Maryland Primary Agent - September 2018

SEPTEMBER 2018 | MARYLAND

THE AGENT-CARRIER CONNECTION

APPOINTMENTLINK IMPACTS OF CARRIER TECH TRENDS

At Plymouth Rock, we know that a strong and dedicated partnership will help your agency grow and thrive.

That is why we offer programs and benefits that will make your agency stronger and more profitable.

• Breakthrough HOME quoting tool • Unique benefits and services like Get Home Safe® • Competitive rates

• Over 30 years of experience serving agents with More Than Just Insurance • Highest quality service and customer care

Get in touch with us and find out how we can grow together!

To talk about appointment opportunities for your agency, contact:

David Gant, Chief of Agency Marketing at dgant@plymouthrock.com.

Plymouth Rock Assurance is a marketing name used by a group of separate companies that write and manage property and casualty insurance in multiple states. Insurance in Pennsylvania is underwritten by Palisades Insurance Company, Palisades Property and Casualty Insurance Company and High Point Preferred Insurance Company

IN THIS

12 SIX CARRIER TECH TRENDS THAT IMPACT AGENTS

As carriers race to adopt technology and respond to customers’ evolving expectations, find out what the changes mean to agents.

18 HOW APPOINTMENTLINK CONNECTS AGENTS, CARRIERS

Learn how to take advantage of AppointmentLink – IA&B’s new tool to connect member agencies with Partner companies.

20 ARE YOU STRATEGICALLY INVESTING IN YOUR TECHNOLOGY?

Compare your agency’s IT investments to those that healthy, growing agencies make.

IN EVERY ISSUE 2 3 4 6 8 9 10 26 28 28 28

Chair of the Board’s Message Claire-ification Legal Corner 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 # 2018-9, 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

GETTING BY WITH A LITTLE HELP FROM OUR FRIENDS

R

elationships between independent agents and their carriers can be a mixed bag. For some, it’s smooth sailing. For others, it’s more tumultuous. But in the end, our relationships are symbiotic, as we rely on one another to get the job done, to find solutions for our customers, and (ultimately) to make money.

When you consider your relationships, you may not be aware of how those carriers support you more indirectly – through their partnership with your agents’ association. The IA&B Partners Program allows companies to support and connect with our independent agent community while helping IA&B to offer the programs and services we rely upon. It’s truly a win-win-win.

Later this month, the IA&B Board of Directors will host a meet-and-greet for our top-tier sponsors – the Platinum Partners – in conjunction with our board meeting. It’s a first-of-its-kind event for us, and we’re looking forward to thanking them for their support and furthering IA&B’s relationship with them.

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

OFFICERS

Chair of the Board

John B. Hollister

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

Bottom line: We can’t go it alone. There are challenges ahead for the independent agency system. But with our tenacity – and the ongoing support of our carrier partners – we can overcome them.

Lisa A. Leach Goth, CIC

If you haven’t yet, I encourage you to peruse the list of supporting companies (IABforME.com/Partners) and thank those that you represent for their support.

Elizabeth H. Martin, CIC

New Bethlehem, PA

Shannon Lipniskis Indiana, PA

Millersville, PA

Mark J. Monroe

West Chester, PA

Richard M. Rankin, CIC Lancaster, PA

All the best,

D. Bradley Rosenkilde Jr. Hunt Valley, MD

Tara S. Silfies, CPCU Bethlehem, PA

Robert L. Smyrl Jr., CIC

John Hollister Chair of the Board

Hatfield, PA

Glenn R. Strachan

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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SEPTEMBER 2018

Claire-ification IA&B Vice President - Advocacy Claire Pantaloni, CIC, CISR provided this month’s answer.

QUESTION:

Ask our experts!

Do we need to get ACORD applications signed for small business customers? We currently send proposals. Are they an adequate substitute for a signed app?

Have a question?

Rely on our team to find the answer.

ANSWER: A signed application is better, and here’s why: Generally, company guidelines make reference to properly executed forms.

That means the forms are signed by the parties. These “forms” are not just the executive officer exemption, terrorism, or auto forms. They include the underlying application where the applicant commits to responses made to specific questions.

Your agency agreement also could expressly require you to secure signed applications, in which case failure to do so would place you in breach of contract.

Contact Claire: 800-998-9644, ext. 604 WHAT ARE THE RISKS OF NOT HAVING A SIGNED APP? The big risks for the agency are misrepresentation – and any defense based on it. Absent a signed application, a carrier could be made to pay a claim, and then could seek reimbursement from the agent because the agent was unable to produce the signed app.

