AUGUST 2016 | PENNSYLVANIA
FINDING SUCCESS: CAREER AND TRAINING PATHS
SALES SKILLS FOR E&O LOSS PREVENTION
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IN THIS
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THREE CAREER PATHS TO SUCCESS Agency staff have varying trajectories, so our new, segmented focus on professional training and development aims to capture their individuality and cater to their unique goals.
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SALES SKILLS AND E&O LOSS PREVENTION Beyond increasing agency revenue, providing staff with sales training can lead to enhanced E&O loss-prevention efforts.
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6 HABITS OF TECH-SAVVY AGENCIES Is it time to hit the reboot key on your attitude about technology?
IN EVERY ISSUE 2 Chairman of the Board’s Message 3 Ask Our Experts 4 Preventing Errors & Omissions 6 Coverage Corner 8 State News 10, 12 Platinum Profile 11 IA&B Partners IBC Advertiser’s Index IBC My Events IBC Classified Ads
Periodical postage paid at Mechanicsburg, Pa. and at additional mailing offices. Postmaster: Send address changes to Insurance Agents & Brokers, 5050 Ritter Road, Mechanicsburg, PA 17055. Primary Agent (ISSN 1543-3110), Permit # 638-620, Issue # 2016-8, is published monthly by IA&B Service Group Inc., a subsidiary of IA&B.
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Copyright 2016. 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 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. 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 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.
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CHAIRMAN OF THE BOARD’S MESSAGE
REFLECTIONS AND REINVENTIONS
INSURANCE AGENTS & BROKERS 5050 Ritter Road | Mechanicsburg, PA 17055 800-998-9644 | IABforME.com
OFFICERS
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Chair of the Board
Robert S. Klinger, LUTCF, CPIA
hat a year! It feels like yesterday that I was sitting down to write my first chairman’s message, and now here I am, mulling over my last. At the same time, in just one short year, so much has happened…. If you haven’t noticed already, you will soon: There is a shift underway at your agents’ association. In recent months, IA&B renewed its commitment to members, refining its focus on member engagement and, in many ways, lifting the veil on its operations. On behalf of your boards of directors, I can report that the change is an exciting one. Board members and IA&B staff alike are energized, and the feeling is contagious. If you haven’t engaged with IA&B recently, you’re missing out. I often wish that I had taken better advantage of my membership earlier in my career. Be sure that you and your staff don’t make the same mistake. Turn to IA&B for professional development, compliance help, industry updates, E&O protection and more. I know that you’ll find the resources top-notch, the association vibrant and the staff welcoming. This re-envisioning of IA&B membership is just beginning. There are a great group of leaders ready to fill my shoes and those of the other outgoing leaders and directors, and there is a commitment among staff to keep this momentum going. I’m thankful for the opportunity to lead this organization, and I’m excited to watch it evolve and prosper in the years ahead. n
Vice Chair of the Board
Michael F. McGroarty Sr. Immediate Past Chair of the Board
Diana M. Hornung Hanby, ACSR
MEMBERS E. Stephen Burnett, CIC, ARM Wilmington, Del.
Richard F. Corroon, CPCU Wilmington, Del.
N. Lee Dotson, CIC, AAI Wilmington, Del.
Michael P. Ertel+ Columbia, Md.
Bryan C. Hanes, JD Hagerstown, Md.
John B. Hollister Milford, Pa.
Jocelyn R. Howard-Sinopoli, CIC, CISR Butler, Pa.
David C. King Lancaster, Pa.
Douglas A. Loesel, CPCU Erie, Pa.
Crag S. Mader
Gambrills, Md.
Ann Gallen Moll, CIC Reading, Pa.
Mark J. Monroe
West Chester, Pa.
Joseph R. Pastor, CPCU, AAI Oil City, Pa.
Richard M. Rankin, CIC Lancaster, Pa.
Best,
April E. Ressler, CIC Altoona, Pa.
Scott C. Rogers, CPIA* York, Pa.
Glenn R. Strachan
Robert S. Klinger, LUTCF, CPIA Chairman of the Board
Ft. Washington, Md.
Lawrence A. Wilson, CIC, CPIA, CPCU, ARM** New Castle, Del.
J. Marshall Wolff, CIC, CPCU Easton, Pa.
* Pa. IIABA National Director ** Del. IIABA National Director + Md. PIA National Director
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AUGUST 2016
Ask Our Experts This month’s answer was provided by Don Bankus, our legal affairs manager, with special thanks to Rita Hollada, our flood insurance instructor and resident advisor, for her guidance.
Question: A community in which I write flood insurance was rezoned in 2011. The rezone had the effect of reducing premiums, but neither I, nor my customers, became aware of the rezone until now. Will my customers be entitled to a refund of the premium difference for more than just the current policy year?
Answer:
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nfortunately, under the vast majority of circumstances (including the one you describe above), a refund of the premium difference will only be granted for the current policy year. Procedures for endorsing a policy as a result of a change in risk, and the applicable refund guidelines, are addressed in the “General Change Endorsement” section (Section 12) of the NFIP Flood Insurance Manual (“FIM”), specifically on pages END 1, 2 and 3. The guidelines provide as follows: • If a map revision or amendment became effective prior to the previous policy year, a refund of the premium difference is
granted for the current policy year only (see FIM - General Change Endorsement Section II.B.4). • If the map revision or amendment became effective in the previous policy year, a refund of the premium difference is granted for the current policy year and the prorata portion of the previous policy year (see FIM - General Change Endorsement Section II.B.4). A side-note in the context of premium refunds: Under circumstances where a “misrating” (as opposed to a “map revision”) occurred at the time of application, a refund of the premium difference may be issued back to the date of the policy inception, with up to a five year maximum.
