DELAWARE
IN THIS ISSUE ________________ How to add Life to a P/C agency Differentiating yourself in employee benefit sales
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Contents
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PRIMARY AGENT MAGAZINE
Mixing Life into the P/C agency Simply adding a Life producer isn’t enough to launch an agency into the Life market. There needs to be agency-wide buy-in. Here, Dick Langhough offers the key ingredients for mixing Life into a P/C agency.
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Differentiate yourself in employee benefit sales The voluntary benefits market is lucrative, and carriers are making it easier than ever for producers to dive in and quickly get into the swim of things. This article explains how.
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In every issue
Mission Statement Primary Agent delivers ideas to help Insurance Agents & Brokers’ members negotiate their unique position as guardians of trust between insurance consumers and companies while facing the challenges of maintaining a small business. Primary Agent also supports IA&B’s mission to preserve and advocate the American Agency System.
2 3 4 6 7 8
Chair of the Board’s Message Member FAQ State News Preventing Errors & Omissions Glance at Events Coverage Corner
15 20 24 24 24
IA&B Partners Technology Update Advertisers Index Classified Ads Last & Least
Subscriptions: Non-member price: $2.25 per copy or $15 per year. All communications for publications, including news, features, advertising copy, cuts, etc., must reach the editor by 1st of month two months prior to publication. Advertising rates furnished upon request. Address inquiries to: Primary Agent Editor PO Box 2023 Mechanicsburg, PA 17055-0763 Phone (800) 998-9644 or (717) 795-9100 Fax (717) 795-8347 Periodical postage paid at Mechanicsburg, Pa. and additional entry post office. Postmaster: Send address changes to above address. Primary Agent (ISSN 1543-3110), Permit # 638-620, Issue # 2010-5) is published monthly by IA&B Service Group Inc., a subsidiary of IA&B.
Copyright 2010. All rights reserved. No material may be reproduced in whole or in part without written consent of the publisher. The information in this publication is general in nature and is not intended to serve as legal, accounting, financial, insurance, investment advisory or other professional advice as to any reader’s particular situation. Users are encouraged to consult with competent legal, financial, insurance, investment advisory and or other professional advisors concerning specific matters before making any decisions and we disclaim any responsibility for any decisions or actions by readers. Statements of fact and opinion in Primary Agent are the responsibility of the authors alone and do not imply an opinion on the part of the officers or the members of the IA&B. Participation in IA&B events, activities and/or publications is available on a non-discriminatory basis and does not reflect IA&B endorsement of the products and/or services.
Board of Directors Officers Kathleen M. Glattly, ChFC, CLU, CPCU Chair of the Board Factoryville, Pa. David Rosenkilde, CIC Vice Chair of the Board Reisterstown, Md. Robert J. “Buc” Cawley, AAI Immediate Past Chair of the Board Wexford, Pa.
Members Norman F. Basso, CPCU York, Pa. Vincent D. “Chip” Boylan Jr., CPCU Rockville, Md. Henry “Butch” Bradley, Jr. Crofton, Md. Timothy P. Burris Thompsontown, Pa. M. Scott Clemens, CIC, CPCU, CLU, ChFC Souderton, Pa. John T. “Chip” Colwell Jr., CIC Corry, Pa. G. Greg Gunn, CIC Lemoyne, Pa. Robert B. Hall, CPCU, CLU, ChFC, ARM, ARM-P West Chester, Pa. Diana M. Hornung-Momot, ACSR Wilmington, Del. Linda A. McCann, AAI, CPCU, CPIW Salisbury, Md.
Kathleen Glattly CPCU, CLU, ChFC, AIM
Chair of the Board’s M
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Susan A. Sallada, CIC** Ft. Washington, Pa.
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Springtime has arrived. Flowers are blooming, birds are chirping, golf courses are bustling…. So what better time to add life (pun intended) to your book of business? Offering L/H coverages should be a necessity for most P/C agencies. Some carriers require it. Some customers request it. And it makes good business sense. But how do you do it right? This issue of Primary Agent magazine is dedicated to just that. You’ll find a feature article on seven considerations for truly integrating L/H into your agency. A second article looks specifically at the rapidly growing employee-benefits market and how producers can up the ante in sales. Springing full force into the L/H and related markets is not easy. But your clients need it and so does your bottom line. And, as always, your association is behind you every step of the way. Check out IA&B’s education courses (including on-demand long-term care training) or give the staff a call if you have any questions. Good luck!
Until next time, Kathleen
William D. Schneider, CPCU, ARM* Pittsburgh, Pa. Robert A. Walbeck, CIC Homer City, Pa. David B. Wasson Sr., CIC State College, Pa. James M. Watkins* Dover, Del. King W. “Kip” White, LUTCF Fallston, Md. John S. Yasik, CIC Newark, Del. * IIABA National Director ** PIA National Director
A
Spring your agency to life
Michael F. McGroarty Sr. Pittsburgh, Pa. Scott C. Rogers, CPIA York, Pa.
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Member FAQ QUESTION: Our agency has received a subpoena to provide copies of a client’s file following a claim. The client’s file is huge. Do we have to provide the whole file? And what about privacy?
?
ANSWER: Your question can be viewed from different angles. First, there are different types of subpoenas. A subpoena for records is an official written request for documents from an attorney. Keep in mind that a subpoena for records is not approved by a judge. This is not to say that you should disregard it and go about your business, because the attorney could then go to court and get an order seeking compliance or financial sanctions against you. However, this request can, to a certain extent, be flexible. If the subpoena for records seems excessive You can discuss and negotiate the subpoena with the attorney. It is not unusual for a subpoena to request everything, when the relevant sections are only a small part of the whole. If the request is overly burdensome, call the issuing attorney. He or she may be willing to settle for only part of the record. Pick up the phone, explain what and how much is in your file, and you will likely be able to narrow down the request to something more manageable. Concern for privacy To keep things simple, let’s assume we are dealing with a Property & Casualty account (with no involvement of any health information that could trigger the Health Insurance Portability and Accountability Act, a.k.a. HIPAA). w If it’s a commercial account, P&C commercial accounts are normally outside the scope of the privacy regulation.
w If it’s a personal line account, the regulation still provides an exception that allows producers to share information “to comply with a properly authorized civil, criminal or regulatory investigation, or subpoena or summons by Federal, state or local authorities.” In your case, this is not a court-ordered subpoena, but it would be a properly authorized civil investigation. Side note on record retention There is a clear connection between this request and your agency’s record retention policy. Producers have to follow certain requirements when it comes to record retention. The timeframe to retain documents depends on your state’s legal and regulatory requirements, the statute of limitations, the type of document, and whatever you
have agreed to in your agency agreement. Whatever the case may be, the retention schedule applies the same to paper and electronic records, and it must be applied consistently. If not all records are kept with the same schedule and you make exceptions, the credibility of the agency’s record-keeping procedures is going to be challenged.
