Delaware Primary Agent - October 2018

OCTOBER 2018 | DELAWARE

KEEPING UP OUR GUARD IN DOVER: AN INTERVIEW WITH IA&B’S LOBBYIST

AGENTPAC CONTRIBUTORS RESERVATION OF RIGHTS TECHNOLOGY SPENDS

IN THIS

10 MEET IA&B LOBBYIST SCOTT KIDNER

We recently caught up with IA&B’s new lobbyist to learn about his background, the opportunities and threats he sees for our industry, and his goals for representing our association.

16 2018 AGENTPAC CONTRIBUTORS

These IA&B members’ financial support of AgentPAC helps make sure independent agents’ voices are heard during the legislative process.

18 HOW MUCH DO I NEED TO SPEND TO KEEP MY TECHNOLOGY HUMMING? Learn what healthy, operationally mature agencies should plan to spend to get the most out of their technology.

IN EVERY ISSUE 2 3 4 6 7 8 23 24 24 24

Chair of the Board’s Message Don’s Discussion Coverage Corner Message from Jason Ernest State News IA&B Partners Pics & Posts Education Classified Ads Advertiser’s Index

JOIN US ON SOCIAL MEDIA: Facebook.com/IABforME LinkedIn.com/company/IA_and_B Twitter.com/IA_and_B About IA&B IA&B is the premier resource and champion for independent insurance agents in Pennsylvania, Maryland, and Delaware.

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 # 2018-10, is published monthly by IA&B Service Group Inc., a subsidiary of IA&B.

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Copyright 2018. 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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CHAIR OF THE BOARD’S MESSAGE

BOARD OF DIRECTORS INSURANCE AGENTS & BROKERS

THE MORE THINGS CHANGE

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5050 Ritter Road | Mechanicsburg, PA 17055 800-998-9644 | IABforME.com

OFFICERS

Chair of the Board

John B. Hollister

hen you think of your state agents’ association, what comes to mind first? When IA&B last surveyed agency principals, the top three responses were “education” (28%), “lobbying” (22%), and “advocacy” (11%).

Considering that these are the very reasons that industries first formed trade groups just proves the old adage: The more things change, the more they stay the same.

This fall marks the start of my eighth year with the IA&B Board. During that time, I’ve seen the challenges facing the organization (no doubt similar to those facing the vast majority of industry trade groups). But I’ve also seen the innovative ways that the board and staff are positioning IA&B to remain responsive and relevant to the independent agent community.

Offering tools to compete in an increasingly digital marketplace. Finding new talent to perpetuate the industry. Combining efforts with like-minded state associations to deliver new programs, products, and services. These are all new IA&B initiatives – ways that the organization is rising to the challenge and helping us meet our evolving needs.

However, what I find most impressive is how the organization has not lost sight of what it has always done well – providing top-notch professional development and effectual legislative, regulatory, and carrier advocacy. Year in and year out, decade in and decade out, IA&B has remained at the forefront of industry education and advocacy.

Bottom line: Change is inevitable, and when it’s managed well, it can mean more, not less. And at IA&B, I am confident that is what we’ll all continue to receive – the core products and services we have always relied upon, along with the tools we need to thrive into the future.

Milford, PA Vice Chair of the Board

Craig S. Mader

Crofton, MD Immediate Past Chair of the Board

Michael F. McGroarty Sr. Pittsburgh, PA

MEMBERS

Emory Stephen Burnett, CIC, ARM Wilmington, DE

Richard F. Corroon, CPCU Wilmington, DE

Michael P. Ertel Sr.+ Columbia, MD

Ashley M. Fitzsimmons, CISR Forest City, PA

Len Gieseler, LUTCF Pottstown, PA

G. Greg Gunn, CIC* Lemoyne, PA

Bryan C. Hanes, JD Hagerstown, MD

Lisa A. Leach Goth, CIC New Bethlehem, PA

Shannon Lipniskis Indiana, PA

Elizabeth H. Martin, CIC Millersville, PA

Mark J. Monroe

West Chester, PA

Richard M. Rankin, CIC Lancaster, PA

D. Bradley Rosenkilde Jr. Hunt Valley, MD

Tara S. Silfies, CPCU

All the best,

Bethlehem, PA

Robert L. Smyrl Jr., CIC Hatfield, PA

Glenn R. Strachan

John Hollister Chair of the Board

Ft. Washington, Md

Bryan S. Willey Dover, DE

Lawrence A. Wilson, CIC, CPIA, CPCU, ARM** Newark, DE

J. Marshall Wolff, CIC, CPCU Easton, PA

* Pa. IIABA National Director ** Del. IIABA National Director + Md. PIA National Director

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OCTOBER 2018

Don’s Discussion IA&B Legal & Corporate Affairs Director Don Bankus provided this month’s answer.