ClaireP@IABforME.com IABforME.com

From an E&O perspective, the best practice is to have a signed application on every risk, even if the application is signed after coverage is bound (simply show the date it is signed and place the app in the file). It is better than relying on a proposal. When doing so, the agency can still maintain a flexible workflow that accounts for time constraints. The agency can provide a quote based on a phone conversation, bind coverage when the price is accepted, and secure the signed application after the fact.

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LEGAL CORNER

PA SUPREME COURT DECISION HELPS INSURANCE AGENTS, FINANCIAL ADVISORS

By Tim Ventura, Esq.

I

nsurance agents and brokers and financial advisors should welcome the recent Supreme Court of Pennsylvania decision in Yenchi v. Ameriprise Fin., Inc., 161 A.3d.

811, 820 (Pa. 2017). It clarifies and limits the basis for finding a fiduciary relationship that would trigger an agent’s heightened duties to act with “utmost good faith in advancing another’s interests.”

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Where evidence can be developed to demonstrate that plaintiffs/consumers ultimately retain final decision-making power on the types and amounts of insurance to purchase, then summary judgment should be granted in favor of insurance agents on fiduciary duty claims. (An example of demonstrating that decision-making power would be establishing that a customer accepted certain offers while rejecting others, such as multiple premium quotes

SEPTEMBER 2018

documented.) Such claims should be dismissed against agents/brokers as a matter of law on motions, before trial.

CASE SPECIFICS In Yenchi, the Pennsylvania Supreme Court analyzed whether a fiduciary relationship existed in the context of a financial advisor selling insurance to a married couple. After a “cold call,” a captive financial advisor met with the Yenchis and, for a $350 fee, presented

them with a financial management proposal, including various financial recommendations. At a subsequent meeting, the advisor proposed a whole life insurance policy, which Mr. Yenchi opted to purchase. The advisor later proposed that the Yenchis increase their life insurance coverage, but they rejected his advice on that occasion.

After their portfolio was reviewed independently by a third party a few years later, the customers were told that the whole life insurance policy would inevitably lapse, was underfunded, and that additional premiums beyond those allegedly represented by the advisor would have to be paid. The Yenchis filed suit against their advisor and Ameriprise, alleging claims for negligence, fraud, unfair trade practices, and breach of fiduciary duty, among others. A fiduciary relationship/ duty for an insurance agent imposes a higher standard to act with “utmost good faith in advancing another’s interests,” rather than merely obtaining the types/amounts of insurance requested by a customer.

COURT DECISION The trial court granted summary judgment on the fiduciary duty count.

It held that no fiduciary relationship existed because the plaintiffs continued to make their own investment and purchasing decisions.

In addition, the lower court cited its own decision in Ihnat v. Pover, 1999 Pa.Dist. & Cnty. Dec. LEXIS 225 (C.P.Alleg.

Feb. 1, 1999), in which it held that no fiduciary duty arises between an insurance agent and a policyholder unless the policyholder delegates decision-making control to the agent. In applying that decision, the court found no material difference between an insurance agent and a financial advisor.

The Supreme Court in Yenchi held that no fiduciary duty exists in a consumer transaction for the purchase of a whole life insurance policy based upon the advice of a financial advisor when the consumer purchasing the policy does not “cede decision-making control to the other party.” In so holding, the court noted that fiduciary duties do not arise “merely because one party relies on and pays for the specialized skill of the other party.”

The court noted that fiduciary duties do not arise ‘merely because one party relies on and pays for the specialized skill of the other party.’

— Tim Ventura

CONCLUSION As a practical tip, it is always best practice for insurance agents/brokers to memorialize and document when specific types and amounts of insurance are rejected by their customers. Such documentation is critical for the defense of agents/brokers in civil litigation –

when a loss occurs and there becomes a claim from a policyholder that he believed he had different types or amounts of insurance in place.

Often times, absent documentation, the agent claims that the customer verbally declined to pay for a specific type of coverage or higher limit, while the customer claims he wanted it. Without an email or log note confirming that decision by the customer, it amounts to a credibility/factual dispute left for a jury to decide at trial.

Tim Ventura is a shareholder in the Philadelphia office headquarters of Marshall Dennehey. He is a graduate of Boston College and Temple University School of Law. As a member of the Professional Liability Department, Tim represents insurance agents/brokers, financial entities, real estate professionals, and attorneys. In addition to civil litigation, Tim presents and writes on various Errors & Omissions topics affecting insurance agents nationwide.

Tim is a member of the Professional Liability Underwriting Society, Claims and Litigation Management Alliance, and the American, Pennsylvania and Philadelphia Bar Associations. He can be reached at 215-575-2582 or tgventura@mdwcg.com.

EDITOR’S NOTE: While this addresses a recent Pennsylvania Supreme Court decision, the rationale and best practices provided in this article are applicable for agents in all states.