DO YOU HAVE A QUESTION? E-mail it to us at iab@iabgroup.com. Please use “Primary Agent FAQ” in the subject line of your message. You can also fax your question to (717) 795-8347. We look forward to answering your questions!
State News Primary Agent | May 2010
Cashing in on the captive craze DAIAB’s public affairs committee recently heard from an agent who successfully integrated captive business into his agency. This is the latest testimony in the committee’s investigation into Delaware’s booming captive insurance market. The committee also invited representatives from the Department of Insurance’s Captive Bureau and the Delaware Captive Insurance Association to a March 2010 round-table discussion. The guests expressed the opportunities present for independent agents and the broader insurance community resulting from the growing market.
In addition to forming a captive bureau, Insurance Commissioner Stewart oversaw a 20 percent increase in domiciled captives over the past year. And in March the state House passed a bill to allow for the licensing of agent and branch captives. The Senate is expected to act on the legislation before the end of the session. DAIAB will continue to monitor this evolving market and related legislation and their impact on the independent agent community.
PROVIDING AGENTS NETWORKING OPPORTUNITIES WITH PEERS AND CARRIERS That’s how we deliver distinction. Earn state continuing education credits, network with peers and mingle with key company contacts during the 2010 DAIAB Annual Convention. Scheduled for June 8-10 at the Atlantic Sands Hotel, this is the event of the year for Delaware Agents. Space is limited, register today at iabgroup.com. Delaware Association of Insurance Agents & Brokers. Driving members to distinction.
FOR MORE INFORMATION, VISIT IABGROUP.COM/DE OR CALL THE IA&B MEMBER SERVICE CENTER AT (800) 998-9644.
Driving members to distinction
ROUND ROBIN TOPICS:
Members pinpoint priorities
AgentPAC and national PACs Carrier downgrade letters
How can DAIAB help members meet regulatory requirements, navigate technology advancements and improve carrier relations? The Board of Directors has a better idea thanks to the April 15 Member Agent Panel (MAP) in Dover. Member agents attended the semi-annual meeting to weigh in on industry happenings and DAIAB activities. The spring 2010 MAP meeting format was dubbed Round Robin. Association staff jumped through a dozen topics (see sidebar) by providing a brief overview and then asking for member input, experiences and recommendations.
“MAP meetings are one way we keep a pulse on members’ needs,” said John Yasik, chairman of DAIAB. “What we heard in April will drive the Board’s strategic direction.” MAPs are held in 13 locations throughout the association’s three-state footprint. Participants – usually agency principals – sign on for a two-year commitment and then meet each spring and fall to provide feedback to the association and bounce ideas off of colleagues. For more information on MAPs, contact DAIAB’s Member Service Center at (800) 998-9644, option 0.
Certificates of insurance Company Satisfaction Index Credit scoring E-newsletter service Executive Management Conference Fiduciary duties Legislative update National Legislative Conference Privacy Workers’ comp seminar
PROVIDING AGENTS VISIBILITY WITHIN THEIR COMMUNITY That’s how we deliver distinction. Promote your agency brand by sponsoring the 2010 Trusted Choice Big “I” National Junior Golf regional and state tournaments. Support the next generation and gain visibility by becoming a sponsor. Host breakfast, lunch or beverage for the junior golfers, or become a hole sponsor. Various sponsorship opportunities are available. To learn more about the sponsorship opportunities available, visit iabgroup.com/dejrgolf. Delaware Association of Insurance Agents & Brokers. Driving members to distinction. FOR MORE INFORMATION, VISIT IABGROUP.COM OR CALL THE DAIAB MEMBER SERVICE CENTER AT (800) 998-9644.
Driving members to distinction
Preventing Primary Agent | May 2010
ERRORS AND OMISSIONS
GREEN RISKS: SHOULD THEY BE A RED FLAG FOR YOUR AGENCY? CURTIS M. PEARSALL, CPCU, AIAF, CPIA Curtis M. Pearsall contributed this article on behalf of Utica Mutual Insurance Company in Utica, N.Y.
I was recently approached by an agency asking if I would write an article on insuring green risks. No problem. As I began my research, however, it was apparent that this was an exposure I was not up to speed on.
Insurance Agents & Brokers Service Group Inc. is the exclusive agent for the Utica E&O program in Delaware, Maryland and Pennsylvania. For questions regarding this article or your Errors & Omissions coverage, contact IA&B at (800) 998-9644 or by e-mail at iab@iabgroup.com.
While I had a general impression of what “green” meant, this industry has truly exploded. Fortunately, there are many excellent Web sites which helped educate me on where this industry is and where it is headed. (Simply google “green buildings” and you, too, can access more information on this subject than you probably thought imaginable.) Since there is no doubt this industry is here to stay, this presents a tremendous opportunity for your agency to increase its knowledge to more adequately serve this building segment, both on the personal and commercial sides.
This industry is projected to grow over the next five years, according to the consulting firm McGraw Hill Construction, to a $96-140 billion market — and that’s despite current negative market conditions. The firm further notes that today the global green building market is around $36-49 billion for residential and non-residential buildings, compared to the 2005 total of $10 billion. This article will not delve into why this is occurring. Its primary goal is to shed some light on some potential issues your agency might face as it looks to insure green risks. Because your community most likely has some personal or commercial buildings being renovated or built green, this is a critical time to invest in increasing your knowledge level. What it’s all about Essentially, green buildings heavily involve increasing the efficiency with which buildings and their sites use and harvest
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energy, water and materials. In addition, they protect and restore human health and the environment throughout the building’s life-cycle: siting, design, construction, operation, maintenance, renovation and deconstruction. There are many issues surrounding this industry as well as potential insurance implications of which you should be aware. E&O claim activity in this area has been minimal — if there’s been any at all — but it’s fair to say that it is only a matter of time. Potential issue: placement of risk With respect to your homeowners’ carriers, are they receptive to these risks? If so, do you have authority to bind the way you do for a more traditional home construction risk? Speak with your carriers to determine their appetite as you might find they get a little uneasy when you state you have a customer looking to insure a
“rammed earth home” or a home constructed of straw bales. Or what about insulated concrete forms, described as essentially Lego® blocks made from Styrofoam? If you find your carriers are not receptive to these risks, research companies that are.
