to close.

No. 2: Work hard on your closing techniques. Script, practice, drill, and rehearse your closes and your closing techniques. Know them in your sleep. Most importantly, practice and perfect your closing out in the field.

• Do what you can to get the deal done now.

No. 3: Always be prepared to close. Make sure you’re mentally prepared, have all materials with you, and that your materials are presentable, operational, and ready to go. Have calculators, pens, contracts, and everything else necessary to finalize the sale. Add the numbers before you show up. Know how far you can go with your discount and other concessions. Know what all the terms and conditions of your contract are and what they mean. No. 4: After you close, remain silent. After you close, keep your mouth shut. The first one to talk buys. Either the prospect buys your product or service, or you buy the prospect’s excuse for not moving ahead. No. 5: Once a decision has been made, close the sale as soon as possible. When a prospect is ready to buy, close the sale. If you are on the phone setting up an in-person appointment with a prospect who has just decided to buy the insurance policy, get over there. Let as little time pass between the point when a decision is made and when the signature goes on the contract. No. 6: Make the closing process as smooth, relaxed, and as simple as possible. Try to limit paperwork, the time it takes, and the level of work that goes into it. Do as much of the paperwork as you can before you get there, such as filling in the prospect’s basic information. One of the worst things you can do is close the prospect, then spend 10 minutes filling out paperwork before getting the contract signed. No. 7: Keep yourself busy, avert your eyes, and stay quiet while the prospect is signing the contract. You don’t want the prospect to feel as if he or she is under a spotlight. Look at your calendar, phone, or anything else you have with you. No. 8: Smile and thank the customer for his or her business. Make sure you cover all necessary details including what will happen next in the process. No. 9: Follow up after you close. Follow up promptly after the close and make sure the sale is solid. You want to prevent buyer’s remorse and anything else that could undo the sale after it’s been closed. There are a few things to keep in mind: • You must be convinced that your product is a great product before you close the prospect on it. The first sale is to you! • Close different people and personality types differently.

PROFESSIONAL INSURANCE AGENTS MAGAZINE

• Bring as many senses as possible into the close. • Be prepared to hear no and to handle objections and close several times afterward. • Know how far you can go to get the deal done.

• Trust your gut. If it doesn’t seem like a good deal, let it go. Sometimes it’s better not to close business. • When closing, take advantage of Fridays and holidays. At these times, people tend to be in better moods and their defenses are down. • Keep track of your closing success rate. Remember, you will be most effective when closing—and selling in general—if you are enthusiastic, motivated, ethical, and if you believe in your product or service completely. If you are motivated and have a strong belief in your product, you’ll ask people to buy it and you’ll fully believe they are better off with your product than without it. You’ll also have conviction when selling your product to your prospects. Chapin is a motivational sales speaker, coach and trainer. For his free eBook: 30 Ideas to Double Sales and his monthly articles, or to have him speak at your next event, go to www.completeselling.com. He has over 33 years of sales experience as a No. 1 sales representative and he is the author of the 2010 sales book of the year Sales Encyclopedia (Axiom Book Awards). Reach him at johnchapin@completeselling.com.

e h t r o . f y n c o n i t e u g l a o s e l c a n t a o r t u T he de nt in s . w o r n r e o p m e o t d ind n a • y a d To

ES NUS PPORT O B D U G AN ETING S N I R RK HA FIT S ES & MA O R P S, S AL RATE TIONS N O LU SSI MMI SED SO O C R BA IGHE N TECHH • IES SO PAN COUNT M O DIS OC SS T CHING • E C A AC & CO G N AI N I

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Find your agency’s

FOCUS, OPTIMIZATION AND DIRECTION Use your AMS to its full potential

our agency management system is the single most important tool you have in your agency. While its name conveys its purpose and importance, few agencies manage it with the focus it deserves. Simply put, if you’re not getting everything you can out of your management system, you’re not getting everything you can out of your agency.

