2024 April PIA Vermont

PIA is here to help you navigate through uncertain times, so let’s make sure you have great errors-and-omissions coverage at a competitive price.

Why PIA is the Best Choice for E&O

• Our professional liability and cyber liability programs are designed for your agency’s needs and risk exposures

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• Experience & expertise from our team

IMPROVE YOUR AGENCY’S EFFICIENCY

The insurance industry is ever-changing as technology improves and new business strategies develop. Whether you’re a leader of an insurance agency or a staff member, it’s up to you to make the most these new tools and improve the efficiency of your agency.

Do more with less

Simplify your products

When people are shopping for insurance—or anything, really— they don’t expect to jump through hoops or consider what they are purchasing excessively. That’s why simplifying your insurance products— or establishing a niche—can lead to positive feedback from customers and less confusion on the agency’s end.

Customers are less likely to feel overwhelmed if they have access to products with few premium levels or add-ons. Agents won’t have to handle a massive selection of variables for each product that they have. It’s a win-win.

Less is more for product lines

Following the thread of simplifying the products themselves, this leads into agents simplifying their product lines, as well. For similar reasons, this can be a great benefit for your agency and your customers.

Having a large pool of products to choose from can be just as overwhelming as having a large pool of customization options for a singular product. If you have products that, upon further inspection, seem redundant or overlap with the others, it may be time to cut or bundle them. Again, this leaves the customer less deluged with too many options, and you with a simpler portfolio to manage.

Streamline daily functions

On top of streamlining products and product lines, consider ways to streamline the daily functions of your agency:

Maintain clear internal communications and organizational awareness

In any industry, communication is key. For insurance agents, they must be able to effectively communicate their line of products and make sure that their vision is understood by everyone on the organizational ladder.

This starts with crystal clear internal communication by making sure employees are in the loop about major changes to the agency’s structure or operation. The vision and objective of the agency also should be effectively communicated from the top down, so that each employee has a clear picture of what the agency is trying to achieve.

Don’t forget about your agency management system

You can further increase internal efficiency by having an agency management system handle your data.

Effectively communicate with your clients

Having clear internal communication can keep an agency running smoothly, but what about prospective and client outreach? When it comes to pursing leads, make sure that you prequalify them, so that nobody’s time is wasted.

Once you have leads who are interested in your services, make sure to maintain consistent contact with them, that way they don’t go cold: drafting a follow-up process can help further save time and increase efficiency.

Finally, for your existing clients, you can automate your outreach en masse with newsletter, advertising and email campaigns.

Investing in apps or online claims services can make it easier for clients to start the claims process, and keep them informed of their progress.

Grow and achieve more with agency automation

By Vijay Rengarajan, director of product management, EZLynx

Independent agents face high volumes of paperwork, complex processes, intricate regulations, risk management, and the growing demand for smooth customer service. Agents need to use tools that take on these challenges while improving operational efficiency, simplifying tasks and ensuring a competitive edge.

These benefits can be achieved by investing in agency automation software. From employee workflows to customer and prospect outreach, automation software creates better experiences and helps to increase revenue.

What is agency automation?

Agency automation happens within the agency management system and simplifies repetitive, labor-intensive tasks and processes, including policy administration, claims processing, customer service, billing and marketing. Automation can improve several areas, such as allocation and monitoring of responsibilities, sale and service protocols, and customer engagement methods. Automation can streamline agency operations, and allow employees time to focus on customers and to build revenue.

How automation can help your business

There are numerous possibilities for automation in the insurance industry, including the following:

Helps improve client relationships. Insurance professionals know the importance of establishing and building our client relationships. However, it can be overwhelming to meet daily responsibilities, complete all tasks, and provide superior customer service that your clients deserve. This is where automation software steps in. Instead of staff members spending time monitoring client milestones, automation can track and send out timely communications. Automating touch bases with insureds regarding important dates and updates—from birthdays to renewals and policy change notices—increases client satisfaction. Automation software also enables easy, personalized communication for clients based on their history and preferences, leading to better engagement.

Simplifies document management. Automation software simplifies document management by digitizing paperwork. Policies, clients’ claims, quotes, invoices, and more can be stored in a streamlined, accessible, and searchable database. Automation reduces the risk of losing documents or data, eliminating the need for physical storage spaces and the time-consuming task of manual filing. It also allows for easy retrieval and sharing of data, with optimal data security measures in place. Insur-

ance automation software supports real-time updates for constant system information, and can produce accurate reports quickly, saving resources and time.

Boosts agency productivity and sales. Automation software simplifies (e.g., claims processing, underwriting, policy administration, payments, and reporting). It can perform simple, repetitive, but essential tasks faster and more dependably, to give your staff time for other assignments while reducing human error for greater accuracy.

Increases client retention. Automation allows you to engage with all renewals, assuring maximum retention. It also can assist in analyzing policies during renewal download and prioritize them based on risk. Then, you can concentrate on the clients who are most likely to leave. Meanwhile, customers who are likely to renew will receive automated messages, reassuring them that their policies are in line with the current market and that you are available for further discussions.

Ensures carrier compliance. Frequent dependence on manual procedures can make an agency susceptible to errors and potential issues with compliance. To help adhere to the regulations and industry standards and avoid the stress of accidentally being noncompliant, utilize insurance automation software. Automation streamlines the process of maintaining compliance with industry regulations and carrier standards by updating rules and procedures as they change automatically.

Insurance automation software often includes builtin features specifically designed to address compliance. These may include pre-programmed rules, templates, and review processes that recognize and incorporate new regulations and standards from various carriers.

Collects reviews and referrals from clients. Reviews and client referrals are key to growing your agency, but prompting your clients to write reviews or referrals can be time-consuming. Automation can help you obtain reviews and referrals. After a client has a positive experience with your agency, automation software creates designated triggers that request referrals or reviews instantly.