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COVERAGE CORNER

CYBER: DO WE KNOW WHAT WE’RE INSURING

By Jerry M. Milton, CIC

I

t seems to me that it hasn’t been that many years ago that life was not as complex as it is today. Our insurance contracts were simpler. We insured “bodily injury,” “property damage,” and “personal injury.” We used terms such as “replacement cost” and “actual loss sustained.” Well, that was then.

This is now.

As life has gotten more complex, the risks our insureds face have also gotten more complex. Therefore, I guess our

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insurance contracts, out of necessity, have also gotten more complex. Two major contributors to this complexity are computers and the internet. Our insurers have addressed this issue by either limiting or excluding electronic data and use of the internet under their property and liability policies.

These limitations and exclusions have resulted in our insurers developing new policies to address the risks associated with computers, electronic data, and

SEPTEMBER 2018

the internet. The name frequently used to describe these policies is “cyber.”

This term “cyber” means it relates to or is characteristic of the culture of computers, information technology, and virtual reality.

These new cyber policies are so complex that I doubt most insureds and many insurance people (company and agency) fully understand what’s covered and what’s excluded. Don’t get me wrong.

Many of our insurers have done a good

• Media material

These new cyber policies are so complex that I doubt most insureds and many insurance people (company and agency) fully understand what’s covered and what’s excluded.

— Jerry Milton

• Newsworthy event • Security event costs • Special expenses Folks, when it comes to using terms that we do not know what they mean, this is just the tip of the iceberg.

These cyber policies had to be developed because of the limitations and exclusions that have been incorporated in our property and liability policies. I complement our insurers for addressing the cyber issues. But no two policies are the same. What may be covered under one insurer’s policy could very well be excluded under another.

I’m afraid that these policies are so complex that when we’re asked, “Is that covered,” we may have to answer, “I don’t know” or “Maybe, maybe not.”

Y’all take care!

job, but they’re all using terminology that we insurance people just don’t understand. When we encounter a term in the insurance contract that we don’t fully understand, we go to the definitions section. Get ready. One insurer’s policy has 57 definitions, another has 55, and another has 30.

To further confuse the situation, the insurers do not use the same terms to define what damages are covered and what damages are excluded. For example, what do the following terms mean?

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.

GET SCHOOLED ON CYBER LEARN ABOUT cyber liability without leaving your office. Cyber Liability – The 21st Century Peril returns to our live CE webinar series next month.

The course, which delivers 3 CE credits (without an exam), will answer: • What are the most common first- and third-party exposures?

• How do traditional insurance products respond to these threats?

• How do laws on privacy and security of personal information affect insureds?

• What should you consider when selling coverages available in the cyber insurance market?

Monday, Oct. 15 | 1-4 PM

Register online or by phone: IABforME.com/webinars 800-998-9644, option 1

• Control group • Electronic media peril • Electronic publishing • Knowledgeable person

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ONWARD & UPWARD: A MESSAGE FROM JASON ERNEST In this month’s issue, we highlight carrier relationships with our members. It’s an important topic.

I’ve spoken a lot during my first six months as CEO about what it takes to be a winning agency. Building a good culture, embracing technology, and creating efficiencies all contribute to winning. But equally as important are close and respected partnerships with independent agent insurance companies.

IA&B has a robust partnership program consisting of 55 carriers. These carriers have shown their commitment to the independent agent channel by investing in IA&B. And, in turn, we work closely with them. Our staff meets regularly with our partner carriers to discuss the independent agent channel and how we can mutually improve it. For example, several of our partner carriers have expressed interest in our initiative with the Future Business Leaders of America and want to get involved. Other partner carriers want to work with us on compliance-consulting services.

I’m also happy to announce that we will be providing our eighth Agency Agreement Seal of

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Approval next month. This Seal is given to those partner carriers that work with us in reviewing new agency agreements, ensuring that the final draft is mutually acceptable to both agent and carrier. It is a winwin initiative and shows that a carrier has the utmost respect for their agents –and for IA&B. In the last two months, I have been to independent agent conferences in Washington, D.C.; Rehoboth Beach, DE; Cleveland, OH; and Whistler, BC, and at each was a strong showing of carriers that want to support independent agents and the associations that represent them. Carriers often get a bad rap from agents – but trust me when I say our partners are heavily involved in this industry and are working toward a common good with us.

Bottom line: There can be no successful independent agent without a productive, profitable relationship with carriers. This issue will highlight that, and I want to thank our partner carriers for their efforts to make the independent agent better.