Ask our experts!

QUESTION: A producer just retired. We’re worried about potential liability should a customer report a claim or attempt to modify coverage via an email to the retired producer’s agency email account.

Are there any practical steps we can take?

ANSWER: Whether an employee leaves employment with the agency (for retirement purposes or otherwise), or is simply away for a short or extended period of time, it’s important to establish and implement standard policies, procedures, and workflows to address incoming email issues. From both E&O and customer service perspectives, you’re right to be concerned; and yes, there are a couple of practical steps you can consider.

OPTION 1 One option would be to keep the former employee’s email account open for a specified period of time, during which time a customer (carrier, vendor, etc.) who sends an incoming email should receive an out-of-office reply. The outof-office reply should include additional information, such as the contact information (name, phone number, and email address) of the individual within the agency to whom the customer should direct his or her inquiries.

As part of this procedure, if your system has the capacity, emails should be automatically re-routed to the agency employee(s) assigned to handle

the former employee’s work. In the alternative, the agency would need to implement procedures whereby the former employee’s email account is proactively monitored.

OPTION 2 In the alternative, the agency could opt to shut down the former employee’s email account completely, after which any customers sending an email to the former employee should receive an undeliverable notice. As with the first option, the undeliverable notice should include additional information, such as the contact information (name, phone number, and email address) of the individual within the agency to whom the customer should direct his or her inquiries.

Following is a sample template for inclusion with either your out-of-office or undeliverable notice reply: Thank you for emailing [former employee’s name] at [agency name].

[Former employee’s name] has left employment with [agency name]. You are directed to contact [insert name, phone number, and email address of new contact person], or you may

Have a question?

Rely on our team to find the answer.

Contact Don: 800-998-9644 Ext. 603 DonB@IABforME.com IABforME.com

contact the agency at [insert primary phone number for the agency].

It’s also important to make sure outgoing emails include appropriate disclaimer language notifying recipients that coverage can’t be modified, or a claim submitted, via email, and that any requested changes will not be effective until confirmed by a licensed agent.

In conjunction with these options, it would also be prudent to communicate directly with affected customers via regular mail, advising them (1) that the agent is no longer employed with the agency; (2) as to whom within the agency the customer should contact if they need to discuss anything (to include an applicable phone number and email address); and (3) that emails should no longer be sent to the former employee’s email address.

Whatever practice you decide to implement, it’s never advisable to leave customers in a position where they believe someone within the agency has received, and is appropriately handling, their email request.

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COVERAGE CORNER

UNDERSTANDING THE INSURER’S RESERVATION OF RIGHTS

By Jerry M. Milton, CIC

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our insured has caused a loss, resulting in an injury to another person. That person has filed a claim against your insured. The insured then forwards the claim to the insurer.

Sounds pretty simple, doesn’t it? We follow that process every day.

But, it may not be that simple. Upon receipt of the claim, the insurer reviews the facts of the claim and is not sure it’s covered by the insured’s policy. It may be covered. But, then it could be excluded.

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Not having all the facts, the insurer is reluctant to say, “No covered.”

If it turns out later that the claim is covered, the insurer could face a bad faith claim. Wanting to further review the facts, and limited by the amount of time the insurer has to respond to th e insured and claimant, the insurer sends a reservation of rights (ROR). An ROR letter should be sent as soon as any question of coverage is recognized.

OCTOBER 2018

An ROR is a means by which the insurer agrees to defend the insured against a claim or suit while simultaneously retaining its ability to evaluate, or deny, coverage for the claim. ROR letters typically recite a laundry list of reasons the insurer could have for denying the claim. These letters tend to frighten policyholders who purchased their policies thinking they would be covered in the event of a loss.