As you can see, agency automation is a transformative tool that offers significant benefits for agents aiming for swift, affordable growth and enhanced efficiency.

This article is adapted from “Grow and achieve more with agency automation,” which can be read in its entirety on PIA Northeast News & Media (blog.pia.org).

DANIELLE CASWELL, ESQ. Associate counsel, PIA Northeast

Hard market: When carriers withdraw from a market

The hard market has been a recurring topic of conversation over the last several months as something impacting insurance producers nationwide significantly. Diving further into the topic, the recent pattern of carrier withdrawals from various markets has become rather alarming—and it has made a difficult problem even more difficult—as producers scramble to find their clients adequate coverage in these carriers’ absences. Many point to new patterns of extreme weather as the cause of carriers withdrawing from markets. For example, the devastating wildfires in California have caused carriers to rethink risk in the state. The same can be said for Florida and the rest of the Gulf Coast—as hurricanes become even more damaging and routine. Extreme heat impacts the South and middle of the country, and now the Northeast and other coastal states are beginning to see

the insurance impacts on premiums and availability due to flooding and windstorms. The consensus is that California, Florida, Texas, Colorado, Louisiana and New York now seem to be the most difficult states to insure a home.1 Major carriers have been retreating from at-risk areas and small insurers have been driven out by claims that have overwhelmed their finances, leaving many home and property owners to rely on last-resort state programs.2

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There also are other significant contributing factors besides extreme weather that have been leading to the withdrawal of insurers from certain markets. In fact, the hard-market crisis in certain states is largely connected to human action in the form of frivolous lawsuits and fraudulent claims.3 Litigation costs have skyrocketed, forcing local, residential-only insurers to become insolvent while driving up premiums and decreasing policy offerings by national insurers.4 Additionally, insurance carriers have cited increased costs due to inflation as a reason for withdrawal.5

The regulatory environment is proving to be less than ideal to help the situation. For example, in California, insurers have been blocked from increasing rates above certain thresholds, which they cite as a reason for their inability

HOP ON OVER FOR SOME

to cover costs of their policies.6 Insurance Information Institute spokesman Mark Friedlander has been quoted as saying that insurance rates have been “artificially low” for decades now, with carriers writing business for very high risk and losing money.7

However, it does seem that the federal government is beginning to wake up when it comes to the detrimental impact climate change is having on the nation’s property insurance industry—especially because of the scrutiny it is receiving as premiums have been soaring and at-risk regions are losing carriers.8 The U.S. Treasury Department, two U.S. senators and a national group of state regulators have launched various inquiries into just why the industry is destabilizing, thus forcing property owners to pay these much higher rates or skip out on coverage altogether.9 These efforts are being undertaken in the hope that the federal government will be able to better understand how climate change is impacting everyday costs for Americans, as well as develop ways to make property insurance more accessible.10

In the meantime, where does that leave us?

Navigating a carrier withdrawal

While the hope is to never be impacted by a carrier withdrawal, recent trends suggest it may be something that will touch your business. When insurance carriers withdraw from a market, there is a range of legal and regulatory considerations insurance producers must keep in mind to protect their agencies and clients. Here are a few things to consider:

Notification requirements. It is essential that insurance producers are aware of the legal requirements in connection with notification— not only to policyholders—but to producers, as well as state regulatory agencies. Many such agencies are concerned with the potential disruptions associated with carrier withdrawal, and in some instances, they have begun to adjust their notification requirements. For example, for both admitted and authorized nonadmitted carriers in Connecticut, Bulletin PC-34-2311 issued in September 2023 updated and replaced prior stipulated notification requirements for carriers seeking to discontinue or substantially reduce “its writings in a line or subline of property and casualty insurance.”12

Regulatory compliance. Every state has its own insurance regulations. Therefore, it is critical that producers remain updated on them and in compliance when a carrier exits a market. This includes knowing any state-specific rules for each state in which you conduct business so that when it comes time to transfer or replace a policy for a client, there are no legal violations in the process. For example, in New York state, the Department of Financial Services under Section 3425 of the New York Insurance Law13 has detailed strict procedures for creating and getting approval of a carrier plan for withdrawal, and understanding this as a producer will better help you navigate this type of situation with your business and clients.

Policy transfers and replacements. As part of a carrier withdrawal, a producer will most likely have to transfer a client’s policy to another carrier or replace policies altogether. When doing so, producers must be mindful of the new policies they are

securing—they should be equivalent, if not superior, in coverage to what the clients had previously. It also is important to notify a client of any changes, explain these changes, and receive client consent.

Fiduciary responsibilities. Insurance producers are fiduciaries, and they are required to act in the best interest of their clients. Make sure you are familiar with the fiduciary requirements of the states in which you conduct business, as well as any other heightened duty requirements imposed by your state. For example, in New Jersey, the outcomes of several state Supreme Court cases14 indicate that there is an expected heightened duty of care upon producers in the state to render advice to their clients regarding choices to be made concerning

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coverages and other information on their policies. This type of heightened duty will be important in situations, such as a carrier withdrawal.

Record-keeping and documentation. In general, it is best practice to maintain accurate and detailed records, including all communication with carriers and policyholders. The implications extend beyond just helping clients and your business navigate through a carrier withdrawal—quality record-keeping is a good idea in all instances for errors-and-omissions purposes.

Summing up

Handling these situations in an ethical manner are paramount to your business reputation and to the health of your client relationships. You can do so by providing honest and clear information about a carrier withdrawal and the options available to your clients. This also can be accomplished with awareness and full compliance when marketing policies, as well as staying informed and educated of legal and regulatory updates.

Keep in mind that to truly protect yourself and your business in the event of a carrier withdrawal, it is best for you to consult legal professionals representing your agencies or compliance experts in their field.