Jason Ernest, Esq. IA&B President & CEO

SEPTEMBER 2018

RULES CHANGE ON ADJUSTING COMMISSION RATE ON COMMERCIAL PROPOSALS The ability to request a lower commission rate on a commercial account has been officially restricted. While the Maryland Insurance Administration’s (MIA) position on the permissibility of variable rate filings had gone back and forth in the past, two bills (HB 1078 and HB 1127) and Bulletin 18-13 are shutting the door to the practice, unless: • the commercial account meets specific criteria and • the commercial account has executed a document to evidence that it meets those criteria (Certificate of Qualification as an Exempt Commercial Policyholder).

Changes made to the law this year (and becoming effective on Oct. 1, 2018) are now precluding the ability for carriers and producers to adjust a commission rate unless the insured qualifies as an Exempt Commercial Policyholder,

STATE NEWS which means it meets at least two of the following characteristics: • Generates more than $5,000,000 of annual revenue or sales • Has a net worth in excess of $2,500,000 • Employs at least 25 full-time employees • Is a non-profit organization or public body with an annual budget of at least $5,000,000 • Is a municipal corporation with a population of at least 15,000 Carriers currently using variable commission rates have been asked to submit new filings that comply with the changes. Producers need to be mindful of the change and properly secure a signed Certificate of Qualification for each applicant or policyholder for which a reduced commission is going to be applied.

Exam scores currently are valid for two years. Beginning in October, the state will shorten this time frame so that a candidate who passes both portions of the licensing exam will have six months to apply for the appropriate Maryland license. Failure to apply within six months will require the candidate to retake the pre-licensing course and to apply to retake both portions of the exam.

Finally, a candidate who receives a pre-licensing education waiver currently has one year to pass both portions of the licensing exam. This will change to six months.

Beginning this fall, Maryland will shorten the eligibility period for aspiring producers to take the insurance licensing exam and the time frame for the validity of their exam results. The changes, which were announced this summer, take effect Oct. 1.

WHAT’S NEW Currently a candidate has one year to pass both portions of the Maryland licensing exam. The state will shorten this eligibility period to six months. Failure to pass the exam within six months will require the candidate to retake the prelicensing course and to apply to retake both portions of the exam.

NEW PARTNERS & MEMBERS NEW PLATINUM PARTNERS: BBSI Salisbury, MD FARMERS MUTUAL FIRE INSURANCE COMPANY OF MARBLE Marble, PA

PRE-LICENSING PREP IA&B offers its Maryland Property & Casualty Pre-Licensing Manual to help aspiring agents improve their chances of passing the licensing exam on their first try. The state-specific guide provides: • Insight into the questions they should be prepared to answer • Explanation of the test process (from registration to test-taking tips)

PRE-LICENSING TIME FRAME TO SHORTEN

WELCOME

• Study schedule

NEW SILVER PARTNER: CAPITAL PREMIUM FINANCING Landenberg, PA

NEW MEMBER: REEDER INSURANCE FINANCIAL SERVICES INC. Nottingham, MD

• Mentoring program The complete manual is $169 for IA&B members ($189 for non-members).

IABforME.com/licensing

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 Program

Among the IA&B Partners are the following Platinumand Gold-level sponsors.

ELEVATING AGENTS

PLATINUM PARTNERS

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.

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Offering sincere thanks

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

GOLD PARTNERS Berkley Mid-Atlantic Group EMC Insurance Keystone Insurers Group MMG Insurance Company Mutual Benefit Group Progressive Zenith Insurance Company

SEPTEMBER 2018

PLATINUM PARTNER

Insurance Agents & Brokers proudly recognizes Acuity as one of its Platinum Partners.

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

PLATINUM PARTNER

Ben Salzmann

President and CEO

Acuity has also received more technology awards from ACORD than any other P&C carrier in the nation.

Acuity offers real-time, online policy quotation and application and automatic issuance and delivery of policies to agents within seconds in both personal and commercial lines.

“We have demonstrated our commitment to being a true partner with independent agents in Pennsylvania and throughout our operating territory,” Salzmann says. “We are thankful to Pennsylvania agents for the trust they have placed in us, and we are confident about our continued success in the state thanks to those partnerships.”

Since opening its doors in Pennsylvania in 2010, Acuity has been growing personal and commercial lines business with independent agents in the state at a rapid pace, including a 15% YTD growth in 2018.

The credit for Acuity’s strong and sustained growth in Pennsylvania goes to independent agents and, according to President and CEO Ben Salzmann, no company is more committed to agents than Acuity.

“For more than 90 years, we have done business exclusively through independent agencies,” Salzmann says. “Our experience and dedication to building strong partnerships with agents in Pennsylvania has definitely fueled our successes in the state.”

“Agents know what to expect when they do business with Acuity,” adds Wally Waldhart, Vice President - Sales and Communications. “We want to be agents’ ‘go-to’ company for the type of business in our wheelhouse, and we deliver what agents need and want in order to write personal and commercial lines customers.”