This issue is addressed in the FIM, under “General Change Endorsement” – section 12 (pages END 1, 2 and 3), which is available on FEMA’s website (http://www.fema.gov/flood-insurancemanual). n
Have a question? Ask our experts! Rely on our experts to answer your most perplexing questions. Visit the Ask Our Experts section of IABforME. com (find the link in the website footer) to submit your question and review answers to other frequently asked questions. Or email your question to us at IAB@IABforME.com. We look forward to hearing from you.
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PREVENTING ERRORS & OMISSIONS
HR
HOW HR FITS INTO A POSITIVE E&O CULTURE By Curtis M. Pearsall
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hen one thinks of the key elements and steps in developing a strong E&O culture, I am not sure how much the human resources element is factored into the equation. More often than not, the areas that deal directly with the public in sales or servicing get the most attention. However, since “agencies don’t make mistakes, people do,” wouldn’t it make sense to include the division that is heavily involved in the selection and training of staff? To build an effective team of working insurance professionals, management
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of the human resources of the firm is extremely important. The HR division (or those who have this responsibility) plays a key role in whether the firm meets its objectives and achieves the desired success. Some of the key areas where human resources should have their hand in the process: • The development of job descriptions. Since the objective is for the staff to “do their job,” wouldn’t it make sense that there be a document that essentially advises them what their job is?
AUGUST 2016
• An effective means to ensure that the firm is properly staffed with qualified individuals. The success of an insurance agency is going to largely be determined by the level of execution of the agency staff. As Jim Collins stated in his book Good to Great, “Get the right people on the bus and the wrong people off the bus.” Bottom line, having the right people heavily determines the success of an agency.
• Training of the staff is extremely important, and the training should be ongoing. The insurance industry is constantly changing, and the agency should have programs in place to provide the staff with the necessary knowledge and skills. • L ast, but by no means least, is the issue of performance appraisals. These should be done at least annually and should contain goals for the following year that enhance the overall E&O culture of the agency. If the agency is performing internal auditing, the individual’s audit results should be factored into his or her review. The human resources area in an agency is one that is often overlooked as to the impact they can have on the E&O culture of the agency. Don’t under estimate the impact they can have on taking the agency to the next level of E&O commitment. n
Curtis M. Pearsall is a consultant and national expert on errors and omissions for insurance agencies. He is president of Pearsall Associates Inc., which specializes in E&O risk management and loss control, and provides expert witness services for E&O claims and litigation. Read more from Curtis on his blog, Agents E&O Tips (agentsEOtips.com).
HR PITFALLS FOR INDEPENDENT AGENCIES AS CURTIS shares, human resources play a vital, and often overlooked, role in agencies. If your agency’s HR program is lacking (or non-existent), check out our new “HR Pitfalls for Independent Agencies” seminar, available on-demand and – coming soon – in the classroom. Designed for agency principals, the course covers management practices that help with agency stability and perpetuation, as well as with remaining compliant with state and federal laws. Specifically, the program delves into: • Hiring of employees • Producer agreements • Position descriptions • Evaluating & terminating employees • Associate handbook IABforME.com/HRpitfalls
HR SOLUTION DID YOU know that you have access to HR Solution© as a benefit of IA&B membership? The comprehensive collection of human resources products and services is designed exclusively to help you develop and maintain your agency’s HR program. It not only complies with federal law but has been customized for state- and insurancespecific laws and regulations. IABforME.com/emp_mgmt
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COVERAGE CORNER
UNDERSTANDING CONTRIBUTORY NEGLIGENCE AND COMPARATIVE FAULT By Jerry M. Milton, CIC
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here are many exceptions in each state with regard to whether its particular negligence system is applicable to a particular case. For example, some states limit the application of their system to negligence claims and avoid applying it to product liability cases. Only four states and the District of Columbia recognize the Pure Contributory Negligence Rule, which says that an injured party cannot recover any damages if it is even 1 percent at fault. In certain cases the contributory negligence defense can be overcome. If
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the plaintiff can prove the defendant’s willful and wanton acts caused the injury, then the defendant cannot claim contributory negligence bars recovery by the plaintiff. Likewise, if the plaintiff can show that the defendant had a last clear chance to avoid the accident and did not do so, then the defendant can still be held accountable even if the plaintiff is found contributorily negligent. The jurisdictions that apply to the Pure Contributory Negligence Rule are Alabama, District of Columbia, Maryland, North Carolina, and Virginia.
AUGUST 2016
Thirteen states recognize the Pure Comparative Fault Rule, which allows an injured party to recover even if it is 99 percent at fault, although the recovery is reduced by the injured party’s degree of fault. These states are Alaska, Arizona, California, Florida, Kentucky, Louisiana, Mississippi, Missouri, New Mexico, New York, Rhode Island, South Dakota, and Washington. There are two different rules of recovery in the 33 states that recognize the Modified Comparative Fault Rule.