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At face value, the management system offers the tools to provide service to your clients, store your data, create processes and efficiencies, provide reporting and tracking, and keep your agency protected from errors-and-omissions claims. Features and functions among the list of management systems and vendors varies, but the same is true for all: The management system allows you to manage your agency, and as a tool its value is derived from how you use it. For most insurance agencies, the management system is one of the top three annual expenses (typically behind payroll/benefits and real estate). Considering this, one might expect that the average agency places a great deal of emphasis on its management system. However, that’s not a common prac-

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tice as many agencies utilize a fraction of the functionality available to them and still maintain manual and outdated processes. From paper files and manual reports, to not utilizing basic functions like activities/notes, the lack of optimization in the insurance industry is surprising. It would be like driving a sports car in a race and never getting out of second gear. Sure, you can get to the finish line, but you’ll leave a lot of time on that track. Some agencies still may be racing in the equivalent of the horseand-buggy days if they do not have a management system at all. If you want to be a competitive agency, and a successful one, using the full range of functionality in the management system is going to set you up for success. It should be one of the driving forces in your agency, allowing you efficiencies through technology and automation—thus saving time for your service staff. It should be providing detail that is storytelling and actionable, allowing you to make better-educated decisions and understand what’s working and where improvement is needed. It should be providing you better ways to communicate and provide service to your clients to add to their overall experience. Essentially, it should be the brain of your operation, allowing your people the tools they need to provide excellent service, and you the tools to grow your agency.

Your agency’s focus

(800) 440-9932 www.4lawyersinsurance.com 22

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This is all possible if you have a focus on your management system. Investing time and resources into optimization is critical to becoming an efficient and effective agency. In today’s environment, agency owners need to understand the importance of efficiency. This industry is service based, which means that you’re

going to rely on your staff’s ability to sell and provide services to clients to make money. If your staff members have tools available to them that are optimized, they can handle business efficiently resulting in better service and higher profitability. Today’s hiring environment is a consistent struggle for agencies. It’s harder to recruit and retain talent, which is placing further stress on workloads and service staff. Optimizing the management system to create efficiency allows your agency to handle more with less; the more your staff can handle, the less staff members you need. Considering payroll/ benefits are the highest expense for insurance agencies, this means that you’ve taken more control over your largest expense.

Optimize your agency’s workflow Efficiency in any management system starts with workflows. It is important to highlight the difference between putting a workflow into your management system and optimizing one. Optimization involves a full analysis of your process and pairing that with the functionality within your management system to create a perfectly blended process focused on efficiency. You’re using all the tools available to you, and not simply taking the workflow you had in a prior system and modifying a few activity codes. It’s something that takes effort and a consistent approach as it needs to be evaluated at least annually to ensure that new functionality or changes in your process don’t require a change to your agency’s workflow. Optimizing workflows within your management system allows for consistent data and processes, eliminating redundancy and mistakes,

thus contributing to time saved and better data. Consistency can be optimized in your management system through configuration and controls. Many systems offer the ability to customize items like policy types, activity codes, servicing roles, carrier lists, etc. While these changes are small in scope, they can pay large dividends when it comes to data accuracy and reporting needs. Each management system has different abilities and it’s important that you learn what options are available to you, so you can optimize your system for your agency. Beyond configuration, many systems have automation and various levels of integrations available. The first of these is download. This is one of the biggest areas in which most agencies can improve. Taking full advantage of download opportunities drives efficiency and data quality. Carriers continue to offer download for more lines of business and for more types of download. Policy download, electronic copies of documents, carrier messages, claims, and direct-bill commission download are widely available. Specifically, commission download is a tool that many agencies are lacking, and it’s something that could save days of work for your accounting staff each month by automating the entering and tracking of commissions. Agencies should review what’s available regularly as it constantly changes. Someone in your office needs to be responsible for optimizing download as it impacts all areas of the agency. Other automation tools and functionalities beyond your daily download can take what traditionally have been pain staking and manual processes (like renewals and quoting) and improve them significantly. For example, creating customized proposals is a common feature in many management systems. Doing this could save commercial-lines account managers hours of preparing manual proposal pages as these packages can be generated from your management system within 30 seconds and a few clicks of a mouse (if the data is in the system). Automating routine and redundant tasks like client communications is another area that is significantly underutilized. Many agencies are not taking advantage of automation tools like renewal communication and routine checkins. There are plenty of agents who have fallen behind in these efforts due to the workload demands and continuous need for re-quoting. Many systems now have functionality either built-in or through integration that allows you to automate renewal emails, so that clients receive something personalized and branded from your agency a certain number of days prior to their renewals. Again, functionality does vary among vendors, but these are the items to consider when optimizing your own management system and/or looking at third-party integrations. Reporting is another area that has made leaps and bounds in recent years as the insurance industry tries to keep up with the demands of the information age. Customized reports and analytical dashboards now are standard within many of the top-performing management systems. However, agencies are not utilizing these tools to anywhere near the extent that they can. Proper reporting in an agency should consist of a comprehensive approach. It should encapsulate all areas within the business and provide information to all members responsible for those areas. Report formats and data should be customized, so the information displayed is useful to the end user. Reports also should be automated when available. Many systems now provide the ability to PIA.ORG