The insurer is obligated to notify the insured that it may not cover a particular claim in order to allow the insured ample time to prepare an adequate defense in the event the claim is denied by the insurer. The ROR letter must explain to the insured why a particular provision of the policy could result in the denial of coverage. The letter must quote the relevant policy language that will be the basis of any possible future denial of coverage.

When the insurer’s coverage obligations are unclear, it is beneficial for the insurer to defend the insured subject to an ROR and then seek a declaratory judgment determining the obligations of the insurer. The issuance of an ROR allows the insurer to fulfill its obligation under the policy to provide a defense for the insured while protecting itself and further investigating the claim.

Typically, when an insurer issues an ROR, it retains counsel for the insured while simultaneously monitoring the case and related coverage issues. However, the ROR may give the insured the right to choose its own counsel paid for at the insurer’s expense.

If the insurer defends the insured under an ROR, and it is later determined the claim is not covered, does the insurer have the right to be reimbursed by the insured for the costs and expenses defending this claim which was not covered? Probably not. However, if the insurer had the insured sign an indemnification agreement, then the insured could be held responsible for reimbursing the insurer.

Any attorney defending an insured under an ROR must be extremely vigilant to ensure that it maintains allegiance to his client, the policyholder.

Y’all take care!

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/education.

MORE ABOUT REIMBURSEMENT OF DEFENSE COSTS The state where the insured is located may have a bearing on how reimbursement of defense costs will be treated.

Case in point, Pennsylvania insurers used to rely on an implied principle that if an underlying claim was questionable, the insurer could seek reimbursement of the defense costs. In 2010, a Pennsylvania Supreme Court decision (American and Foreign Insurance Company v. Jerry’s Sports Center, Inc.) ruled that an express provision needed to be included in the policy for the defense-cost recovery to be valid.

ISO introduced an endorsement (IL 01 20) for that purpose. These endorsements have since been added to a number of commercial policies in Pennsylvania.

Can the same attorney represent the insurer and the insured? In most circumstances where consent has been obtained from both the insurer and the insured after full disclosure, defense counsel can continue dual representation of both clients. However, this is not always a good idea since the insurer and the insured will have conflicting interests.

When there is a conflict, the attorney representing both parties must promptly, fairly, and fully inform the insured of all the facts and legal consequences regarding the conflict so the insured can make the decision whether or not to retain independent counsel.

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ONWARD & UPWARD: A MESSAGE FROM JASON ERNEST

We’re excited to provide you with the new “Proud IA&B Member” logo to showcase your membership. Common usages include:

Every once in a while, IA&B will get an email or note from a member, saying they don’t agree with our political leanings, and they are no longer going to support AgentPAC, or worse yet, they are dropping their membership.

• Advertising

IA&B has only one political leaning – and that is to protect the independent insurance agent in Dover and Washington, D.C. We work with lawmakers on both sides of the aisle. What matters is if you are friendly to independent insurance agents and small businesses. If you are, we will support you. If you’re not, you won’t have our support, and we will actively oppose your legislation that is harmful to our members.

As another contentious and unpredictable election plays out this November, we will be watching. Our advocacy team and lobbyist Scott Kidner (read a Q&A with him in this issue) have been tracking the races, learning about the candidates, and supporting those that we feel will be most favorable to our issues. There may be questionable social platforms or personality flaws with some candidates we support – that’s inevitable in the business of politics. But at the end of the day, the only thing that counts is what is best for our members.

The American democracy is a pillar to the success we all enjoy today.

It’s by no means a perfect system – and the current political landscape is as fractured as we’ve seen in some time. But please know this one constant when it comes to politics: IA&B has your back, and we do so with no biases or favoritism.

And I can’t let this pass – now, more than ever, we rely on your AgentPAC (IABforME.com/AgentPAC) and InsurPac (InsurPac.com/ form) contributions. There are many key races we are watching this year, and your contributions can help ensure our success.

Jason Ernest, Esq. IA&B President & CEO

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DOWNLOAD THE NEW “PROUD IA&B MEMBER” LOGO

OCTOBER 2018

• Business Cards • Envelopes • Memos • Stationery/Letterhead • Website Review our logo usage guide to ensure proper use – including graphic standards to ensure consistency and accuracy – and then download the logo.

