To
THE EVOLUTION OF AMERICA INSURANCE AGENCY
Steve Sarkisian, Trevor Gettmann, and Nathan Breece talk about perpetuating – and growing – the family business, an IA&B member agency based outside of Philadelphia.
NEW MEMBER BENEFIT: CATALYIT
Technology is a common pain point for independent agencies. Enter the go-to tech resource Catalyit, to which IA&B members now receive a free, full-access subscription.
IA&B prides itself on being an organization driven by member input. Most recently, we conducted a comprehensive member survey as part of our long-term strategic planning. The number one request from members is the need for new talent and employees. We will address that shortly with the launch of a program to recruit, train, license, and place talent (much more on that in the months ahead).
Technology comes in a close second. It’s a large and broad ask, and one that IA&B has been trying to tackle over the years. We believe we have found the perfect solution - Catalyit (pronounced Cata-lit). It is the single greatest tech resource dedicated entirely to independent insurance agents. Developed through a collaboration of state associations and industry experts, this resource can be a game changer for agencies.
Catalyit’s simplified technology resource opens independent agents to a community where they can inspire, grow, and succeed. Agents can begin by taking a tech assessment and reviewing the results. Catalyit offers solutions for any deficiencies. Plus, Catalyit's ongoing education on a variety of technology topics keeps agents on top of their game. It truly is a one-stop solution for agents.
And the best news – IA&B and its board of directors decided to fully fund access to Catalyit for all members. IA&B members get the highest level of access to these resources for free, giving them a leg-up in the technology race. This is a significant investment by IA&B, but one we feel is critically important for our members. When our members ask, we do everything we can to answer.
Please read more on page 12 and then begin your technology revolution at catalyit.com/iab – and please keep that member feedback coming.
Onward and upward,
Jason F. Ernest President & CEO
INSURANCE AGENTS & BROKERS
650 Wilson Lane, Suite 200 Mechanicsburg, PA 17055
191 Main Street, Annapolis, MD 21401 800-998-9644 | IABforME.com
Sarah Brown, CIC, CRM, AFIS - Chair
Keller Brown Insurance Services | Shrewsbury, PA
Andrew Enders, Esq. - Vice Chair Enders | Harrisburg, PA
Greg Bennett Famous & Spang Associates Aberdeen, MD
Kate Dawson, CPIA
Ferri Dawson Insurance Murrysville, PA
Len Gieseler, LUTCF
Evans Hauseman & Richard, Inc. Pottstown, PA
Bruce D. Kraft, AAI, CIC Arbor Insurance Group Allentown, PA
Debra McAfee McAfee Insurance Agency, LLC Wilmington, DE
Shayne McIntosh, CIC JPI Insurance Associates Dillsburg, PA
Chris Miller, CIC Miller Insurance Protection Team Jonestown, PA
Michael Papa, CIC, MBA
Diversified Insurance Industries, Inc. Hunt Valley, MD
Lisa Parry, CPIA Parry Insurance Langhorne, PA
Bill Purdy Purdy Insurance Agency, Inc. Sunbury, PA
Kent Reynolds, CIC Blue Ridge Risk Partners LLC Hagerstown, MD
David Rivell, CIC, CRM Element Risk Management West Chester, PA
Jason Rodriguez, CIC Prominent Insurance Svcs Wilmington, DE
Donna Roper E K McConkey & Company York, PA
Candace Shoupe, AAI, AIC CBM Insurance Agency New Castle, DE
Bob Smyrl, CIC
Robert L. Smyrl, Inc. Hatfield, PA
Michael Thomas Lighthouse Insurance Svcs Gambrills, MD
Mike Ertel (PIA)
The Jacobs Company | Columbia, MD
Diana Hornung, CIC (IIABA)
IOA National, Inc. | Wilmington, DE
Mark Monroe (IIABA)
Griffith Insurance, LLP | West Chester, PA
Are you a member with a question?
IA&B Vice President - Advocacy Claire Pantaloni, CIC, CISR
Contact Claire to find the answer at 717-918-9202 or ClaireP@IABforME.com.
When cancelling a policy currently with another agent, who should sign and send the ACORD 35 to the carrier?