automate a report and its delivery, however, many agencies still run the report manually, and then distribute it themselves. Again, this is time wasted on tasks that could be done automatically.

Know where you are One of the most important tools an agency owner has is information. Without it, you don’t know where you are, where you’re going, or how to get there. Accurate reporting from your management system is crucial and powerful. Reports should be viewed as proactive efforts as much as they are reactive. In an environment in which negative trends typically are not seen until a month later—when reviewing commissions, new business, or canceled-business reports—it’s important to have proactive information available, so negative trends can be spotted sooner. To better manage and understand your agency, you need to optimize your reporting methods and the data you’re generating. With the new functionalities available, agency owners now can have their fingers on the pulse of the business to understand performance. For agency staff, reporting is equally as important. While an expiration list is the bare minimum, there are plenty of reports that can be delivered to staff members giving them insight into their own books of business. A great example is automatic exception reports for service staff. These reports allow your staff members to self-correct and catch issues prior to them becoming a larger issue. Examples of these reports could be highlighting policies that were missed or unbilled, policies that are close to renewal that haven’t renewed, policies or activities that are coded improperly or were not closed out effectively. Using the power of data can drive results that traditionally a manager would have to step in and assist with correcting.

Keep up with the tech With the evolution of management systems and vendors providing more functionality than ever before, agency owners now have tools available to them that are empowering, so that they can better understand their businesses. The challenge is keeping up with the enhancements and the technology. Many small- and mid-size agencies don’t have the technical knowledge in-house or the time in which to use it. This poses a challenge for most owners, and maintaining the management system tends to get split up among various members of the agency. As a result, a cohesive approach to optimizing the management system typically falls short and turns into more of a daily survival mode rather than consistent improvement. It’s important that agencies become proactive with their handling of the management system and their understanding of it. While it can be a little daunting to figure out where to start, the simple answer is talk to your vendors and your agency partners about available resources. There are a host of user groups and boards completely dedicated to answering questions, providing useful information and resources that can assist in these areas. There also are a host of resources that most vendors provide their agency clients beyond these user groups to help agency’s get past that learning curve. After all, it’s in their best interest for you to use their product fully. Lastly, in today’s environment,

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there are consultants and third-party solutions that can assist in various ways as well. At the end of the day, it’s important that agency owners understand the need to optimize their management system. As stated, most owners don’t do this due to the resource requirement—whether that be knowledge, time or money. However, as a tool and the most important one an agency has, it’s only going to bring the value that you put into it. Back to the race car analogy: You could have the fastest car in the world, but if you don’t know how to drive it, you’re not going to win any races. Milliken is an agency operations and technology consultant and founder of Milliken Agency Services. MAS has a team of experts and insurance professionals who assist independent agencies across the country with operational and technology items on a project and recurring basis. Milliken has held various senior level positions in his 16 years in the industry, managing over 60 system conversions, and working with most major technology vendors in the industry. He served on the national board of directors for the National Association of SIS (Strategic Insurance Software) Partner Agents from 2008 until 2010 and was a recipient of the Pinnacle Award from Applied Systems. A consultation with Milliken is offered to PIA Northeast members through PIA’s Technology Hotline service, available through the PIA Industry Resource Center, members can access this hot line service to have their technology-related inquiries answered. For more information about this PIAmember benefit, log on to www.pia. org/IRC/tech/consultants.php.