Twelve states follow the 50 Percent Bar Rule, which means an injured party cannot recover if it is 50 percent or more at fault. If the injured party is 49 percent or less at fault, it can recover, although its recovery is reduced by its degree of fault. States that adhere to the 50 Percent Bar Rule are Arkansas, Colorado, Georgia, Idaho, Kansas, Maine, Nebraska, North Dakota, South Carolina, Tennessee, Utah, and West Virginia. Twenty-one states follow the 51 Percent Bar Rule, under which an injured party cannot recover if it is 51 percent or more at fault. However, the injured party can recover if it is 50 percent or less at fault, but that recovery would be reduced by its degree of fault. The states that follow the 51 Percent Bar Rule are Connecticut, Delaware, Hawaii, Illinois, Indiana, Iowa,
Massachusetts, Michigan, Minnesota, Montana, Nevada, New Hampshire, New Jersey, Ohio, Oklahoma, Oregon, Pennsylvania, Texas, Vermont, Wisconsin, and Wyoming. Remember your auto accident and your claim against the other driver? The court determines the other driver should pay you $100,000 for your injuries. How much will you receive? That depends on where you are and your degree of fault. If the court determines that the other driver is 90 percent at fault and you are 10 percent at fault, and you’re in Maryland, you receive nothing, unless the court waives the contributory negligence rule, which they often do. If you’re in Pennsylvania or Delaware, you receive $90,000.
Who determines this degree of fault by the defendant and the plaintiff? The judge or the jury. Y’all take care! n
Jerry M. Milton, CIC, teaches and consults on industry issues. The legal profession recognizes him as an expert on insurance coverages. He also serves as our education consultant, working with our CISR, CIC and continuing education programs. Catch him at one of our upcoming seminars: IABforME.com/MyTraining.
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gEt a
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STATE NEWS
PCRB TO CHANGE TO RATING EFFECTIVE DATES The confusion caused by anniversary rating date (ARD) soon will be eliminated. The insurance commissioner recently approved the Pennsylvania Compensation Rating Bureau (PCRB) filling to “eliminate and revise rules and endorsements that reference [ARD].” The change will take effect May 1, 2017 on new and renewal policies.
PENNSYLVANIA SCHOOL INSURERS ACQUIRED BY NATIONAL CARRIER The School Boards Insurance Company of Pennsylvania (SBIC) and School Claims Services (SCS) soon could write outside of Pennsylvania. Church Mutual Insurance Company highlighted the opportunity for expansion when it announced its acquisition of the companies from the Pennsylvania School Boards Association (PSBA). SBIC currently provides property and casualty coverages for Pennsylvania public schools. SCS handles third-party claims administration services for SBIC, as well as risk management services, employee benefits consulting and marketing for PSBA members. Wisconsin-based Church Mutual is licensed in all 50 states and the District of Columbia and specializes in churches, schools, camps, conference centers and assisted living centers. Church Mutual announced its plans to acquire SBIC and SCS last fall and finalized the acquisition on Wednesday, June 1.
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AUGUST 2016
WHAT’S THE ISSUE? In its Filing No. 272, the PCRB asserted that “the determination and application of the ARD can be difficult and confusing to policyholders.” The filing memorandum included an example of a situation where “more than one set of rules, classifications or carrier rates” could apply during a single policy period when an ARD is in effect. Workers’ compensation is the only line of insurance using an ARD rules system, and according to the PCRB, in 2014, less than 6 percent of policies in the state were subject to it. In recent years, several other states eliminated ARD with no ill effects or complaints. PCRB.com (select “Filings”)
PCCPAP MANUAL REVISIONS IN STORE Workers’ compensation policies that fall within the Pennsylvania Construction Classification Premium Adjustment Program (PCCPAP) will face standard changes this autumn. The Pennsylvania Compensation Rating Bureau (PCRB) filed and the insurance commissioner approved the following manual revisions for new and renewal business as of Oct. 1, 2016: • Qualifying wages will be based on the third calendar quarter of 2015 • Minimum hourly wage eligibility for the premium credit will increase to $29.15/hour • Revisions will be made in the increments in qualifying wages used to determine premium credits PCRB.com (select “Circulars”)
LATEST TRENDS IN INSURANCE FRAUD Complaints of suspected insurance fraud in the commonwealth increased 2 percent from 2014 to 2015. The Pennsylvania Insurance Fraud Prevention Authority (IFPA) recently recapped the past year, sharing that the agency’s law enforcement grantees made 410 fraud arrests – over 200 of which led to criminal convictions. In total, defendants were ordered to pay over $1.5 million in restitution to insurance fraud victims and $279,200 in civil penalties.
SEARCHING FOR BALANCE IN LTC INSURANCE MARKET Pennsylvania Insurance Commissioner Teresa Miller is attempting to find middle ground in the volatile long-term care (LTC) insurance marketplace. Late this spring Miller announced significant reductions in the rate increase requests of four LTC insurers. She also shared options for consumers to reduce or avoid any rate increase by agreeing to benefit reductions. The commissioner asserted that these decisions also provide for the four companies to stay financially afloat. The announcement came after an early spring public hearing on the rate filings in question. In total, the four LTC insurers – Metropolitan Life Insurance Company, Genworth Life Insurance Company, Unum Life Insurance Company of America, and John Hancock Life Insurance Company – cover 46,525 policies in Pennsylvania. As filed, the rate increases would have impacted 81 percent of those policies.
THANK YOU TO OUR VOLUNTEERS We send our sincere thanks to Ann Moll, CIC, of Gallen Insurance Inc. in Reading, and Jocelyn Howard-Sinopoli, CIC, CISR, of C.W. Howard Agency Inc. in Butler. Both will complete their terms on the IA&B of Pennsylvania Board of Directors this month.
www.insurance.pa.gov
WELCOME NEW MEMBERS RSK ADVISORY LLC Wayne, PA
The IFPA reports that the majority of fraud complaints (48 percent) and arrests (68 percent) in 2015 stemmed from auto insurance.
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PLATINUM PROFILE
Insurance Agents & Brokers proudly recognizes The Main Street America Group as one of its Platinum Partners. IA&B Platinum Partners dedicate the highest level of sponsorship to our organization.