IABforME.com/IAB_member_logos

DCRB CLARIFIES FENCING INSTALLATION CODES Some construction companies that install fencing will receive a significant workers’ compensation rate cut. The Delaware Compensation Rating Bureau (DCRB) recently released Circular No. 954, which makes a classification procedural change applicable to fence erection contractors.

Previously, “the DCRB classified fence erection to two classifications depending upon the type of fence erected” – wood and/or vinyl was Code 651, while metal was Code 658. According to Circular No. 954, effective Dec. 1, 2018, all types of fencing will be assigned the same classification: Code 361. “Employers eligible for reclassification … will receive a rating value reduction of 39.32%.”

STATE NEWS Our Advocacy team reached out to the DCRB to inquire if silt fence installation is impacted by Circular No. 954. The DCRB confirmed that because it is considered “temporary in nature” and “is typically used for erosion control and related purposes,” silt fencing is not impacted by the new classification procedural change.

The DCRB went on to clarify its existing classification of silt fence erection: • The installation should be classified to a contractor’s applicable construction classification(s) if the work is performed by a construction contractor at the contractor’s own job sites and incidental to the contractor’s construction work.

• However, it should be classified to Code 609 if it is performed by a specialist contractor who exclusively performs silt fence installation work. (Code 609 is applied because the work can involve an excavating and trenching exposure.)

DCRB.com

DELAWARE ENSURES MINIMUM AUTO LIABILITY LIMIT CONSISTENCY The minimum combined single limit for auto liability insurance is now $60,000 in the state – up from $40,000. The Delaware Department of Insurance (DOI) in August re-issued Auto Bulletin No. 25 (for a second time*) to inform auto insurers of the change.

House Bill 333, which Gov. John Carney signed on July 11, 2018, addressed a statutory inconsistency created by HB 114 – the legislation that raised minimum bodily and property damage limits as of Dec. 13, 2017.

At issue: While HB 114 raised the limits from 15/30/5 to 25/50/10, it did not address the combined single limit. In response, HB 333 increased the combined single limit within the statutory definition of “proof of financial responsibility.” * The DOI first re-issued Auto Bulletin No. 25 in July 2017 to clarify that HB 114 only impacted liability limits.

COMMISSIONER APPROVES 2019 ACA RATE Affordable Care Act (ACA) rates will rise next year– but just shy of half as much as Highmark Blue Cross Blue Shield of Delaware proposed.

Insurance Commissioner Trinidad Navarro in mid-August announced approval of a 3% rate increase for individual health insurance plans available through the ACA. Highmark originally proposed a 5.7 percent rate increase.

Approximately 20,000 Delawareans have health insurance through the ACA.

WELCOME NEW PARTNERS & MEMBERS NEW SILVER PARTNER: FREDERICK MUTUAL INSURANCE COMPANY Frederick, MD

NEW MEMBERS: INSURANCE XCHANGE LLC Philadelphia, PA HUMPHRIES INSURANCE GROUP INC. Blue Bell, PA THOMAS ROBINSON INSURANCE Jamison, PA REDMER INSURANCE GROUP White Marsh, MD MCAFEE INSURANCE AGENCY LLC Wilmington, DE

Learn more about membership by contacting IA&B Vice President – Membership Tim Wonder.

800-998-9644 Ext. 351 TimW@IABforME.com IABforME.com/membership

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PARTNERS PROGRAM

& through IA&B’s Partners Program.

Supporting Connecting

2018 Partners

ELEVATING AGENTS

Program

Offering sincere thanks Among the IA&B Partners are the following Platinum-level sponsors.

PLATINUM PARTNERS ACUITY Agency Network Exchange LLC BBSI Chubb Donegal Insurance Group Erie Insurance Group Farmers Mutual Fire Insurance Company of Marble Insurance Agents & Brokers Service Group Millers Mutual Group Penn National Insurance Plymouth Rock Assurance The Main Street America Group

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The IA&B Partners Program allows companies to support and connect with independent insurance agents and brokers in Pennsylvania, Maryland and Delaware. Through their sponsorship, Partner companies allow IA&B to offer the programs and services that help member agencies succeed.