Acuity’s commitment to independent agents includes an unwavering focus on providing the technology, products, and value-added services that make the insurer a powerful business ally. On the technology front, Acuity has focused on developing and investing in solutions for agents that have earned the insurer recognition as one of the easiest companies for agents to do business with.

When it comes to products, Acuity offers agents a wide array of monoline, package, and portfolio policies, as well as many important and unique coverage enhancement endorsements designed for Pennsylvania accounts. In personal lines, Acuity provides true tiered rating programs in both auto and homeowners. In commercial lines, Acuity offers monoline and commercial package policies, businessowners’ (BOP) forms, and endorsements designed for targeted classes of business, including contractors, truckers, retailers, and manufacturers.

Acuity also provides agents many value-added services, including an expansive continuing education (CE) program featuring courses taught by expert Acuity staff as well as award-winning video courses, delivered through its innovative Acuity U program. All of Acuity’s CE services are offered at no cost to its agents.

Acuity’s service to independent agents and customers also benefits from the insurer’s experienced and dedicated staff. Named a Best Employer by Forbes, Acuity features an employee-friendly workplace that has led to remarkably low staff turnover among its 1,300 staff members, helping build stronger relationships with customers and independent agents.

Lastly, Acuity offers independent agents stability that spans years of financial and operational performance. The mutual insurer is rated A+ by both A.M. Best and Standard & Poor’s and is the only regional insurer to have been named to the Ward’s 50 list of top-performing property-casualty companies for 19 consecutive years.

Operating in 26 states, Acuity is trusted to protect over 100,000 businesses and over 450,000 homes and vehicles. Acuity generates over $1.4 billion in revenue through 1,000 independent agencies and manages over $4 billion in assets. Acuity earns a 96% claims satisfaction rating from customers and maintains a reputation for innovative products and service excellence.

FOCUSED ON RESULTS FEATURED PARTNER Acuity

PRESIDENT & CHIEF EXECUTIVE OFFICER Ben Salzmann

COMPANY LOCATION Sheboygan, Wisconsin

A.M. BEST RATING “A+” (Superior)

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SEPTEMBER 2018

SIX CARRIER TECH TRENDS HOW ARE AGENTS IMPACTED?

By Jerry Fox

As carriers race to adopt technology and respond to customers’ evolving expectations, agents often find themselves bogged down in new workflows.

On the following pages, industry-tech expert Jerry Fox offers considerations for agents – pros, cons, and opportunities.

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T

here are times as an agent when it seems like the processes for quoting, issuing, and servicing a policy become more difficult with each change carriers make.

However, if you step back and look at the whole process and compare it to the days of “10-key” calculators and paper applications, things are much simpler and faster now. The process has gone from days to minutes.

DATA, DATA, DATA I suspect that most agents are getting sick of hearing about “data.”

The problem with raw data is that it needs to be interpreted and can quickly overwhelm even the mot savvy agent.

Though carriers may speak of getting data, most often they are actually referring to information which is actionable data. The sources of this information are expanding every day with new and repurposed uses for data. All carriers are looking for the best business, and by compiling enough information on given customers, they are able to better segment them into appropriate rate classifications. The more accurate the rate is for any given risk, the more profitable that risk is.

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This needs to be encouraged, but it must be done with a workflow that makes sense for the agents. It is exceptionally frustrating when agents receive inaccurate rates through a comparative rater, all because carriers are running thirdparty data sources behind the scenes. Agents need to talk to their carriers and ask that they work more closely with their comparative rating partners to deliver the required information through the rating process in order to gain more accurate rates at the point of sale.

USER INTERFACE AND CARRIER PORTAL DESIGN, FUNCTIONALITY While this is changing some now, the amount and style of changes will accellerate in the near future. As carriers add artificial intelligence and adaptive technologies to their systems, the screens that agents and consumers use will change and adapt as questions are answered.

The goal is to ask as few questions as possible to get the answers needed. With the vast array of prefill data available, the ability to absorb different sources in one set allows carriers (in some

SEPTEMBER 2018

[Carriers’ data usage] needs to be encouraged, but it must be done with a workflow that makes sense for the agents.

— Jerry Fox

cases) simply to ask for an address and verify all the information needed to issue an accurate quote.

Agencies should be working with vendors that provide this type of functionality for their own agency portals. Also, agents should be working with their management system and comparative rating vendors that leverage these technologies – all with the end goal of satisfying how the consumer expects to work with you.

DELIVERY TOOLS The consumer is driving change rapidly in how and where they want delivery of policies, policy changes, billing, and claims. Instead of the carrier sending out new policies as they have done in the past, they are changing their systems to have the agent access the policy declaration pages and change documents through the company portal and then deliver them to the consumer.