FOCUSED ON RESULTS THE MAIN STREET AMERICA GROUP
T
he Main Street America Group’s rich history began 93 years ago when we formed our company to serve the insurance needs of Grange fraternity members. Today, Main Street America’s affiliated insurance companies provide a full line of competitively priced personal lines and commercial lines products and services to individuals, families and small businesses in 37 states, and fidelity and surety bond products in 47 states and the District of Columbia. We annually write nearly $1 billion in premium, have surplus of nearly $1.08 billion and more than $2.4 billion in total assets.
anyone else in the market. We are also a founding company partner of the TrustedChoice.com consumer agent portal and the Insurance Institute for Business & Home Safety (IBHS) Research Center. To become our customer and represent NGM and Main Street America in your market, please visit www.msagroup.com and click on the “Become a Main Street America Agent” link. n ** A.M. Best’s rating of “A” (“Excellent”) applies to The Main Street America Group and its nine affiliated writing companies. Ratings listed herein are as of June 11, 2015, are used with permission of A.M. Best, and are subject to changes by the rating service. For more information about ratings, please access www.ambest.com
Through our nine “A” rated property and casualty writing companies — including our largest carrier, NGM Insurance Company — we partner with 3,000 independent agents to provide superior, personal service to more than 600,000 policyholders. As the founding company partner of the Trusted Choice® brand, Main Street America is fully committed to the independent agent distribution channel. We strive to meet the needs of our customers (agents), and our customers’ customers (policyholders), better than
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FEATURED PARTNER The Main Street America Group CHIEF EXECUTIVE OFFICER Tom Van Berkel, Chairman President and CEO CORPORATE HEADQUARTERS Jacksonville, Florida Northeast Region Headquarters Syracuse, New York Northeast Region President Mark Berger Northeast Region Sales Director John Hwilka Northeast Region Field Representatives Bridget Glass (Central Pennsylvania) Renee Herness (Eastern Pennsylvania) Kyle Martin (Delaware) Dave Roshala (Western Pennsylvania) Northeast Region Markets Delaware, Maryland, New York, Pennsylvania A.M. BEST RATING Financial Strength: “A” (Excellent) Issuer Credit Ratings: “a+”
Mark Berger Northeast Region President
AUGUST 2016
PARTNERS PROGRAM
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.
PLATINUM LEVEL
BRONZE LEVEL
ACUITY
Aegis Security Insurance Co
Amerisafe
Agency Insurance Company
Berkley Mid-Atlantic Group
AmWINS Program Underwriters Inc
Donegal Insurance Group
ARI Insurance Companies
Erie Insurance Group
Auto-Owners Insurance Company
Harleysville Insurance
Bailey Special Risks Inc
Insurance Agents & Brokers Service Group Inc
Brethren Mutual Insurance Company
Liberty Mutual Insurance
Conemaugh Valley Mutual Insurance Co
MAPFRE Insurance
Countryway Insurance Company
MMG Insurance Company
Encompass Insurance
Millers Mutual Group
Foremost Insurance Group
Mutual Benefit Group
GMI Insurance
Penn National Insurance
Goodville Mutual Casualty Company
Swiss Re The Main Street America Group United Fire Group
DO YOU SEE YOUR NAME? To become an IA&B Partner, choose the sponsorship package that matches your commitment of support. Contact the Member Sales Center at 800-998-9644, 717-795-9100 or visit us online at IABforME.com to get started.
Utica National Insurance Group GOLD LEVEL
Progressive Westfield Insurance
Briar Creek Mutual Insurance Company
Grinnell Mutual Reins Company Guard Insurance Group HM Workers’ Compensation Insurance Alliance of Central PA Inc Insurance House Insurance Placement Facility of PA Lackawanna Insurance Group Lebanon Valley Insurance Company Merchants Insurance Group Mercury Casualty
SILVER LEVEL
Millville Mutual Insurance Co
Access Insurance Company
PennPRIME Municipal Insurance
American Mining Insurance Co
Reamstown Mutual Insurance Company
Cumberland Insurance Group
Rockwood Casualty Insurance
Farmers Mutual Insurance Company of Western Pennsylvania
State Auto Mutual Insurance Company
Frederick Mutual Insurance Co
TAPCO Underwriters Inc
Juniata Mutual Insurance Co
The Motorists Insurance Group
Keystone Insurers Group Inc
The Mutual Service Office Inc
PSBA Insurance Trust
Travelers
Selective
Tuscarora Wayne Group of Companies
The Philadelphia Contributionship
Zenith Insurance
Strategic Comp
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PLATINUM PROFILE
Insurance Agents & Brokers proudly recognizes AMERISAFE as one of its Platinum Partners. IA&B Platinum Partners dedicate the highest level of sponsorship to our organization.
AMERISAFE: WORKERS’ COMP FOR WORKING PEOPLE
A
t AMERISAFE, the key to our success comes down to the Insured and AMERISAFE being a good fit for each other. Our services are what set us apart. Our safety people are out working with our insureds, speaking their language and knowing how to prevent injuries in their industry while also letting them know we are there – not to prevent them from getting their work done – but to show them how to do it more safely. AMERISAFE works with Agribusiness, Bridgework, Construction, Forest Products, Oil & Gas, Roofing, Trucking, USL&H/Marine and other industries having significant exposures. Our Monthly Payroll Reporting payment plan makes it easier for our insureds and agents to keep the financial part of the insurance policy in good order.
