We built the pedestal. You supply the hero. Each year, a group of exceptional insurance professionals are chosen by The National Alliance for Insurance Education & Research to represent their states and compete to become the National Outstanding CSR of the Year.ÂŽ This prestigious award, regarded as the foremost national award of its kind, recognizes the contributions and commitment of those who serve clients within the insurance industry.
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The National winner, finalists, and nominator of the National winner all receive cash awards!
Competition entry is open to all insurance and risk management customer service representatives, account managers, and professionals primarily responsible for customer service. Submissions must be completed by May 1, 2020. 2019 NATIONAL OUTSTANDING CSR OF THE YEAR Mary Katherine Henderson, CIC Insurance Center, Inc.
Visit TheNationalAlliance.com/OCSRY-2020
Contents
TheNationalAlliance.com
FEATURES
COLUMNS
4 Which “I” is The Most Important “I”?
8 Mind the Millennial Gap
William (Bill) C. Toll, CIC, encourages agency owners (and others at management levels) to actively establish a culture of integrity and ethical behavior in their organizations.
28 Insider Insights
Read the revealing and enlightening essays of the best of the best in customer service: the national winner and finalists of the 2019 Outstanding CSR of the Year award.
Creating culture through leadership
—page 4
Kelly Surles, CIC, CPRM, CISR, ACSR, discusses the disparity between certain risks millennials face and the insurance products available to address those risks.
18 Tracking the Exposures and Insurance for Executive Liability Risks
24 How Does Your Agency Measure Up?
A thought-provoking look at the key performance indicators for agencies found in the newest edition of Growth and Performance Standards (GPS).
NEWS
Up-and-comers, movers and shakers
12 Ask Bettie
—pages 36–39 30TH ANNIVERSARY EDITION
Growth & Performance Standards CRITICAL DATA FOR DEVELOPING KPI’S FOR YOUR AGENCY
Bettie shares heart-felt success stories conveyed by National Alliance designees.
17 Learning Horizons
INSURANCE AGENCY
Richard (Dick) G. Clarke, CIC, CPCU, RPLU, announces the newest edition of Executive Liability Insurance and delivers valuable insights into critical coverages provided for D&O, Employer Practices Liability, and Fiduciary Liability exposures.
Industry insights and coverage clarity 6TH EDITION
—pages 21 & 25
22 Your Career, Your Choice
INSURANCE
How to Protect Executives from the Liability Exposures Prevalent in Today’s Business Environment
A visual guide to your many update options.
26 Research Associates
Executive Liability EVOLVING TIMES • EVOLVING EXPOSURES • EVOLVING INSURANCE
Our new Corporate Learning Portal helps you manage employee learning; free webinars give you more ways to learn.
These outstanding organizations step up to support the important work of The National Alliance Research Academy, and invite you to join them.
36 In the Spotlight
Industry accolades and achievements.
alliance@scic.com • 800-633-2165
GUIDING PRINCIPLES
I
magine that you are at a party and your friends are playing a new game. It’s a word game that has taken off on the Internet and social media channels. Some people are saying that it could be bigger than Words with Friends™, and everyone is shocked that you haven’t heard about it. They explain that the game is based upon psychological principles that can be very revealing, and everyone is having a wonderful time debating their various word choices, voting online, and waiting for the next round to begin. In this game there are 26 rounds, and the next round is called “The Most Important ‘I.’” Intrigued, you take a seat and wait for the action to begin. And then they’re 4
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off and running. “Innovation,” someone screams, followed immediately by someone else who says, “Imagination.” “That’s it!” Joe exclaims. “Imagination is the most important value. Nothing happens without imagination.” “But wait,” Chris responds. “Imagination is all fine and dandy, but it’s meaningless unless you follow through. Innovation moves the world forward.” “True,” says a quiet voice from across the room, “but think about what the prolific motivational book author and radio host, Earl Nightingale, once said: ‘Integrity is the seed for achievement. It is the principle that never fails.’ So, I say INTEGRITY is the most important ‘I.’”
We won’t wait for the game to end. The National Alliance adopted imagination, innovation, and integrity as our corporate values long ago, and while each has its place in any life, business, or industry, we concur with Mr. Nightingale. As a member of our CIC Agency Management curricula committee, and a former Academic Director for many years, I have notebooks full of quotes about integrity. But I particularly like this quote because the principles shared by Mr. Nightingale were transformational for generations of insurance professionals While Mr. Nightingale is better known as the voice behind one of the most syndicated radio programs of all time, it is interesting to me that one of his greatest successes began with
William C. Toll, CIC agency has integrity? For that matter, what does integrity look like in a person and/or at an insurance agency or company? In general, integrity is the quality of adhering to moral and ethical principles. But from an insurance agency owner’s point of view, how can you control the moral and ethical principles of your agency? The first idea to understand is everyone who works for you does not think exactly like you. As a person, you have a perception of moral and ethical principles. We are a nation of immigrants from many cultures that are different from the one you might be most familiar with. Different cultures have different ideas of what is right and what is wrong, and cultures change over time, often significantly. Even in the same culture, the difference between right and wrong can be in shades of gray.
The idea is to have the courage to do what is right, even under pressure to do otherwise.
the fact that he owned an insurance company. Even today, you can read on nightingale. com/authors/earl-nightingale.html, “…Earl had bought his own insurance company and had spent many hours motivating its sales force to greater accomplishments. When he decided to go on vacation for an extended period of time, his sales manager begged him to put his inspirational words on record. The result later became the recording entitled, The Strangest Secret, the first spoken-word message to win a Gold Record by selling over a million copies.” So what do integrity and insurance have in common besides the “I?” How do you know if a person or an
State legislatures and insurance commissioners across the country are concerned about integrity and ethics in the insurance community—and let’s face it—as an industry, we do not have the best reputation regarding claims settlements, advertising, and rebating. As a result, states have enacted ethics requirements in continuing education regulations. What are agency owners to do? First of all, we must be aware of where our ideas regarding integrity and ethics come from. The basic formation of our integrity and ethics starts with our family, including
extended family members as well a other influential adults who mold our ethical values. Our belief systems, religious or otherwise, also have a direct impact on our concepts of integrity and ethical behavior, while friends and acquaintances, both current and from our youth, are another formative component. Our integrity and ethics are also influenced by educational institutions through our interactions with teachers and curriculum, and media such as television, films, music, printed matter, and social media. In addition, society in general undergoes continual changes, as do legal considerations and constraints, and these conventions exert influence as well. With all of these areas interacting and influencing one another, is it any wonder that we each have different understandings regarding the meanings of integrity and ethics when it comes to application in our everyday business lives? To overcome this dilemma, agency owners and managers must set expectations within the agency and ensure that personnel are aware of those expectations. This can be done at staff meetings, as well as in the agency’s personnel manual—but that is the “short list” that should be augmented in each agency. If the ownership does nothing to set standards of integrity and ethics, the agency’s staff will set their own, and the ones they set may not conform to the standard the agency ownership would like to see in place. Setting expectations for integrity and ethical behavior requires a constant commitment. The idea is to have the courage to do what is right, even under pressure (perhaps even coming from the client) to do otherwise. The impression that a carrier has of the agency’s integrity, and vice versa, is invaluable. In fact, any business should strive to be perceived as having integrity concerning its actions and being ethical in its behavior. If an underwriter knows your “yes” is yes and Winter 2019 | RESOURCES
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GUIDING PRINCIPLES your “no” is no, there is trust and business moves more smoothly. An agency must also look for prospects who have integrity and exhibit ethical behavior. When agency owners have implemented integrity and ethical expectations of behavior, employees will feel safe in speaking openly and honestly with agency management and all agency staff, clients, and carrier personnel. Performance targets will be realistic and business goals will be fair. Integrity and ethical behavior considerations will be discussed routinely, rather than after a crisis—when it is too late. Most importantly, agency leadership must model integrity and ethical behavior. Our clients, and society in general, expect integrity and ethical behavior from the insurance industry and agents who work in it. If we do not behave with or demonstrate integrity and ethics in our professional work, then we will suffer a loss of reputation and image. As National Alliance designees, it is important for each of you to understand that one of our highest missions is to continually enhance the value of your designations. Due to our efforts, along with your in-
Learn More, Earn More The Agency Management CIC course provides an in-depth look at ethics and integrity in today’s insurance agencies, and is relevant to insurance company personnel as well. Learn about different ethical viewpoints and how to focus on molding business ethics to help assure every transaction projects integrity, is ethically based, and reduces E&O exposures. The ethics component of the Agency Management CIC course meets or exceeds the ethics CE requirement in a majority of states. 6
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The National Alliance promotes professional standards of competency and upholds legal, ethical, and moral practices… tegrity and professional reputations, National Alliance designations are of significant value in the marketplace. It is incumbent upon all of us to ensure that your designations continue to appreciate in the future. Many things have changed since the Society of CIC was founded 50 years ago. One thing that has not, and will not, is our commitment to providing practical education with real-world relevancy. The same can be said for our commitment to upholding and enforcing our standards of conduct and continuing education policy. To do otherwise would render the designations meaningless. As integrity is one of the key values of The National Alliance, it is important to ensure that all designees are aware of the organization’s standards of conduct. As insurance agents and risk managers bear responsibility for the financial well-being of individuals and corporations, The National Alliance promotes professional standards of competency and upholds legal, ethical, and moral practices in these fields. As an organization, The National Alliance is governed by Boards that establish competency standards, including currency and awareness of every-present changes, as well as the Boards’ Rules of Conduct. The National Alliance’s Standards of Conduct and Continuing Edu-
cation Policy can be accessed by using the following link: www.scic. com/pub/media/docs/StandardsofConduct.pdf. We hope that you will take a few minutes to read this document and reflect upon your membership in a professional organization that is second to none because of the standards of excellence that are in place. We do not accept the thinking that new times call for lax standards. They may prompt new ways of doing things, but they do not call for the abandonment of long-standing principles, moral rectitude, or the certainty that doing what is right is the best course of action at all times. n
About the Author: William (Bill) C. Toll, CIC
Bill Toll is President of Bill Toll & Associates, Inc., an organization specializing in insurance and risk management education and professional development, located in Austin, TX. He is a CIC National Faculty member, and serves as Educational Consultant at CIC Institutes, CRM Courses, and Ruble Seminars across the country. He continues to help with several areas of the work of The National Alliance, and the National Alliance Research Academy.
Scan this QR code (point your smart phone camera at it) or enter the URL below into your web browser to review The National Alliance’s Standards of Conduct and Continuing Education Policy.
www.scic.com/pub/media/docs/StandardsofConduct.pdf
President William T. Hold, PhD, CIC, CPCU, CLU Publisher/Senior Art Director Becky Keeling bkeeling@scic.com Editor-in-Chief Carol Crysup ccrysup@scic.com Senior Editor Donna Loughran Department Editors Deborah Davis, PhD, MEd, BA ddavis@scic.com Paul Martin, CPCU pmartin@scic.com Mandy Whorton mwhorton@scic.com Kelly Surles, CIC, CPRM, CISR, ACSR ksurles@scic.com William C. Toll, CIC btoll@scic.com Contributing Designer Jeff Buck
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Resources is published by The National Alliance for Insurance Education & Research, P.O. Box 27027, Austin, TX 78755-2027, 800-633-2165, Fax: 512-349-6194, Internet: TheNationalAlliance.com, email: alliance@scic.com. At present, Resources is available to dues-paid Certified Insurance Counselors (CICs), Certified Insurance Service Representatives (CISRs), Certified Risk Managers (CRMs), Certified School Risk Managers (CSRMs), Certified Personal Risk Managers (CPRMs), and affiliates of The National Alliance Research Academy. Entire contents Copyright © 2019, The National Alliance for Insurance Education & Research. All rights reserved. Material in this publication may not be reproduced in any form without permission. Authorization to photocopy items for internal or personal use, or the internal or personal use of specific clients, is granted by The National Alliance, provided that the following words are included on any copy: “Reproduced from Resources with permission of The National Alliance for Insurance Education & Research.”