Determining the value of the structure Valuation is a key issue to both your customer, in the event of a loss, and your agency in properly protecting your customer. Each home may be so unique that they may struggle to adequately address these risks and determine the proper factors for valuation. There are probably parts of the risk for which you will be able to determine a value and others which may require the assistance of a contractor or professional appraisal service. This is where you will benefit from the expertise and understanding of exposures of a company committed to dealing with green risks.
Potential issue: coverage afforded Is the carrier using the standard homeowners’ policy? If so, be alert to gaps for such items as cisterns, underground storage tanks and storm systems to collect water. I suspect that carriers serious about writing these risks will develop a customized form addressing the uniqueness and the exposures. For example, a contractor you insure has a significant exposure in making sure the risk meets the necessary certification standards. Does the GL form cover that? You need to know.
Environmental Design) accredited professional to consult on the repair covered? Are recertification fees covered? The question of “like kind and quality” will come into play if the lumber used was extremely rare or unique. These and other questions need to be addressed and resolved before a loss, not after. It’s probably only a matter of time before you have a customer — personal or commercial — involved with a green risk. Don’t wait. Take time now to better understand these risks as well as the exposures and issues. This will keep your agency from raising a red flag when it’s asked to insure a green risk.
When customer suffers a loss How confident are you that the loss will be adjusted fairly? One of the Web sites I visited raised some questions and points worth repeating: Is the cost for a LEED (Leadership in Energy and
Glance at Events M A Y
C A L E N D A R
Date
Topic
Location
3-6
CIC-Commercial Casualty
Ellicott City, Md.
4-6
P&C Licensing Study Course
Allentown Area, Pa.
5
CISR-Agency Operations
Hagerstown, Md.
6
CISR-Agency Operations
Altoona, Pa.
11
Best Practices of E&O
King of Prussia, Pa.
CISR-Agency Operations
Reading, Pa.
E&O Coverage Standards
Williamsport, Pa.
12-14
James K. Ruble Graduate Seminar
King of Prussia, Pa.
12
CISR-Agency Operations
York, Pa.
Mistakes That Lead to E&O Claims
State College, Pa.
17-20
CIC-Life & Health
Erie, Pa.
18
Dynamics of Service
Mechanicsburg, Pa.
20
Flood Webinar
Online
25
William T. Hold Seminar
Frederick, Md.
26
William T. Hold Seminar
Wilmington, Del.
27
CISR-Commercial Property
Lancaster, Pa.
Coverage Primary Agent | May 2010
CORNER
WHEN IS THE CLAIM MADE?
JERRY MILTON, CIC Jerry M. Milton teaches and consults on industry issues. The legal profession recognizes him as an expert on insurance coverages. He is also the education consultant for IA&B, working with CISR, CIC and continuing education programs.
None of us want a liability claim filed against us. That includes our insureds. Therefore, we may hide our heads in the sand when we receive a complaint and hope it will go away and not turn into a full-fledged claim. After all, notifying the insurance company every time we receive a complaint by letter, e-mail or a phone call throws up a red flag. The question here is, “What constitutes a claim?” An engineering firm purchased Professional Liability insurance from Everest National Insurance Company for the time period of April 15, 2005 to April 15, 2006. The policy was subsequently renewed for another 12 month period. A developer wrote a letter to the engineering firm in March 2006 stating that the engineering firm’s slope design was faulty, resulting in the parking lot not draining. The letter concluded by directing the engineering firm to “develop a plan to correct the drainage problem.” The engineering firm did not notify Everest of a “claim,” but instead wrote a letter to the developer explaining that the problems were caused by defective construction rather than defective design.
The engineering firm met with the developer on several occasions and sent a followup letter reiterating that the problem was caused by construction defects. After receiving that letter, the developer sent another letter to the engineering firm in May 2006 specifically accusing the engineer of design error. In August 2006 the engineering firm advised Everest of the “claim” it received in May. The developer subsequently filed a suit against the engineering firm as well as the architect and contractor. Everest refused to defend the suit on the basis that the engineering firm did not give timely notice of the claim as required by the policy. The engineering firm filed suit against Everest for breach of duty to defend it against this litigation. The court in this case (Matkin-Hoover Engineering, Inc. v. Everest National Insurance Company, 2009 WL 1457669 W.D. Tex., 2009) denied Everest’s motion for summary judgment. This means that the case will go forward on its own merits to determine whether Everest properly declined to defend the engineering firm.
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“Claim” was defined in the Everest policy as follows: Claim means a demand for money or professional services received by an insured for damages, including but not limited to, the service of a lawsuit or the institution of arbitration proceedings or other alternative dispute resolution proceedings, alleging a wrongful act arising out of the performance of professional services. The court explained that it did not find this definition to be ambiguous. The judge evaluated the letter from the developer to determine if it fit in the definition of a “claim,” and explained that this determination requires a factspecific analysis to be conducted on a case-by-case basis. The judge further stated that the question “asks when circumstances known to the insured would have suggested to a reasonable person the possibility of a claim.” Everest argued that a reasonable person should have understood the letter to constitute a claim because it demanded performance of professional services to repair the drainage problem. In rejecting that argument, the court stated that “considering
the circumstances known to the insured, the letter did not necessarily suggest to a reasonable person the possibility of a claim.� Based upon the number of meetings between the developer and the engineering firm and the fact the developer eventually sued everybody (engineer, architect and contractor), the court found that the developer was uncertain who was responsible for the problem. This supported the engineering firm’s argument that they did not consider the letter a “claim.� As stated earlier, this case will proceed through the Texas courts. Who knows what the eventual outcome will be. Sounds to me like the engineering firm has a pretty good argument. But I have no legal knowledge whatsoever. When does a claim become a “claim� as defined in the policy? If we don’t notify the insurance company when we receive that letter, e-mail or phone call, we may be at the mercy of the court. Ya’ll take care!