CALLING ALL COMPANIES Your support helps independent agents succeed and their agencies become more profitable — a win for your company and the independent agency channel. What’s more, you will find more value than ever before from our revamped Partners Program.

Learn more by visiting IABforME.com/Partners or contacting Jess McWilliams at 800-998-9644, ext. 503, or JessicaM@IABforME.com.

OCTOBER 2018

PLATINUM PARTNER Insurance Agents & Brokers proudly recognizes CHUBB as one of its Platinum Partners.

IA&B Platinum Partners dedicate the highest level of sponsorship to our organization.

PLATINUM PARTNER

FOCUSED ON RESULTS OUR COMPANY CHUBB

CHIEF EXECUTIVE OFFICER Evan G. Greenberg Chairman & CEO

NORTH AMERICA HEADQUARTERS Whitehouse Station, NJ

A.M. BEST RATING

Issuer Credit Ratings: “A++”

WEBSITE

Chubb.com

Chubb is the world’s largest publicly traded P&C insurance company and the largest commercial insurer in the U.S. With operations in 54 countries and territories, Chubb provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance to a diverse group of clients.

We are more than an insurance company. We are a true partner to our clients, constantly striving to provide the best solutions and services possible. We believe that insurance is a craft and that each client has unique needs — whether they are a multinational company, a mid-market firm, small business owner or individual policyholder. Our team of professionals is highly skilled and trained to help clients stay protected, avoid risks and mitigate those risks as situations occur. We stand out from the competition because we are extremely passionate about what we do and genuinely care about our clients.

Across our many divisions, we can address a broad range of risks through our core and situational coverages, our services and claims delivered by technology and our innovative delivery options. Along with our main coverages, we also provide a full line of top-rated insurance products, services and expertise in just about every industry. Chubb is well-known for its exceptional service and attention to each and every client.

Our Field Operations team consists of experienced leaders who work hard to maintain these long-term client, agent and broker relationships across North America. These leaders help Chubb successfully deliver world-class insurance products and services at the local level in 8 regional offices and 40 additional branch offices throughout the United States and Canada. In the Mid-Atlantic, our offices include:

Baltimore St. Paul Plaza, 23rd Floor 200 St. Paul Place Baltimore, MD 21202-2038 T 410-659-6500

Harrisburg 4999 Louise Drive Suite 203 Mechanicsburg, PA 17055 T 717-791-6000 T 412-391-6585

Richmond 4470 Cox Road Suite 150 Glen Allen, VA 23060 T 804-935-6300

Washington DC 1001 G Street NW Suite 400 Washington, DC 20001 T 202-822-3200

Philadelphia 436 Walnut Street Philadelphia, PA 19103 T 215-640-1000

Pittsburgh Fifth Avenue Place 120 Fifth Avenue Pittsburgh, PA 15222-30008 T 412-391-6585

If you’re an agent interested in an appointment with one of the Chubb Mid-Atlantic branches, please visit: https://www2.chubb.com/us-en/agents-brokers/mid-atlantic-region.aspx.

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OCTOBER 2018

MEET IA&B LOBBYIST

SCOTT KIDNER

Meet Scott Kidner – our association’s new lobbyist. The Primary Agent editorial staff recently caught up with him to learn about his background, the opportunities and threats he sees for our industry, and his goals for representing IA&B members.

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ou have a job to do, an agency to run, and customers to serve. You don’t have the time or resources to monitor the General Assembly and advocate for (and, sometimes, against) the issues set to impact your livelihood.

are affected by regulatory actions, and you both need to talk the people who make the rules. That’s what this is all about – participating in our government.

Enter Scott Kidner, of CS Kidner Associations Capitol Strategies in Dover. Our new lobbyist, Kidner began representing the Delaware Association of Insurance Agents & Brokers (IA&B) in January 2018. Late this summer, he sat down with the Primary Agent editorial staff to talk about his background, beliefs, and goals.

IA&B: What professional accomplishments are you most proud of?

IA&B: Why did you become a lobbyist, and how did you get into this field?

I’ve had a number of lobbying victories, but I don’t see those as what I’m most proud of. Instead it’s the consistent and long-term visibility I offer for my clients.