It is of utmost importance to stay connected to regulatory bodies, as well as PIA Northeast, as we will continue to monitor the market and producer feedback and provide updates to members should there be any developments involving a carrier withdrawal.

Caswell is PIA Northeast’s associate counsel.

“There is no way I could get by without PIA.”

—Richard A.Mayo, CPCU

“I am so proud of being a PIA member!”

—Robert Charles Robert Charles Brokerage Inc. Romay Insurance Services

What are the benefits of a cybersecurity mesh?

Cybersecurity mesh is a modern approach to network security that allows policies to be tailored and enforced around a user’s or device’s identity, rather than focused on a centralized network. Instead of having all the policies centralized, this approach makes it possible to wrap security controls around each device or individual, regardless of their location. This decentralized approach offers a significant advantage—especially in an organization dependent on remote work.

With cybersecurity mesh, protection extends to individuals in any location rather than confined to a physical office space. This flexibility enhances security and supports efficient digital collaboration and productivity.

A cybersecurity mesh can provide many benefits to organizations—including insurance agencies. By creating a secure network of interconnected devices, networks are protected from malicious actors attempting to access sensitive data. Additionally, cybersecurity meshes can help protect from data theft and unauthorized network access.

The architecture of cybersecurity mesh

Cybersecurity Mesh Architecture can be understood as a web of connected security applications and controls applied at an individual level. This architecture is crucial because it allows for flexible, scalable and robust cyber security solutions that can adapt to the ever-evolving landscape of cyberthreats.

Decentralized security control. Traditional security measures function based on a central server or system. In a CSMA, security controls are distributed across all devices and users. This decentralized approach ensures that each individual and device operates within its secure boundary.

Identity-centric protection. The next feature of this security architecture is decentralized identity management, which places the identity of the user or device at the forefront for identity proofing. Each user or device is given a unique identity, and protection measures are wrapped around these identities. This allows for a highly targeted approach to cybersecurity that can be tailored to specific needs.

Interconnected security nodes. In the CSMA, security nodes are interconnected. These nodes could be individual devices, users or even software applications. They are connected so that if one node detects a threat, it can share this information with the rest of the network. This interconnected-

ness allows faster detection and reaction to threats, minimizing potential damage.

Scalability and adaptability. CSMA is designed to be scalable and adaptable. As the number of devices or users in a network grows, the mesh can expand to accommodate them. The mesh adjusts accordingly if a device or user is removed from the network. This scalability and adaptability are crucial in the modern digital world, where the number of connected devices is increasing rapidly.

Implementation of policies and protocols. The architecture of a cybersecurity mesh also involves the implementation of robust policies and protocols. These protocols can govern everything from user authentication to data encryption. Policies can be tailored to the specific needs of each user or device, ensuring a high level of protection that also is flexible and adaptable.

Integration with existing systems. CSMA is designed to be integrated with existing systems. This includes everything from legacy software applications to cutting-edge cloud technologies. This integration allows for a seamless transition to a cybersecurity mesh approach and ensures that all systems are protected, regardless of age or complexity.

Significant benefits of cybersecurity mesh

The cybersecurity mesh brings myriad benefits to the table, all tailored toward enhancing the security of an organization’s digital infrastructure. Here are the key advantages:

Enhanced security. By isolating devices and identities, cybersecurity mesh limits the potential for widespread breaches. Even if one device is compromised, the damage is restricted to that device alone, preventing a domino effect.

Scalability. As the digital landscape expands, so too must our security measures. The cybersecurity mesh is inherently scalable. As you add more devices and identities to your network, the mesh grows and adapts.

Flexibility. The cybersecurity mesh is not a one-size-fits-all solution. It allows customization based on each identity’s or device’s unique security needs. This flexibility ensures no device is left under-protected or over-encumbered with unnecessary security controls.

Improved threat detection and response. The interconnectedness of the cybersecurity mesh allows for rapid detection and response to threats. If one node detects a threat, the rest of the network is immediately notified, which allows for a quick, coordinated response.

Seamless integration. Often, implementing a new security solution means overhauling your existing systems. However, cybersecurity mesh is designed to integrate seamlessly with your current infrastructure, minimizing downtime and disruption.

Cost effective. Because the cybersecurity mesh is scalable and integrates into your existing systems, it is a cost-effective security solution. You pay for the level of your agency’s security posture that you need, and as your agency grows, you can scale up without significant capital expenditure.

Facilitates remote work. The COVID-19 pandemic has ushered in an era of remote work and new security challenges. The cybersecurity mesh is wellsuited to these challenges because it can extend to any location—ensuring that remote workers are as secure at home as they would be in the office.

Regular device compliance. As the digital world grows, so does the regulatory landscape around it. The cybersecurity mesh can help ensure your agency stays compliant with various cyber security regulations, such as the New York state’s cyber security regulation or General Data Protection Regulation, by providing robust, adaptable security.

Future-proof. Cybersecurity is not a static field. It constantly evolves, and the cybersecurity mesh is designed with this evolution in mind. Thanks to its flexibility, scalability and integration capabilities, the cybersecurity mesh is a future-proof solution that can adapt as your organization’s needs change and new threats emerge.

Increased trust. Implementing a cybersecurity mesh can increase trust in your organization. Clients, customers and employees can have peace of mind knowing that their data is secured using the latest, most effective security measures.

Who needs cybersecurity mesh?

Below are the main groups of people who need to consider implementing CSMA in their organization:

Businesses with remote workforces. Organizations that have embraced a remote-work culture can benefit immensely from cybersecurity mesh. This architecture ensures that all remote devices are secure, maintaining the integrity of the organization’s data and systems, irrespective of the geographic location of the workforce.