This creates a cumbersome and inefficient workflow scenario for agents – whether it’s the extra step of going to the carrier portal to print or email the policy or it’s giving the customer access to the portal to obtain the policy. This creates a lot of confusion and work for the agents, who often don’t know what the customer would prefer.

What’s more, most states require an opt-in/out for electronic delivery, and agency management and carriers systems are not ready to deal with this. Electronic documents and messages, known as eDocs (see: insurancedigitalevolution.org/edocstoolkit), are available through most agency management systems, but the type of documents and messages is not yet complete or standardized for all carriers. Plus, the policy management systems that carriers buy are not consistent in the way they handle electronic documents.

carriers offer “change requests” for email address changes, which is needed to create a policy change so that the insured gets a copy of what was done.

The bottom line is that it lies in the agency’s hands to make sure that the updated email address is validated with the consumer.

Agents should ask their carriers and vendors to create the appropriate opt-in/out systems and get involved in eDocs – otherwise, the workflow will continue to degrade.

APPLICATIONS AND POLICY MANAGEMENT Carrier portals continue to add functionality that is not always convenient or efficient for agents. As the portals become more complex to deal with consumer demands, the agent must deal

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

On the billing side, this can create a major E&O exposure with bad email addresses and changes of email addresses, as consumers assume they will get paper in addition to an email. This is another section that requires the agency to consistently and regularly validate current emails and keep them up-to-date on their systems, as well as the carrier systems. And currently, not all

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with multiple carriers, changing their interaction with sites on a regular basis. The only solution here is to encourage your carriers to get actual end-user input before they make changes to their sites and ways of delivery (see above). Aside from security issues (coming up), carriers are trying to differentiate themselves and be better, but they’re not always checking with the end user on what it does or does not do for their workflow.

HOW TO COMPLY WITH PRIVACY REQUIREMENTS TAKE YOUR agency’s privacy compliance seriously, or risk sanctions, fines, and penalties. As more and more data is used to streamline the application process, agents should be mindful of what information is pulled from where. As author Jerry Fox shares: If an agency does a property pre-fill on a specific property address, this is public personal information. If they now add the insured’s name and date of birth to that address in their management system, it is now non-public personal information, and the agency has a legal responsibility to protect that data.

IA&B members have access to comprehensive privacy resources, including explanations of what constitutes non-public personal information and how to comply with state and federal requirements.

Contact our Advocacy team or log onto our website to learn more.

Claire Pantaloni, CIC, CISR Vice President - Advocacy 800-998-9644, ext. 604 ClaireP@IABforME.com

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There is public personal information (PPI) and non-public personal information (NPPI), as well as third-party aggregators of information. What most people do not understand is that, if you get PPI and combine it with other collected data, in many cases it now becomes NPPI – which is held to a completely different legal standard. For example, if an agency does a property pre-fill on a specific property address, this is PPI. If they now add the insured’s name and date of birth to that address in their management system, it is now NPPI, and the agency has a legal responsibility to protect that data as NPPI. [See sidebar for more on agencies’ privacy requirements.]

If the carrier or agency is using a third-party data aggregator, they should be taking a close look at where that data is coming from and what is being aggregated to know how to deal with it.

Permitted use in contracts (which click-through agreements are) dictates what you can use the data for.

SECURITY

Don Bankus Legal & Corporate Affairs Director 800-998-9644, ext. 603 DonB@IABforME.com IABforME.com/privacy

Within the application process, there will continue to be more information needed to satisfy the increasing data needs (see above), and hopefully most of that will come from prefilled data sources. However, agents need to understand what information is being pulled and from where.

This section could easily become an entire article on its own, and in fact, there have been many published already. Suffice to say that all agencies should be looking into what they need to do to keep up with the changing laws and requirements.

The Agents Council on Technology (ACT) has put together resources as starting points for most agents, including an Agency Cyber Guide to address cyber regulations (see independentagent.com/ACT).

The point is that every agency – big and small – needs to make the time to understand its legal requirements, as well as learning how to protect its business and customers from cybercrime.

The most pressing need right now is the changes in the security requirement laws and multifactor authentications. With the average agent having eight staff people multiplied by eight carriers multiplied by two IDs per user, the complexity increases

SEPTEMBER 2018

dramatically. It will not be legal nor effective for agencies to have one sign-on per carrier much longer.

The good news for most agents is that their management system vendors are working hard to fix what could become a huge roadblock by looking at options like ID Federation (see: IDfederation.org). To be clear, this is not just a carrier or agency problem, this is an industry problem that needs a concerted effort to solve.

CONCLUSION The one constant now is that things are always changing, sometimes for the better and sometimes, well, not so much. The big difference now is that the consumer is driving the change by demanding real-time service and convenience because they have been experiencing it in all other areas of their lives. Agents need to keep up with the changes and demand more from their carriers and management system vendors in order to provide service to the consumer in the way they expect.