Goodville Mutual New Holland, Pa. Partnering with the finest independent agents for over 80 years Contact Fred Macy, CPCU fred.macy@goodville.com 800-448-4622 goodville.com
UnderwritingYour
Success
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GIVING PROPERTY OWNERS CONFIDENCE TO BUILD UPON. Years ago, Mike Serluco had a national company insuring his growing property development business. “But they go the way the wind blows,� he says. Then Independent Agent Don Kingsbury, of Christian Baker Insurance Agency, Lemoyne, suggested a local insurer with a stronger commitment to building owners – Millers. “It’s very, very important for an investor to have an insurance partner, and that’s what I call Millers,� Mike says. With the few insurance claims he’s had, “Bing, bam, boom – it’s done and taken care of.� Adds Kingsbury, “With Millers, they actually listen to what you have to say. And not only do they know this industry, they offer package policies at a good price, and they back it up with excellent claims service.� Smart business people, independent agents and Millers...truly partners in protection. .*--&34 .656"- (3061 t 805 N. Front St., Harrisburg, PA 17108 'BY t NJMMFSTJOTVSBODF DPN *OTVSJOH ZPVS CVTJOFTT UISPVHI .JMMFST $BQJUBM *OTVSBODF $PNQBOZ *OTVSJOH -JHIU .BOVGBDUVSJOH t 0GGJDFT t 4NBMM 3FTUBVSBOUT t 3FUBJM 4UPSFT 4USJQ .BMMT t "QBSUNFOU #VJMEJOHT
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MARKETS
Mixing Life into the P&C Agency
Simply adding a Life producer isn’t enough to launch an agency into the Life market. There needs to be agency-wide buy-in. Here, Dick Langhough offers the key ingredients for mixing Life into a P/C agency.
Primary Agent | May 2010
I
’ve never met a P/C agent who was completely happy with his Life production. And I’ve never met a Life producer who didn’t think he could expand Life production in a P/C shop.
So why then, according to a recent industry report, does the average P/C shop derive less than 2 percent of revenues from individual Life production? I would wager that it’s because neither producer described above is focused on a plan to work effectively together. The following pages will detail the key ingredients I believe are necessary for an agency to maintain a synergistic, consistent and profitable flow of Life, LTC and related business.
Compensation The obvious motivator is “What’s in it for me?” It’s important to every member of the food chain. From the person who secures the prospect, to the person who supports the paperwork, to the person who finishes the file — compensation drives behavior.
What is the worst phrase you
Experience tells us that the way compensation will be distributed must be agreed early in the process and that all parties must feel that they are being compensated appropriately for the work they are doing.
can hear from your best client?
If the commercial producer makes less than he believes is fair for exposing his client to the “Life guy,” then he most certainly will find excuses to stop doing it. Referral fees don’t work here. There must be a correlation between the target premium on the case and the compensation paid to the P/C producer.
needs, I would have bought it
“If I knew that you could handle my Life insurance
from you.”
However, if I am the CSR on a nice salary and I get a “fat” finders fee for simply referring a client, I might be pretty happy. The bottom line is that we all want to be paid and recognized for performance, and management should have a clear understanding of each person’s expectations. If compensation is not properly distributed, the program will break down and ultimately fail.
Lead generation Every business unit should have its own system to generate and communicate leads. For Life insurance purposes, the producer, CSR and managers all should be involved in generating leads. The CSR only needs to be equipped with enough knowledge to ask a client, “Who currently handles your Life Insurance needs?” Let’s say the typical personal lines CSR speaks with 30 clients a day and the typical commercial lines CSR talks to 10-15 clients each day. Those contacts alone constitute over 12,000 client contacts a year. If 25 percent of those contacts
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_____________________________ When a new line of business is sold to an existing client, the percentages of keeping the client long term increase dramatically. Life insurance can be a nice retention strategy. _____________________________
MARKETS
have interest and 10 percent of those buy a new Life insurance policy, that’s 300 new Life insurance policies. Too often, the service rep just doesn’t ask (mostly because there is nothing in it for her), or she asks for the business but doesn’t know how to translate the information into a prospect. Easy to do, but often overlooked. The P/C producer who doesn’t broach the subject of Life insurance with the executive at his commercial account probably walks past thousands of dollars a year in bottom line revenue. Just asking the question about reviewing a policy will result in new Life production and help lock out competitors.
P/C agent engagement The Life insurance program is only as good as the willingness of the individual P/C agent to participate. The agent must see the value a Life insurance program can generate, including but not limited to generating new revenue, protecting and retaining existing clients and recruiting new clients.
Client control To optimize the value of a Life insurance program, the P/C agent must have client control. Meaning, the agent must have direct and credible access to the client. The agent must also have access to and the trust of the client’s advisors, such as other executives in the
firm, accountants, lawyers, etc. The client must trust the P/C agent, and the client must take the P/C agent’s suggestions and recommendations on how to proceed.
Executive endorsement This is simply an issue of the P/C shop owner stating to all of the associates of the firm that the Life insurance program is important and part of the overall growth strategy. Experience shows that executive endorsement clears the way for all producers to participate and gives rise to creative thinking on how to best participate in the “companywide” program.
Cooperation among business units The agency principals and department managers should be frequent guests of the other departments’ sales meetings. It is in this way that an agency can maximize its assets and resources. These meetings should include the designated Life department manager. The goal of most meetings is to pass information about market changes or company products and policy changes in order to keep the producers, CSRs and clients aware of any new market conditions. The simple task of letting the right hand know what the left is doing with respect to Life insurance is often left undone. For example, if the personal lines manager announces a change in a specific
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Homeowners’ policy, wouldn’t that be a good time to review all the personal insurance for those clients? If a commercial carrier makes an enhancement in a liability package, wouldn’t it be nice if the messenger carried information on the new estate tax law changes as well? “By the way, did you know that our agency also specializes in Long Term Care Insurance?” All of these things create talking points and, as a result, create the possibility of new crossselling opportunities. Another recent study showed that statistically, when a new line of business is sold to an existing client, the percentages of keeping the client long term increase dramatically. Life insurance can be a nice retention strategy.