The issue of how to complete, sign, and process the ACORD 35 comes up every so often. For various reasons, which we won’t delve into, some agencies are reluctant to process an ACORD 35 cancellation request received from another agency, and we have heard of cases where the signed form was sent directly to the trash. This led to duplicate insurance and headaches down the road trying to address a retroactive cancellation and the return of premiums.
So what is the proper way to handle the ACORD 35 to ensure both a smooth transition and a compliant process? Can the new producer sign it rather than the incumbent? How can you avoid issues?
The basics: The ACORD 35 was designed, in part, to cancel a policy. While the legal right to cancel an insurance policy rests with the insured as outlined in the policy documents, the ACORD 35 form serves to facilitate a clear and documented cancellation process.
Which producer can sign it? Both old and new agents are authorized to complete the ACORD 35. Yes, the new agent is more likely to send the notice as opposed to the old agent. But it is important to know that as a general practice, the countersignature of the old agent is not required.
What’s the best practice to avoid issues? The new agent can ensure a smooth transition by:
▲ Submitting the Cancellation Request: By formally and directly submitting the ACORD 35 to the insurer, the new agent guarantees that the cancellation will be initiated with the previous carrier.
▲ Preventing Duplicate Coverage: Timely cancellation avoids the potential for overlapping coverage periods and unnecessary premiums.
▲ Simplifying Communication: Sending a copy of the form to the incumbent agent keeps them informed and avoids confusion.
Bottom line: Having the new agent complete the form and send it to the insurer and the old agent on behalf of the policyholder is now considered the best practice.
This document is not a legal opinion and should not be relied upon as such. The intent of this document is to provide a general background regarding the topic or topics discussed, not to provide legal advice. Producers and agencies should consult an attorney regarding specific situations and specific questions with respect to the topic or topics covered in this document. Neither the Insurance Agents & Brokers nor any of its employees shall be responsible for any errors or omissions regarding any statements made in this document, nor any errors or omissions regarding any statutes, regulations, court rules, and/or any other government documents cited in this document.
Also available in audio format
By Bill Wilson
I continue to believe that the No. 1 insurance myth is the belief by the public (and far too many industry practitioners) that insurance is a commodity that is differentiated only by price. This premise permeates industry advertising, so it is drilled into consumers’ heads daily.
But if there is a close second place, it’s the advice all too often given by consumer media that drivers don’t need to buy the loss damage waiver (LDW) when renting a car because their auto insurance already covers damage to the rental vehicle.
Well, first of all, there are auto policies that don’t cover the use of nonowned autos or that have somewhat lesser limitations, like the use of nonowned pickup trucks or nonowned autos on business. Absent that, there are still reasons why I almost always recommend the purchase of
the LDW. The following are my Top 10 Reasons to Buy the Rental Car LDW, with the proviso that there may be statespecific exceptions in some cases.
1. Loss Valuation. An ISO Personal Auto Policy (PAP) covers the lesser of the actual cash value (ACV) or the amount “necessary” to repair or replace the damaged property. Rental agreements usually impose a contractual requirement to reimburse the rental agency for the “full value” of the vehicle, whatever that is, and it is quite possibly something different than ACV. The PAP also has a “betterment” clause that may reduce payment.
2. Loss Settlement. The PAP grants the insurer the right to “inspect and appraise the damaged property before its repair or disposal.” That doesn’t always happen.
3. Loss Payment. The rental company isn’t always obligated to wait on payment from the insurer. They may insist on immediately charging the customer’s credit card and “max” it out while the insured is traveling, impacting other travel expenses.
4. LDW vs. Insurance. The PAP may have exclusions not found in the LDW. On the other hand, the PAP may cover losses excluded by the LDW. This is why having insurance and buying the LDW is a more complete “belt and suspenders” approach to risk managing the exposure.
5. Indirect Losses. The PAP may have no or limited coverage for loss of rental income to the rental agency, or the adjuster and rental agency may disagree on how this is calculated. Most important is the fact that most (but not all) auto insurers exclude charges for diminished value that can amount to thousands of dollars. I’m personally aware of numerous such uninsured charges ranging from $2,500 to $7,500, and I’ve heard of others of up to $15,000.