CLAIMS This is an area where changes are starting to happen as a result of consumer pressure. Be prepared to see self-handling claims processes where the adjusters never leave their desks. Consumers will use their smart devices to take pictures, measure, and have interactive video discussions with adjusters. There also will be a lot more direct claims processing using artificial intelligence to handle the small, easy claims. Expect to see a lot more innovation in this area as the consumer is constantly demanding faster, more complete and efficient service.

J erry Fox has a long career in the independent agency distribution channel – as an indpendent agent based in Minnesota, chairman of the NetVU user group, and a leader within Marshall&Swift/Boeckh CoreLogic Spatial Solutions, as well as a leader of many Agents Council for Technology workgroups.

Contact Jerry at jdfoxmn@gmail.com.

17

MATCHMAKING IN THE INSURANCE INDUSTRY HOW CONNECTS AGENTS, CARRIERS

18

SEPTEMBER 2018

I

n recent years, it wasn’t uncommon for member agencies to contact IA&B to discuss attracting new markets. Nor was it uncommon for carriers – particularly those entering a new region or launching a new product – to contact IA&B in hopes of securing leads for agency appointments. So it was a natural progression for IA&B to develop a more strategic role in the agent-carrier matchmaking process.

Earlier this year, IA&B launched AppointmentLink – a proprietary tool that sets the stage for potential appointments between IA&B member agencies and company partners.

In today’s business world, it’s who you know, which is why we work to build relationships with tools like AppointmentLink.

— Jason Ernest, Esq. President/CEO of IA&B

GET STARTED IT BEGINS with your profile. By completing an online form, you’ll create an agency profile in our AppointmentLink database.

From there, your information could match that of an IA&B Partner company.

Please note that AppointmentLink access is restricted to those listed as IA&B member agencies’ primary and alternate contacts in our database. While AppointmentLink does not guarantee an appointment, it does help you find the right contact and prepare for the conversation.

Log into our website to begin, or contact Claire Pantaloni with questions.

IABforME.com/AppointmentLink.

Claire Pantaloni, CIC, CISR Vice President - Advocacy 800-998-9644, ext. 604 ClaireP@IABforME.com

“In today’s business world, it’s who you know,” said Jason Ernest, Esq., president/CEO of IA&B, “which is why we work to build relationships with tools like AppointmentLink.”

AppointmentLink works by gathering basic member agency demographics – such as mix of business, premium volume, and agency’s general location/marketing area – and then comparing them against the criteria of carriers that are seeking appointments. Any IA&B member agency can participate, as well as companies in the top two tiers (platinum and gold) of the IA&B Partners Program.

After completing their online profile, agencies receive a list of companies that meet their criteria, as well as contact information for each one to begin discussion about an appointment.

“We joke that this is the Match.com for the independent agency system, but there really is some truth to it,” said Ernest.

“AppointmentLink is about making connections, and it’s a really worthwhile tool for agencies to explore their options.”

19

TECHNOLOGY UPDATE

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SEPTEMBER 2018

ARE YOU STRATEGICALLY INVESTING IN YOUR TECHNOLOGY? PART I

By Greg DiDio

On the following pages, Greg DiDio pinpoints the five categories of IT investments that healthy, growing agencies make. Look for a follow-up article in the October Primary Agent where Greg will share the cost side of the equation: how much these agencies spend to maximize the value of their technology.

21

TECHNOLOGY UPDATE

INVESTING IN AN AGENCY MANAGEMENT SYSTEM MAKE AN informed decision about your next agency management system. As author Greg DiDio explains, your management system has a profound impact on your operation – from defining workflows to meeting customers’ (and producers’) changing demands.

Now you can take a guided tour through agency management system platforms without leaving your home or office. The Agency Management System E-Summit is a series of recorded webinars that allows insurance agencies to investigate over a dozen different platforms.

Learn more or register by visiting the IA&B website. For questions, contact Steve Anderson, host of the virtual summit, directly.

IABforME.com/AMS_selection

Steve Anderson 615-599-0085 steve@steveanderson.com

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W

orking with scores of small and mid-size insurance agencies over the last 12 years has given me an interesting vantage point to compare agencies. I have noted the differences between healthy, growing agencies and those that are stagnant, and one of the differentiators between the two groups is their approach to technology.

Well run agencies, large and small, see technology as a valuable investment to be leveraged for the improvement of their business. Those agencies that are struggling usually view technology as an expense that must simply be controlled and minimized. I have watched this differing perspective have a huge impact on agencies’ experiences.