Kidner: Throughout my high school years, I had worked on a bunch of political campaigns. When I came back from the army and finished college, I worked on another series of campaigns. So I had been in and out of the political arena for some time.

Then when I was working for a private company, a friend encouraged me to apply for a government affairs director position at a local trade association – the Delaware Association of Realtors.

I wasn’t even looking for a new job. It was pure serendipity.

Kidner: For as long as I’ve been doing this, I still have many of the same clients I had when I started out – including my first client, the Delaware Apartment Association. If my clients stick around, then I know that I’m providing a valuable service.

IA&B: Looking ahead into the next legislative session, are you able to project any policy, legislative, or regulatory issues that should be on our radar?

Kidner: We have the Form A and the PIP issue – those are two items still out there.

But because this is an election year and we have over 12 retirements and changes within the General Assembly, that

After four or five years with the Realtors, I began picking up other clients. And off to the races we went. I picked up my first client – the Delaware Apartment Association – and I still have them today.

IA&B: What do you like most about your job as a lobbyist?

Kidner: Representing clients who have important issues and whose voices need to be heard. The world is run by those who show up. If no one is showing up and talking about your concerns and interests, then someone else is telling your story, and they’re telling it the way they want it to be heard.

I honestly believe that the people I represent have valid points of view that need to be heard and spoken about in the General Assembly. I think that’s a critical service. [Legislators] don’t know everything. They couldn’t possibly know everything.

If we’re doing our job right, we become the resource for elected officials.

Fundamentally, ours is representative government, a participatory government. It is our duty to petition our government. There’s no difference between a dairy farmer and an insurance agent. You both have issues to address and

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OCTOBER 2018

Many of our members … don’t feel like they have the time to get involved in politics or advocacy. But if you don’t make time for this piece of your business, you may lose it.

— Scott Kidner

means a lot of new faces. That also means we’re not sure whether these folks have a good sense of the issues or where they’re coming from.

Those are the big unknowns: Who are these new folks, and where do they fall on the issues? Because it’s not like these people are talking about insurance on the campaign trail. It just never comes up.

IA&B: What are your goals for representing IA&B? Kidner: Foremost, it’s to supply the information you need in a timely manner so we can make good decisions about what’s best for the membership. That’s the most important part: Knowing what’s going on, reacting to what’s going on, making sure that we take care of the members the best we can.

And really the goal is to maintain the status quo: Ensuring members’ ability to sell and broker insurance to the consuming public goes without additional burdens – financial burdens, regulatory burdens, or other issues.

Continued on page 14

Shopping your E&O? IA&B offers coverage that agents need.

Contact David today.

For personalized service, CONTACT DAVID WERTZ 800-998-9644, ext. 506 DavidW@IABforME.com IABforME.com/agency_insurance

MEET OUR VOLUNTEERS OUR GOVERNMENT Relations Committee provides input to our staff and lobbyist to help shape our legislative agenda to benefit the insurance industry, small businesses, and insurance consumers. We send our sincere thanks for their time and commitment.

Noel L. “Lee” Dotson, CIC, AAI, Chair Bellevue Insurance Services - Wilmington John B. Allen, CIC Allen Insurance Group - Wilmington Emory Stephen “Steve” Burnett, CIC, ARM Insurance & Financial Services - Wilmington Andrew P. Cousins, CIC L&W Insurance, Inc. - Dover Jason Rodriguez Prominent Insurance Services - Wilmington James M. Watkins Pfister Insurance, Inc. - Dover Bryan Willey Harrington Insurance Agency - Dover Lawrence A. Wilson, CIC, CPIA, CPCU, ARM S. T. Good Insurance - New Castle John S. Yasik, CIC Poland & Sullivan Insurance, Inc. - Newark

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Continued from page 13

IA&B: What can our agents do to assist you and your efforts?

Kidner: You have to get in the game. You have to know who your state rep and senator are. You have to build a relationship with these folks. If they’re friends of yours and friends of the industry, you have to help them get elected. Then the next time you need something, you can reach out to them. That’s getting in the game.

Many of our members are small business owners themselves and want to be left alone. I get it. Their world feels complicated enough, and they don’t feel like they have the time to get involved in politics or advocacy. But if you don’t make time for this piece of your business, you may lose it.