Tech-driven startups. Given their innovative ideas and intellectual property, startups operating in the digital space are prime targets for cyberthreats; a cybersecurity mesh provides a robust security posture while being adaptable to the changing needs of a growing startup. Health care institutions. Health care institutions handle sensitive patient data that must be protected under regulations like HIPAA. Cybersecurity mesh can help safeguard this data, ensuring compliance and maintaining patient trust. Educational institutions. Schools, colleges and universities implementing tech-driven learning methods need cybersecurity mesh to protect student data and institutional resources, providing a safe digital learning environment.

Financial institutions. Banks, credit unions, investment firms and insurance companies can leverage cybersecurity mesh to protect sensitive financial data and transactions, ensuring compliance with financial regulations and maintaining client trust.

Government organizations. Cybersecurity mesh can help government organizations secure sensitive data, protect against cyberthreats and comply with regulatory standards. It also supports secure remote work, which can benefit public-sector employees.

E-commerce platforms. Online retail platforms handle vast amounts of customer data and financial transactions daily. Implementing a cybersecurity mesh can help protect these platforms from data breaches and cyberthreats, fostering customer trust and promoting a secure shopping environment.

Conclusion

Cybersecurity mesh is a practical and comprehensive approach to protecting your agency from cyberthreats. It introduces a versatile

architecture that decentralizes security measures, empowering individual treatment of each access point, while ensuring comprehensive protection. This innovative approach elevates the security of remote workers and diverse digital assets by adapting to their specific needs and vulnerabilities. By understanding your current infrastructure and implementing the right cybersecurity mesh solution, you can help ensure your data is secure for your remote workforce, and increase customer, employee and partner trust.

Yager has been helping organizations build successful roadmaps for their business goals for over 15 years. His experience spans a multitude of industries, but his effectiveness comes from understanding each organization individually and their specific challenges. He is a virtual chief information officer with TAG Solutions, an information technology managed services agency that helps organizations develop and enhance their information security programs, reduce risk and achieve compliance with state and federal information security regulations. TAG Solutions’ Cybersecurity Mesh secures digital infrastructures, and its comprehensive security suite protects organizations from the ever-evolving digital age threats. Additionally, Tag Solutions has partnered with PIA Northeast to offer association members agency-specific security plans. For more information, log on to www.pia. org/quote/tagny.php.

HARRINGTON-DESCOTEAUX Performance coach, Agency Performance Partners

10THE SECRETSTOSUCCESSFUL AGENCYMANAGEMENT BUILD YOUR OFFICE CULTURE

Welcome to the never-boring world of insurance agency management, where the culture you cultivate can make or break your success. Let’s chat about how to build a culture that not only lifts your agency to new heights, but also makes it a great place to work. So, grab your drink, and relax while I spill the beans on the 10 key steps that can transform the agency’s culture and your work life.

STEPHEN

No. 1: Cultivate a clear vision and goals

First things first, you must have a clear vision and goals. As the leader of your agency, you’re more than just an employer, you are the captain of the ship, and it’s your job to set the course. You must be the compass that guides the team. It takes hard work and dedication. This means having a clear and compelling vision that everyone on your team understands and connects with.

Then, break this vision down into achievable and measurable goals. It’s not just about setting targets; it’s about giving your team a roadmap to success. It’s kind of like drawing a treasure map for your team, showing them the path to success (the treasure). When they see the map, understand the journey, and what the treasure looks like, trust me, their engagement and motivation levels will skyrocket.

No. 2: Foster open and transparent communication

The next tip I’ve got to share is about something that’s worked wonders for me. It’s all about open and transparent communication within your team. Think of it as this secret ingredient that just binds everything together. Now, here’s the key: you’ve got to cultivate this space where everyone speaks freely and honestly. It’s not just about letting people talk; it’s about truly listening, giving real weight to their ideas and feedback.

But there’s more to it. Make sure every person feels like he or she is being heard. It’s like unlocking this hidden potential in your team. You’ll be amazed at how quickly problems start to untangle themselves, how creativity just starts to blossom—and before you know it—there’s this incredible sense of community that forms. It’s like flipping a switch that lights up the whole room. Trust me, fostering this kind of environment is like discovering a secret passage to a more cohesive, innovative and connected team.

No. 3: Prioritize continuous learning and development

The insurance industry is ever-evolving, and the most successful agencies that I work with prioritize continuous learning and development. Keeping your team’s skills sharp and knowledge fresh is like having a secret weapon. Here’s what to do: Invest in the team’s growth. Send your employees to training sessions, workshops and industry conferences. But here’s the real secret sauce—make it engaging and fun. Maybe throw in some team challenges or learning competitions—you know, to spice things up. When your team members are always learning and growing, they’re not just better at what they do; they actually feel like they’re a crucial part of the agency.

And there’s a bonus to this: it creates this buzzing, vibrant atmosphere at work. Everyone’s excited, ideas are flowing, and there’s this sense of moving forward together. It’s like igniting a fire that keeps burning with new energy and ideas. Seriously, try making learning a core part of your team’s journey, and watch how it transforms your workplace.

No. 4: Implement flexible work practices

The workplace is changing at a record pace. It’s all about embracing flexible work practices in the workplace now. I know it might sound standard, but here’s the secret part: it’s about so much more than just letting people clock in and out at different times. You’ve got to tune into the unique rhythms and life demands of your team. Think about it—some employees might be night owls, other employees might be early birds, and some employees might have family commitments. Offering the option to work remotely, or adjusting work hours to fit their personal schedules, can make a world of difference.

This isn’t just about work-life balance (which we will review next); it’s about showing your team members that you genuinely care about their wellbeing. When they see you’re trying to accommodate their lives outside of work, you’ll be amazed at the loyalty and productivity that comes back to you. It’s like unlocking this hidden potential in your team that you never knew existed. Plus, happier employees often mean happier clients—it’s a win-win.