6. Administrative Expenses. The PAP may not cover incidental expenses like towing, storage, appraisal, adjustment expenses, etc.
7. Other Insurance. I’m aware of three instances where insurers denied claims involving damage to rental or loaner vehicles because of the carriers’ interpretations of Other Insurance clauses. (I wrote about this in my October 2023 Primary Agent article, “Coverage Gaps for Nonowned Autos.” Find the article at: issuu.com/ primary_agent)
8. Excluded Vehicles and Territories. The PAP may exclude damage to certain vehicles like motorcycles and motorhomes or limit coverage to vehicles like trailers. Non-ISO PAPs can be very restrictive, especially in the nonstandard auto marketplace. In addition, keep in mind that PAPs have limited territorial coverage.
9. Excluded Uses and Drivers. PAPs have limitations on coverage for some uses such as transportation of people or property for a fee or have driver exclusion endorsements (or limitations to specific operators) or not cover valet parking.
10. Additional or Future Costs. The PAP will have a deductible that can be sizeable and accidents may result in future premium surcharges or loss of credits. Keep in mind that rental cars are often vehicles with which the drivers are not familiar, and they may be operating these vehicles in unfamiliar areas with variable weather conditions, possibly increasing the risk of an accident.
So, should consumers purchase the LDW? While there may be state-specific exceptions, it is almost always advisable, from a belt and suspenders risk management approach, to buy the LDW if only for the peace of mind it provides.
Tune in for my October 2024 article when we talk about the fascinating insurance issues involving toilets.
Bill Wilson, CPCU, ARM, AIM, AAM is the founder and CEO of InsuranceCommentary. com and the author of seven books, including “When Words Collide…Resolving Insurance Coverage and Claims Disputes.” He can be reached at Bill@InsuranceCommentary.com or found hanging out on LinkedIn..
Also available in audio format
Learn more about personal auto exposures in this upcoming live CE webinar.
HOME AND AUTO EXPOSURES FOR LIFE
AUGUST 22
9 AM-Noon
CE PA/DE: 3 GEN | MD: 3 PC
IA&B Members: $75 (save $30!)
Non-Members: $105
Register today.
IABforME.com | 800-998-9644, option 1
IA&B was named a 2024 Empowering Women award winner. The award, which is coordinated by Lehigh Valley Business and the Central Penn Business Journal, “shines a light on companies and organizations that have demonstrated tangible efforts and documented results in supporting and empowering women in Central and Eastern PA.”
Beginning in 2023, IA&B undertook several initiatives to support women in the industry:
• Professional development – holding the annual Women’s Conference and ongoing women-focused webinar series
• Community – creating networking opportunities through the Women’s Self-Coaching Program, Make-A-Wish fundraisers, and IA&B Women in Insurance Facebook group
• Recognition – elevating and celebrating women leaders in the insurance industry through the March editions of Primary Agent magazine and at the Women’s Conference
Learn more about IA&B’s women in insurance initiatives. IABforME.com/women-in-insurance
Register and attend the 2024 Young Agent Conference, coming to Gettysburg, PA on Oct. 28-29. Plan for two days of high-energy speakers, hands-on workshops, and networking opportunities – all with the goal of developing young insurance agents into successful leaders. Registration opens Aug. 1.
Learn more and register. 800-998-9644, option 1 | IABforME.online/YAconference
Gain valuable insights into the latest state-specific P&C Market Share Report. On July 23 Paul Buse, CPCU, ARM, shared his expertise and findings during a live webinar, Interpreting P&C Insurance Trends: A Focus on Pennsylvania, Maryland, and Delaware.
This P&C Market Share Report highlights top lines of business, agent penetrations, loss ratios, percentage of
surplus lines, the biggest writing insurers, and more. During his presentation, Paul explored the 2023 numbers and explained what they mean for the independent agency system as a whole and your business in particular.
Access to the recorded webinar is free for IA&B members. IABforME.com/member-resources/#marketplace-summaries
Women in insurance, unlock your potential with IA&B’s Women’s Self-Coaching Program. You’ll join a supportive community of like-minded women on a journey of selfdiscovery and growth. Led by facilitator Tarryne West, of Change One Woman, this program provides the tools, techniques, and guidance to tap into your inner strength and build confidence.
