WE LOVE YOUR BUSINESS! To celebrate we are extending our 5% new business commission program. Bring your business home to New Mexico Mutual and celebrate with a 5% increase in commission on NEW BUSINESS* bound with effective dates through August 31, 2012. We appreciate your business and our partnership! We look forward to providing your clients the opportunity to put their business with a New Mexico company. If you have any questions, please feel free to contact your sales representative.
SM
SM
New Mexico’s Experts in Workers’ Compensation Insurance. 3900 Singer Blvd. NE • Albuquerque, NM 87109 • 505.345.7260 or 800.788.8851 •
www.NewMexicoMutual.com
*Excludes accounts that were insured with New Mexico Mutual in the previous 6 months, short-term policies, rewritten policies, and renewal policies.
"The Voice" of Independent Agents since 1934
“La Voz� is the official monthly e-publication of the
a L
Independent Insurance Agents of NM 1511 University Blvd. NE Albuquerque, NM 87102. (505) 843-7231. Fax (505) 243-3367. Web site www.iianm.org. This publication is intended to provide accurate and authoritative information on the subject matter covered, but is distributed with the understanding that neither IIANM, nor any contributing author, publisher, contributor or advertiser is rendering legal, accounting or any other professional service and assume no liability whatsoever in connection with its use. Further, the electronic links to our advertisers and/or contributors found in this publication are provided as a courtesy to our readers and do not necessarily indicate an endorsement by IIANM. News items from members of Independent Insurance Agents of New Mexico and the general insurance industry are encouraged. The advertising deadline is the fifteenth day of the month, preceding publication. Advertising rates are available upon request. Please contact Rachel Sheffield at rachel@iianm.org for details
IIANM Staff
Features
o VZ
RLI - Announces New Underwriting Guidelines for New Mexico Risks
05
NMM & IIANM Scholarship GOLF TOURNAMENT - 6 Days til Tee Time! 06 13 Steps to Keeping Both Internal & External Customers Happy
08
Accidental Discharges vs. Sewer Backup
11
Proposed Regulations Create New Retirement Planning Opportunities 15 Adapting to Changing Technologies
17
Bridging the Gap Between NM Flooding Events & Insurance Coverage 18 Net Cost of Having an Agent is Small
20
Checkmate! (Coverage Check Lists)
23
2012 IIANM Company Partners
04
Loyalty to Independent Agents Remains Strong
26
Fight the Seven Branding Challenges
29
President/CEO Thom Turbett Vice President Lorri Gaffney Communications Director Rachel Sheffield
In Every Issue Tech Talk
12
Insurance Programs Administrator Julie A. Franchini
ABEN - The Next Big Thing in Continuing Education
04
Member Services Associate Renee Trujillo
May's Clickable Calendar
30
Odds n Ends
31
2011-2012 Officers Chair Scott Jones Vice-Chair PJ Wolff Secretary/Treasurer Diana Hobbs National Director Sam Conlee Immediate Past Chair Kathy Yeager
Advertiser Index Acuity Burns & Wilcox Hallmark Insurance Company Litchfield Special Risks Lovelace Health Plan Market Finders, Inc. MexiPass Mountain States Insurance Group New Mexico Health Insurance Alliance (NMHIA) New Mexico Mutual Risk Placement Service Trustco
10 21 19 22 14 16 04 28 04 02 27 32
The Next BIG Thing in Continuing Education!
High quality continuing education for independent insurance agents, brought to you via live streaming video.
For more information and to view course listings click here
Insurance agents!
You spoke, we listened! New plans and more options now available!
Click here to visit our website.
IIANM’s Market for Stand-alone Personal Umbrellas Announces
New Underwriting Guidelines for New Mexico Risks EFFECTIVE 4-1-12 FOR NEW BUSINESS AND 6-1-12 FOR RENEWALS, RLI WILL NO LONGER OFFER LIMITS HIGHER THAN $1,000,000 ON PERSONAL UMBRELLA POLICIES IN THE STATE OF NEW MEXICO.