No. 5: Encourage work-life balance

In the whirlwind of agency life, it’s easy to zoom past the fact that there’s a world beyond the office walls. It’s all about championing an amazing work-play harmony. Think of it like mixing the perfect cocktail of productivity and downtime. You’ve got to make sure your team members are shaking up their routine with some well-deserved vacation time, stirring in regular breaks, and

maybe even blending in some chillout zones in the workplace. It’s like being the maestro of a symphony in which work and life flow in perfect harmony. Remember, a team that’s all work and no play is like a phone on 1% battery—not super effective and about to shut down. Keep the energy up and the creativity flowing by making work-life balance a part of your agency’s vibe.

No. 6: Establish a recognition-andreward system

Here’s the secret: Get to know your team and what they like. Make it personalized. Most of the time it’s not just about the recognition itself; it’s about creating a culture in which everyone feels seen and appreciated. It’s like planting a seed of positivity that grows into a tree of team spirit. A small gift (favorite: candy, beverage, etc.), a pat on the back, or a well-timed “thank you” can be like a ray of sunshine on a cloudy day. Start with simple gestures— like acknowledging someone’s hard work in a team meeting or sending a personalized thank-you note. You wouldn’t believe the buzz it creates.

You also can introduce some fun, low-key rewards—things like the “Star of the Week,” or a small treat for the team after a big project. These aren’t just about giving out perks; they’re about showing your team that you see and value their efforts. So, try sprinkling a little bit of appreciation here and there. You’ll be amazed at how it can transform the atmosphere in your workplace.

No. 7: Build a collaborative team environment

Most of us have heard that two heads are better than one, but why stop at two? Remember, the more, the merrier. When it comes to sparking real innovation and energy in the office, we can stir things up with some team-building activities. Not just your run-of-the-mill trust falls and group chats, but really fun stuff like office scavenger hunts or problem-solving escape rooms. Then, mix in regular brainstorming sessions in which everyone—and I mean everyone— throws their ideas into the pot, no matter how out-there they seem.

What if we also created chances for people to collaborate on actual projects. It’s like watching a group of artists creating together, each bringing their own unique vibe to create something amazing. And, the result? The office feels more like a community than just a place to work. We need to focus on a nurturing environment in which teamwork isn’t just encouraged; it’s the norm.

No. 8: Foster accountability and responsibility

This next little nugget is more like a Golden Rule: accountability and responsibility. But, there’s a trick to making it work wonders.

You must lay down crystal-clear expectations—everyone needs to know exactly what’s in their wheelhouse. We can’t just tell people what to do; we must give them the space and the tools they need to own their roles. Think of it like a chef in a kitchen; each person needs the right ingredients and the freedom to create his or her masterpiece. Then, here’s the crucial part: trust. It’s like handing over the keys to the car. Once you’ve set your expectations and provided the resources, step back and let your team members drive. Trusting them to deliver is a game-changer. It’s like you’re saying, “I believe in you,” and that belief can light a fire under them.

When people feel that their work is truly their own, they put more heart into it.

No. 9: Embrace diversity and inclusivity

Here is something every leader should know: Your agency needs to embrace diversity and inclusivity. These might sound like buzzwords that everyone throws around—but trust me, there’s a secret power in them.

Take a step back and then think of your team as this amazing mosaic of different pieces, each with its own unique color, shape and texture. Embracing diversity means you’re not just acknowledging these differences; you’re celebrating them. It’s like having this incredible palette of experiences and viewpoints at your fingertips.

The cherry on top: This inclusive vibe doesn’t just make your team stronger, it also reflects in how you connect with your clients. They come from all walks of life, right? So, when they see that your team really gets them, that’s when the real magic happens in business relationships.

No. 10: Lead by example and inspire

As we are nearing our last bean, here is the most powerful advice I have to give, it is that of transformative leadership. You must lead by example and inspire your team. Now, this isn’t just about ticking boxes on a leadership checklist, it’s about embodying the very essence of the values and culture you want to see in your agency.

Imagine yourself as the lighthouse for your team. Your actions, your attitude and your behavior—they’re like the beams of light that guide ships through the dark. You’ve got to display qualities like integrity, dedication and empathy— not just in words, but in every action you take, and every decision you make.

When you live and breathe these qualities, you become more than a leader; you become an inspiration. It’s like you’re the spark that ignites a fire in your team. They start to see in you the kind of person they aspire to be. And before you know it, they’re not just following your lead, they’re walking alongside you, sharing your vision, your dedication and your passion.

This kind of leadership is like a force of nature. It transforms the atmosphere of your workplace. People are motivated—not out of obligation—but out of a genuine desire to mirror the greatness they see in you.

So, step into those shoes of a leader who leads not just by words but by example. Be that powerful force that inspires and uplifts your team. It’s one of the most impactful secrets of leadership, and it can change the game for you and your agency.

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Final thoughts

Building a thriving culture in your insurance agency isn’t just about the bottom line; it’s about creating a place where people feel valued, engaged and part of something bigger. It’s about balancing the achievement of goals with nurturing a positive and supportive environment.

Remember, a great culture is a journey, not a destination. It requires continuous effort and commitment, but the rewards—a motivated team, satisfied clients and a successful agency—are well worth it.

So, as you go back to the drawing board to reflect on your agency’s culture, keep these 10 steps in mind. They’re your roadmap to creating a workplace that’s not just productive but also happy, inclusive and thriving. Here’s to building a culture that sets your agency apart!

Harrington-Descoteaux has led both small and large independent insurance agencies for over 20 years. Before joining Agency Performance Partners in 2022 to pursue his passion for training and coaching, he excelled as a chief operations officer, refining his expertise in operational efficiencies and strategic planning. APP has become a pivotal force for insurance agencies seeking sustainable growth, leveraging Harrington-Descoteaux’s extensive experience and operational acumen. With a keen understanding of the industry’s challenges, APP offers a comprehensive program equipped with innovative tools and strategies to help clients overcome obstacles and achieve success.