It is a 12-month program running September 2024 through August 2025. It includes:
• 2 in-person, regional skill-building workshops
• 10 interactive monthly training webinars
• Regional self-coaching cohorts
The registration deadline is Wednesday, Sept. 4 at 4:30 PM.
Learn more and register. 800-998-9644, option 1 | IABforME.online/self-coaching
Delaware Senate Bill 200, which affects non-renewal notices for homeowners’ insurance contracts, will take effect on Oct. 1, 2024.
The bill requires insurers to deliver any homeowners’ notices of cancellation or non-renewal by USPS certified mail or USPS Intelligent Mail barcode. Further, it limits insurers’ ability to cancel or non-renew a policy for nonweather-related claims and establishes a 36-month lookback period (previously, insurers could cancel or nonrenew a policy because of two non-weather-related claims over the entire lifetime of the policy).
IA&B supported amendments to exclude non-renewal notices for nonpayment of premium from the new requirements.
In 1978 Steve Sarkisian opened America Insurance Agency in Philadelphia, PA. In 2007, he turned over agency operations to his son-in-law Trevor Gettmann, who ran the business until his move out of state in 2023. This year Steve’s grandson, Nathan Breece, purchased the agency which now has locations in Newtown and Langhorne, PA.
Q. Steve, tell us about America Insurance Agency’s beginnings. And what was it like starting an agency from scratch in the late ‘70s?
A. Steve: I finished college in 1971 and worked as a real estate agent until 1976, when I started my own real estate company. By 1978 we had six offices and 150 agents. That success gave a wonderful influx of leads to start a personal lines insurance agency. Getting an appointment with an insurance company was difficult, but when they saw the real estate company’s success, they were willing to give me a shot. With thousands of home sales from my real estate company, the homeowners’ market grew rapidly. Expanding into auto and life was an easy transition.
Q. Steve and Trevor, what have been the biggest changes to the independent agency system over the years?
A. Steve: Some insurance companies have tried to make personal lines products a commodity that can be bought off the shelf by answering a few questions online. It used to be understood that having a professional insurance agent review the options and discuss your budget versus risk was the way to go. In the past companies
considered the independent agent a frontline underwriter, but technology has reduced the scope of the agent’s underwriting role. While I am not optimistic that personal lines can be independent agents’ main focus in the future, I am confident that independent agents will continue to thrive in the commercial lines market. There will always be a need for an agent to visit the business and advise on their various insurance needs.
A. Trevor: There are two major differences that really stick out in my mind. The first thing is technology. When I started, everything was in a filing cabinet, and there was a typewriter at pretty much every desk. We had at least five companies where we had to manually rate. The computer certainly helped speed up the process to quote and service our clients.
As a direct result of this, the second thing that changed is our relationship with company underwriters. Because of our ability to leave detailed notes, we now have a team, instead of that one assigned underwriter whose children’s names you knew. I miss the relationships, and I’m glad we still have one company (Hanover Fire and Casualty) that gives us one underwriter so Nathan gets to experience that.
Q. Trevor, tell us about the technological and operational changes you implemented during that critical time period you ran the agency (2007-2023).
A. Trevor: The very first thing I did was to go paperless. It was October 2007, and Charlie Spencer, another agent in the Philadelphia area, graciously allowed me to see how he was using TAM in his agency. Once my IT company and I saw what it could do, we moved full speed ahead. I also combined our home and auto insurance departments. I wanted anyone who called in to get immediate assistance. This was not necessarily well received by staff at first, but it was exciting to see the employees rise to the challenge.
Beyond that, I always tried not to micromanage. I wanted each employee to have the framework of how to sell and service clients in the insurance industry and then let them use their unique gifts, talents, and abilities to meet our clients' needs.
Q. Nathan, you went to work at the agency right out of high school. What was it that intrigued you about the industry?
A. Nathan: Like most agents who join the family business, I had no interest in learning about the industry! In high school I worked a couple sales jobs and really enjoyed them, but my ultimate plan was to go to school for music. It was in 2016 that Steve and I had a heart to heart about coming to work for him and establishing myself in a more stable industry than music. I will never forget mentioning the idea to my Uncle Trevor, and he set up a job interview later that week.