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Up to 35% Advance Discount Retailers

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2003 Bakeries 7998 Hardware Store 8001 Florist Store 8006 Food/Fruit/Deli/Grocery 8008 Clothing/Shoe/Dry Goods 8013 Jewelry Store 8016 Quick Printing 8017 Retail (Not Classified) 8031 Meat/Fish/Poultry Store 8033 Supermarkets 8039 Department Store 8043 Retail (including Food) 8044 Furniture Store 8046 Auto Accessories 8072 Book/Music Store 8105 Leather Store 8382 Self serve gas w/conv. store Residential Care Facilities

8864 Developmental Organizations 8865 Residential Care Facility 9063 Senior Citizen Centers

Hotel/Motel

9052 Hotels NOC 9058 Restaurants in Hotels

Wholesale 4310 Greeting Card Dealer 7390 Beer/Ale Dealer 7999 Hardware Store 8018 Wholesale Store/NOC 8021 Meat, Fish Dealer-Wholesale 8032 Dry Goods, Clothing, Shoe 8047 Drug Store 8048 Fruit & Vegetables 8111 Plumbers Supplies Dealer-Wholesale Restaurant

9061 Clubs 9071 Full Service Restaurants 9072 Fast Food Restaurants– Including Drivers 9074 Bars & Taverns Social and Health Services

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The Workers’ Compensation Leader Call Cosmo Preiato at (800)394-7004 ext. 203 Fax: (914)694-6004 e-mail: cosmop@friedlandergroup.com 2500 Westchester Avenue, Suite 400A Purchase, New York 10577 www.friedlandergroup.com Safety and Workers’ Compensation Strategies To Unleash Productivity and Profits Featuring insightful interviews with experts, including Paul O’Neill, the 72nd Secretary of the U.S. Treasury by Adam Friedlander, now on Amazon https://safetyandworkerscomp.com/

PETER MACDONALD, MBA, CPCU, CRM, CIC, LIA Co-founder & CEO, Wunderite

Use technology, data and economics

What insurance postcards teach us about agency processes

I received two insurance mailers to my home address this year that stuck out of the rest of the notices in my mailbox. The first was a series of two postcards from a well-known InsurTech managing general agency that sells cyber, tech, errors-and-omissions, and directors & officers insurance directly to startups. (It also sells insurance through agents.) The postcard was simple, well-designed (like a contemporary website), with a call to action to visit the InsurTech’s website to get a business insurance quote.

Second, they show that the best agents are using data to differentiate and simplify their prospecting and sales process. Third, these mailers show that efficient snail-mail marketing remains appealing (and likely profitable) to both old and new agencies.

The second was a folded letter from a somewhat local insurance agency explaining that, based on a recent building permit for my existing home, that could mean changes for my insurance. The postcard further explained that it is an opportune time to review my insurance. The call to action was a simple QR code at the bottom to scan and take next steps.

No. 1: Technology is (and isn’t) changing the game. In the old days, the call to action was to handwrite a response form or call a phone number. Today, on both mailers, the only call to action was to visit a website (arguably with clear next steps on the website). Neither the InsurTech MGA nor the local agent included a phone number, email, or mailing address in their call to action. Props to the local agent for including a QR code that brought me right to an online form.

As a former insurance agent turned InsurTech company founder, I found these mailers interesting. First, they show that technology is (and isn’t) changing the game.

Let’s analyze these three reasons to provide a framework for assessing how technology and data can set your insurance agency apart (and keep it relevant)—not just for mailers—but also to make every customer a top-of-stack submission.