Resources is designed to provide accurate and timely information in regard to the subject matter covered. It is published with the understanding that the publisher is not engaged in providing legal, accounting, or other professional services. If legal advice or other expertise is required, the services of a competent professional should be sought. The publisher has taken all reasonable steps to verify the accuracy and completeness of information contained in Resources. The publisher may not, however, be held responsible for any inaccuracies or omission of information in any article appearing in Resources. The National Alliance Standards of Conduct: scic.com/pub/media/docs/Standardsof Conduct.pdf
Winter 2019 | RESOURCES
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COVERAGES
BY KELLY SURLES, CIC, CPRM, CISR, ACSR
A
s one of the cities that is consistently on lists of the best places to live, or work, in the United States, Austin, Texas, is a mecca for millennials. In addition to having a high-tech culture, Austin offers a vibrant music scene, a wide variety of other entertainment venues, city governance that places an emphasis on environmental sustainability, a business climate that attracts entrepreneurs and startups, and lots of other millennials. But you don’t have to live—or sell insurance—in Austin to know that millennials will continue to have a 8
RESOURCES | Winter 2019
tremendous impact on the insurance industry. Millennials comprise approximately 40% of the U.S. population. However, as a group, millennials have been defined frequently as “atypical” consumers who are somewhat disengaged from the insurance purchasing process. What comes to my mind is that it could be argued that millennials are the “new typical.” In other words, it is more likely that the industry will need to respond to the unique needs of this demographic group, rather than thinking that millennials will somehow come around to 20th century ways of doing things.
Are Insurance Products Keeping Pace With the Kinds of Risks Millennials Face? It’s not that our industry has been completely complacent. As many millennials prefer to conduct business online, the Internet has no shortage of insurance agencies and companies that can be accessed digitally. Even in terms of social media, the industry has progressed—some sectors and businesses adapting at a faster pace than others. And there is
no shortage of funds being expended on new technologies and ways of doing business that will certainly be well received by millennials. Where I see significant gaps is in the products that we are providing (or not providing) to meet the lifestyle needs of millennials. Here too, the industry has not simply sat on its laurels. For example, the 2018 version of ISO’s Personal Auto Policy addressed the need to cover the replacement of lost or stolen key fobs, as well as pet injury expenses. ISO also developed an endorsement for personal auto policies to cover individuals who may need to cover their personal possessions anywhere
in the world, subject to a deductible and endorsement exclusions. It is worth noting that this policy provides coverage worldwide, a need that is more important to a generation of individuals who like to travel far more than their parents and grandparents did. Many millennials embrace a lifestyle that is less property and possession laden. And so far, the industry has not responded well to covering tiny homes on wheels (for more information on this topic, please refer to the 2019 Spring issue of Resources magazine). Then there is the matter of the many millennials who work abroad. Whether they’re digital nomads freelancing from anywhere in the world or employees of American companies conducting business in foreign countries, a growing number of American millennials live in other countries for significant portions of each year. If they’re freelancers, they have to procure life, health, and travel insurance on their own. Travel insurance is pretty much a necessity for those who have a greater probability of dealing with flight cancellations, stolen belongings, or medical emergencies. However, there is a vast difference in the medical coverage provided by travel insurance and the much broader benefits available with health insurance. Life insurance is another consideration entirely, and many millennials have no idea how much it could cost to repatriate their body if they happen to die in another country. Millennials need help navigating the coverages that are available while they are circumnavigating the globe, and it seems that some sort of combined life/health/travel product would be well received by this market. Now let’s look a little closer to home. With so many millennials living in urban environments, home sharing and ridesharing apps have become a part of our common vernacular. E-scooter and bicycle rental
HOW OFTEN DO YOU ASK YOUR CLIENTS…? companies have proliferated in cities across the nation, including Austin. Of course, there are insurance problems with all of these new ways of doing things. When it comes to e-scooters, Austin is representative of other university cities. As scooters are popular modes of transportation for students, employees of various businesses, and visitors on campus and across the city, there are numerous concerns regarding liability for injuries. The wider concerns across the city regard the large number of scooters that are rented, and the fact that the rental companies place the liability for accidents solely on the renters. There are a lot of e-scooter rentals in Austin, and a lot of pedestrians on the street. Yep—it’s like an accident waiting to happen—and they do! But how often do you ask your clients if they ever rent scooters or bicycles? Is there coverage for your client if they hit a pedestrian when they’ve rented a scooter or bicycle? The ISO Personal Auto Policy specifically excludes liability coverage for the use of any vehicle which has fewer than four wheels or that is designed mainly for use off public roads. Furthermore, any property damage caused to the scooter or bicycle would also be excluded in the PAP. What about liability coverage from the ISO Homeowners policy? The policy defines a “motor vehicle” as “a self-propelled land or Winter 2019 | RESOURCES
9
amphibious vehicle. The “Motor Vehicle Liability” exclusions in Section II – Exclusions states “there is no Liability and Medical Payments coverage for any ‘motor vehicle liability’ if, at the time and place of an occurrence, the involved “motor vehicle” is registered for use on public roads or property, or if the ‘motor vehicle’ is not registered for use on public roads or property, but such registration is required by regulation issued by a law or regulation issued by a government agency for it to be used at the place of the occurrence.” What if you’re the pedestrian and injured by someone riding an e-bike or e-scooter? Medical payments coverage, if selected in the Personal Auto Policy, would apply as the policy will pay for reasonable expenses incurred for necessary medical services Learn more Earn More because of To learn more about bodily inpersonal insurance for jury caused your millennial clients, by an acconsider attending cident and sustained the CIC Personal Lines by an incourse. You may also be sured. The interested in examining policy does the topics that are not state presented in the courses the bodily leading to attainment injury has of the Certified to occur Personal Risk Manager because of (CPRM) designation. an AUTO Course agendas can accident— be accessed on The only an National Alliance website accident. Many (TheNationalAlliance. rooms and com). homes are rented in Austin during SXSW (South by Southwest) and other festivals, and clients need to be aware of the exclusions involved with this exposure. If the home or room is rented too often, the insurer can consider 10
RESOURCES | Winter 2019
it to be a business activity. The ISO Homeowners’ Policy is filled with exclusions and limitations when is comes to business property and liability exposures. Suffice to say that if your clients are engaged in these types of rental activities, you need to know about it. But how often do you ask your clients if they have joined this bandwagon? For the problems associated with ridesharing, let’s look at Uber. If the driver is “on the clock” and carrying a passenger when an accident occurs, Uber’s liability policy will generally provide coverage. The problem is that Uber drivers are considered to be independent contractors, and there are many scenarios that could cause a denial of coverage (e.g., if the driver was texting at the time of the accident, etc.). The driver’s insurance company would also deny coverage because the driver was using a vehicle as a “public or livery conveyance,” which includes a vehicle while it is logged into a “transportation network platform.” But how often do you ask your clients if they’re using their vehicles in this manner? Awareness is key. You have to ask good questions to know what your clients are doing. There is a good reason why risk identification is the first step in the risk management process—you can’t analyze, control, or finance the risk if you don’t know that it exists. Let’s look at another risk—that of being an agent with your head stuck in the past. Just because you look for the taxi stand at an airport doesn’t mean that everyone else does. Millennials have a unique perspective on things. They’ve grown up in the digital world. They’ve learned about different cultures and ways of doing things. They lived through the Great Recession, gone to college, and many of them are now saddled with enormous amounts of student debt.
They’d like to be optimistic, but can you blame them for thinking that maybe there are better ways of doing things? They know that there are. Speed, performance, high quality interactions, and platforms that allow them to do anything that needs doing from a mobile device are highly valued. So are the opinions of their peers. As you look to how your agency conducts business, keep an eye out for how you approach millennials. As an Academic Director for The National Alliance, I am well aware of the gaps that exist in coverages due to new lifestyle exposures. As an agent, I loved working with millennials. They’re smart, they’re efficient, and they ask really good questions. They valued the relationship that we developed as much as I did. AND while they are price conscious, they are also risk adverse. If you can explain how the coverage that you can offer is worth purchasing, chances are you’re looking at renewals for many years to come. Just remember—you have to ask good questions too! n
About the Author: Kelly Surles, CIC, CPRM, CISR, ACSR Kelly is the Academic Director of Personal Lines for The National Alliance. Her prior industry experience includes Personal Lines Account Manager, Personal Lines Manager, and Private Client Account Manager for three large independent insurance agencies in the Austin, TX, area. She served on the Board of Directors for IIA of Austin for seven years, including her most recent role as President, before joining The National Alliance.
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William T. Hold, Ph.D, CIC, CPCU, CLU, President of The National Alliance
Get to know these industry “Difference Makers”—professionals who tackle loss during a crisis, advocate for education, and make a difference for the greater good. Learn what inspires them, how they became so accomplished, and what they have learned along the way. Go to scic.com/difference-makers to discover their stories. Do you know a Difference Maker? Send your nominations to differencemakers@scic.com
Brandon Cole, CIC, CRM, CISR, CSRM, CPCU, ARM-P, RPLU, AINS, National Director for Schools and Nonprofits Cristina PedrazaMartinez, J.D., CPA, CIC, SVP of Business Development & Sales at Popular Insurance, LLC
Kathleen Hicks, CIC, President of HR&R, LLC
Debra Richardson, MBA, CIC, CRM, CPCU, AINS, Director of RMI Program at the University of Texas at Dallas
Winter 2019 | RESOURCES
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A
s we conclude our 50th anniversary year, we continue to celebrate each of
YOU and YOUR successes in the industry. For this issue of Resources, we thought that you would enjoy reading some of the success stories that I have received from your colleagues. From those who are just beginning their education to those who are nearing the ends of their careers, these individuals remind us all of the history that we share, the accomplishments that have been realized, and the quest for personal and professional excellence that continues to guide us as we embrace our collective future in the industry.
A Strong Foundation
The first success story that we would like to share with you comes from Jennifer Marines, a CISR, from Clinton Polley Group, Inc., in Gold River, California. Jennifer writes: “It’s become apparent to me that education now is more important than ever. As our world continues to evolve and advance, so too have insurance complexities. I learn something new at least once a week. I’ve been in the insurance industry for over 20 years and to be able to make that statement is a testament to the industry. New insurance products, ever-changing policy forms, as well as fulfilling the best interests of clients, challenge me constantly. While this could seem daunting to some, I relish these encounters. However, I didn’t always feel this way. In the early days of my
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career, I loathed picking up the phone or meeting with a client. I never knew what was lurking behind the conversation; would I be able to understand what the underwriter was telling me, or better yet, would I be able to relay the very same information to the client correctly? As much as I tried to learn while I was in the trenches, so to speak, I realized I never had a strong foundation of insurance; I had been getting by on just the basics. I struggled with wanting to be more knowledgeable. I knew I had to. But how? Then I found Clinton Polley Group. They’re forward thinkers and are a dynamic company on the cusp of changing what it means to be an insurance broker. What really got my interest was how much they advocate for education to all who work there. I realized over a decade ago that this was the
company I had to call my home. They turned my attention to The National Alliance. This was exactly the insurance education I had been looking for. The courses are
The insurance world will continue to change. And that’s okay—I’ll be ready for it.” Jennifer, thank you for using the word “relevant.” It speaks volumes
“The National Alliance has given me the strong foundation I craved… It’s broadened my abilities to be able to handle the more challenging business risks…” in-depth, but engaging, and dare I say even fun at times, too! The National Alliance has given me the strong foundation I craved all those years ago. It’s broadened my abilities to be able to handle the more challenging business risks of some clients and I feel like I have a better mindset to pay more attention to the nuances within policy forms. I’m more confident and empowered to be relevant in this industry.
that you recognized the need for knowledge that would help you make a difference in the industry. We applaud your efforts, as well as the educational guidance and support that Clinton Polley Group provides to you and your colleagues.