As you might expect, agencies who invest wisely in technology have more secure and reliable systems. But good technology investments also extend to better productivity which can improve sales and reduce service expenses. The result is higher profits and greater agency valuation. A healthy perspective on technology can even help your culture and employee engagement.

This article is the first of a two-part series. In this issue of Primary Agent, I will provide a perspective on how healthy, operationally mature agencies are investing their IT spend to achieve high performance. In the next issue, I will provide some parameters for how much you should expect to spend to maximize the value you get from your technology.

For clarity, I am going to review five major categories of IT investment and discuss how healthy agencies approach each. The five categories are: 1) agency management systems,

SEPTEMBER 2018

2) office productivity software, 3) employee experience, 4) security and compliance, and 5) proactive management and support.

AGENCY MANAGEMENT SYSTEMS As your primary line of business application, your agency management system will have a profound impact on your operation. Healthy agencies are investing in proven agency management systems from vendors who have deep experience and a track record for deploying and supporting agency management systems.

A complete agency management solution includes more than the traditional accounting, workflow, and customer relationship management modules. As client expectations evolve, the tools must evolve as well. Operationally mature agencies understand that state-of-theart sales automation tools allow them to differentiate from their competitors as their target clients shift to a younger generation with different expectations for conducting business. They know that younger clients have a higher expectation for serving themselves, so online tools that allow them to pay their premium, request auto ID cards, submit a claim, and review their coverages are necessities.

Likewise, as producers skew younger, there is greater need for quality mobile versions of the tools that allow producers to manage their accounts, quote, and close business. Whether these additional tools are provided by your agency management vendor or a third party, a cohesive solution is a must, so these modules need to integrate well. Most thriving agencies already have their agency management system “in the cloud” hosted by the application vendor.

If your agency still has its management system running locally on premise, then

you should be planning for the migration to the cloud now.

PRODUCTIVITY SOFTWARE The second category is office productivity software. This includes software for email, spreadsheets, presentations, document management, collaboration, as well as voice communications.

Most agencies are committed to Microsoft for these solutions given the needs to integrate email and documents with their agency management system.

Microsoft continues to innovate to provide a more feature-rich, dependable suite of solutions. Healthy agencies are moving to Office 365 or already there in order to get the benefits of the newest features in the Microsoft Office suite, facilitate the “work anywhere” capabilities of Office 365, and reduce their backend infrastructure costs for servers.

These agencies also understand that their phone system is a critical part of office productivity and facilitates that “work anywhere” goal. They are re-evaluating the features of their phone system to ensure it has the flexibility to accommodate their workflows irrespective of where their employees are physically located.

EMPLOYEE EXPERIENCE The next category is the employee experience. In some respects, not much has changed in user requirements in the last decade. Typical employees in an agency, including CSRs and accounting personnel, still generally require fully functional workstations.

Healthy agencies are investing in multiple monitors for efficiency, solid-state hard drives for fast performance, and plenty of computer memory. Executives and producers are investing in laptops or combination

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TECHNOLOGY UPDATE

tablets/laptops such as the Microsoft Surface to get the benefits of a full featured desktop without sacrificing mobility. Successful agencies also stay current on desktop hardware, replacing PCs approximately every four years. They make sure they are using a supported Windows operating system. This means they are well aware that Windows 7 will no longer be supported after January 14, 2020 and they are working now with their IT solution provider to upgrade to Windows 10 before they are out of compliance.

SECURITY AND COMPLIANCE

competence and urgency when issues arise, and a clear understanding of your agency needs. It certainly helps if your provider is a trusted advisor with strong credentials in the first four categories.

Then, your solution provider can be the glue that binds all of these needs together.

Properly evaluating the value of any investment requires an understanding of the costs and the benefits. Above we discussed maximizing the benefits by making wise technology choices. In the next issue of Primary Agent, we will look at the cost side of the equation.

Stay tuned.

The fourth category requiring IT investment is constantly evolving. This is the area of security and compliance.

Security threats are growing as are the toolsets and best practices for combatting them. As new regulations kick in at the state and federal levels, the requirements for compliance continue to increase as do the penalties for noncompliance. I advise agencies to work with security providers that are in tune with the specific regulations affecting the insurance industry, are forward-thinking, and are nimble enough to adjust to the changes in security regulations, threats, and tools.

PROACTIVE MANAGEMENT AND SUPPORT The fifth and final category is proactive management and support. Most high performing agencies recognize that their IT dollar can be stretched if they engage a solution provider to provide proactive management and support of their users and technology rather than doing it themselves.

Some of the attributes you should look for in a quality IT provider are a proactive approach to technology management,

24

SEPTEMBER 2018

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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Find us at Facebook.com/IABforME, Linkedin.com/company/IA_and_B, and Twitter.com/IA_and_B.

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SEPTEMBER 2018

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