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Ten years ago, I had QR codes on my business cards. It was a fun networking gimmick. People first had to download a QR scanner, and fumble to save my information to their contacts. Today, it seems like every restaurant has a QR code taped onto the table for a touchless menu. You find QR codes at information booths, airports, tourist attractions, even at the local Hatchet House (to sign the liability waiver). It’s probably safe to assume that most of your best prospects know how to use QR codes. The how has changed (reply on a website instead of calling or mailing), but not the why. Your prospects (and your best customers) still are getting snail mailers because the economics still work. And, they are getting mailers because the data is getting better. No. 2: The best agents use data to differentiate and simplify their sales process. Every six months, I get the same old mailers from the direct car insurers. Maybe there’s a new cartoon on the front—but the content is the same. Frequently, those mailers go right in the trash because I don’t have time to fuss around with my whole insurance situation. Maybe I could save a few bucks on car insurance, but I don’t want to be bothered with 30 minutes of hassle, especially since I must consider the insurance on my home, boat, umbrella, life, etc. The MGA InsurTech mailer was interesting because it ran a targeted campaign. It must have looked at all new tech-focused companies that have started in the past few years. And, it mailed the postcard to my home address, where perhaps, it stands an increased chance of breaking through the noise. It was an impressive sales maneuver. The local agent mailer was impressive because it made me question my current situation. The agency used data from my recent building permit to inform me (quite accurately) that this change has an impact on my insurance policy. I’m not sure my current insurance company even knows that I had construction going on in the house. In both cases the targeted data and new technology hit me in a time of need: whether starting and growing my business or pulling a building permit—both insurance providers were ready to educate me about my insurance needs and provide a streamlined workflow to make getting a quote as painless as possible. No. 3: These mailers aren’t that revolutionary. At his agency, my dad used to run mailing campaigns every week. New Construction–Builders Risk campaigns went off like clockwork. We want you back mailings were sent out to churned customers. Anyone with a few years’ experience in sales and marketing at an insurance agency who is reading this article has sent these types of notices to prospective and current customers. For all the hype and fear about disintermediation, it turns out that mailers still are an economical and efficient way for insurance agents (or new InsurTech MGAs) to win new customers.

So, what …? Insurance marketing mailers have been around and continue to stick around because they work. Data and technology can help differentiate and streamline the call to action. However, this is just one part of winning and retaining new customers. 28

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We all know that the bigger administrative challenge starts when you have an interested prospect or customer engaged in a renewal process. Traditionally, producers struggle to complete supplemental apps, ACORD forms, and schedules quickly, and then get everything signed off just as fast, so they’re first to market. However, PDFs and XLS documents can get lost in the email shuffle. There is a better and faster way for agents to gather customer data, prefill applications, supplementals, and ACORD forms, and send it to the client for his or her digital signature. Fancy mailers are one part of a good strategy for winning new customers. The most forward agents are digitizing the entire new business and renewal process, and bringing their customers into the process for faster, better, more complete, top-of-stack submissions. Before founding Wunderite in 2018, MacDonald worked at a family insurance agency selling most types of insurance. In this role, he earned industry licenses and credentials, represented independent agents to lawmakers in Washington, D.C., and built and implemented technology for the agency. MacDonald earned a Masters of Business Administration with distinction from Boston College as a Dean’s Scholar and a Bachelor of Science in Mathematics cum laude from Wheaton in Illinois. Wunderite is a Bostonbased insurance technology company that provides an intuitive customerfacing platform for independent insurance agencies. The Wunderite platform makes insurance transparent and approachable by simplifying and automating the sales and underwriting process. For more information, visit www.wunderite.com.

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Salary transparency can help to retain top talent We live in an information age, in which colleagues share more of their personal selves in the workplace. Today’s employees want full transparency on all levels. Gone are the days when it was taboo to discuss money, wages, bonuses and pay with your colleagues. However, this cultural shift—in addition to various federal and state laws that protect discussion and disclosure of salary information—has confused some employers. Compensation is not just the salary or take-home amount an individual brings home each week. Compensation includes salary, bonuses, profit sharing and retirement benefits, medical benefits, and paid time off. An employer should understand the law around the topic of pay, including the following: The National Labor Relations Act. Salary and wages are working conditions under the National Labor Relations Act, so employees are free to discuss them with each other—and confidentiality provisions or agreements regarding this topic may not be enforceable. Worse yet, trying to enforce these provisions and agreements could land an employer in trouble with the National Labor Relations Board, which enforces the NLRA. Salary history bans. Employers in various major markets around the country are prohibited from inquiring about a potential employee’s previous salary. This means that when interviewing potential candidates—and during the hiring process—employees should not be asked to disclose prior salary. Some states that restrict inquiries into prior pay include: California, Colorado, Connecticut, Illinois, New Jersey, New York and Vermont. These laws have been put in place to help combat the fact that women and minorities historically have been paid less than men for the same or similar work. The Equal Pay Act. The Equal Pay Act is an amendment to the Fair Labor Standards Act. Companies covered by the FLSA also are covered by the EPA. The law requires that employees be paid equal wages regardless of gender. Several states also have enacted their own broader laws that apply to those employees working in their states. To comply with the EPA, it is important that employers have clear job descriptions for each role within the company and that they have business need-based reasoned compensation for each position within the company. These pay differentials can be based in various business reasons such as seniority basis, merit basis, quantity or quality of production basis, or any factor other than sex. It is the responsibility of the employer to show that the reason for a pay differential is business and not gender based. Often, this is called salary banding. The Equal Pay Act, and state equivalents, require that employees be paid equal wages for equal work. Therefore, PIA.ORG

it is a good practice for companies to review their salary bands at least once a year.