Q. Nathan, you really hit the ground running with your career. What advice would you give to other young agents just entering the industry?
A. Nathan: The best thing I did was pursue my CISR designation in the first year or two. Learning everything you can about coverage, exclusions, and definitions through a designation program gives you the confidence to speak with clients. (I am not being paid by IA&B to say that!)
Continued on page 10
Continued from page 9
My other advice is don’t be scared to try things differently than other people – whether that is your marketing, your processes for customer experience, or the type of business you write. If you do what the average agent does, you will end up with average agent results!
Q. How did the idea for Nathan to purchase the agency come about, and how did the plan evolve?
A. Steve: Nathan was becoming more and more experienced at running the sales department, and I knew it was time to make a commitment to him. To be a real success requires a great sacrifice of time, money, and energy, and Nathan deserved to know his efforts would go into building something for himself.
A. Nathan: The original buy/sell was in place between Steve and my Uncle Trevor. When Trevor decided to move to Ohio and work remotely, he graciously offered that Steve and I could produce our own buy/sell that would supersede his. Within the agreement between Steve and me, we allowed for a sale of the agency before his death which led to us exploring all the different options to make the deal work.
Q. What type of outside help did you enlist to streamline the transition? And what was most beneficial?
A. Nathan: We worked with Kelly Drouillard, a consultant specializing in M&A with insurance agencies. The important points she established for us were:
1. A feasibility report to conclude how much expense the cash flow of the agency/I could carry in terms of loan amount,
2. How much cash flow would be freed up with Steve no longer the owner, and
3. A review of the various outside financing options and the pros and cons of seller financing.
We used our CPA firm to advise Steve of the various tax implications of selling the agency, including:
1. Capital gains consideration
2. Federal and state income tax
3. How it would fit into future tax planning
4. Setting an interest rate (We learned that you cannot have a 0% interest loan, so the government releases a required minimum interest rate each month that we needed to use.)
Once we knew we wanted to move forward, we found an attorney who was very experienced with the sale of insurance agencies. With the attorney, we worked on establishing the loan terms, life insurance as collateral, legal protection of the stock in the event of default, and limitations on purposefully devaluing the stock.
Q. Overall, what advice would you give to others who plan to perpetuate a family agency?
A. Steve: Start with a professional consultant who is good at evaluating an insurance agency’s value and has been involved with the sale of many insurance agencies. An experienced person is quite valuable in advising you what you can afford to do and explaining options on how to do it. Next, review that consultant’s plan with your accountant. After we had a few meetings with the consultant and knew what we wanted to do, we had a lengthy zoom meeting with the consultant, the accountant, and the attorney so we were all on the same page. This helped the attorney understand what needed to be included in the legal documents to match the financial considerations and terms we all agreed on.
A. Nathan: When it comes to family perpetuation, my biggest advice is that all parties are completely transparent and that expectations are set up front. Because Steve and I knew what each other needed to make it happen, instead of negotiating against each other, we were negotiating with each other. This also allowed us to present to the professionals the outcomes we need and then let them figure out the best way to do it.
Q. Nathan, you’ve recently added staff and opened a second office. What goals have you set for yourself and the agency?
A. Nathan: We are definitely in growth mode! As an agency, our new business is up over 350% since I took over sales in 2019, and I personally wrote about $800,000 in new business in 2023. America Insurance was historically a personal lines agency, and we added commercial lines a few years ago, which helped diversify our book and open more opportunities for new business. We also brought on a full-time life producer to make sure we can offer as many products to our existing clients as possible.
My goal is to continue establishing a company culture for my producers and customers. Over the next five years, I will nurture my existing producers into manager roles where they have their own team of producers working for them. I want my agents to have a long career in the industry, be rewarded for hard work, and feel valued, but it takes building a desirable culture to fulfill this.
Q. Steve, congratulations on your retirement! What have you been up to?
A. Steve: I am Vice President of Paul Tripp Ministries which is a nonprofit ministry with 16 employees working from various states and even internationally. In addition, my wife and I enjoy spending time with our three children and their spouses, 10 grandchildren, and two great
Now part of Harford Mutual Insurance Group, Clearpath Specialty provides specialized Workers’ Compensation coverage to protect your business.