Even with the most diligent safety precautions, however, there will be accidents. While AMERISAFE adjusters have a solid support team behind them, the company also encourages them to become personally invested in each case they handle, seeing it through to conclusion. Most company adjusters have so many cases they often do not see the actual outcomes. AMERISAFE’s claims adjusters are fully involved which is the reason they are assigned much lighter caseloads. Because of the high hazard nature of our business, we have
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a high proportion of physical injuries, which is why we need to be especially proactive. Once a claim has occurred, we want our people there face-to-face finding out what happened, communicating, and being responsive. Our work is hard but we like our niche because we know we do a good job. OUR STRENGTHS A publicly traded workers’ comp insurance carrier serving 27 states with a niche in industries most carriers shy away from. We employ approximately 250 in our DeRidder, Louisiana home office and 200 throughout our territories. A financially strong company with a Financial Strength Rating of “A” (Excellent) by A. M. Best Company with a financial size category of IX. We’ve earned Ward’s Top 50 six years in a row (2009 – 2015). OUR SUMMARY Specialized underwriting knowledge of hazardous industries, extensive field services in workplace safety and intensive claims management, and financial soundness makes AMERISAFE the right choice for your workers’ comp insurance needs. n
AUGUST 2016
FOCUSED ON RESULTS FEATURED PARTNER
AMERISAFE CHIEF EXECUTIVE OFFICER
Janelle Frost President and CEO HOME OFFICE LOCATION
DeRidder, Louisiana A.M. BEST RATING
A (Excellent) WEBSITE
www.amerisafe.com
Expect big things in workers’ compensation. Expect to save a third of your clients 30% or more. Most classes approved, nationwide. For information call (877) 234-4450 or visit auw.com/us.
Š2016 Applied Underwriters, Inc., a Berkshire Hathaway company. Rated A+ (Superior) by A.M. Best. Insurance plans protected U.S. Patent No. 7,908,157.
FINDING
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CAREER PATHS
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AUGUST 2016
YOUR WAY TO SUCCESS The experience of navigating an insurance career is as unique as the people who find themselves in this industry. Agency staff and the offices from which they hail have varying trajectories, so our new, segmented focus on professional training and development aims to capture this spirit and cater to individual goals.
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A
n employee’s education needs are as unique as his or her role (and aspirations) in the agency. Have a new hire who is a natural at sales? Then let’s steer him to the appropriate resources and professional development to cultivate that talent. How about that producer who is shining – and leading the way for her peers? Let’s consider what she needs to know to make the leap to management. We’re committed to helping producers and agencies meet their unique goals. It’s an offshoot of our overarching “IA&B for Me!” brand and the driving force behind our recent creation of agency career and training paths (IABforME.com/TrainingPaths) and complementary professional development opportunities. The training paths are designed to provide structure for insurance agency managers who are preparing current employees for new duties and for those who are integrating new employees. Each job segment – sales path, service path and management path – comes with a checklist of relevant professional development and IA&B member resources, as well as an individual checklist that
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AUGUST 2016
CAREER AND TRAINING PATHS OUR NEWLY developed paths are designed to provide structure for insurance agency managers who are preparing current employees for new duties and for those who are integrating new employees. What’s more, we’re refining our professional development offerings to provide fresh opportunities that mirror the segmented needs of agency personnel – producers, CSRs and managers. IABforME.com/TrainingPaths
ost there when it matters most there when it matters
Technology
At Donegal we understand that “ease of doing business” is vital in determining the value of a carrier to any independent agency. That’s why Donegal focuses on providing superior technology including fully automated web-based systems for Personal, Commercial and Farm Lines to give our agents optimal efficiency in quoting and issuing policies. And while we’re pleased to offer advanced technology equal to any of the national carriers, Donegal constantly strives to improve and enhance that technology. Donegal’s commitment to delivering superior technology to make your job easier… another way Donegal is “There When It Matters Most.”
To learn more visit www.donegalgroup.com or call Rick Kelley at 800-877-0600. 800-877-0600
can be used to monitor progress. And as you’ll read on the following pages, we’re refining our professional development offerings to provide fresh opportunities that mirror the needs of those in each job segment. PREPARING PRODUCERS Thanks to the nature of producers’ work – and thanks to their typically confident and independent personalities – agency managers often give their sales force a great deal of freedom. While that makes sense to a degree, it is also critical to give producers, who are the lifeblood of an agency, the necessary resources, knowledge and support they require to succeed. Prior to launching our Futures Program for young agents this year, we spent considerable time talking with millennials in the field. A common concern among new producers was the lack of guidance and structure as they entered a new industry. Our career and training paths help to alleviate this void.
We’re refining our professional development offerings to provide fresh opportunities that mirror the needs of those in each job segment.
In addition, we will hold an inaugural, sales-focused Futures Conference next month that aims to tap the potential of the next generation of producers. The agenda, which was defined by young agents themselves, will include generational sales strategies and technology insights to support the sales funnel. (To learn more, visit IABforME.com/FuturesConference.)
ELEVATING CSRS Customer service representatives are on the front lines of claims and other key customer interactions. Ignoring the importance of their role as gatekeepers could open an agency to everything from a declining book of business to an E&O claim. Our training path outlines the service skills, agency procedures and policy specifics that front-line staff need for success. Supervisors
Specialized coverage from the farm insurance experts at AIMS for
The training path provides supervisors with guidance for assimilating new producers into the agency and industry at large. The corresponding checklist navigates the essentials, from instituting a clear job description and agency procedures manual; to initiating the appropriate licensing, coverages, E&O prevention and sales training; to showcasing useful IA&B member resources. Besides categorizing existing offerings, we’ve also taken this need into consideration when creating additional professional development opportunities. For example, our new pre-licensing programs in Maryland and Pennsylvania include an already-lauded mentoring guide, which provides strategies, schedules and sample questions for an experienced producer to use when aiding an aspiring agent.