Employee awareness This is the process of keeping employees in the know with respect to what the agency is looking to accomplish in its marketplace. It is vitally important that each employee have a sense of what they mean to the greater goals of the operation in which they work. An uninformed employee adds little or nothing to growth outside of his immediate focus. How many times has one of your sales people been at a social function and opened the opportunity to work on a sale because she simply informed others about what she does? Why not arm the other
Primary Agent | May 2010
members of the team with the basic knowledge that can be passed along at any time, whether in a casual or business setting?
with clients at the point-of-sale — creating a “virtual” Life Department.
I have heard the following story many, many times. A P/C producer will share that he just met with one of his best clients and decided to ask about that client’s Life insurance needs. The client responded by saying that he just bought Life insurance from an outside source because he “didn’t know your agency handled that type of insurance.”
Editor’s note: This article was adapted from a white paper: “Creating and Sustaining a
There is no better time to become part of The Cumberland Insurance Group Team. We are now appointing agents in Central Pennsylvania.
Commercial and Personal Lines Competitive Commissions Exceptional Customer Service Financial Strength Experienced Underwriters Marketing Support
Contact Cheryl Oswald at: 610-857-9900, ext. 3117 or coswald@cumberlandgroup.com
ND INS LA I N E R V A
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STRONG RELATIONSHIPS PRODUCE RESULTS
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Just asking for this business is an easy fix for the agency to make, but so many never do it. What is the worst phrase you can hear from your best client? “If I knew that you could handle my Life insurance needs, I would have bought it from you.”
To reach LifeSource – A Crump Company, call (888) 852-3727.
Consistent Flow of Individual Life and Related production within a Property-Casualty Operation.” The complete paper is available by contacting Anne Rockwell at (888) 852-3727 Ext. 8407.
OUP
Dick Langhough, Senior Vice President for LifeSource — a Crump Company, authored this resource. LifeSource is a division of Crump Life Insurance Services, an insurance outsourcing organization. Crump represents over 100 carriers and 6000 Life, Long Term Care, Disability and Annuity products, as well as unique special risk offerings. LifeSource specializes in working with Property and Casualty insurance agents, offering them the ability to take advantage of seasoned life insurance professionals to assist with detailed fact finding, total case design and face-to-face support
Celebrating 166 years of service
◆
1844 - 2010
Platinum Profile Insurance Agents & Brokers proudly recognizes Selective as one of its Platinum Partners. IA&B Platinum Partners dedicate the highest level of sponsorship to our organization.
FEATURED PARTNER: Selective CHIEF EXECUTIVE OFFICER: Gregory E. Murphy Chairman, President and CEO HOME OFFICE LOCATION: Branchville, New Jersey A.M. BEST RATING: A+ (Superior)
I
n 1926, Selective was started by a small business owner committed to providing prompt, fair settlements and exceptional personal service. Today, Selective’s outstanding performance continues, and can be credited to people at every level of the organization who turn individual creativity, skill, purpose and hard work into the collective innovation, strategies and energy that characterize excellence. Their expertise at delivering the distinctive combination of high-touch through strong relationships and high-tech through ease of seamless automation has created a powerful engine for profitable growth. The company’s value-added products and services are offered through approximately 960 independent agents in 22 Eastern and Midwestern states. Commercial insurance for small and medium-sized businesses, light industry, and public entities represents about 84% of the company’s insurance operations.
Selective’s highly regarded field force is dedicated to servicing and supporting agents and customers. Living and working in their territories provides Selective’s field-based employees with unlimited opportunities to develop extraordinary relationships and to deliver a level of service unmatched by competitors. The 48th largest property and casualty group in the U.S., Selective is a customer-focused, super-regional company providing a broad range of insurance and alternative risk management products and services. Rated “A+” (Superior) by A.M. Best for 48 consecutive years. Selective’s financial stability in the marketplace, coupled with the nimbleness of a regional carrier, provides security for policyholders and the capacity for profitable growth for the company and its agents.
“Since our founding more than 80 years ago, Selective has remained committed to building strong relationships with all of our stakeholders. We value the relationships we have built with a select group of independent agents, and are dedicated to supporting their success through the powerful combination of our ‘hightouch’ business model and leading-edge technology.” Gregory E. Murphy, Chairman, President and CEO
Listed below are those companies that strongly support the independent agency system and Insurance Agents & Brokers. Thank you for your continued sponsorship.
WHAT IS IA&B PARTNERS? The IA&B Partners program gives company and allied businesses the opportunity to demonstrate their commitment of support to independent agents and receive maximum market exposure. As an IA&B Partner, you will also realize the benefits of IA&B membership to help you succeed in the insurance industry.
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AAA Insurance Agency Insurance Company Allied Insurance Auto-Owners Insurance Company Briar Creek Mutual Insurance Company Builders Insurance Group Capitol Insurance Company Chubb Group of Insurance Companies Companion Property & Casualty Group Countryway Insurance Company Encompass Insurance First General Services Foremost Insurance Group Friends Cove Mutual Ins Company Goodville Mutual Casualty Company Grange Insurance Companies Hanover Fire & Casualty Insurance Company Insurance Alliance of Central PA Inc Insurance Placement Facility of PA Keystone Insurers Group Inc Lebanon Mutual Insurance Company Mercer Insurance Group Merchants Insurance Group Mercury Casualty Penn Millers Insurance Company Penn Prime Municipal Insurance PMSLIC Insurance Company Reamstown Mutual Insurance Company Rhoads & Sinon LLP Rockwood Casualty Insurance State Auto Mutual Insurance Company TAPCO Underwriters Inc The Brethren Mutual Insurance Company The Mutual Service Office Inc The Philadelphia Insurance Companies Tuscarora Wayne Mutual Insurance Company UPAC Insurance Finance
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package that matches your commitment of support. Contact the Member Sales Center at (800) 998-9644, (717) 795-9100 or visit us online at www.iabgroup.com to get started.
Primary Agent May 2010
MARKETS
Differentiate yourself in employee benefit sales
The voluntary benefits market is lucrative, and carriers are making it easier than ever for producers to dive in and quickly get into the swim of things. Read on to discover how.
Primary Agent | May 2010
W
hat do you do that differentiates yourself from all the other producers out there? Do you offer a higher level of customer service? Do you specialize in a specific industry? What if you could differentiate yourself by offering your clients more resources and making them feel like they are receiving a higher level of service without incurring any additional overhead?