Employees are making comparisons Employers should expect that their employees are discussing pay, researching pay, and getting as much information as they can from companies like Glassdoor, Salary. com and PayScale. It is best to have solid compensation strategies and plans in place for every role. It also is important to keep lines of communication with employees open so that discussions about development are part of the plan and managers are not caught unaware for promotion or salary increase requests.

STAFFING

VANESSA MATSIS-MCCREADY Associate general counsel and director of human resources, Engage PEO

Managers should be able to respond to requests regarding an individual’s salary or requests for increases with performance and business neutral facts (e.g., performance on a challenging project leading to future promotions, or increases based on certain position milestones). Often, experience can be a differentiator, too. When having these conversations, managers should listen intently and be careful not to make promises upon which they cannot deliver. Increases should not only be given because someone asked, but

they should be reviewed based on performance and other factors for all individuals on the team.

The hybrid workforce Today, many businesses are working remotely or have a hybrid plan in place. Managers must be mindful not to treat individuals who are working remotely differently than those employees in the office. All employees should be offered similar opportunities to interact with management and the chance to work on different projects regardless of whether they are in-person or working remotely.

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Regular check-ins with all employees are important and managers should focus on employee engagement regardless of which work method they select. In hybrid workplaces, departments may choose to have a set in-person day so that there can be more collaboration and interaction. Maintaining open communication with your team and regularly reviewing pay against market conditions and with compliance in mind is a beneficial practice so that management is prepared for any salary conversations that may arise. Managers should expect that salary is being discussed everywhere, on job boards, in networking groups and amongst colleagues. They should be prepared with the data to support their decisions. Matsis-McCready directs the Engage PEO HR Consultant team, advises internal teams on a wide range of HR compliance matters, and works closely with Engage clients across industries to help them navigate employment law issues. Joining the Engage team in 2014, she supported Engage clients— primarily in the Northeast—on a variety of complex HR and employment issues. Prior to joining Engage, Matsis-McCready was an employee relations manager at a unionized public utility where she managed employee and labor relations issues for more than 500 employees. She also previously handled HR compliance issues for Time Inc.; was an associate at the law firm Kaye Scholer LLP; and served as a law clerk at Kane Kessler P.C., where she supported the Labor and Employment group with a focus on unionized hospitality clients.

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Snowplows, citizenship and licensing, and more Bait-and-switch activities Q. I lost a client to a direct writer that offered him a lower rate on his auto policy. However, shortly after the policy was bound, the client called me up to complain that the direct writer increased the premium. The direct writer did not run the motor vehicle report on the client until after the policy was bound. It discovered an accident that had not been disclosed by the client. Can the direct writer do this? A. Yes. New York State Insurance Law Section 3425 establishes the rules for changing the terms or canceling a personal-lines policy midterm. In general, a company may make changes to the premium or coverage, or cancel a newly issued policy (not a renewal) during its first 60 days by providing a notice and a reason. Here’s the statutory language: (b) During the first 60 days a covered policy is in effect, no notice of cancellation shall be issued or be effective unless it states or is accompanied by a statement of the specific reason or reasons for such cancellation [Section 3425(b)]. In the present case, as long as the direct writer made the changes to the policy within the first 60 days, then it would be in compliance with the law. —Bradford J. Lachut, Esq.

Learner’s permit holders Q. Through an underwriting questionnaire, an auto insurance company learned about a child in the household who just started driving with a learner’s permit. The company is demanding an additional rate for this driver, even though he is not yet licensed. Can the company do this? A. Yes. Essentially, a permit is the same as a restricted license. In fact, the legal definition of a permit is “a written warrant or license granted by one having authority.” Providing that the rating rule is reflected in the company’s approved rate filing, this is a legal practice. While some companies would not pick up or rate for this driver until he or she is fully licensed, there is nothing in the policy or statutory language to prohibit the company from charging for this additional operator in the household. —Bradford J. Lachut, Esq.