Help My Clients
We know that like Jennifer, each of you are always willing to ‘go the extra mile,’ and that certainly applies with our next success stories. Crystal Williams, CIC,
AAI, from Lipscomb & Pitts Insurance, LLC, in Memphis, Tennessee, said that the instructors she lauds had a major impact on her career, and personal life, as well. Crystal writes: “I began the CIC Program in 1993, which was very early in my personal lines career as a Producer and a Personal Lines Account Manager. I was working hard to write large complex personal lines accounts throughout the United Stated and needed an education boost to help me compete with more experienced agents. Many of my colleagues in commercial lines suggested educational courses offered by The National Alliance and strongly suggested the CIC Program to give me a well-rounded education in personal lines, commercial lines, and life and health. I started with one of the CIC Commercial Lines Institutes and immediately followed up by enrolling in the CIC Personal Lines Institute which was led by Bruno Falvo, CPCU, AU. Bruno spent some time talking about flood insurance in coastal areas so I went back to the office on Monday after completing the Personal Lines Institute and contacted all of my clients and prospective clients in coastal areas and suggested we review their wind coverage, flood coverage,
and excess flood coverage. Some of my clients and prospective clients had chosen to selfinsure their wind and flood exposures so I reeducated those clients after returning from CIC Personal Lines. I used the knowledge I gained from CIC to
I applaud Rick Goolsby, CIC, for leading the CIC Life & Health Institute in January 1996 in a way that provided me with the knowledge and interest to help myself, my friends, and my clients. Several suggestions Rick made during the Life & Health Insti-
“I used the knowledge I gained from CIC to help my clients understand the importance of properly insuring their coastal homes…” help my clients understand the importance of properly insuring their coastal homes and also helped them to find more cost-effective ways to add wind coverage, flood coverage, and excess flood coverage to their portfolio of personal insurance policies. Writing additional lines of business was a financial win for me and for the agency but the real winner was the client whose home and net worth were both better protected against devastating hurricanes and floods. Bruno Falvo helped plant this seed in my mind when I attended CIC Personal Lines many years ago and I am still using the same educational process today when working with clients in coastal areas.” Crystal shared this experience, as well:
tute have had a tremendous positive impact on my financial picture.”
It Really Does Feel Great
Dr. Hold often reminds us that “it is hard to do a good job when you don’t know what you are doing,” and Crystal reminds us of exactly how important knowledge is, both personally and professionally. The National Alliance has always been in the business of making a difference in the lives of participants, and we are truly gratified and proud of the work that we do when we receive these types of letters from you. The next success story was written by Mary Hollenbeck, from Higginbotham Insurance Agency in Fort Worth, Texas, and provides an even more personal reflection on the
tremendous difference that attending a CIC institute made in her life. Mary writes: “Last week, I attended my first CIC class. It was Life & Health. Not only were the instructors great, but in the middle of the class, it hit me! I need to really take a deeper look into life insurance and long-term care coverages. I am not married and have no children so I really thought, “I’m good.” I work, and my company provides me with life insurance and long-term care coverage. But wait a minute—what about life after retirement? How am I going to cover certain expenses with a limited income; and I have nieces and nephews that I love to death and want to be able to leave them something. My family has a history of Alzheimer’s and I need to think about how this might impact me. Long-term care provides coverage for things that I never thought of. I could stay in my own home and choose my home healthcare provider. If it ever got to the point that I could no longer stay in my home, how would I pay for a nursing home? Long-term care! When I returned to the office, I reached out to a co-worker that has great knowledge of these coverages and we got the ball rolling. It really does feel great to know that as a result of this Life & Health class, I now have
Winter 2019 | RESOURCES
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the additional protection needed.”
Ahead of the Pack
Mary, congratulations on the completion of your first CIC institute! Your success story reminds us all of the importance of being prepared for the future from a personal perspective, and when you multiply this letter by the thousands of individuals who have attended CIC institutes, you begin to see how we all have a greater impact than we realize. This is especially true when you consider how the professionalism of the industry has evolved over time, and for a brief history of these developments we turn to an email submitted by Sam Revenson, CIC, from Associated Risk Management in Richmond, Virginia. Sam writes: “I, too, am indebted to the vision, courage, and persistence of Dr. Hold. Some will recall that for decades and until the late 1980s there were no requirements for continuing education for the insurance industry. If someone chose to learn more and grow their career towards a meaningful accreditation there was only one option to go to. Dr. Hold first and foremost solved this challenge of creating another option to accomplish all of the above plus more. His programs would put you in a room with often
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RESOURCES | Winter 2019
over 100 insurance professionals of all experiences and backgrounds to learn from each other while being engaged and instructed by top people in their specialty. Until then, this was unheard of. While continuing education is now considered a minimum for our industry and others, CIC has grown to be the leader for real world insurance education on an even broader array of topics in an everchanging world. In my own career of over 40 years, this one organization has always kept me ahead of the pack and on the front lines for whatever is next. I have and continue to enjoy an interesting journey helping others in significant ways. Starting as a young agent to presently an older risk manager, I cannot imagine my path without my CIC and the many friends I gained because of these recurring immersive experiences.”
Protecting My Agency
Sam, thank you for reminding everyone that there was a time when CE was not required by any state. Dr. Hold and the other founders felt very strongly that education should be rigorous—and continuing—and that is the primary reason that the CIC Program had a continuing education requirement from inception. If
“In my own career of over 40 years, this one organization has always kept me ahead of the pack and on the front lines for whatever is next.” anything, it has become even more important for insurance professionals to remain current because the industry keeps changing faster than most of us can keep up with it. Ashlee Sparks, CIC, CISR, from Hotchkiss Insurance Agency, LLC, in Carrollton, Texas, aptly demonstrates this point: “While attending The National Alliance CIC Commercial Multiline course I learned about Cyber Liability coverage and this new emerging risk our clients face. A cyber attack can leave a company in a bad financial position, ruin their reputation, and compromise their valuable data. After taking this program and learning the basics about Cyber Liability, I came back to my agency and started recommending this coverage to my clients as an optional coverage on their renewal proposals. In addition to this being a good way to protect the agency from an E&O claim, I noticed that this was also a good opportunity to educate our clients about the growing force of technology and the potential for them to be negatively impacted. When we have a chance to educate our
clients this helps to solidify our relationship with them. They find us more knowledgeable and it gives them peace of mind knowing that we are looking out for their best interest. Cyber Liability was not an easy sell at first. I was met with responses of “We don’t keep personal information,” “The owner is the only one who can transfer money,” “We have nothing that someone would want to take,” and the list goes on. Using the knowledge I gained from my classes with The National Alliance, I was able to identify some of the cyber exposure these clients faced and relate them to their everyday operations. Being able to show them that not only are small businesses targeted because they do not have the means to prosecute, they also do not have the high strength security that most of the larger firms have. This actually makes them more susceptible to a cyber risk than a larger company. Once I was able to relay to the client that they did, in fact, have a true exposure for a cyber-attack, and give them examples of this happening more and more, the sell became
almost instant. Who wouldn’t pay a small amount of premium now to save big and protect their company in the future? Using the knowledge and resources from National Alliance programs, I have been able to sell Cyber Liability to over half of my customers since taking the course in 2018. This education has not only allowed me to protect my agency, but I have been able to offer protection to my customers for a risk that most do not even know they have.”
Better Understanding
Ashlee’s letter illustrates one of the reasons that The National Alliance has always placed an emphasis on offering current and relevant curricula taught by faculty members who are experts in their field. Who needs yesterday’s news? Today is a new day, and you have to be prepared for it. The next story, written by Paula Fisher, CISR, from BXS Insurance in Gulfport, Mississippi, expands on this point: “Leaving my office for the day to go to a National Alliance class usually starts out with a little anxiety. I start stressing about what I still have to do and what all is waiting for me back at the office, but once I sit down in class and I listen to the hum of my peers and
they are talking about their stress, I know I am not alone and I start to relax. Then class begins and usually in every class, even the ones I have taken before, I am always surprised at how I learn something new. Maybe it is a new law concerning autos or an update to an ISO form, yet what I always seem to remember is when an instructor gives me examples or stories
about a client having a small kitchen fire, but because of the damage to some of the wiring they had to be out of their home a couple of days for repair and cleanup. I have used these examples many times to explain water back-up and loss of use. Those examples give them a better understanding than just reading the definition. That’s when I know that taking time
“This education has not only allowed me to protect my agency, but I have been able to offer protection to my customers for a risk that most do not even know they have.” about a problem with coverage or a claim that details how a certain coverage that seems trivial was exactly what was needed. Those examples and stories often stay with me and I now am able to explain to a customer why this coverage will benefit them. For example, I remember someone talking about a client leaving on vacation and coming home to their washing machine hose coming undone and flooding a room in their home, and because they had not been home the water caused enough damage to file a claim. I also remember a story
to go to those classes and continue my education really pays off—not only for the customer, but for my company.”
Sounding Board
Paula’s letter re-emphasizes the importance of practical education and how National Alliance faculty members enhance their lectures with real-life examples that help participants make a difference in their customers’ lives while simultaneously making significant contributions to their employers. Mary Fowlkes, CIC, ACSR, from Higginbotham Insurance Agency in Fort Worth, Texas, also notes the many ways that faculty members have been of
great assistance to her: “While I obtained my CIC designation many years ago, I would always come away from each update with a list of items to look into for various needs. However, I also began reaching out to The National Alliance and some of their instructors with questions that were a bit “gray” and the answers were not easily found. The National Alliance team members have always been willing to help in any way they can. They often refer me to individuals who can help on certain needs, even those outside of their company. When I needed assistance in dealing with an issue with NCCI [National Council on Compensation Insurance] where we were getting nowhere, I reached out to The National Alliance and they put me in touch with someone who could assist. I also have formed good relationships with the various National Alliance instructors and reach out to them as well. Allen Messer, CIC, CPCU, has been invaluable to me when I need to “dig deep” into coverage issues. Having such an experienced sounding board has really helped our agency, and me personally, to develop and grow in understanding the complex ins and outs of commercial insurance.” (Continued.) Winter 2019 | RESOURCES
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Negotiating Challenges
Mary’s letter highlights some of the ways that the The National Alliance team, as well as faculty members, try to help participants where we can. There was a time when we personally knew every participant in the CIC Program, and from the beginning we have always tried to treat each of you as we would like to be treated ourselves. We have tried to be fair while simultaneously upholding the standards that are crucial to maintaining the value of The National Alliance designations. To reinforce that philosophy, the following email from Brad Johnson, a Tenured CIC in Crosby, North Dakota, requires no additional commentary. This is what he wrote to me: “I am contacting you to let you know that I will not be retaining my CIC designation, as I have decided not to do an update. I am now semi-retired and have transferred my ownership in the agency to my wife, Denise, who now manages the agency, and son Loren. Loren and his family moved back here from Florida to work in the agency, and I hope that he will be able to start the CIC Program in the near future. In 2002, I contracted gastric cancer
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RESOURCES | Winter 2019
(stage 3), and underwent a total gastrectomy along with numerous lymph nodes, with subsequent radiation treatments and intense chemotherapy at Mayo Clinic in Rochester, MN. In 2004, I contracted lymphoma (stage 4) and was told by the doctors at Mayo Clinic that the chemotherapy treatments in 2002 may have caused the lymphoma. However, the treatment for my lymphoma (very aggressive) was additional intensive and brutal chemotherapy. That same year, my son, Rodney, who was
ing our agency in an intensely competitive business environment in a very rural state. We only have about 2,200 people in our whole county in northwest North Dakota—about seven miles from Canada, and 35 miles from Montana—and our population continues to decline due to increasing farm size and our dependence on an ag economy. Again, thank you for your help in negotiating the challenges of a complicated business that is crucial to the economic welfare of our county, state, and country.”