Voluntary benefits and the added value services they offer
Do I have your attention now? Then why aren’t you offering voluntary benefits?
not only allow you to generate
Voluntary benefits market opens up
allow you to help your smaller
Many voluntary carriers are offering services well beyond the traditional policies. And these extra services, such as core enrollments, dependent verifications, benefits counseling, benefit statements and access to human resource Web sites, come at no cost to your clients.
clients by offering “big
a new revenue stream, but
company benefits.”
According to a small business study by LIMRA in 2009, 78 percent of employers with more than 1,000 employees offer voluntary benefits to their employees. Only 27 percent of employers with less than 100 employees offer voluntary benefits to their employees. Voluntary benefits and the added value services they offer not only allow you to generate a new revenue stream, but allow you to help your smaller clients by offering “big company benefits.” These benefits and programs can help your clients attract and retain better employees.
Educating consumers In most cases, the standard enrollment goes something like this: w Group presentations are held, and you speak about the plan being offered. w Many employees are timid about asking questions. Think about it: Who wants to ask a personal question during a group presentation? w Many employees leave this presentation confused and do not fully appreciate the benefits being offered. How do you differentiate yourself? Let’s take a look at this scenario. w Employees receive a one-on-one enrollment with a benefits expert. w Employees feel more comfortable asking questions. w Employees understand and appreciate their benefits more. You are offering a service your competition doesn’t. You are separating yourself and differentiating your services from many other producers.
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______________________________ As health care reform is fleshed out, it is more important than ever that your clients perceive your full value. Talk to your clients about something rather than rate increases. Tell them a different story and advise them about the additional services available. ______________________________
MARKETS
MetLife’s 2009 Study of Employee Benefit Trends shows a direct correlation between benefits satisfaction, loyalty and the benefits communication employees receive. The more employees know about their benefits, the more likely they are to be happy in their jobs. We all know that if the employees are happy and loyal to their company, the boss is usually pretty happy, as well.
Adding value Beyond the enrollments, many voluntary carriers offer the ability to provide benefit statements or total compensation statements. This is one of the most useful tools that you can use to maintain and develop your business. Imagine being able to provide these statements to all of your client’s employees at no cost to your company. Employers love these statements because it allows the employees to fully understand and appreciate the benefits being offered by their company. We have all heard employees complaining about how much their health insurance costs, but many of these employees are shocked when they find out how much their employer is contributing. Many employees feel underpaid and underappreciated. Total compensation statements allow employees to learn just how much they are really worth.
Their salary may be $35,000 per year, but they do not understand that they really are worth an additional 30 percent or more when you add in their benefit package. It is important to note that beyond these services, you are also offering these clients additional benefits such as short-term disability, life insurance, accident coverage, cancer coverage, critical illness and MediGap policies. (Note: In some cases, too many offerings leads to confusion. Try keeping your enrollments to no more than three or four policies.)
Delivering service As health care reform is fleshed out, it is more important than ever that your clients perceive your full value. Talk to your clients about something rather than rate increases. Tell them a different story and advise them about the additional services available. Develop a benefit strategy for your clients that is centered on rising health care costs. Develop a strategy for client retention, and show your commitment to them by taking the time to address the needs of their employees. You can do a lot of this at no direct cost. Last week, I had the opportunity to conduct a webinar for a small broker. Before the webinar, he was just another broker who offered health benefits to his clients.
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After our meeting, he is a broker who offers: w Employee education services w One-on-one benefits counseling w Custom benefits portfolio w Benefit statements w Enrollment services w Case-scrubbing services w Section 125 premium only plans at no cost to clients w A human resources Web site for his clients to use at no cost Best of all, he is able to offer these services without incurring any additional overhead. If an employer is looking to choose a producer, who do you think they want to work with? The one who offers the same generic services or the producer who has differentiated himself from the rest of the pack?
__________________________ Brian Summers is a partner with The Madison Benefit Group. He can be reached at bsummers@thembg.com. The Madison Benefit Group assists brokers and their clients in developing, educating, communicating and implementing voluntary employee benefit packages. For more information, visit www.thembg.com. This article was republished with permission from ProducersWEB.com.
Stability Security Sensibility Formerly LG Insurance Leading Insurance Group Insurance Co., Ltd. is a licensed commercial insurance carrier providing competitive rates on property and casualty insurance to business owners in NY, NJ, CA, IL and PA. We spare no effort in providing our utmost products and prompt service for any and all of your insurance needs.
(source by www.ambest.com)
Building and Building Owners Business Personal Property Dry Cleaners Retail Stores Pizzerias / Takeout Pharmacies
Business Owners Program
Apartments Convenience Store Risks Liquor Stores LRO Buildings
Commercial Package LIG Umbrella Policy
LIG offers up to $ 5,000,000 above LIG BOP and Package
NJ
Leading Insurance Services, Inc. US Manager for Leading Insurance Group Insurance Co., Ltd.
Office Building Distributors Condo / Co-op
400 Kelby St., 15th Floor Fort Lee, NJ 07024 T. (201)720-2100 F. (201)720-2119
CA
505 N. Brand Blvd. Ste 1025 Glendale, CA 91203 T. (818)254-1040 F. (818)254-1039
marketing@ligmsi.com
www.ligicus.com
Tri-State General Insurance Agency 1-800-556-7894
Artisan / Trade Contractors Property Casualty Underwriter
Vickie Doane x241 VDoane@tsgia.com
x x x x x x x
Transportation Underwriter
New Ventures accepted Up to 50% work subcontracted Exterior work up to 4 stories Blanket Additional Insureds Expanded list of eligible classes Tool Floaters Business Auto
Phone quotes and on-line quoting available !!
Kineta Arendall x249 Karendall@tsgia.com
We write more than just “trucking� . . . Visit us at www.tsgia.com
Maryland * Pennsylvania * Delaware * DC * Virginia * New Jersey
Primary Agent | May 2010
Technology U P DATE
Duke Williams has been a leader in
THE CHANGING INSURANCE CONSUMER
insurance automation since 1981. You can follow him through his blog at http://dukethinkingonline.blogspot.com.