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Business-growth objectives to become the gateway

The information era has transformed the dynamic in the insurance and financial services industry. Clients no longer need to come to you for the basics. They now control the purchasing process with access to more information than ever before. We still succeed by providing value to our clients, but how we provide that value has changed.

I’m going to share with you a powerful approach to unlocking your agency’s full potential. It employs a radically different practice management mindset that involves shifting your focus from sales, to service and client relationships. In this model, building deep relationships with your clients by providing unrivaled service offers the greatest potential for consistent, long-term growth.

Think of other businesses often referred to as practices (e.g., medical clinics and law firms). We refer to them that way because they offer an expertise-based service that fulfills a specific set of needs. Generally, we don’t think of interactions with legal and medical practices as transactional. However, like any business, they must generate a profit to survive. They provide value through the expertise and solutions they offer, and they generate profit

through the relationships they build. The same is true for your insurance agency. To accelerate growth in your agency, you must first shift from a transactional-mindset to a relationship-mindset, placing service over sales.

Become the gateway

Your goal is to become the gateway to all your clients’ insurance and financial services needs—even those you don’t offer through your agency. When clients have questions about protecting their physical or financial assets, the first person they should think of is you. They should see you as a partner in helping them to manage risk protection and achieve their financial goals.

Focus on five business-growth objectives for becoming the gateway:

1. Build a high-performance team

2. Maximize the sales process

3. Deepen client relationships

4. Optimize operations

5. Lead with purpose

Let’s explore how each of these objectives works to transform your agency into an indispensable source of value to your clients.

Building a high-performance team

A high-performance team provides unrivaled, professional service and solutions to clients. They perform to high standards of excellence and are committed to a common vision, working together to achieve superior results.

To build a high-performance team, you first define your desired organizational structure, focusing on roles rather than people. Then you assess the capabilities of your current team to identify opportunities and gaps. From this assessment, you can identify:

• team members who require further development in their current roles;

• team members who may advance into specialist roles;

• new team members you will need to hire to achieve your goals;

• crucial conversations you must have with team members who are not performing to high standards; and

• partnerships you want to develop with experts outside of your organization who provide products or services you do not.

Developing and executing this organizational structure and staffing plan is the first step in building a practice that provides your clients with unmatched expertise and unrivaled service.

Maximize the sales process

Putting service over sales does not mean you ignore the sales process. However, it does mean that you focus on building relationships throughout the sales process. When you consistently put clients first, the sales will follow. To accelerate agency growth, we recommend focusing on three areas: lead generation and management, appointment-setting, and conducting powerful client meetings.

Lead generation and management. People do business with people they know and trust. Focus your efforts on generating new leads through client referrals and centers of influence. Prospects will be more open to speaking with you when you are referred by someone they trust. You also should develop a plan for identifying leads within your existing book

of business. We believe each household has up to 10 opportunities. One highly successful strategy we use is what we call a retooling day, when we contact every client to update their information in our database. These conversations almost always uncover additional client needs.

Appointment-setting. Appointments are the lifeblood of your agency. You must schedule enough appointments every day to ensure a consistent selling cycle. We recommend holding a minimum of 10 agency appointments every day.

Conducting powerful client meetings. Every client meeting is an opportunity to deepen the relationship, learn more about them, and uncover additional needs. This fivestep process will ensure consistent, powerful client meetings every time:

1. Gather information. Getting a 360-degree view of your clients is essential for building a comprehensive plan.

2. Give information. Use the meeting as an opportunity to remind your clients of the value you provide, and to explain what sets you apart from the competition.

3. Provide recommendations. Partner with clients to determine the best solutions for their family or business.

4. Pivot. Never try to sell your clients anything other than what they came in for that day. Instead, pivot to identify next-focus topics for future appointments.

5. Close. One of two things must happen at the close of any meeting (preferably both): You need to close the sale the client

came in for, and to identify the next product or service to schedule a subsequent appointment.

Implementing a consistent meeting process provides value to your clients and can generate opportunities for additional business.

Deepen client relationships

Your book of business is one of the most powerful lead-generation tools you have. When working with agencies, I am often surprised at how infrequently they stay in touch with clients after the initial sale. Many only reach out to clients once a year at renewal time.

You must stay top of mind with clients to maintain the relationship and retain their business. We use a client engagement matrix to ensure we connect with clients at least seven times a year. We also recommend scheduling an annual review with every client every year. This annual review is not a sales meeting. In addition to ensuring your clients have adequate coverage, it reinforces your position as the gateway to all their insurance and financial services needs.

The experience your clients have with your agency is as important as the products and services you provide. At a minimum, clients expect a positive experience with every interaction and across every channel. Whether they are connecting with your business in person, online, over the phone or via email or text, your clients expect convenient, friendly and knowledgeable service. Take time to examine the client experience to remove pain-points and identify opportunities to enhance service.

We often say that a value proposition is a promise to your clients—a promise to deliver superior service and provide quality products and services that they truly value and need. Make sure you are delivering on your promise with every client interaction.

Optimize operations

In today’s environment, agency leaders must think like business owners. Establish processes to regularly monitor key business metrics and financials, and to assess the return on investment of different strategies. You should know and be able to justify the percentage of each expense line-item in your budget.

Providing unrivaled service while also managing expenses requires streamlined processes. Documenting processes and workflows will create consistency and make training team members more efficient. Another highly effective strategy for streamlining operations is creating talk-paths for client interactions. Documented processes along with talk-paths ensure all clients receive the same information and level of service, regardless of which team member they speak to.