“The CIC Program was an integral part of my success in managing our agency in an intensely competitive business environment…” in the Army National Guard, was deployed to Iraq. So, he was worried about me and I was worried about him. He was subsequently deployed again to Afghanistan in 2012. We both have survived. He did lose close friends in both deployments, however. I am telling you this because I wish to thank the Society of CIC for allowing me to make up my CIC updates when I recovered. The CIC Program was an integral part of my success in manag-
At root, all of these letters have been about the meaning of success, doing what is necessary to make a difference, and the value of personal and professional integrity. To say anything more seems almost redundant, and yet I cannot conclude this column without thanking each of these individuals who allowed us to share their personal stories with each of you. I would be remiss if I did not follow up on something that Brad
said. As individuals who are involved in the insurance and risk management industry, we are all a critical underpinning of our national economy. Moreover, each of you are the lifeline that your clients cling to when things get bad and they fear what tomorrow may bring. We are so proud to be affiliated with each and every one of you. We are also pleased that so many of you mentioned the contributions that faculty members have made to your personal and professional lives. We know that these individuals wear their professionalism like a badge of honor, and we are all enlightened and enriched by the many contributions that each of them makes to the industry. By the time you receive this magazine, 2020 will be upon us. It is interesting that “20/20” is used to define excellent vision, and it is very fitting that The National Alliance will embark upon its next 50 years at this time. As we reach for the future, may we remember the success stories that have been shared here. As these stories demonstrate, in 2020, as in every other year, there is simply no substitute for doing our best to make a difference, and doing so with integrity. Happy New Year! n
Innovation Integrity Imagination
Guide Employees Toward Success with the NEW Corporate Learning Portal Success in the insurance and risk management industry is dependent on what you know. Employees are hungry to learn everything they need to ensure their clients feel protected. Are you supporting them on their learning paths? Our new Corporate Learning Portal empowers you and your employees to succeed. Managing employee learning is challenging—we make it easy. Track and offer employee learning opportunities in one simple platform so your organization can reach its full potential. Manage learning paths, receive course enrollment and completion updates, and schedule exams. Easy to use • Intuitive navigation • Seamless registration and CE requests • Automatic progress updates Customized for your organization. • Branding and logos • Team dashboards • Individual learning paths Integrated web-based system • Access to online and classroom courses • Centralized employee and billing information • Powered by The National Alliance Spend less time organizing professional development and more time identifying gaps in capabilities, researching the right learning options, and guiding employees on the path to success.
Request a demo at
co.scic.com/corporate-learning-portal/
FREE Webinars for Dues-Paid Designees One of the substantial benefits you gain as a dues-paying designee is access to National Alliance webinars. Presented by subject experts, these webinars cover hot topics in insurance and risk management that you can watch, listen to, and learn from at your convenience. This year’s webinar topics have included: Ensuring You are Insuring the HO Property Exposure Correctly! Let’s Talk Construction Risks & CGL Insurance Environmental Insurance & Risk Management for Contractors Gray Areas of Agency Errors or Omissions International Travel Where the BAP and the PAP Collide A B C Retirement Planning It’s a Drone Raid Lying, Stealing, New Types of Fraud: The Importance of Crime Insurance Only Crazy Agents Ignore Employer’s Liability Business Income Basics Additional webinars are added on a regular basis. To gain access to this valuable content, go to scic.com, log in to your PROfile, and then click on “Dues-Paid Webinars” in the left-hand column.
Winter 2019 | RESOURCES
17
COVERAGES
BY RICHARD (DICK) G. CLARKE, CIC, CPCU, RPLU
E
xecutive liability insurance refers to insurance coverage in the general exposure areas of directors & officers liability, employment practices liability, and fiduciary liability insurance. Each of these separate areas have specific exposures, usual claims allegations, focused legislation at the national, state, and local levels, and an active insurance market with available coverages. For private companies (including family businesses), as well as nonprofit organizations, there is ample insurance available, with numerous insurers clamoring to provide coverage; the market is less competitive for organizations with publicly traded stock. Let’s take a look at the exposures, current events impacting exposures, and some of the insurance policy nuances that make executive liability insurance both a challenge and a specialty for underwriters, agents, and wholesalers.
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RESOURCES | Winter 2019
Directors & Officers Liability Exposures and Insurance
Underwriters at Lloyd’s, London, are generally given credit for writing the first Directors & Officers (D&O) Liability insurance policy in the USA shortly after the country began rebounding from the devastating financial effects of the Great Depression. Apparently, the first D&O insurance policy was written to cover executives at Federated Department Store in Chicago in 1943. Subsequent D&O policies were few and far between, but domestic insurers began to write D&O insurance in the 1960s, led by St. Paul Insurance Company. The early policies were very specific in protecting only company decision makers; entity coverage did not really make an appearance until the 1990s. Real interest in the product did not develop until the 1990s, and at that time employees were first added as “Insured Persons,” the real value in which is easily debat-
able. Today, there are as many as 50–60 insurers underwriting some form of this “managerial malpractice” insurance. However, there is a significant distinction in adding a simple endorsement to a Business Owners’ Policy (BOP), as opposed to solid monoline coverage. While the former is likely to be less expensive, the coverage will likewise be much less comprehensive. One of the largest exposures receiving significant attention these days is the increasing concern for allegations of improper protection of an organization’s database and internal information, an outcome of recent and highly publicized data security breach situations. For example, in 2017, major credit bureau Equifax announced a security breach which potentially exposed up to 149 million individual records. Although an announced settlement with various state attorneys general was made public in 2019, liability cases remain to be heard and settled, and
“
legislation throughout the 1990s, this coverage has become a “mainstay” in commercial insurance portfolios. Employees are no longer reticent to bring allegations of discrimination, harassment, or wrongful termination against current or previous employers, and even prospective employers have an exposure with respect to hiring procedures and practices. Current events impacting this coverage include the #MeToo movement and the prohibition by some states, cities, and counties of initial application for employment forms’ questions about past criminal activities.
…expertise in this critical coverage line is not only admirable, but necessary…
on January 1, 2020, are expected to place additional compliance pressure upon executives and boards of directors worldwide, as well. While the focus is often placed on large entities, small business and non-profit organizations are not immune to litigation alleging “managerial malpractice.” Most executive responsibilities are the same—a critical difference between organizations with publicly-traded stock and private (or, family businesses), is that the latter may not have shareholders, at least not “public shareholders.” Thus, that potential plaintiff category is not of concern in making decisions affecting business operations. A recent example of a small business exposure might be the 2019 Labor Day weekend fire and destruction of a dive boat, which occurred off the California coast. An early morning fire spread rapidly, apparently trapping more than thirty sleeping passengers, all of whom lost their lives in this accident. If it is found
that the vessel owners were negligent by not providing appropriate safety or passenger security aspects/ procedures, then the owners could face allegations of “managerial malpractice,” which could be covered by D&O insurance should there be any such coverage in place. D&O insurance is so much more than just insurance for allegations brought by stakeholders in the business. Understanding and promoting this facet of the coverage that is provided could increase an agent’s writing of this insurance product, thus expanding the protection provided to
both large and small clients, many of whom are unaware of the true scope of the exposures. The world of D&O insurance is exciting, fast-paced, and not for the faint of heart. But knowledgeable and experienced underwriters, agents/brokers, and even consumers will find that expertise in this critical coverage line is not only admirable, but necessary, for appropriate, current insurance protection for the organization’s decision makers.
Employment Practices Liability Insurance and Exposures
Other than workers’ compensation insurance, no other coverage line is more likely to develop claims experience than employment practices liability (EPL) insurance. The coverage was first written at the end of the 1980s—again, by underwriters at Lloyd’s of London, and although both agents and underwriters struggled with exposures, litigation, and
“
it is thought that litigation making the case for lack of IT oversight and customer data protection could result in potential liability of hundreds of millions of dollars. Certainly, proven responsibility for any proven security or IT protection lapse could trigger D&O insurance, as one of the many duties of the executives of an organization is protection and security of business operations. The enactment of the General Data Privacy Requirements (GDPR) in the European Union in May 2018, and the California Consumer Privacy Act (CCPA) which becomes effective
The EPL policy is also the proper place for coverage for allegations of discrimination and harassment brought by a business’s customers (“third-party extension”). The federal government agency tasked with oversight and enforcement of federal laws aimed at prohibiting employment-related discrimination and harassment, is the Equal Employment Opportunity Commission (EEOC—www.eeoc. gov). Each year, the just-concluded year’s statistics are reported, and upward trends are noticeable in many areas. Most particularly of concern are increases in both the number of reported incidents, as well as the monetary settlements. These trends should concern employers, especially those with 1,000 or more employees. Additional employment-related issues which cause human resources managers to prematurely gray, include medical and/or recreational marijuana, the statics revealing an Winter 2019 | RESOURCES
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Learn More Earn More When it comes to Directors and Officers, Employment Practices, and Fiduciary Liability insurance, change is the name of the game. Stay current on business practices and employer responsibilities by attending the CIC Commercial Casualty course and the CRM Practice of Risk Management course. In addition, the newly published sixth edition of Executive Liability Insurance: Evolving Times, Evolving Exposures, Evolving Insurance (see ad on page 21) can also help you to develop your understanding of this complex coverage area. 20 RESOURCES | Winter 2019
“
…executives risk personal assets in exchange for making difficult, often legally-challenged decisions.
decisions as to whether to offer the insurance, and how to price it.
Fiduciary Liability Insurance and Exposures
When Congress passed the Employee Retirement Income Security Act of 1974 (ERISA), and it was signed into law by former President Gerald R. Ford, new responsibilities were placed upon employers, at least one new insurance product was developed, and new insight was given to an older, traditional insurance product. ERISA mandated the purchase of employee dishonesty insurance (in the legislation, it was referred to as “a fidelity bond”), and new responsibility was placed on those executives with discretionary judgment authority for employee benefit plans. The ERISA legislation was made to apply to almost all types of employee benefit plans, and not just pension, profit sharing, or stock ownership plans. Thus, with regard to insurance protection for this newly-created exposure, the use of omnibus language to refer to an organization’s employee benefit plans is a very beneficial aspect of the insurance coverage provided. With respect to the mandated insurance coverage, the ERISA legislation (and as it has been amended over the years) provides a formula
“
increasing rise in opioid addiction (now taking more lives in the USA each year than automobile-related deaths), and, even a business’s web site accessibility by persons with various handicaps (“Website Content Accessibility Guidelines”—WCAG, which may ultimately prove to be a greater Third-Party EPL exposure than a “cyber” exposure). Over the past few years, employees have increasingly brought allegations relating to employers’ violation of the Fair Labor Standards Act— FLSA—or, more commonly known as “wage and hour” lawsuits. This exposure is most often excluded from EPL insurance, but many insurers are willing to “carve out” coverage from the exclusion for limited defense expenses in such cases. However, once an employee count rises above about 750, or the insured organization has publicly-traded stock, or, in some cases, is located in litigation-prone areas of the USA, the coverage may be no longer available. The good news for buyers is that there is a vibrant market for EPL insurance, with many interested underwriters. However, most providers of this insurance carefully underwrite the exposures, and claims experience, which is increasingly common, is certainly taken into account on
for calculating the amount of employee dishonesty insurance which an organization is required to carry, in order to be in compliance with the legislation. It is critically important for both the agent and the insured organization to realize that failure to comply can result in fines from the regulatory agency, The Department of Labor (DOL). Fiduciary liability insurance is also the proper insurance mechanism to obtain insurance for: • Health Insurance and Portability and Accountability Act (HIPAA) civil money penalties. Most fiduciary liability insurers will provide a sub-limit for such penalties, ranging from $100,000, or greater; and, • Fines and penalties arising out of violation of the “Employer Mandate” of the Affordable Care Act (ACA). Most fiduciary liability insurers will provide a fines and/ or penalties sub-limit for this coverage. Insurance company underwriters are eager to underwrite fiduciary liability insurance: costs are rather minimal against the potential protection provided, and, most risks are seriously considered for underwriting. For executives charged with decision making for employee benefit plans of an organization, fiduciary liability
6TH EDITION
insurance is important! There is no real alternative insurance product. And for organizations which expect their Boards of Directors to ratify management decisions on employee benefit plans, it must be remembered that D&O policies almost always exclude liability under ERISA!
Conclusion
Executive Liability insurance is important to any organization, especially given the fact that executives risk personal assets in exchange for making difficult, often legally-challenged decisions. The governance exposure is protected by sound D&O Liability insurance, the human resources function is protected by solid employment practices liability insurance, and employee benefit plan decisions should be afforded the best possible fiduciary liability insurance. All three coverages work in concert to protect decision-making executives, and collectively are of great importance to the organization, as well as the individuals who are also at risk and would like to have assurances that the best available insurance protection has been procured. n
About the Author: Richard (Dick) G. Clarke, CIC, CPCU, RPLU Dick Clarke, a 48year veteran of the property/liability industry, retired as Senior Vice President of J. Smith Lanier & Co., in 2016. Dick is the proprietor of Dick Clarke Insurance Answers, a consulting firm, as well as an Educational Consultant and National Alliance Faculty member who teaches a variety of advanced Ruble Graduate Seminar subjects and other courses. Dick is also the author of all six editions of Executive Liability Insurance, the most recent of which has recently been published and is available at NationalAllianceBooks.com.