“If you dislike change, you are really going to dislike irrelevance.” – General Shensecki Communication technology has changed the insurance consumer permanently. Today’s newest insurance consumer is a part of Generation M. This is the first generation not based on age or date of birth. This generation is based on work and activity habits. Anyone can be part of Generation M. M is for mobile, multitasking and multimedia. Work is mobile. Family is mobile. Schedules overlap, so Gen Ms might work and play at the same time – and probably not on a traditional nine-to-five schedule. Information is consumed through many sources: phones, texts, Facebook, search, Twitter, blogs, RSS readers, YouTube and even television. Those are just some of the names and terms you may recognize; there are many more to come. Connecting with Generation M They have to find you – and you have to find them. Technology changes, but human nature doesn’t.
Humans are social critters. Today’s technology enables us to be social in a wider variety of ways. Your goal should be to allow your customers to get the same result and level of interaction with you online as they now do via phone or in person. They have to be able to interact with you. Consumers today want to interact with you through the communications methods they prefer. Remember: The customer is always right. If you can’t (or won’t) be where they are, then you don’t exist to them. Change keeps coming In the spring of 2008, I would have advised you to optimize your Web site for search engines. But now, everything about being found has changed. It has become more complicated. The good news is that competitors who were ahead of you are probably not as far ahead anymore. Google is still the king of search, but now YouTube is number two. Social networks and social media have passed the tipping point. Some sites get more traffic from links and [ 20 ]
mentions in social media or on social networks than they get from a Google search. Here is what is true today: 1. The Web is now about what is going on now. 2. New technologies allow you to create new relationships with new people online. 3. New technologies allow you to make existing relationships stronger. The Web is the greatest direct marketing tool ever created. And that is a fantastic use for the Web. Search and static Web pages can be a major source of business and revenues. The social Web is not the best for direct marketing. The social Web is best for relationship marketing. You can do both. I do. I keep direct marketing separate from relationship marketing, but you could also combine them. Here is what I believe to be true and constant about insurance agents and their customers. 1. Customers like to have a relationship with a real person.
2. They prefer to find you instead of you direct selling to them. I admit that direct sales can work very well. But I believe customer retention — which is where you make your profits — is much, much better if you can sell through relationship marketing. In the past, many people found you through the Yellow Pages. Some found you through other static media — newspapers, billboards, etc. Take action today The Internet has passed these forms of advertising. Most insurance agents still don’t completely understand how to use the Internet. And now that the Internet is changing significantly again, many of you will wonder exactly what steps to take. Here is my suggested list of action items, listed in order of priority. 1. Create a Gmail account (a Google account). 2. In your Google account, set up Google Alerts and Google Reader. 3. Create a Twitter account. 4. Create a blog. 5. Create a YouTube account. 6. Look and listen for a little while. Then, join the conversation! Create a Google account To create a Google account, go to www.google.com. If you click on the “Sign in” link on the top right, you will then see “Don’t have a Google Account? Create an account now.” Click on that link to create an account. The next page will ask you for a current e-mail address and a password. The password is not your current e-mail’s password; it is the password you’d like to use for your new Google account. You cannot have more than one Google account per e-mail address.
The Google account will create a new Gmail account for you. Use this new e-mail address for all other accounts that I am going to suggest you establish. That way, all of your social Web e-mail will come to the same place and will be accessible to you from any Internet connection.
What blogs should you enter? Well, you could look for blogs in or about your local community. In search, look for the name of your town plus the word “blog.” Most newspapers, radio stations and TV stations now have blogs. Ask around. You will be surprised.
Google will walk you through setting up an iGoogle page. This is a portal page where you can add gadgets that make monitoring your social Web easier and more convenient. On the right-hand side at the top of the page will be a link for “My Account.” Click on this link to activate other tools that Google provides for free.
Reading and commenting on blogs One of the first things you should do is add appropriate comments to some of the blogs you read. This does two things. It introduces you to the person writing the blog. Folks always appreciate that. It also helps others discover that you exist online. You should not try to sell anything through your comments. Your comments are just a way for you to join the conversation and begin to become a member of the community.
Google Alerts The first tool you should set up is “Alerts.” Just click on the link for “Alerts” and follow the instructions. Alerts lets you keep track of words or phrases that are mentioned on the Web. This is your first step at tracking your online reputation. Enter your business’ name, your name, your competitor’s name, names for the insurance companies you represent, etc. Don’t worry, you can come back and add, delete, or change these at any time. Alerts will send you an e-mail once a day with a summary of any hits and the link to that hit. You may go a week or more without getting any emails related to certain phrases (such as your business name). Don’t worry about this. Google Reader Next, set up Reader. Reader enables you to track many blogs in one place. This is more convenient than bookmarking the blogs and going to each to see if there is an update. To have Reader track a blog for you, just enter the blog’s address in the Reader by clicking on the “Add a Subscription” button at the top lefthand side of the Reader page.
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Create a Twitter account To create a Twitter account, go to www.Twitter.com and sign up. Just like reading blogs, Twitter can help you create relationships. Start by following someone on Twitter. My Twitter name is williduke. Steve Anderson’s is stevetn. To find folks to follow, click on the link at the top right-hand side of your Twitter page that says “Find People.” Then type the name of your town or other towns in your area. Click on anyone who appears. This will take you to their profile. The profile generally includes a brief description of the person and a link to a Web site. Follow the link and see if the person looks interesting. If so, follow that person by clicking on the “Follow” button under his/her picture. This brings up a point about your profile. Upload a picture. Also, if you have a Web site, enter the link so people can learn more about you. Other places to find folks to follow include www.wefollow.com and http://search.twitter.com.
What should you say on Twitter? You can say anything. But I recommend you start by doing what is called re-tweeting other people’s tweets. When you find something interesting that someone else has tweeted, copy it and paste it as your own post. BUT start with “RT” (for retweet) followed by the @ sign and then — with no spaces — the Twitter name of the person whose tweet you are re-tweeting. People always appreciate being re-tweeted. They will come check you out. You can also reply to interesting tweets by starting your reply with the “@” sign followed by (no spaces in between) the person’s Twitter name whom you are replying to. This does two things. It lets everyone know you are replying and to whom. It shows up as a reply in the original person’s account. You will need to click on the links on the right-hand side of your Twitter page regularly to see if you have anyone sending you replies. You should also check “Direct Messages” regularly. Links in tweets You will notice that many tweets have a link in them. This lets the person posting the tweet give you a way to go to a page and find more information on the subject. This is a great way to use Twitter. A problem can be that the link may be too long — remember, Twitter only allows 140 spaces. There are several services that shorten links. I use www.idek.net. In addition to giving you a shorter link, this service also keeps click-through statistics. This helps you know if other folks are finding your tweets interesting. You can also post pictures on TwitPic (www.twitpic.com). TwitPic then creates a link to the page with the picture.