Lead with purpose

Streamlined systems and processes—and team training and development—are essential elements in a high-performance organization. However, the element that has the greatest influence on high performance is your agency’s culture. What has the most influence on culture? You.

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Promote a serve-first culture. Team engagement is the true measure of leadership. To create a serve-first culture, you must put a framework in place to build connections, create consistency and foster collaboration.

I’m sure you are familiar with many of the tools used to provide direction and guidance for teams, such as vision and mission statements and core values. We recommend going a step further. Define team behaviors to emphasize that how the team works together is as important as the results it achieves. Implement weekly team meetings and scorecards to track key performance indicators. Develop conflict resolution guidelines for the inevitable disagreements that arise. Schedule one-on-one quarterly conversations to clarify expectations, make course corrections and refocus on priorities.

Agency principals own what happens in their agencies—good or bad. To create a high-performance, serve-first culture, you must first establish a framework for success, and then ask yourself each day: What am I doing to build connections, create consistency, and foster collaboration within my team?

Organizational alignment

Now that we have examined these business-growth objectives, how will you use them to reach your goals? Consider the following chart:

Organizational Alignment

Focusing on these five business objectives creates alignment of purpose, people, and processes across your organization. Together, they provide direction and focus that increases team engagement, strengthens client retention, and unlocks the full potential of your agency.

Hubert is a principal at Korsgaden International, a company specializing in the seamless distribution ecosystem, global marketing, strategy and execution, agency building, and technology implementation for many of the world’s largest insurance carriers and financial services companies. To learn about Korsgaden International’s Practice Management Program, contact Hubert at michelle@korsgaden.com.

BRIAN REFICI Vice president, MarshBerry

Control your destiny: Create predictable organic growth TRENDS

If your agency’s or brokerage's profits are up one month, and down the next, it may start to feel like you’re on a rocking boat, longing for the solid ground of consistent, reliable growth. Good news: there are many ways to create predictable growth and drive reliable profitability. By focusing on predictable, profitable organic growth, your business will not only grow, but it will thrive. Here are ways to drive PPOG.

No. 1: Lean on data and benchmarking

Benchmarking is imperative to stay successful in multiple areas, including recruiting, expanding product and service offers and maintaining productivity. Comparing your business to the industry’s best will help you identify business growth opportunities and identify stagnant areas. Understanding key performance indictors is imperative to determine if your firm is performing its best. Top KPIs include the following:

Sales velocity. Defined as total new business divided by prior year’s total fees and commissions, sales velocity is one of the best indicators of how well you are growing organically. Once sales velocity is established, subtract leakage (which includes rate, retention and exposure changes) to understand the true organic growth that was achieved. This chart illustrates both the average and top performing (Best 25%) firms’ sales velocity and organic growth.

Sales velocity and organic growth benchmarking

Last 12 Months, Mid-February 2024

The “right” expenses. The average company can control costs across three main areas—compensation, selling, and operating. A general rule is to target total compensation and selling expenses to 65% of revenue and operating expenses to approximately 15%. Net Unvalidated Producer Payroll is a critical measure of how much a firm is reinvesting in its future. Targeting 2%-3% as part of selling expenses should be every business’s targeted NUPP approach to spending. Choose a spend approach that focuses on controlling costs and removing unnecessary expenses that cut into profits.

EBITDA margin. Once the expense base is optimized toward the right expenses, EBITDA margin (earnings before interest, taxes, depreciation and amortization divided by total revenue) can be tracked meaningfully. Based on the guidelines above, the average firm produces approximately 20% in EBITDA margin. Assess your performance for steady improvements to further drive growth objectives.

The rule of 72. Do you know what annual organic growth is needed to double your agency? Do you use the rule of 72? To apply this to your agency, divide 72 by your growth rate and you’ll get the number of years it will take to double in value. Now you’ll need a strategy to make that number a reality.

Source: MarshBerry’s Perspectives for High Performance-Best 25% represents top quartile. Data as of Feb. 13, 2024

It may surprise you that the top performing firms across MarshBerry's proprietary financial management system Perspectives for High Performance, have achieved approximately 19.3% organic growth on approximately 22.6% sales velocity and approximately 32% EBITDA margin while reinvesting over 4% in new producers.

When you look at metrics of competitors, how do you compare? Most importantly, where can you make adjustments that lead to predictable profits?

No. 2: Create a growth-driven sales culture in your agency or brokerage

Being focused about growth often is overlooked within a business. Here are some tips:

Be intentional. Create a culture in which wins are celebrated. Include the growth-mindset in recruiting, communications, recognition and core values. Hold individuals accountable for being complacent and failing to improve or innovate. Ask your employees for barriers preventing them from meeting sales goals or supporting clients. Make sure they understand how their role contributes to broader firm goals. A key driver of PPOG is to have engaged and productive employees.

Process driven new customer acquisition. Now that there is a conscientious decision to focus on profitable growth, adapt a process-driven, new-customer acquisition strategy. This includes setting producer goals around new business, providing tools for vertical specialization, and mentorship for junior sales professionals to set meetings and accompany your senior producers.

No. 3: Begin with the end in mind: Use strategic planning as a growth tool

Creating a business plan to reach that revenue goal and fill your pipeline with clients is essential for enabling success and measuring progress. This should be an ongoing process that requires continuous review, adaptation and refinement. To strengthen your plan, partner with a trusted consultant who has expertise in the insurance industry. An expert perspective can ensure your plan is complete, help you assess progress on your strategy regularly, and drive accountability across your organization. Plus, they’ll help you design a plan— not just for your overall firm—but for each producer.

Insightful data, strong growth culture, and thorough strategic planning are the keys to sustainable, long-term profitable growth. These areas help you uncover opportunities, identify weaknesses and tackle improvement areas. Share your growth mindset with stakeholders and employees to influence a transformation across the organization. And remember—without data and a plan, you’re just guessing.