Executive Liability INSURANCE
EVOLVING TIMES • EVOLVING EXPOSURES • EVOLVING INSURANCE
How to Protect Executives from the Liability Exposures Prevalent in Today’s Business Environment
Hot Off the Press The newest edition of Executive Liability Insurance: Evolving Times, Evolving Exposures, Evolving Insurance, by Dick Clarke, CIC, CPCU, RPLU, is now available in our online bookstore. Get your copy in paperback ($75) or digital ($65) format. Learn how to protect executives from the liability exposures prevalent in today’s business environment.
NationalAllianceBooks.com Starting mid-December, tune in to hear the author’s podcast, “Executive Liability Insurance Trends—a Conversation with Dick Clarke”—the newest installment in our Nat Alliance NOW Risk & Insurance Podcast Series.
scic.com/natalliancenow
Podcasts
Listen. Learn. Succeed. Subscribe to Nat Alliance NOW podcasts—offering risk and insurance professionals rich, nuanced conversations with active industry experts and guest hosts who explore trends and tackle challenging issues. Access the series on Apple Podcasts, Google Play, and at scic.com/natalliancenow. Subscribe to the series to hear these and many other informative topics: • Executive Liability Insurance Trends • Navigating Medicare and Medicare Supplements • Retirement: The Risk of Living Too Long • The Social Breakdown: How Insurance Agencies Can Leverage Social Media • When the Wind Blows: Hurricane Preparedness and Response • How Technology Transforms the Risk and Insurance Industry • TDI: Artificial Intelligence Meets the Auto Policy Winter 2019 | RESOURCES
21
Q: “What are my options?” As a
National Alliance Designee,
you have dozens of choices for your update, your career path, and your future. One of the most common questions designees ask us is, “What options do I have for my update?” The answer is, literally, “You have dozens of choices!” It’s your career, your future, and your success at stake, so we have structured our programs to offer you a vast range of learning opportunities. The choices are yours as you decide on the learning path that will best meet your specific career goals.
CIC
CRM CPRM Online Instructor-Led
Classroom
You always have the option of repeating a class you’ve taken before, whether to learn the latest developments or further master the knowledge for daily use.*
You even have your choice of preferred learning style, since our courses are offered in a variety of formats (classroom, online instructor-led, and online self-paced).
CRM Course
CRM Course
CPRM Course
CPRM Course
James K. Ruble MEGA Seminar
James K. Ruble MEGA Seminar
James K. Ruble Graduate Seminar
PROFocus Seminar
Dynamics Series Course PROFocus Seminar Certified Marine Insurance Professional Seminar
Must Be Dues-Paid
But, that’s not all—your options include dozens of advanced programs. Ruble, PROFocus, and Hold Seminars allow you to dive deeply into specific risk and insurance topics. The Dynamics Series courses are very popular— for honing selling skills, relationships, and sales culture—and are taught by some real industry rock stars. And be sure to take note of our newest update option for CICs, CRMs, and CPRMs—Certified Marine Insurance Professional Seminars, for those who serve or wish to serve marine and longshore clientele.
CIC Course
Must Be Dues-Paid
You can also start on the path toward your next designation, enhancing your credibility and reputation as a true professional, while opening doors to additional markets and job positions.
CIC Course
So Many Gr Visit our website to se all of the PROFocus, Dynamics Series for your
The choices are YOURs.
TheNationalAlliance.com
Visit our website for full details about all of your update options.
22
* Repeating a course may not provide state CE credit hours. RESOURCES | Winter 2019
A: Your career, your choice. CE Credit:
CISR ELITE
CISR
Online Instructor-Led
Classroom
CISR Course
CISR Course
CSRM Course
CSRM Course
William T. Hold Seminar
William T. Hold Seminar Dynamics of Service Course
eat Choices!
CPRM Course James K. Ruble MEGA Seminar PROFocus Seminar
CPRM Course James K. Ruble MEGA Seminar James K. Ruble Graduate Seminar Dynamics Series Course PROFocus Seminar
CRM Course
CRM Course
Must Be Dues-Paid
e a complete listing of William T. Hold, and choices available update.
Earn Up to Two Years Update Credit
CIC Course
CIC Course
Must Be Dues-Paid
Earn Up to Two Years Update Credit
Online Self-Paced
CSRM
Refer to scic.com/ce-by-state for information about CE credit hours and requirements in your state.
Train Your Team:
Remember, we also offer programs for industry newbies (Introductory Series), university students (University Associate Programs), and Producers (our renown Dynamics Master Sales Class), as well as in-house training (ACES) customized according to your needs.
Winter 2019 | RESOURCES
23
AGENCY MANAGEMENT
Key Findings from the 30th Anniversary Edition of the Insurance Agency Growth & Performance Standards Study
Key Performance Indicators to Drive Your Agency Forward
T
he newest edition of Insurance Agency Growth and Performance Standards (GPS) will soon be available, and its publication will mark 30 years that The National Alliance Research Academy (The Academy) has conducted this study at regular intervals. Over this span of time, the GPS has consistently reflected changes occurring in the ever-changing independent agency system, as well as trends within the insurance and risk management industries and the national economy.
Background
The GPS continues to be the leading source of financial and productivity comparison standards for independent agencies operating in the U.S. 24
RESOURCES | Winter 2019
today. As technology has evolved, the methodology utilized to conduct the study has evolved as well. What began as a paper survey questionnaire back in 1988, has morphed into an online survey. To be flexible, some paper questionnaires are still used, depending on what works best for the individual agency. Because GPS is very detailed, The Academy has endeavored to control the length of the survey, and we thank each of the agencies that completed the surveys that were used to compile data for this new edition of the publication.
Purpose and Use
The purpose of the GPS is to provide reliable comparison standards and averages to be used by owners and
managers of independent agencies, as well as industry analysts, to determine the financial and productivity health of their agencies. By conducting variance analysis using the standards and averages presented in the GPS, these individuals can formulate plans to position their agency for future growth. The GPS provides standards and averages for: • Agency profile and statistical makeup • Income and expense averages for various revenue ranges • Balance sheet composition and liquidity ratio averages • Productivity and staff workload averages The GPS study also includes a complete glossary of terms and an
agency planning guide, along with appropriate forms. In addition, the study allows agencies to use several comparison methods for maximum understanding of their current position: comparing to all agencies that participated in the study, to those in specific revenue ranges, those of a similarly sized metropolitan area, or by area of focus (commercial or personal lines). In addition, agencies can compare their performance to be benchmarks posted by the top 25% of the agencies in each revenue range.
Key Findings
While different agencies participate in each study, some supporting agencies voluntarily participate every time. Therefore, the study never consists of data from the same exact agencies. However, even with the variety of agencies that participate, the data has remained largely consistent over time, given current events and circumstances that impact the survey findings. Here a few of the key findings from the 30th Anniversary study: • The average age of the participating agencies is 44 years, a testament to the staying power of the independent agency system. The average varies from 26 years in the smallest agencies to 64 years in the largest agencies. Prior GPS studies range from 20–58 years. • The average growth rate of all the agencies that participated in the study is 10%, a decrease from the 12% reported in the 2014 study. Because they have a smaller base, the smaller agencies achieved the highest growth rate of 15% (21% in the 2014 study), and the growth rate in the larger agencies averaged 5% (7% in the prior study). • Ten percent of the participating agencies had purchased or merged with another agency in the prior year, as compared to 11% in the 2014 study. This is surprising considering the strength of the current
economy and the number of baby boomer agency owners looking to sell their agencies. Twenty-seven percent of the surveyed agencies had more than one location. However, sixty percent of the agencies with over $3 million in revenues had more than one location, an increase of 10% as compared to the 2014 study. • Personal lines average commission rate in this study is 15%; this is the average including all lines of personal lines production. For commercial lines, the average indicated by the participating agencies is 11%, and this again is the average of all commercial lines production. • The retention ratios reported by the participating agencies was 90% for commercial lines and 89% for personal lines, figures that are consistent with 2014 results. Increased retention leads to increased profitability because it is less expensive to retain business than to produce new business. Thus, these figures represent a good retention level for each line of business.
New Questions
A new question in the most recent study asked about the level of agency-billed business in the participating agencies. The surveyed agencies reported that on average, only 15% of total agency premiums were agency-billed. This result confirms that the majority of business is moving to direct-bill. Another new question asked how many agencies were paperless for each line of business, and the participating agencies reported being 83% paperless for personal lines and 65% paperless for commercial lines. Other key findings were:
Learn More Earn More To learn more about the current financial and productivity performance of agencies, and how you can use this data effectively, attend a CIC Agency Management course or select Graduate Ruble seminars (check agenda for topics). A webinar on this topic will be posted to your profile page in December, and check out Nat Alliance NOW on our website for a new podcast every month.
pared with 27% from personal lines production and 11% from a combination of life and benefits production. • Contingent income (bonus income) was reported by these agencies to be 9% of revenues, and up to 82% on the average reported pre-tax agency profit. The agencies in the 30th Anniversary survey also provided information on agency expenses, balance sheet and balance sheet ratios, as well as a wide range of productivity measures. Just like a global positioning satellite, the GPS study has provided position and direction for agencies since 1989. To compare your agency to the most recent GPS performance indicators, order your copy at NationalAllianceBooks.com. n 30TH ANNIVERSARY EDITION
INSURANCE AGENCY
Growth & Performance Standards CRITICAL DATA FOR DEVELOPING KPI’S FOR YOUR AGENCY
• The participating agencies reported that 50% of total agency revenue was from all lines of commercial production, as comWinter 2019 | RESOURCES
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IN
R
esearch Associates are organizations who have stepped up to support the efforts of The National Alliance Research Academy. These fine organizations understand the value of the research, publishing, and recruiting efforts conducted by The Academy. We are proud to partner with each and every one and invite you and your organization to join this prestigious list! As a Research Associate, you’ll contribute to our efforts to recruit into the industry new, more qualified, careeroriented students through the University Associate CIC (UACIC) and University Associate CRM (UACRM) programs at institutions of higher learning. You are also invited to participate in cutting-edge research projects, conducted by The Academy, documenting the latest industry trends and innovations. Collectively, we help to “raise the bar” for everyone in our industry. The National Alliance salutes our Research Associates for all of the ways they make us better—from generous annual contributions to their considerable expertise and leadership. New members in this extraordinary group are always welcome. To learn more about the benefits of becoming an Academy Research Associate (including a 10% discount on all Academy publications), contact Carol Crysup, CISR Elite, at ccrysup@scic.com or call 800-633-2165, ext. 6191.
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RESOURCES | Winter 2019
HON OR
Research American Automobile Association, Inc.
Alabama IIA
American Agents Alliance
Bancorp South Insurance Services, Inc.
Calhoun, Thomson+ Matza, LLP
Trusted Choice Insurance Agents of Colorado
PIA of Georgia
HR&R Intergovernmental Pool Administration, Safety & Loss Control
IIA of Illinois
IIA of Kentucky
PIA of Kentucky
Keystone Insurers Group, Inc.
Michigan Association of Insurance Agents
Minnesota Independent Agents and Brokers Association
Missouri Association of Insurance Agents
Ohio Insurance Agents
IIA of Oklahoma
State Auto Insurance Companies
Insurors of Tennessee
Texas Capital Bank
PIA of Virginia & D.C.
OF
O UR
Associates Ask Bettie
IIAB of Arizona
Assurex Global
Bowen, Miclette & Britt
Brown & Brown, Inc.
PIA of Connecticut
CRC Insurance Services, Inc.
IIAB of Delaware
Dick Clarke Insurance Answers, LLC
Florida Association of Insurance Agents
IIA of Indiana
INSURICA, Inc.
ISU Insurance Agency Network
Jerry Montgomery Memorial Research Fund
Kansas Association of Insurance Agents
IIAB of Maryland
Marble Box
MarketScout, Inc.