GET IN THE GAME TAKE A cue from Lobbyist Scott Kidner and get involved. If you’re interested in the political process or personally know a legislator, contact IA&B Government Affairs Director Lauren Brinjac to see how you can lend a hand.

IA&B works on your behalf to ensure that Delaware legislators and regulators understand the issues affecting agents.

But it is your financial support that helps our message to be heard loud and clear.

Please consider contributing.

More information at IABforME.com/AgentPAC

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OCTOBER 2018

Lauren Brinjac Government Affairs Director LaurenB@IABforME.com 800-998-9644, ext. 607

Acuity Loves You! PROU D TO PARTNER WITH THE BEST I N DEPEN DEN T AG ENTS IN THE BUSINESS!

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2018 AgentPAC of Delaware Contributors We sincerely thank everyone below for contributing at every level.* Your financial support of AgentPAC helps make sure your voice, collectively with other agents, is heard during the legislative process, and helps us as we advocate for ways to strengthen agents’ political interests on key insurance and business issues in Delaware.

Learn more at IABforME.com/AgentPAC.

PRESIDENT’S CLUB ($1,000+)

SENATE LEVEL ($250 - $499)

HOUSE LEVEL ($100 - $249)

Lee Dotson Bellevue Insurance Services LLC

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William Davis Davis Insurance Group Inc

Jim Watkins Pfister Insurance Inc.

Zhaohua Deng L & D Insurance Services

Howell Wallace Pratt Insurance

Jeffrey Good S T Good Insurance Peter Wolff Wolff Insurance Agency

UP TO $99 Jason Bonardi Travelers

* Contributors between Jan. 1 and Aug. 15, 2018.

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OCTOBER 2018

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TECHNOLOGY UPDATE

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OCTOBER 2018

HOW MUCH DO I NEED TO SPEND TO KEEP MY TECHNOLOGY HUMMING? PART II

By Greg DiDio

On the following pages, Greg DiDio follows up on his September Primary Agent article – Are You Strategically Investing in Your Technology? – with a look at how much you need to spend to maximize the value you get from your technology.

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n the last issue of Primary Agent, I provided advice on how healthy, operationally mature agencies should be investing their IT spend to achieve high performance. In this issue, I will review how much you should expect to spend to maximize the value you get from your technology. I will review costs associated with six major categories that require IT investment: 1) agency management systems, 2) sales automation, 3) office productivity software, 4) user/desktop experience, 5) proactive management and support, and 6) security and compliance.

AGENCY MANAGEMENT SYSTEMS Market-leading agency management systems, such as Applied Systems’ EPIC or Vertafore’s AMS360, will cost around $150 per month per user to obtain the comprehensive functionality of a modern agency. This includes features such as policy download, invoicing, claims tracking, sales/renewal management, and financial reporting.

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TECHNOLOGY UPDATE

WHAT ABOUT YOUR WEBSITE? YOUR AGENCY’S website is an additional – and integral – component of your agency’s technology investment. First impressions matter, today more than ever, and they’re happening online.

Forge3’s ActiveAgency website platform is designed to help your agency look great, reinforce credibility, and build relationships. Plus, it’s easy to use, cost effective, and streamlined – integrating seamlessly with Rocket Referrals and any agency management system.

In addition to ActiveAgency’s built-in, bestin-class sales and servicing tools like Clickable Coverage, Hello Producer, and live-chat integration, IA&B members have full access to several exclusive features.

Pricing is just $250/month, and there are no upfront setup fees or long-term contracts for IA&B members.

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Zack Yurch Director of New Business Forge3, Ltd. 484-275-0983 Zack.yurch@forge3.com

Deploying these applications or migrating to a new system is a significant undertaking requiring a large investment in both labor and capital. For a successful agency management deployment, agencies typically spend about $2,000 per employee in project implementation costs. Agencies who try to cut corners to reduce costs are often disappointed with the results. We strongly warn agencies not to cut corners, especially when it comes to dataconversion preparation and employee training.

SALES AUTOMATION Sales automation is generally included in the full-featured, industryleading products from Applied Systems and Vertafore. If you have one of these products, your out-of-pocket costs are covered above, but you still need to take the time to build workflows and train staff to deploy best practices.