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Bow, NH 877.552.2467 • www.aimscentral.com Underwritten by member companies of Great American Insurance Group, 301 E. 4th St, Cincinnati OH 45202
AUGUST 2016
Provide more than protection for your clients. Offer them the added value of EMC’s no-fee loss control services, which could help reduce the cost of their insurance. It’s just one of the many reasons policyholders Count on EMC ®. JEREMY GALLO, CSP Risk Improvement Specialist EMC Valley Forge Service Office
REDUCING LOSSES ADDS
VALUE FOR CLIENTS. VALLEY FORGE SERVICE OFFICE Phone: 800-362-3620 | Home Office: Des Moines, IA
www.emcins.com © Copyright Employers Mutual Casualty Company 2015. All rights reserved.
can review the checklist to help orient new CSRs with office protocols, licensing requirements, the basics of various lines of coverage and more.
that support development of a high-level vision for the agency, strategic awareness of its markets and operational knowledge to run the business.
As with producers, we are focusing the development of new professional training opportunities to meet the specific needs of CSRs. Last year we unveiled Agency CSR Evolution, an innovative one-day conference. The agenda combined a half day of traditional CE with an energizing half day workshop on social style strategies – how to understand and communicate with people based on their preferences and personality. The presentation dovetailed into communicating with confidence and cross selling as a function of customer service.
Over the past seven years, we have honed into the specific professional development needs of agencies’ senior management through our annual Executive Management Conference. Topics have ranged from technology to finances, perpetuation to human resources. This year we will refocus our efforts to meet agency principals’ evolving needs. Rather than one two-day conference, we will offer an intensive, one-day, managementlevel seminar at various locations throughout our tri-state footprint.
After rave reviews, we repeated the Agency CSR Evolution this year. Next up, in an effort to meet the travel limitations and preferences of many CSRs, we will explore ways to make similarly relevant and inspirational training available on-demand. SUPPORTING MANAGERS Last but certainly not least is our focus on rising agency managers. Agency management, particularly in the small shops that make up the vast majority of independent agencies, requires wearing many hats. And more often than not, the person wearing those hats faces the additional challenge of supervising family members, or relying on job experience that is unrelated to business management, or both. Our career and training path for management outlines the wide range of business administration skills, broad coverage knowledge and keen awareness of compliance and legal issues that agency managers require. And the complementary checklist shares the training and resources
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Our first offering will be a human resources course, taught by IA&B Deputy CEO Jason Ernest, Esq., and Richard Molden, Certified Professional Behavioral Analyst. Based on our on-demand “HR Pitfalls for Independent Agencies,” this executive-level workshop will focus on hiring, evaluating and terminating employees. Watch IABforME.com and Agent Headlines for more information in the weeks ahead. CONCLUSION Navigating a career in this industry is not for the faint of heart, but the rewards are great. Whatever your or your agency’s unique goals are, look to our career and training paths – along with the corresponding professional development opportunities – to help meet them. n
Partners.
You and your clients. You and Harford Mutual. We’re committed to protecting their business and building yours. That’s what mutual success is all about.
Explore P&C insurance opportunities at www.HarfordMutual.com 410.838.4000 / 800.638.3669
AUGUST 2016
Our Umbrella Programs Give You More Options Preferred Property Program gives you broader, more flexible coverage with a range of limits Fast Service and more security are what you get with Preferred Property Program. Our umbrella liability policies are written by XL Insurance with Chubb Insurance Group for excess layer – two of the industry’s most highly rated carriers.
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COULD SALES SKILLS BE THE KEY TO
?
E&O PREVENTION
22
By Curtis M. Pearsall
Agencies that are truly serious about growing should take the initiative to sharpen the sales skills of staff and to educate customers. As a bonus, the combination of sales training and consumer education can reduce the potential of an E&O claim significantly.
23
I
s your agency looking to meet the competition head on? Providing producers and CSRs with quality sales training is a practical option that can bear positive results. There’s a byproduct of this sales training, too: enhanced E&O loss-prevention efforts. Ironically, or magically, there is a strong connection between solid sales skills and E&O loss prevention. A significant aspect of sales training involves education – of agency producers, CSRs and customers. As an agency educates customers on key definitions, the customers should better understand what coverages provide and what they don’t. Take, for example, the concept of insurance to value. For a business customer to truly appreciate and understand why properly insuring property is so important, the agency should supply definitions of related insurance terms such as actual cash value or replacement cost, blanket or agreed amount, etc. Because most commercial policies will be written on a coinsurance basis, the agency should provide a definition of this concept with some claim examples. This can clearly illustrate how failing to satisfy the co-insurance requirement could cause the customer some financial consequences. What else has customer education accomplished? If a customer suffers a property loss (and a subsequent co-insurance penalty due to their lack of insuring their property to value), they might be hard-pressed to successfully bring an E&O action against the agency – because the important terms and how they applied to losses were brought to the customer’s attention beforehand.