Massachusetts Association of Insurance Agents
McGriff Insurance Services
McGriff, Seibles & Williams
PIA of Nebraska and Iowa
PIA of New Jersey
PIA of New York State
IIA of North Carolina
PATRA Corporation
IIAB of Pennsylvania
Popular Insurance, LLC
ReSourcePro
IIAB of South Carolina
Zurich North America
ADD YOUR ORGANIZATION’S NAME TO THIS PROUD GROUP Contact Carol at ccrysup@scic.com
PIA of Washington/ Oregon
Westwood Wealth Management
PIA of Wisconsin
Winter 2019 | RESOURCES
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INSIDER INSIGHTS
E
ach year, insurance customer service personnel across the country step up to compete for the top customer service award in the industry— Outstanding CSR of the Year®. Judged on essays, education, references, and civic involvement, a winner for each state is chosen, and the field is then narrowed to four finalists and a national winner. The National Alliance extends heartfelt congratulations to each of these deserving professionals. Mary Katherine Henderson, CIC, with Insurance Center, Inc., in Little Rock, AR, is this year’s national winner. Mary Katherine and the four finalists have been presented with gold pins, cash awards, and more for excelling in the national competition. Presented here are the top five essays submitted for the 2019 Outstanding CSR of the Year® award.
The essay topic for the 2019 competition:
Scan this QR code (point your smart phone camera at it) to view a video interview with National Winner Mary Katherine Henderson, CIC.
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RESOURCES | Winter 2019
“Many agencies recognize the professionalism and knowledge of Account Managers and CSRs who successfully weave sales into their day-to-day responsibilities. Please summarize the sales training (if any) you’ve received from your agency or company and discuss what you believe are the three most effective sales techniques or tools that make you a better Account Manager/CSR.”
2019 Outstanding CSR of the Year®
“A large component of outstanding customer service is providing extensive product knowledge to our customers. Insurance clients want to do business with people they like and trust, but a client won’t do business with a likable, trustworthy agency that doesn’t know their product!”
THE NATIONAL WINNER’S ESSAY Mary Katherine Henderson, CIC Insurance Center, Inc. Little Rock, AR A sale is often defined as a single transaction between a buyer and a seller. But as an insurance account manager, I believe my job is to continually sell my customers and my carriers on quality insurance service and expertise. It is crucial to equip account managers with appropriate
sales techniques. Not only must we sell our service to our insureds, but we must also sell our insureds to our carriers. Account managers are on the frontline of every agency and must be armed with the proper sales training in order for an agency to be successful. While being
a salesman does require a unique skill set that not everyone possesses, account managers can aide in an effective sale through their positive attitude, effective communication, and product knowledge. I try to wake up every morning to face each new day with a bright and positive attitude, emphasis on TRY. Customers can hear a smile on your face through the telephone. Underwriters
can sense a smile on your face through an e-mail. I think having a great attitude is the most important part of my job. Knowledge and experience are important, but attitude is what separates a good account manager from a great one. Skills can be taught, experience will come with time, but a positive attitude is one thing that we, as account managers, can control on a daily basis. People do business with people they like, and people like positive people. An effective sale starts with a positive attitude. My customers, my underwriters, my producers, and support staff deserve my kindness, my time, and my respect. In fact, I am approved to teach a continuing education course in the state of Arkansas entitled “Attitude is Everything”—and I believe that title to my very core: attitude truly is everything! (Continued.) Winter 2019 | RESOURCES
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INSIDER INSIGHTS (Mary Katherine’s essay, continued.) because of this industry. Be a team player! Go the the account manager has to edge is one way to ensure Sometimes I think it’s hard extra mile! Take the time to continue to sell outstanding you can make the sale. I love for me to see past the day to listen! If you practice these customer service. A large to learn! I’ll be the first to day tasks of my job to know philosophies, your business component of outstanding admit when I don’t know an that I’m truly in the business will reap the benefits! customer service is proanswer, but I’m also the first of helping people. Helping Taking the time to get viding extensive product to dig in and figure it out. people—I love that! In a to know a customer’s knowledge to our customers. We all know who really does world that seems to focus on individual story and prefthe heavy lifting at an insurInsurance clients want to do getting more for less, I pride erences is vital to providbusiness with people they ance agency and empowermyself on trying to provide ing outstanding customer like and trust, but a client ing our account managers an outstanding insurance service. Through continuous, won’t do business with a likwith as much knowledge experience at an affordable effective communication, an able, trustworthy agency that as possible will only help price. While I have never account manager strengthdoesn’t know their product! ensure the future success considered myself as a salesens the bond between client I have often heard insurof the agency. It’s the job man, I know that in my role and carrier. By taking the of the account managers to ance agents being compared as an account manager, I time to personally interact to used car salesmen, and be the hands, feet, eyes and constantly use sales techwith my customers, I’m I think I’ve made it my caears of a new piece of businiques in all of my day to building a relationship with reer’s mission to change that ness. While producers are day interactions. Through them. Trust plays a large view! Yes, we sell a product, often placed in the role of my positive attitude, my efpart in a client’s decision but we also do so much presenting a proposal to the fective communication skills, on where to place insurance more! I challenge young client, the account manager and my product knowledge, coverages and by providing people to explore the wonhas to first sell a carrier on I will continue to help my open, honest, and frequent derful world of insurance, as that piece of business. And agency grow one sale at a communication with my I know how many opportulong after the producer has customers, I’m earning that nities I’ve been blessed with “proposed” that business, time! n trust. Everyone wants to feel important; from the biggest corporation to the smallest NATIONAL FINALIST’S ESSAY contractor, making each customer feel like they are being Marcella Reynolds Beasley, MA, CIC, CISR, heard and being helped is CRIS, CLP, MLIS one of the biggest parts of Alliant Insurance Services, Inc. my job. Keeping open lines Fresno, CA of communication is funda“In the insurance Most people would asmental to building strong sume a move from a local, relationships with insureds industry there is privately held brokerage to and insurers. Through open a corporate, national agency communication, I am doing constant change. would result in a loss of my part to continue to sell It is imperative that flexibility, personalized that client into a long and attention, and a family feel (hopefully) profitable relawe, as insurance to the workplace. However, tionship for our agency. professionals, make sure that we are in my move this past year Anyone is teachable, and to Alliant, only the opposite everyone always has more to educating ourselves, to not only better has ensued. In taking an learn! Our industry is conAccount Manager position, ourselves, but to better our clients. stantly changing! Through I have been given a great continuing education, daily opportunity to delve deeper encouraged to seek my Cerare given multiple resources experiences and ongoing into specialized insurance, tified Insurance Counselor and access to trainings communication with my by working exclusively in (CIC), and Certified Insurand webinars, including peers, expanding my knowlAlliant’s Construction unit. ance Service Representative networking opportunities, edge base is crucial to being Within the past year, I have (CISR) Elite designations. team workshops, as well the best that I can be at my obtained two designations, In addition to encouraging as company standards and job. While no one can be Construction Risk Insurance me to achieve professional, guidelines to adhere to and expected to know everySpecialist (CRIS) and Certieducational goals, Alliant strive for. I believe I have thing, arming yourself with fied Leadership Professional become an extraordinary is committed to cultivating extensive insurance knowl(CLP), while also being Account Manager due to the whole individual. We 30 RESOURCES | Winter 2019
(Marcella’s essay, continued.) Alliant’s dedication to training and excellence standards. The first tool that I deem crucial to any organization or agency: make everyone accountable. Too often I have worked for companies that tend to let personal feelings or favoritism excuse certain employee behaviors. Each employee should know the rules and values of the organization, and the managers and supervisors should be sure that all are held accountable to the same standards. Most employees are empowered to do a good job when management is appreciative of their service and dedication. However, in order for that appreciation to hold merit, those same values and standards must be applied to every employee. While it is important for management to encour-
DID YOU KNOW? Insurance customer service personnel have been competing to be named Outstanding CSR of the Year since 1991. age employees, they must also make sure to provide constructive criticism and feedback. This second item is a crucial sales tool. This will analyze an employee’s current strengths and weaknesses, and truly identify the areas in which to further improve on an Account Manager or Customer Service Representative’s skills. Personally, my most successful managers and producers were direct, specific, set progressive goals, and advised on the next steps in my course of employment and educational aspirations. Here at Alliant, I am continually supported by correcting and learning from my mistakes, broadening my strengths, and encouraged to pursue multiple designations desired. This encouragement is partially where I find the third most effective sales technique. Management
must give their employees the tools to succeed. Proper training, efficient use of time, and education are instrumental in making an organization run smoothly. Whenever there is a breakdown of proper training, vital resources are used or wasted in retraining and vast amounts of ineffective time wasted. Nothing is worse than finding out you have been scanning a piece of printed paper, when you could have been dragging the same file to your desktop. In addition, I feel lucky that I work for an organization that is committed to continuing education. In the insurance industry there is constant change. It is imperative that we, as insurance professionals, make sure that we are educating ourselves to not only better ourselves, but to
NATIONAL FINALIST’S ESSAY Katie J. Bohrer, CISR Peterson Brothers Insurance Omaha, NE High quality Account Managers and CSRs absolutely have to be able to sell. When I first started in the industry, this wasn't an aspect of the job that I was comfortable with. Now, five years later, it is a part of my everyday life, and I would not be as valuable to my agency if I weren't able to sell, now and again. The three things that help me to sell when the opportunity presents itself are, first of all, knowledge about the insurance products I'm selling; secondly, utilizing carrier proposals to streamline the process; and finally,
passion for the industry and the products that I'm proposing to either an existing insured or a new prospect. Knowledge is paramount in the insurance industry and is one of the things that gets me so excited about my career. There is always something to learn. In the beginning of my career, the lack of knowledge is probably what scared me about sales. I wanted to be perfect and didn't think that I could sell something to someone else if I didn't know everything there was to know about it. I quickly realized
that even a more tenured producer didn't know everything, because it's impossible. This industry is so complex and full of minutiae, no one knows everything! So, I found early on that as long as I knew what the basic coverages are and the reasons that the insured/ prospect should consider adding those coverages to
better our clients. Ignorance may be bliss when it comes to love, but ignorance won’t save you from an E&O claim. Making everyone accountable, providing constructive feedback, and giving your team the tools to succeed are three of the many successful and effective sales tools that my company, Alliant, has given me to become a better Account Manager. With these three tools, I have built my way up to a valuable employee with the Construction Unit in the Fresno office. I truly believe that is through my company’s commitment to excellence and partnership with organizations like The National Alliance, we are better prepared to provide outstanding and amazing customer service to our clients. n
“As I deepen my knowledge of coverages and enhancements, it becomes easier and easier to propose those add-ons to our customers. Knowledge is powerful!” their package, I could sell. As I deepen my knowledge of coverages and enhancements, it becomes easier and easier to propose those add-ons to our customers. Knowledge is powerful! (Continued on next page.) Winter 2019 | RESOURCES
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INSIDER INSIGHTS (Katie’s essay, continued.) The majority of the sales that I end up doing are for small business policies. The producers don't typically have the time to sell a small policy, but we'd still like to keep a book of small business and also don't like to turn away any requests for quotes or small referrals from our other insureds. Those requests end up on my desk and I quote, propose, bind, and service them myself. Utilizing the carrier proposals for these small, minimum premium, policies as a sales tool is crucial. Carriers have done a great
job making their proposals professional. They integrate the agency's information and spell out their coverages and enhancements in an informative, yet non-overwhelming way. It saves me so much time! I can quote, propose, and (hopefully) issue the policies without spending too much of my own valuable time on the process. The most effective tool or technique that I have in my skill set, isn't even a skill, it's passion. Passion for the industry and why we do
NATIONAL FINALIST’S ESSAY Barbara J. Henrich, CISR, AU Howalt+McDowell Insurance, a Marsh & McLennan Agency, LLC Sioux Falls, SD As a client advocate, working primarily in our agribusiness industry practice, I am responsible for the management of sales and relationships with our clients. I serve as the bridge between the client, sales team and insurance carrier by meeting the insurance needs and finding solutions for any conflicts. I’m fortunate Marsh & McLennan Agency (MMA) provides many professional development opportunities for colleagues. These trainings range from technical insurance focus, to business and sales strategies and personal growth. I’m currently participating in our “Accelerate Turbo 3” sales training program which explains the methodology of research, communication, and presentation. This training has helped me better leverage my role in growing our agency, providing 32
RESOURCES | Winter 2019
solutions-based service to our clients, and supporting the sales team in three very impactful areas: 1. Research and Relationships Building a working relationship with the customer is achieved by actively listening to their needs, understanding their business, asking questions on what they need and responding on a timely basis to all forms of communication received from the customer. These actions will prove the individualized services that our agency strives to provide for our customers. Once the relationship foundations have been established; we can open doors to additional communication on future needs and have a clear plan of action. My letter of recommendation from Travis Starks explains a situation that was presented recently
what we do, turns "sales" into something else completely. My motivation isn't the commission or a pat on the back from the agency principals. My motivation is serving my customers with openness and integrity. They don't know what they need, that's why we're here. It's my responsibility as an insurance professional to inform customers and prospects of what I feel that they need and what the industry standards are. They may not decide to buy every bell and whistle, but I at least feel
satisfied when I've laid all of the options in front of them. When I speak to a customer with confidence and passion for the coverages, it makes the sales process easy. I've certainly attended some sales classes here and there, but as an Account Manager I haven't been given formal education necessarily. My selling abilities can be summarized by knowledge, utilizing carrier materials and proposals, my passion for the industry and why I love doing what I do. n
“This training has helped me better leverage my role in growing our agency, providing solutionsbased service to our clients, and supporting the sales team…” with one of my clients; finding the solution solidified our working relationship. The situation which occurred was the railroad discontinued providing railcars to smaller entities for moving grain. Our client needed to lease the railcars and provide railroad liability including FELA and physical damage on railcars/cargo for the leasing company. The carrier providing the current package coverage was not able to provide coverage on grain shipments into Mexico. The producers of this account were at a convention in Florida and the customer needed
an immediate solution. I researched the options and placed needed coverages so business operations could continue. The controller of the grain company was extremely thankful and the following week the client sent me largest bouquet of flowers I have ever received as a show of their appreciation. 2. Communication This is an essential tool for relationship building and cross selling. In person meetings and phone calls have much better results than only email communication. I follow up the telephone conversation with an email summarizing our conversation. This provides clarity
DID YOU KNOW? Anyone involved in insurance customer service may compete to become the Outstanding CSR of the Year. (Barbara’s essay, continued.) and documentation of the discussion. It is my personal goal to increase telephone communication with my customers. Clients do not always understand insurance terminology or what is required on a certificate, motor carrier filing, and lease agreements. I will research what is needed to meet insurance requirements for our clients and provide the requested documentation. 3. Presentation and Cross Selling On a specific subsection of
agribusiness accounts we are using two carriers who specialize in a particular line of business. I found one of the carriers was not providing a needed coverage. I brought this to the underwriter’s attention and was successful in having an endorsement provided for the needed coverage. I actively review the renewals in respect to coverages, sub-limits and deductibles. I ask the carrier for optional quotes on higher limits of excess liability, increasing package sub limits and the cost of adding
NATIONAL FINALIST’S ESSAY Neely A. Lorimar, CISR Elite NFP Longview, WA I have been employed in the insurance industry since 1999. I became a licensed agent within the first six months and have loved this industry since day-one. There are always challenges, but I prefer to think of them as opportunities. My employer has always recognized the benefits of education as key to my success. The more I know about a company, product, underwriting, policy or programs, the more time I can give to the client. I don’t need to spend time researching,
asking, finagling or forcing a risk to fit a company. I can quickly assess and place the risk with the right carrier. My employer has always encouraged me to obtain designations (I am a current CISR Elite), attend agency management presentations, and participate in local insurance education courses provided by local venders. I have cultivated a relationship with many restoration companies, lenders, real estate agencies, and other local community service providers. I approach every transac-
“My employer has always recognized the benefits of education as key to my success. The more I know…the more time I can give to the client.”