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Snowplowing– auto liability Q. My insured has a pickup truck as his personal vehicle. In the winter, he mounts a snowplow on it. He says it is for his personal use. In the event that he may be plowing other people’s property for money, would there be any exclusion of coverage on his personal auto policy?

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A. There is no liability (Part A), medical payments (Part B), uninsured motorists (Part C) or physical damage (Part D) coverage exclusion for an owned pickup used in a business pursuit. Suppose your insured can’t get his truck started one morning, but he gets permission to use his neighbor’s pickup to plow for the people who are depending on him to show up. Expanding on your question, allow me to ask whether the non-owned pickup would be covered for this business activity of your insured? My answer is most likely yes, although you will need to check the edition date of the ISO Personal Auto Policy, or the specific language of an insurer’s independently filed policy. ISO’s 1998 edition introduced coverage for the business use of nonowned pickups under coverage Part A and Part D, followed by the 2005

edition, which introduced this coverage under Part B. With respect to Part D, remember that at least one vehicle must be scheduled for coverage under Part D to trigger coverage for non-owned vehicles. I am assuming that your insured’s business use of the vehicle has not been misrepresented to the insurer. Undisclosed plowing activities could give the insurer a legal basis to deny a claim, depending on the circumstances. Neither a personal auto policy nor a business auto policy will cover the insured for injuries that occur after the plowing has been completed. A commercial general liability policy will be needed to cover this completed operations exposure, but it may require adding the CG 22 92–Snow Plow Operations Coverage endorsement (see Ask PIA 900051 in the Ask PIA database at www.pia.org).—Dan Corbin, CPCU, CIC, LUTC

Citizenship requirements for licensing Q. Can a noncitizen be an insurance agent? A. Yes. On the application to become an insurance agent, there is a citizenship question. If an individual is a noncitizen, it indicates he or she must supply proof of eligibility to work in the U.S.—Katherine Slye-Hernandez, Ph.D.

Symbol 1–named insured Q. My client owns a vehicle scheduled on a personal auto policy. He also has a business auto policy naming him as an individual with covered autos designated as Symbol 1. Will the BAP cover the client while he is operating the vehicle scheduled on the PAP? A. Yes, there will be coverage under the BAP, as Symbol 1 covers the named insured for any auto. Further, this coverage will be primary according to the following provision: 5. Other Insurance a. For any covered “auto” you own, this coverage form provides primary insurance. Since the PAP also is primary for an owned vehicle, claims adjustment will be by pro-rata share.—Dan Corbin, CPCU, CIC, LUTC

Total loss–insurer’s option Q. Following a coastal storm, a client filed a claim for a vehicle that had been immersed in salt water. The client had a $2,000 repair estimate. The company insisted on totaling the vehicle (at about $12,000). The company took the position that, if salt water had come up to the floorboard, it would only give the client the option of withdrawing the claim or accepting the total loss and surrendering the vehicle for salvage. The company said that corrosion would cause her additional problems down the road. The client was adamant about keeping her car—she was driving it. Was the company within its rights? A. Yes. It is the company’s option to require salvage in lieu of repair. According to the Payment Of Loss provision of Part D coverage in the policy, it states:

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“We may pay for loss in money or repair or replace the damaged or stolen property.”—Dan Corbin, CPCU, CIC, LUTC

Additional insured vs. additional named insured Q. Please clarify the difference between an additional insured and an additional named insured. A. It’s not what you call the insured that counts, but it is the coverage afforded that insured under the terms of the policy. A named insured is given unqualified coverage, enjoying the full benefit of coverage provided in the entire policy. All the named insured’s locations and operations are covered automatically unless excluded or limited by endorsement. With no other qualification, an additional named insured would enjoy the same coverage as the named insured—as if a separate policy were issued to that insured (absent independent limits). On the other hand, an additional insured typically is restricted to claims that arise out of the named insured’s operations or premises. An additional insured will need a separate policy to cover its own operations. In that respect, an additional insured is a second-class insured and does not enjoy the full benefit of coverage provided in the entire policy.—Dan Corbin, CPCU, CIC, LUTC