Refici joined MarshBerry in 2021 as a vice president within MarshBerry’s Financial Advisory team. His current responsibilities include acting as a client-facing lead on merger & acquisition and financial consulting projects, developing strategy and implementation of client deliverables, and recognizing opportunities for growth that enhance client satisfaction. Founded in 1981, MarshBerry is a global leader in financial advisory and consulting services serving the insurance brokerage and wealth management industries to help clients grow and advance their business strategies. With locations across North America and Europe, MarshBerry market-sector expertise includes property/casualty agents & brokers, employee benefit firms and specialty distributors, partners in InsurTech, capital markets and insurance carriers, as well as registered investment advisers, retirement planning and life insurance firms. Clients choose MarshBerry as their trusted adviser for every stage of ownership to help them build, enhance and sustain value through Financial Advisory solutions (investment banking; merger & acquisition advisory, debt & capital raising, business consulting), growth advisory solutions (organic growth, aggregation, leadership, sales & talent solutions) and market intelligence and performance benchmarking.

Have a question? Ask PIA at resourcecenter@pia.org

HO/cannabis, nonresident agencies, LLCs and more

FEMA requires agent number, agency NPN on NFIP policies

Q. If a producer’s National Producer Number is missing from the National Flood Insurance Program policy, will the policy be canceled?

A. No. PIA National and Federal Emergency Management Agency representatives met in October 2023 to discuss the proposed regulatory change. At the meeting, FEMA assured PIA National that—at least in 2024—NFIP policies would not be invalidated or nonrenewed because an NPN was missing. However, it’s important to note that FEMA retains the regulatory flexibility to reverse its plan and initiate comprehensive enforcement of this new mandate. PIA members should reach out to their Write-Your-Own partners to ensure their systems are up-to-date and prepared to accommodate both agent and agency NPNs.—Theo Alexander

Home warranty products

Q. My clients keep asking me about companies that offer water-line replacement and sewer-line repair services for homeowners. They are asking whether they should purchase this protection. What should I tell my clients?

A. You should tell them that these products are not insurance, which is why they should view them with caution. Usually, these products are offered by warranty companies, and they have more in common with appliance maintenance contracts than with actual insurance policies.

PIA has fielded numerous calls from members complaining about warranty products. Most warranty companies are not regulated by state insurance departments—one notable difference in the Northeast is New York state, which does regulate service contract providers—as they are not considered insurance.

This makes the purchase of warranty products a risk, as there is little oversight over the company and little assurance that the company will exist when an event occurs that would trigger the warranty. In addition, the warranty contracts can be limiting in what they actually cover. If your clients do want to purchase one of these products, it is important that they read the terms of the

warranty contract closely to make sure they understand what they are purchasing.

If your clients are interested in purchasing an actual insurance policy that should cover water-line replacement and sewer-line repair services, the Insurance Services Office Inc. filed an optional HO 06 69 Utility Line Expense Coverage endorsement in 2020. The endorsement is designed to provide for direct physical loss to a utility line for certain specified perils. The basic limit is $10,000, with increased limit options of $25,000 and $50,000. Limited coverage is provided for Loss Of Use and Ordinance Or Law. Premiums are adjusted to reflect the age of construction.—Dan Corbin, CPCU, CIC, LUTC

Homeowners coverage and cannabis

Q. Does the current ISO homeowners policy exclude materials and cannabis activities?

A. Other than loss by government seizure, there is no property exclusion in the 2011 edition homeowners policy. Section II–Liability Coverage of the policy contains the following exclusion for bodily injury and prop-

erty damage arising out of federally controlled substances, which includes marijuana.

8. Controlled Substance

“Bodily injury” or “property damage” arising out of the use, sale, manufacture, delivery, transfer or possession by any person of a controlled substance as defined by the Federal Food and Drug Law at 21 U.S.C.A. Sections 811 and 812. Controlled substances include, but are not limited to cocaine, LSD, marijuana and all narcotic drugs. However, this exclusion does not apply to the legitimate use of prescription drugs by a person following the orders of a licensed physician.

The more recent 2022 edition homeowners policy addresses cannabis in a more comprehensive manner. The policy has been revised to exclude cannabis as covered property, except for prescription drugs and goods or products containing or derived from hemp. It also excludes any liability arising out of the use, sale, manufacture, delivery, transfer or possession by any person of cannabis, regardless of whether such cannabis is considered a controlled substance. However, limited property and liability coverage endorsements are introduced as an option.—Dan Corbin, CPCU, CIC, LUTC

Nonresident license in Virginia

Q. Do I need to have a domicile in Virginia to do business there as a nonresident agency?

A. In accordance with Viriginia Law Section 38.2-1836, individuals or business entities who are not residents of Virginia, but who are residents of another

state or territory are eligible to receive nonresident agent licenses if they satisfy the following requirements:

1. the applicant presents proof in a form acceptable to the State Corporation Commission that the applicant currently is licensed as a resident and is in good standing in his or her home state;

2. the applicant has submitted the proper request for licensure and has paid applicable fees;

3. the applicant has submitted or transmitted to the State Corporation Commission the application for licensure that the applicant submitted to his or her home state, or in lieu of the form, a completed uniform application; and

4. the applicant’s home state issues nonresident agent licenses to residents of Virginia on the same basis.

So, if you meet those qualifications, you do not need to establish a domicile in Virginia to do business there as a nonresident agency.

—Theo Alexander

Home in the name of an LLC

Q. My client wants me to insure his home, but it is owned by the client’s limited liability company.

What do I do?

A. The problem is that under standard ISO rules, a residence owned by an LLC is not eligible for a homeowners policy.

However, the residence would be eligible to be written on a dwelling policy. Then, the owner could purchase a tenants policy for the contents and personal liability.

—Bradford J. Lachut, Esq.

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