package broadened endorsements when available. I obtain a quote on the Cyber Protection Package for ALL of my customers on renewal; in our rapidly changing technical world I believe that all our customers need to be aware of the Cyber coverage which is available and then allow the customer to make their own buying decision. Our agency also actively collaborates between the Business Insurance Department and Employee Benefits Department to cross sell and close coverage gaps.
Of course, there are many other tactics I employ on a daily basis to best make sure that our clients are taken care of in ways that best serve them and support the growth of the business. Ultimately, though, these can all be summarized by a line the chairman of our agency has instilled in our employees: treat clients as king. Because consistently providing unmatched customer service, little moments of surprise of delight, and true partnership to our clients is the most effective sales tool of all. n
tion with one thought: “Is this how I want my mom to be treated?” This may sound odd, however it really works for me. I want my mom treated with respect, dignity, and care. I want her to be given a little extra attention when she is with any professional. I want someone to recognize she can’t reach to the top shelf (she is only 5 ft. 4 in.) and extend a helping hand. I want her to know that there is care and concern in the world—for her, specifically. Being genuine is one of the three most effective techniques I employ. I use an interview process when working with prospects. This gives me an opportunity to review all the risk factors, get to know them, let them get to know me. I try to make the process fun and joyful. I know that many find our questions invasive and overthe-line at times. As I am asking the questions, I will also give them little tidbits about me. This way I feel that I am giving and taking. I notice that as the questions progress, they are more open
to providing answers. This starts the relationship out on the correct footing. I also really listen to the answers that they give me. I listen to them verbally and physically. If I ask how they are, and they say, “fine,” with tears in their eyes, I stop everything I am doing and ask them how they really are. I let them know they are in a safe place and can talk about what is on their mind. We can provide insurance for many different areas in their lives, but we can’t insure against heart ache, bad health, loss of loved ones, etc. We can provide a moment of our time to listen, and share their current emotion with them. Insurance products are all basically the same with every company (some exceptions apply); our clients build a relationship based on trust and care. I hesitate to call this a technique or tool. I feel that takes away from the truth of the caring— I genuinely care. Of the many tools I keep in my box, I will say that educating others is the Winter 2019 | RESOURCES
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INSIDER INSIGHTS (Neely’s essay, continued.) most important tool. I employ it hourly. I educate the client, the prospect, coworkers, colleagues, and industry partners. Explaining what is not covered has been the most important education process of the insurance purchase transaction. I want to insure to the expectations of the buyer. If they understand what they did not purchase, many times they will recognize the importance of that coverage and purchase it later (sometimes before the ink is dry on the application). There is a real confidence in the client when they know what they have and have not purchased. At the time of a loss, there are fewer surprises and much less agitation. This, again, promotes trust between the client and the company. It is my responsibility to make sure the buyer has the coverage they expect in the event of a loss. It is the company’s responsibility to pay out based on the coverage purchased. This is where I go back to thinking of my mom. Do I want her to be surprised that she purchased a policy with a $1,000 deductible? Do I want her to find out she could have had roadside or rental reimbursement coverage for just a few more dollars a month? Do I want her to find out the hard way that uninsured motorist coverage is not really considered “full coverage”? Of course not. So I don’t want any of my clients to go through that either. I take my position as an insurance agent seriously. I take time to know each person that calls or comes to me for insurance advice. I educate based on the level of interest and try to make it fun. I want to bring a little light and laughter to everyone. In a world that is so technology driven, I am very personally driven. I want to be a resource, a fount of knowledge, a comfortable and familiar person for those who need to have a little extra something in their lives. When I add all those tools/techniques together, I have my recipe for success. Clients and prospects come to me with their lives’ concerns and cares. I help them to talk through these. Many times it leads to a new policy or policy upgrade/change. We can’t insure all of life’s situations, but we can talk about what can be and what won’t be covered. We can talk about what is new and exciting for them. Mostly we can walk together in this life to make them feel more secure. It is my intention to make a difference each and every day. n 34
RESOURCES | Winter 2019
Congratulations to each of our Alaska
Iowa
Alabama
Idaho
Arkansas
Illinois
Anna K. Crocker, CISR Elite Marsh & McLennan Agency Anchorage, AK
Jamie L. Hooie, CIC, CISR, CPIW, PIAM, DAE Thompson Insurance, Inc. Montgomery, AL
Mary Katherine Henderson, CIC Insurance Center, Inc. Little Rock, AR
Kate Schulte, CLCS Holmes Murphy & Associates Waukee, IA
Shellie W. Newman, CISR Elite Archibald Leavitt Insurance Rexburg, ID
Jessica N. Eyler PLR Insurance Bloomington, IL
2019 NATIONAL WINNER
Arizona
Indiana
California
Kansas
Kristin J. Paul, CIC Hester, Heitel & Associates, LLC Phoenix, AZ
Marcella R. Beasley, M.A., CIC, CISR, CRIS, CLP, MLIS Alliant Insurance Services, Inc. Fresno, CA
Denise Shelton Hoffman Insurance Group Granger, IN
Renea L. Faulds Tru Insurance Services Overland Park, KS
2019 NATIONAL FINALIST
Connecticut
Kentucky
Florida
Massachusetts
Georgia
Maryland
Fernanda Ashberg, CIC, CPIA, AAI, ACSR, AINS, AIS Daigle & Travers Insurance Darien, CT Kristin E. Hurst, CISR The Browning Agency Ponte Vedra, FL
Sonya Thompson, CISR Elite The Baldwin Agency, Inc. Americus, GA
Tessa B. Mullen Gartman Insurance Erlanger, KY
Leslie J. Bodge, CISR Elite, AAI C&S Insurance Mansfield, MA
Laura A. Kellner, ACSR, AAI HUB International Annapolis, MD
DID YOU KNOW? If your nominee is named the National Winner, YOU will receive a $1,000 cash award!
2019 Outstanding CSR of the Year State Winners! Maine
North Carolina
Tennessee
Michigan
Ohio
Texas
Minnesota
Oklahoma
Utah
Missouri
Oregon
Virginia
Nebraska
Pennsylvania
Washington
David M. Jensen, CISR Cross Insurance Agency Portland, ME
Laura J. Connolly, CISR Elite Hartland Insurance Agency Hartland, MI
Joan M. Ebert, CIC Weizenegger Engel Insurance Brainerd, MN
Bethany N. Kensinger, CISR, CSRM, ARM, PWCAM Oliis/Akers/Arney Springfield, MO
Katie J. Bohrer, CISR Peterson Bros Insurance Omaha, NE
Jennifer Flannery, CISR Wilmington, NC
Karla Meyer, CIC, CPRM, CISR W. P. Dolle, LLC Cincinnati, OH
Susan M. Lucas, CISR Sullivan Insurance Agency Ardmore, OK
Kristi Tanner-Miller Barker Uerlings Insurance Corvallis, OR
Morgan R. Sweeney, CIC, CISR Lechner & Stauffer, Inc. Pennsburg, PA
2019 NATIONAL FINALIST
Connie M. Eadie, CIC, CISR Brown & Brown Insurance of Tennessee Brentwood, TN
Jeremiah Gonzales, CIC, CRM Higginbotham Austin, TX
Kiersten Moore Moreton & Company Salt Lake City, UT
Kyle M. Persinger, CISR USI Insurance Services, LLC Norfolk, VA
Neely A. Lorimer, CISR Elite NFP Longview, WA 2019 NATIONAL FINALIST
Nevada
South Carolina
Wisconsin
New Mexico
South Dakota
Wyoming
Emily Linnell AssuredPartners Consulting Reno, NV
Victoria M. Lynchesky, CIC J.S. Ward & Son, Inc. Artesia, NM
Lisa M. Earnhardt, CISR Creech Roddey Watson Insurance Sumter, SC
Barbara J. Henrich, CISR, AU Howalt-McDowell Insurance— a Marsh & McLennan Agency, LLC Sioux Falls, SD 2019 NATIONAL FINALIST
Haylie Schmit, CISR M3 Insurance Madison, WI
Danielle Capps, CIC, CISR Wyoming Financial Insurance , Inc. Cheyenne, WY
New York
Jennifer L. Vizza, CISR Market Alternatives, LLC Newark, NY
DID YOU KNOW? The deadline to submit your materials to compete for the 2020 Outstanding CSR of the Year award is May 1, 2020. Winter 2019 | RESOURCES
Visit TheNationalAlliance.com/OCSRY-2020
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A Collection of Success Stories and Press Clippings from Around the World
IntheSpotlight A Job Well Done
After conducting National Alliance programs in Washington and Oregon for 15 years, Pam Busch, Education Director for the PIA Western Alliance, has announced her retirement. At the October Ruble Graduate Seminar in Seattle, National Alliance faculty member, Educational Consultant, and former CISR Board member, Kathy Fraley, CIC, CPIW, presented Pam a commemorative clock on behalf of The National Alliance as a token of appreciation for her 15 years of service. Bob Rogers, CLU, ChFC, National Alliance Head of Curriculum Content, Academy Board member, and CIC National Faculty member, was also on hand to L to R: Fraley and Busch present Pam with a letter signed by National Alliance President Dr. William T. Hold, CIC, CPCU, CLU, and National Alliance CEO William J. Hold, MBA, CRM, CISR, expressing their gratitude for her exceptional leadership and contributions to the success of the CIC and CISR Programs in Washington and Oregon.