If you choose to go a different route and deploy a niche market product, you will likely see much lower rates for agency management. This might be the right solution for you depending on your needs and your willingness to complete the solution through other processes or third-party applications.

Depending on the agency management system you select, some of these savings need to be earmarked for a third-party sales management tool such as Salesforce.com, along with consulting to successfully integrate the application and processes with your agency management solution.

OFFICE PRODUCTIVITY SOFTWARE Generally, office productivity software is provided via Microsoft Office 365 subscription service. A typical agency requires business email and Office applications including Word and Excel. The Office 365 service bundles that include these components start at $12.50 per user per month. If you need data encryption and archiving, your subscription costs will rise to about $20 per user per month.

Most agencies will require a technology consultant to effectively perform the initial deployment of Office 365. Also, since Office 365 data (email, documents, etc.) are not backed up by default, make sure you add a backup service so that your data is fully protected.

This will add $2-$4 per user per month. Finally, these Office 365 bundles include applications such as SharePoint, OneDrive, Skype, and Teams which allow employees to share files, conduct videoconferences, and collaborate. Speak to your technology partner about how to get the most from these tools.

USER/DESKTOP EXPERIENCE This will vary depending on the specific user requirements but for simplicity, we will consider two examples: a typical office-based user and a typical mobile user. Minimum requirements for a typical office-based user includes a business class PC with an Intel

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Core i5 class processor, 16 GB RAM, 250 GB Solid State hard drive, running the Windows 10 operating system. This system currently costs about $1,000 plus approximately two hours of set up time for your technology provider. For high-quality monitors that reduce eyestrain, provide ergonomic benefits, and improve user productivity, expect to pay about $400 for a pair of good-quality, 22-inch widescreen monitors suitable for business use.

The tool of choice for mobile employees including producers is the two-in-one laptop. These devices are convertible from standard Windows 10 laptops to touchscreen tablets.

Depending on features, these devices can vary greatly in price.

A typical two-in-one device with a 13- to 15-inch screen provided by a major vendor (Dell, HP, Lenovo, Microsoft) will cost between $1,300 and $1,600. Our agency clients typically add a docking station, so they can seamlessly transition to their office environment. This usually adds about $300.

PROACTIVE MANAGEMENT AND SUPPORT A competent technology provider is extremely valuable in advising you on your technology investment and keeping your agency running effectively. Rates for such service can vary greatly depending on how comprehensive the services are.

Proactive, high-quality services cost about $100 per user per month (excluding backup/disaster recovery services). At this rate, your provider should be conversant in agency operations and should provide strategic technology reviews. Also included should be help desk support and basic security products such as spam filtering, endpoint protection, computer updates, firewalls, and gateway security. Finally, your provider should interact on your behalf with your other technology vendors such as phone system supplier, internet service provider, and agency management system vendor.

Backup and disaster recovery costs can vary depending on agency requirements from simple “file-based” backup solutions to very expensive high availability alternatives. An in-between solution that will keep your data safe and secure with an “imagebased” backup of your systems should cost between $300 and $600 per month depending on the amount of data.

SECURITY AND COMPLIANCE This area has evolved a great deal in the last few years and will continue to do so as the threats, compliance requirements, and tools all continue to change. Today, enterprise tools are being repurposed for smaller businesses, so new tools and methods are becoming affordable all the time.

Continued on page 22

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TECHNOLOGY UPDATE Continued from page 21 Some of the services you should expect to procure include: annual security assessments, security awareness training for your employees, and security event log management. A basic managed security service will add approximately $400 per month to your proactive managed support. Adding mobile device security, data encryption, advanced endpoint protection, dark web searches, and a more sophisticated security incident and event managements system can add a lot more.

CONCLUSION I hope this overview gives you a sense of the costs associated with key aspects of your agency’s technology. Strategically planning the best use of your technology dollars will go a long way in improving your agency’s productivity and making you more profitable.

Greg DiDio is CEO of Kite Technology Group, a Maryland-based IT services and consulting company serving the needs of over 100 insurance agencies across the country.

He has 25 years of leadership experience, with the last 18 focused on information technology management. Greg has a passion for developing leaders and creating corporate cultures that facilitate high performance and employee growth.

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