STRENGTHENED DEFENSE In personal lines, how many agency customers who own jewelry understand that the mysterious disappearance of the jewelry is not covered by the homeowners’ policy? If the agency wrote to all of its personal lines customers to advise them of this coverage issue, without a doubt some customers would purchase a jewelry floater. The result? Increased sales! Suppose, though, that no customers purchased the floater. Has this customer communication been a waste of time? Not at all! The letter advising the customer of the coverage differences would certainly strengthen the agent’s defense if a problem developed down the road. While you could wait until after a customer has a claim to advise them of this issue, the conversation will probably go much smoother before a loss. A PROACTIVE POSITION A recent insurance survey indicated that less than 50 percent of renters actually have the proper liability or property coverage. The survey further noted that many of the renters believe their landlord’s insurance covers their personal belongings. With the average renter in the survey having approximately $30,000 of personal belongings, a fire could certainly be catastrophic for those without the proper coverage in place. An agency that takes a proactive position in reaching out to this segment of the market could benefit from increased sales while minimizing the likelihood of facing an E&O claim. The opportunities are virtually endless. At your next staff meeting, ask your CSRs and producers what types of questions customers are asking them, and then develop an education campaign around those issues.
SALES STRATEGIES FOR YOUNG AGENTS
Be an agency that educates its customers. By doing so, you will be providing important value to your prospects and customers, which should result in new business sales and high retention.
BUILD YOUR team’s sales skills to enjoy the benefits author Curt Pearsall espouses: revenue growth and E&O loss prevention. Our Inaugural Futures Conference presenters will teach a generational approach to building relationships and making sales, as well as insight into incorporating the latest technology into the sales funnel.
• Annual account reviews
Popular ways to educate customers include: • Newsletters • Social media postings • Proposals that include definitions of key insurance terms • Looking for cross-selling opportunities every time you interact with a customer
IABforME.com/FuturesConference
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AUGUST 2016
A “SILVER BULLET” An exposure analysis checklist is another effective sales tool that has positive sales impact. What’s more, this tool has been called the closest thing to a “silver bullet” to prevent E&O claims. A significant part of a producer’s role is to determine the needs and expectations of his or her prospects and clients. Said another way, the goal is to help the client/prospect conserve assets and reduce the adverse effects of risk. Exposure-analysis checklists, such as the Virtual Risk Consultant – Powered by Rough Notes product or the Vertafore Producer Plus product, should be in every salesperson’s toolbox. These checklists offer a tremendous amount of information on more than 650 different classes of business and the various lines of business pertinent for that class. The detail within these checklists is remarkable, and they greatly enhance an agent’s knowledge of the specific class of business. In addition, checklists give details regarding the exposures a particular type of business presents. Checklists also include questionnaires detailing the crucial questions to ask that will ensure a solid understanding of the customer’s exposures. Including these questionnaires with the carrier submission helps the underwriter better understand the risk. Providing your carriers with full and unbiased information is a great means to avoid future E&O issues. Agencies that are truly serious about growing should take the initiative to educate customers and sharpen the sales skills of the staff, both internal account executives and outside producers. By combining education and sales training, your agency can benefit from increased sales and significantly reduce the potential of an E&O claim. At the end of the day, sales skills and E&O loss prevention is truly a match made in heaven. n
urtis M. Pearsall is a consultant and national expert C on errors and omissions for insurance agencies. He is president of Pearsall Associates Inc., which specializes in E&O risk management and loss control, and provides expert witness services for E&O claims and litigation. Read more from Curtis on his blog, Agents E&O Tips (agentsEOtips.com).
ADDING A “SILVER BULLET” TO YOUR ARSENAL AUTHOR CURT PEARSALL touts the benefits of exposure-analysis checklists, such as the Virtual Risk Consultant – Powered by Rough Notes. The robust, web-based sales and marketing toolkit can help your staff better understand the products they sell. Plus, it can assist agency staff with preparing proposals, explaining complicated insurance terms and documenting client files. Learn more about the product – and your IA&B member discount. IABforME.com/discounted_services/VRC
INSURANCE SUCCESS SEMINARS WANT TO help producers and sales support staff improve their sales techniques? Check out our Insurance Success Seminars (note: approved for losscontrol credit for Utica E&O policyholders). Attendees learn how to generate qualified leads that will translate into more sales. The next offerings are Sept. 20-22 in Philadelphia and Nov. 15-17 in Pittsburgh. IABforME.com/CPIA
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TECHNOLOGY – AN
INVESTMENT,
NOT AN EXP ENSE 6 HABITS OF TECH-SAVVY AGENCIES
26
By Peter Van Aartrijk
Innovative, dynamic independent insurance agencies approach their technology expenditure as an investment, not an expense, and prospective customers and employees recognize this. Is it time to hit the reboot key on your attitude about technology?
27
H
ow can you distinguish innovative, dynamic independent insurance agencies from those that are stuck in status-quo thinking?
Promote: They promote their ease of doing business (such as real-time rating and processing capabilities) with customers and prospects. People want to buy from tech-savvy firms.
There are several indicators, and one is how they approach technology. Namely, it’s an attitude that begins with funding for technology.
Pioneer: They’re willing to try new things. They experiment with solutions that could be appealing alternatives or add-ons to their current software. They even experiment with technology from outside the insurance industry that could be applied to their teams.
Innovative firms approach tech spend in a strategic way. They view it as an investment, not an expense. What’s the difference? Vast. Agency principals grumble about the complexity and cost of the necessary, albeit aged, management system to organize client information and handle carrier real-time communications. We’re not talking about a few bucks here. For most firms, the technology budget line is second only to that of compensating employees. Most of the money goes toward the management system. I’ve observed that innovator agency brands have a strategy in these areas:
Perspective: They make their websites and social media platforms – their most important “offices” – a priority from the perspective of the customer. When you see those sites and outposts, you just know they are innovative firms. @Agency.com: Back in 1998, they gave up their @aol or @juno or even @compuserve email addresses as their official agency email accounts. (OK, sorry, that’s a cheap shot, but I still see them.) Are you differentiating your agency? What is your strategy? Is it time to hit the reboot key on your attitude about technology? n
Proactive: They maximize their investments in the agency management system – using more features than other firms; calling the help desks instead of flailing about; actively interacting with their technology user groups; challenging their vendors to improve; talking with their carrier partners about business processing improvements; and encouraging employees to come up with easier ways to utilize technology to reduce keystrokes and time.
eter van Aartrijk (peter@Aartrijk.com) is CEO of P Aartrijk, a specialist in insurance industry brand strategy and content marketing. He provided this article on behalf of the Agents Council for Technology (ACT). This article reflects the views of the author and should not be construed as an official statement of ACT.