Johansen Moves Up
Stacy Johansen, CIC, has been appointed President of Downeast Insurance Agency, LLC, located in Topsham, ME. She’s worked in the industry more than 14 years—nearly 13 of them with Downeast, working her way up through the ranks. Stacy is also President of the Maine Chapter of the Applied Client Network. (centralmaine.com)
Have YOU been “IntheSpotlight”?
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RESOURCES | Winter 2019
AHT insurance recently named its Senior VP, Tara Trout, CIC, AFIS, a new shareholder. Tara has been with AHT since 2002, and has distinguished herself as a leading producer representing AHT Leesburg’s Private Client Services division. She’s also a graduate of The National Alliance School for Producer Development and expects to graduate this year from the Wharton School of Business with her Certified Advisor of Personal Insurance (CAPI) designation. (insurancenewsnet.com)
Decades of Dedication Byron C. Smith, CIC, CPCU, VP and Branch Manager of Columbia Insurance Group, recently stopped by The National Alliance headquarters to visit with Dr. Hold and to have Dr. Hold’s signature refreshed on his 30-yearold CIC diploma. Smith
If you, or a fellow designee, has landed a promotion, won an award, or been honored in some fashion—don’t be shy! Let us help celebrate! (Can you say, “FREE publicity”?) To submit an item for editorial consideration, send biographical data and a color headshot photo to Becky at bkeeling@scic.com.
Trout Named Shareholder
Murphy
James (Jim) Murphy, CIC, Sales Executive with Brown & Brown, Inc., who earned his CIC designation forty years ago in 1979, enjoyed a photo op with Dr. Hold during our recent 50th Anniversary celebration held in conjunction with the James K. Ruble MEGA Seminar in Dallas this past October.
TheNationalAlliance.com
Bordelon Awarded Krug Scholarship
BXS Insurance—a subsidiary of BancorpSouth Bank—has awarded this year’s Tad and Judy Krug Scholarship (covering tuition to one National Alliance program of the recipient’s choice) to Danielle Bordelon, CIC, CISR, a Senior Commercial Lines Account Manager in their Gonzales, LA, office. Tad Krug, CIC Emeritus, former President/CEO of Ramsey, Krug, Farrell and Lensing, Inc., who was once named one of the 25 Most Innovative Insurance Agents in America, has been a staunch supporter of The National Alliance for over forty years and has served on the Boards for CIC, CISR, and The Academy. He and his wife established the scholarship endowment in 2017. Danielle’s thoughtful essay response to the question, “What do you think our industry is missing in terms of how we serve our clients?” led to her being awarded the 2019 scholarship.
Leadership in New York
Once again, PIANY has chosen several National Alliance designees to lead their organization. Timothy E. Dean, CIC, CRM, President of Marshall & Sterling, Inc., was elected First VP; David L. Sidle II, CIC, CPIA, President/CEO of David L. Sidle Agency, Inc., was re-elected Vice President; Gary Slavin, CIC, CLTC, owner of Slavin Employee Benefits, was elected Secretary; David Dean Lande, JD, CIC (not pictured), of EPIC Insurance Brokers and Consultants was elected to their Board of Directors; and Jamie Ferris CIC, CPIA, AAI, President of P.W. Wood and Son, Inc., is serving as Immediate Past President. Sidle In addition, PIANY named JoAnne Murray, CIC, President of Allan Block Agency, Inc., Industry Professional of the Year. (PIANY press release) We were pleased to note in our Fall issue of Resources magazine that Ms. Murray was also named to Insurance Business America’s 2019 List of Elite Women. Murray
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Designees Named Directors and Officers
The IA&B of PA/MD/DE has selected several National Alliance designees to provide leadership for their organization. Sarah M. Brown, CIC, CRM, President/ CEO of Keller-Brown Insurance Services in Shrewsbury, PA, and Michael Papa, CIC, SVP of Diversified Insurance Industries, Inc., in Hunt Valley, MD, have both joined the IA&B Board of Directors. In addition, the IA&B elected the following Directors to leadership positions: E. Stephen Burnett, CIC, ARM, EVP of Insurance & Financial Services, Ltd., in Wilmington, DE, will serve as Delaware Association of IA&B Chairman; Richard M. Rankin, CIC, Chairman/President/CEO of Murray Insurance Associates, Inc., in Lancaster, PA, will serve as IA&B Service Group Vice Chairman; and J. .Marshall Wolff, CIC, CPCU, President of Kressler Wolff & Miller in Easton, PA, will serve as IA&B Pennsylvania Chairman. (iabforme.com)
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New Role for Gordon
CPRM faculty member, Shirley A. Gordon, CRM, has joined G2 Insurance Services as Director of Family Office & Wealth Management. In her new role, she will be responsible for expanding the company’s Personal Risk Management practice. (finance.yahoo.com)
ERIE Appoints Rugare
Erie Insurance recently appointed Karen Rugare, CIC, AINS, AIS, their VP of Customer Service Operations and Strategy. She is a 20-year ERIE veteran employee, and has served in various marketing and sales roles for the company. (insurancebusinessmag.com)
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A Collection of Success Stories and Press Clippings from Around the World
An “Office-ial” Honor
The Lacy School of Business at Butler University in Indianapolis, IN, officially opened its new building in August 2019. Butler U’s Davey Chair of Risk Management and Insurance, Dr. Victor A. Puleo, CIC, CFP, Chair of The National Alliance Research Academy Board of Directors, and National CIC Faculty member, took the opportunity to name his new office in honor of his mentor and friend, Dr. John C. Bratton, CIC, CPCU, ASLI, ARM, retired Professor of the University of Central Arkansas, current National Alliance Educational Consultant, and retired CISR Faculty member and UACIC Professor.
Rough Notes’ “AOM”
Rough Notes magazine featured CICowned and operated Top O’ Michigan Insurance Agency (TOMIA) as their Agency of the Month in October. TOMIA was established by former CISR Faculty member Donald E. Bartosh, in 1974. His son, National CIC Faculty member Brian D. Bartosh, CIC, LUTCF, is President of TOMIA, and Brian’s son, Tyler M. Bartosh, CIC, is VP of Sales. The Rough Notes feature included a front-cover photo accompanied by a five-page article describing how the agency leverages technology in a number of ways to enhance their operations, and how becoming a partner of Keystone Insurers Group in 2017 has proven an excellent strategy for the continued growth and future of their organization.
L to R: Tyler and Brian Bartosh
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RESOURCES | Winter 2019
L to R: Dr. John Bratton and Dr. Victor Puleo
Recognition by Risk & Insurance
Every year, Risk & Insurance singles out top commercial insurance brokers to be named Power Brokers, and National Alliance designees always make the list. This year, Justin C. Felker, CIC, CRM, Area Assistant VP with Arthur J. Gallagher & Company, was named a Captives Power Broker; Karen Graham, CIC, CRM, ARM, Area EVP with Arthur J. Gallagher & Company, was recognized as a Public Sector Power Broker; and Brian P. Sebold, CIC, Casualty Brocker and SVP of Aon, was named an Agriculture Power Broker. In addition, David J. Glasser, CIC, CRM, CRIS, a construction risk manager and newly minted VP at Moss & Associates, LLC, was named a 2019 Risk & Insurance All Star. (riskandinsurance.com)
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First Mother and Son Designees (that we’re aware of) Cindy Plitt did not initially envision a career in insurance, but when she married agency owner, Kenneth Plitt, she found that with the education she gained through The National Alliance, she was a natural at helping the people of their community with their insurance needs. Later, when injuries caused her son’s baseball career to stall, she encouraged him to jump on the bandwagon. Now, both Cindy and Christopher are CISR Elites with rewarding careers at their family-run agency—Executives Insurance Agency, Inc., in Tempe, AZ. (IIA&B of Arizona newsletter)
TheNationalAlliance.com
FSU Fanfare
Shown below are the distinguished Trustees of the Dr. William T. Hold/The National Alliance Program in Risk Management/Insurance who came together for a meeting at Florida State University in September.
Following FSU’s “Executives in the Classroom Day” event, Bob Rogers CLU, ChFC, National Alliance Head of Curriculum Content, Academy Board member, and National L to R: Bob, Judith, and Kathleen CIC Faculty member, joined RMI student Judith Wieland, and Associate Dean of the FSU College of Business Dr. Kathleen McCullough for a reception of alumni and students. Also in attendance were RMI L to R: Summer and Samantha students Summer Vinson, and Samantha Crohn—both of whom are recipients of Jerry Montgomery Memorial Fund Scholarships and participants in FSU’s UACIC Program.
Lucas Advances at Erie Insurance
Christine Lucas, CIC, CRM, CPCU, CPIW, AU, AIS, of Erie Insurance, has been named Regional VP of Underwriting for ERIE’s west region. She joined ERIE in 1991 as an underwriter and has advanced to roles in management and leadership over the years. Christine is also a recognized expert on cyber insurance and has served on a U.S. Department of the Treasury committee and an A.M. Best panel focusing on the topic. (thereporteronline.com)
Winners in Wisconsin
National Alliance designees have stepped up, once again, to provide leadership in Wisconsin. Sean M. Paterson, CIC, VP of Robertson, Ryan & Associates, has been elected President; CIC/ CISR Committee member Lacey E. Endres, CIC, Director of Client Services–Property & Casualty, with M3 Insurance Solutions, Inc., and Ann M. Linstroth, CISR, PWCAM, Account Executive with Fidelis Insurance, have both been elected to the PIAW Board of Directors. In addition, two National Alliance designees took top honors: Jodi L. Cordes, CIC, CRM, CPIA, Commercial Lines Agent with Glass Insurance Paterson Center, was presented with the Stony Steinbach Achievement Award, and Thomas G. Ermers, CIC, Regional Sales Manager with Society Insurance, was named Company Representative of the Year. (Wisconsin Professional Endres Agent)
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Martinez Makes a Move
Risk Consulting Partners (RCP) has chosen Amanda Martinez, CIC, CISR, as their Private Risk Practice Leader. She brings more than 10 years’ experience to RCP in the private client property and casualty space, having previously filled a variety of related roles at Marsh USA. (newsbug.info)
Peabody Promotions
Two National Alliance designees have recently moved up at F.A. Peabody Company. Troy Heald, CIC, AINS, now oversees the Presque Isle branch operations and Diane DuMont, CISR, ACSR, was promoted to the Caribou/ Adawaska branch Service Supervisor. (thecounty.me) Heald
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Making a Difference: Affiliation One person, one agency or company, one organization can— and does—make a difference in the lives of countless people every day. That person is each of you, each of us, every Board member, faculty member and Educational Consultant. It is the sponsoring state associations that support professionalism through education, and the Research Associates who support the efforts of The National Alliance Research Academy. It is the companies and agencies that bolster the professionalism of the industry with their unwavering commitment to education. And it is the colleges and universities that support our efforts to offer the University Associate (UACIC and UACRM) Programs for the enterprising students who will become the industry leaders of tomorrow. We have all known a kid who had a dream of somehow, someday, making a difference. And what are organizations comprised of except kids who have grown up and into roles that they never imagined with dreams that they had never thought of dreaming before? Unlike the students enrolled in RMI programs at academic institutions, few of us planned careers in the insurance and risk management industry. Yet here we are, and here we stand—casting a steadfast eye toward tomorrow. As we come to the end of our 50th anniversary year, we cannot say THANK YOU enough to each of you. As we well know, the success of The National Alliance is a direct reflection of your desire to make a personal and professional difference every day. By sharing this mindset, we support one another in our continuing quest for excellence. Thank you for your ongoing contributions to the industry and your affiliation with The National Alliance. Together we will use the power of imagination, innovation, and integrity to make an even bigger difference in the future than was ever possible in the past.