Researching, evaluating, and incorporating technology into an independent agency are common pain points. Enter Catalyit (pronounced: cat-a-lit), a go-to technology resource for insurance agencies.
IA&B members now receive a free, full-access subscription to Catalyit.
Catalyit brings together world-class experts, guidance, solutions, training, and community. It aims to Increase agency profits and improve customer experience.
Tools: Rely on the Agency Tech Assessment and Success Journey tools for a customized, step-by-step roadmap.
Guides & Reviews: Access topic guides that share insights, help you compare solutions in minutes, and include reviews.
Training: Get the most out of technology tools with live coaching, Q&A sessions, and an on-demand video vault.
Community: Discuss trends, best practices, and challenges with peers, experts, and providers.
Consulting: Need custom, one-on-one support? A team of experts can work directly with your agency.
Take Catalyit’s 10-minute Tech Assessment. It immediately provides results, identifying where your agency shines and where there’s room to grow.
As part of your complimentary, full-access subscription, you can then schedule a 30-minute virtual meeting with Catalyit Technology Consultant Mark Parrish.
Take advantage of this new member benefit by visiting: catalyit.com/iab
If you want more information or have questions, contact:
Claire Pantaloni
IA&B VP-Advocacy ClaireP@IABforME.com 800-998-9644, ext. 604
Don Bankus
IA&B Legal & Corporate Affairs Director DonB@IABforME.com 800-98-9644, ext. 603
“Catalyit can be a game changer for agencies. The simplified technology resource opens independent agents to a community where they can inspire, grow, and succeed.”
- Jason Ernest, IA&B President & CEO
IA&B members are invited to attend this live webinar to learn about this new tech resource. We will walk you through the tools and benefits of Catalyit, so you can empower your agency.
Host: IA&B President & CEO Jason Ernest, Esq.
Guests: Cataylit's Marit Peters & Jason Furst Thursday, August 29 11AM to Noon EST
To learn more and register: Online: IABforME.online/Catalyit Call: 800-998-9644, option 1
“The number of ways agencies can leverage technology to increase profits and serve customers is nearly unlimited. But time, know-how, and fear of risk are getting in the way. Catalyit will solve it for them.”
- Steve Anderson, co-founder of Catalyit
Not sure which AMS to choose? Don’t have time to research five quoting platforms? Access Catalyit’s guides that help you compare tech solutions and include reviews by peers and tech gurus. Topics include:
Agency Management System
Carrier Submission Management
Customer Relationship Management
Cybersecurity
Data Analytics
Digital Payments
Electronic Signature
Generative AI, Chatbots, & RPAs
IT/Managed Service Provider
Marketing & Sales
Mobile Apps
Online Applications & Forms
Outsourcing Services
Phone Systems
Quoting Platforms
catalyit.com/guides-reviews
At UFG Insurance, we’re your trusted experts for workers compensation protection. In addition to offering your customers the convenience of keeping all lines of business together, we embrace a whole-person recovery approach to claims — infusing empathy, clarity and humanity into every interaction. With free access to 24/7 medical triage services and the availability of Pay as You Go billing, there’s no better time to think UFG for workers compensation.
For competitive protection and compassionate service, turn to your trusted workers compensation experts at UFG.
For information about membership or benefits, contact: Tim Wonder, VP-Membership
717-918-9223 TimW@IABforME.com
A thriving independent insurance agent community.
To serve as a driving force to champion independent agency success by educating, consulting, advocating, and fostering community in Pennsylvania, Maryland, Delaware, and beyond.
Editor: Karen Robison KarenR@IABforME.com 717-918-9209
Contributing editors: Jennifer Ross, Megan Fioretta, Sarah Haas
Sales Account Executive: Rebecca Sieg | 717-430-2351 rebecca.sieg@theygsgroup.com
Risk is everywhere. In everything. With Applied Underwriters by your side, the gears of commerce, innovation, and exploration keep turning. Experience the unrivaled heart and unwavering service that only Applied delivers.
Learn more at auw.com or call (877) 234-4450.