Other Twitter tools When you start following too many people, you will want to manage them in separate groups. I use TweetDeck (www.tweetdeck.com). Once you download it onto your desktop, you can follow and post without having to go online to the Twitter site. If you want to include a location and map in your tweets, you can use services such as www.brightkite.com. Twitter mobile About 40 percent of people using Twitter use it primarily from their cell phones. Just like using TweetDeck on your desktop, there are third-party apps for your cell phone. I use Twitterrific on my iTouch and iPhone (www.twitterrific.com). Create a blog You can create a blog as a part of your Google account. In fact, you can create as many as you wish. Why should you create a blog, especially if you already have a Web site? A blog is regularly updated. It is a conversation. I have always thought that the most important thing about any Web site is not why a person visits, but why they should return. Since your blog content will constantly change, this gives people a reason to return. By contrast, a Web site is usually static. What will you say in your blog? There are three types of content for any blog. The first is telling folks things like what you had for breakfast, etc. This is not the best use for your blog. The second is to provide authoritative information on a subject in which you have some expertise. You are an insurance professional. You can certainly provide this type of information. But don’t make it a direct selling type of post. Make it [ 22 ]
something you would tell a friend or family member. The third type of content is to provide a way for others to discover new things. You can, and should, also do this. In fact, I think this should be at least two-thirds of your content. Will you find enough to say? When you read a blog that is interesting enough for you to comment on, create a short post about that subject based on your comments. As a courtesy, always include a link back to the original blog post you are commenting on. The original blogger will most likely see you have done this (remember Alerts) and appreciate it. When you discover something interesting in Twitter posts you are reading – especially from people whose links you follow – use it for the basis of a short post. Remember to provide a link to the place you found the interesting information in the first place. Be regular in your posting. It doesn’t have to be daily, but you should not go a week without a post. You can also cover the hot topics of the day – news, weather events, etc. – from your perspective. Just remember, once you post it, it will have a long life of its own. Even if you delete it, it has been indexed on search engines and still exists. Create a YouTube account Google owns YouTube, so you can do this through your Google account. YouTube is the second most used search engine on the planet. People use it to find out “How To” do something. Currently, there are almost no videos on how to do anything related to insurance. You should fix that problem. I use several tools to make videos.
First, I use a Flip video camera. They cost $100 to $150. The Flip camera can be connected to your computer using a USB connection built into the camera. When you connect it to your computer, it loads decent editing software. This lets you film several short pieces and then combine them with transitions. I find it helpful to create a storyboard on a pad of paper outlining what I want my video to be before I start filming. This saves a lot of time later. I also use a program called Camtasia from www.techsmith.com. It costs $300. It has great editing tools and lets you capture whatever you are doing on your computer screen and turn that into a video. I also have an inexpensive mixing board and microphone for doing voice-overs for my Camtasia videos. Decent audio quality is very important. My mixing board was $85. You can get a good Shure condenser microphone for about $75. I also have a basic microphone stand. I connect the mixing board to my computer’s audio input jack. I record the audio using Audacity, which is free (http://audacity.sourceforge.net). Then I copy this as a .wav file into my Camtasia editor. Putting it all together Overwhelmed? All of this may seem like too much for you. Take it a step at a time. I currently spend 30 to 90 minutes a day on the things discussed in this article. That may sound like a lot of time, but when you realize that it’s a primary way I market my business, it makes sense. Surely you (or someone at your organization) should be spending more time than this on marketing every day. If not, you will be very pleased by how much better your business will do when you begin marketing on a regular basis.
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These tools are a great start to creating new relationships and enhancing existing ones. They are all designed to allow you to become a part of the conversation that is happening 24/7. Remember, this is where your current and future customers are – or are going. Plus, this new technology is fun and fascinating. Regardless of your age, it is always great to get to know new people.
People are the lifeblood of any business. Your future is with people you have yet to meet. Put yourself in a position to say hello. _________________________
This article was printed with permission from the June 2009 issue of The Anderson Agency Report (TAAR). www.taareport.com
Classified ADVERTISEMENTS SOUTHEAST PA PRODUCERS & AGENCIES Professional agency since 1926 located in Feasterville, Bucks County, Pa. Call for confidential information and a review of our services. Contact Ray Reinard at (215) 375-8600, Ext. 119. If you would like to place a Classified Advertisement, simply fax your ad on company letterhead to (717) 795-8347, and we will take care of the rest.
When Life insurance is a laughing matter “Do you know the present value of your husband’s policy?” the life insurance salesman asked his client. “What do you mean?” countered the woman. “If you should lose your husband, what would you get?” asked the salesman. The woman thought a minute, then brightened up and said, “Probably a poodle.” ________________________________
Ad Index Absolute Risk Placement . . . . . . . . . . . . . . . . .IFC
Question: Do you know the difference between a man and a whole life policy? Answer: A whole life policy eventually matures.
Cumberland Insurance Group . . . . . . . . . . . . .13 Goodville Mutual Cas Co . . . . . . . . . . . . . . . . . .9 IA&B Partners Program . . . . . . . . . . . . . . . . . . .15
Source: http://www.insurancefinder.info/category/humor/jokes/life/
IA&B Series Ads . . . . . . . . . . . . . . . . . . . . . .5, IBC Interstate Insurance Mngmnt. . . . . . . . . . . . .OBC LIG Insurance Co Ltd . . . . . . . . . . . . . . . . . . . .19 Merchants Insurance Group . . . . . . . . . . . . . .25 Millers Mutual Group . . . . . . . . . . . . . . . . . . . . .9 Penn National Insurance . . . . . . . . . . . . . . . . .23 Preferred Property Program . . . . . . . . . . . . . . . .3 Tri-State General Ins Ag . . . . . . . . . . . . . . . . . .19
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----------------------------------------------------------------———————------The Last & Least column is dedicated to the industry’s oddities — from creative claims and kooky coverages, to (tasteful) jokes and strange stories. Submit yours to iab@iabgroup.com, subject line: Last & Least. The editor will happily protect sources’ anonymity upon request.
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