Recruit: They proudly feature their technology in conversations with prospective hires. Young people want to work at firms with modern hardware and software.
CONFERENCE FACULTY TO TALK TECH NEXT MONTH’S Inaugural Futures Conference will feature several sessions on the latest technology tools to streamline and strategize producers’ efforts, from prospecting and networking, to selling and relationship building. If you’re a young agent – or if you have one on staff – this is a must-attend event. Join us Sept. 15-16 at the Chubb Conference Center in suburban Philadelphia. IABforME.com/FuturesConference
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AUGUST 2016
CLASSIFIED A DV E R TI S E M E N TS
My Events
SOUTHEAST PA PRODUCERS & AGENCIES
AUGUST & SEPTEMBER 2016
DATE TOPIC
LOCATION
AUGUST 2016 2
William T. Hold: Condos Concepts & Coverage
Salisbury, MD
2-4
PA Property & Casualty Licensing Study Course
Mechanicsburg, PA
2-4
PA Life & Health Licensing Study Course
Philadelphia, PA
3
William T. Hold: Condos Concepts & Coverage
Dover, DE
3-6
CIC Agency Management Institute
Philadelphia, PA
8-9
James K. Ruble Graduate Seminar
Hershey, PA
9
CISR Personal Residential
Allentown, PA
10
CISR Commercial Property
Mechanicsburg, PA
17-18
James K. Ruble Graduate Seminar
Ellicott City, MD
17-18
James K. Ruble Graduate Seminar
Erie, PA
23-25
PA Property & Casualty Licensing Study Course
Philadelphia, PA
24
Contracts & Leases
Pittsburgh, PA
30
CISR Elements of Risk Management
Erie, PA
31
CISR Elements of Risk Management
Pittsburgh, PA
Professional agency since 1926 located in Feasterville, Bucks County, Pa. Call for confidential information and a review of our services. Contact Ray Reinard at 215-357-8600, Ext. 119.
If you would like to place a classified advertisement, please contact Laura Gaenzle at Laura.gaenzle@theygsgroup.com or (717) 430-2351.
SEPTEMBER 2016 7
William T. Hold: Choices for Commercial Coverage
Pittsburgh, PA
12-15
CIC Commercial Property Institute
Harrisburg, PA
13
William T. Hold: Choices for Commercial Coverage
Altoona, PA
AD INDEX
13
Who, What, When, Where & Why of Workers’ Comp
Mechanicsburg, PA
13-15
PA Property & Casualty Licensing Study Course
Pittsburgh, PA
14
Who, What, When, Where & Why of Workers’ Comp
Philadelphia, PA
Applied Underwriters..................................................13 Berkshire Hathaway Guard Ins Cos .............21
15
Understanding Flood Insurance
Baltimore, MD
15-16
Futures Conference
Philadelphia, PA
20
CPIA Module 1: Position for Success*
Philadelphia, PA
20
E&O Risk Mgmt: Meeting the Challenge of Change
Pittsburgh, PA
21
CPIA Module 2: Implement for Success*
Philadelphia, PA
21
Contracts & Leases: Understanding Ins. Requirements
Mechanicsburg, PA
22
CPIA Module 3: Sustain Success*
Philadelphia, PA
26-29
CIC Commercial Casualty Institute
Erie, PA
27
CISR Commercial Casualty II
Philadelphia, PA
27
Mistakes that Lead to E&O
Baltimore, MD
28
CISR Commercial Casualty I
Mechanicsburg, PA
28
Who, What, When, Where & Why of Workers’ Comp
Allentown, PA
Agricultural Ins Mngmnt Services ...................18
Donegal Insurance Group.......................................17 EMC Insurance Companies..................................19 Harford Mutual Ins Co...............................................20 IA&B Partners Program............................................11 Interstate Insurance Mngmnt Inc.................OBC Millers Mutual Group.................................................IFC PennPRIME...........................................................................7 Preferred Property Program.................................21
*Attend all three CPIA seminars to earn the CPIA designation.
New Truckers Workers Comp Program
Exclusive to Agents of Interstate Insurance • The existing automobile coverage must be written with Interstate. • Coverage will be placed with an A.M. Best rated A+ XV rated carrier • Program available in Maryland, Virginia, Pennsylvania, Delaware and North Carolina. • 5-50 power units but larger exceptional high quality accounts may be considered. • Target account will be regional for hire trucker (some long haul exposure acceptable). • $25,000 minimum premium. * Since we will loss control every account we prefer to receive submissions at least 60 days in advance. - Smaller accounts that underwrite well will be quoted ‘subject to inspection’
* Accounts we will not consider: • Accounts with owner operators • Gasoline/fuel haulers • Moving and storage companies • Trash/refuse haulers with any residential collection • Any operation with extreme loading/unloading exposures
* Very attractive and flexible payment plans available: • Monthly Payroll Reporting • Electronic Pay-As-You-Go • Installment Plans • We will be especially flexible on large accounts
For more information contact Jeff Thomas: jeff@interstate-insurance.com Email all submissions to: submissions@interstate-insurance.com
www.interstate-insurance.com