RLI’s decision is based on recent rulings made by the New Mexico Supreme Court which broaden the scope of Uninsured/Underinsured Motorist coverage in our state. RLI introduced its Excess UM/UIM endorsement for PUPs in 2011, but the company is now concerned that court rulings regarding auto coverage could seep into umbrella policies. RLI will continue to offer the Excess UM/UIM endorsement at $1,000,000 but will no longer write umbrella limits above $1,000,000 on New Mexico risks, regardless of whether or not the Excess UM/UIM endorsement is attached. What to Expect on New Business: Application PUP 276NM (04/12) is mandatory for all new PUPs in New Mexico with effective dates of 4-1-12 and later. Please discard any old applications in your office. The new app can be accessed through the IIANM website, the RLI portal, or by clicking here. If we receive other versions, they will be returned with a request to complete the updated application. What to Expect on Renewals with Limits of $1,000,000: Policies with limits of $1,000,000 will be handled routinely at renewal. A renewal questionnaire will be mailed to the insured 70 days prior to expiration, with a due date
45 days prior to expiration. If RLI does not receive the completed questionnaire by 35 days prior to expiration, a non-renewal notice will be mailed, along with a copy of the renewal questionnaire that was originally sent. If the insured submits an acceptable questionnaire prior to expiration, the policy will be renewed. The only change will be the absence of higher limit options on the renewal billing that RLI sends to the insured after receipt of the completed questionnaire. What to Expect on Renewals with Limits over $1,000,000: RLI will directly communicate this change to policyholders with limits over $1,000,000 by mailing the NM Renewal Cover Letter 70 days prior to expiration. We recommend that you notify your insureds of the limit change before they receive RLI’s notice. Along with RLI’s explanatory letter, the insured will receive the required non-renewal notice and a renewal questionnaire, which the insured can complete if they choose to renew the policy at the $1,000,000 limit. If they do not return the completed renewal questionnaire, coverage will lapse on the expiration date. Alternative Market - Anderson & Murison As IIANM members, you have access to the Anderson & Murison Personal Excess Policy. The PEP is a standalone personal excess policy in the admitted market with limits in most cases to $5,000,000 and, in some cases, to $10,000,000. A&M offers broad acceptability and competitive pricing. Applications, rates and underwriting guidelines are available in Big I Markets by selecting Personal Umbrella Alternative Market. Or you can go directly to A&M’s site for details and a quick rater. Laura Long, the New Mexico underwriter, can be reached at 800-234-6977 x 264. Questions? Contact Julie Franchini at IIANM at Julie@iianm.org or 505-999-5802.
il t s y 6 Da E! IM T E E T 18th Annual Scholarship
Golf Tournament
Registration Deadline: May 2nd, 2012 Includes: Golf, Lunch & Dinner/ Award Presentation
$100/per person
Plan to attend the New Mexico Mutual and Independent Insurance Agents of New Mexico’s 18th Annual Scholarship Golf Tournament which will be held on May 7th, 2012 at the beautiful Four Hills Country Club. This event is designed to fund college scholarships for deserving candidates. Since we are set up as a ‘C-3’ charitable organization, your contributions are entirely tax deductible. We are asking that you contribute to this very worthwhile cause by way of monetary donations, gifts, sponsorships or participation to help us make a dream come true for a worthy nominee. NMM & IIANM are also soliciting nominations for this years recipient. If you are interested in nominating an individual, please contact Cecil Rudd at (505) 343-2823. The scholarship will be awarded at the reception immediately following the tournament. Your participation is vital to the success of our scholarship program. Your contributions and registrations should be mailed to the address listed on the right. Registrations may be faxed to (505) 243-3367. Should you require additional information, please contact Lorri Gaffney at (505) 999-5805 or 800-621-3978 or email lorri@iianm.org.
May 7th, 2012
18th Annual Scholarship
Golf Tournament
Hole-in-One Sponsor $5,000 or more... • • • • • •
Full Page Ad in La Voz Recognition Plaque Full Registration for Four Players Hole Sponsorship and Recognition Sign Recognition in Event Program Listing an Appreciation Sign at Event
Eagle Sponsor $1,000 - $2,500 • • • •
Full Registration for Four Players Hole Sponsorship and Recognition Sign Recognition in Event Program Listing an Appreciation Sign at Event
Double Eagle Sponsor $2,500 - $5,000 • • • • • •
1/2 Page Ad in La Voz Recognition Plaque Full Registration for Four Players Hole Sponsorship and Recognition Sign Recognition in Event Program Listing an Appreciation Sign at Event
Birdie Sponsor $500 - $999 • • • •
Par Sponsor up to $499
Full Registration for Two Players Hole Sponsorship and Recognition Sign Recognition in Event Program Listing an Appreciation Sign at Event
• Recognition in Event Program • Listing an Appreciation Sign at Event
Company / Agency Contact: Company / Agency Name: Address: City, State & Zip: Phone: Fax: E-mail: Sponsorship Level Selections: Hole-in-One Sponsor
Play as one team Double Eagle Sponsor
Willing to play on various teams Eagle Sponsor
(4 players to include) Name Name Name Name Birdie Sponsor (2 players to include) Name Name
Please fax this form back to: (505) 243-3367 Attn: Lorri or mail to: IIANM 1511 University Blvd. NE Albuquerque, NM 87102
Par Sponsor Individual Registration Form: $100 per person Golfer: Company / Agency Name: Address: City, State & Zip: Phone: Fax: E-mail: Your Desired Team: Method of Payment: This is for team assignments only! A separate registration form is required for each player. We will try our best to honor your requests. Questions may be directed to Lorri Gaffney at 999-5805. Bill Agency (for Members Only)
Registration deadline is May 2, 2012.
Yourself Name Name Name
Check Enclosed (payable to IIANM) Credit Card Name: #: Exp. Date:
13 Steps to Keeping both Internal & External Customers Happy through Effective
Communication by John Chapin
Most problems and complaints both outside and inside your company arise from poor communication. Poor communication most often results from either miscommunication or a lack of communication.
1 2
13 Steps to Effective Communication
1) Have a clear objective for your communication. The key in this first step is to stop and think about what message you’re trying to convey and how you can maximize the results of your communication. 2) Decide what form of communication is most appropriate. Is it more appropriate to communicate verbally or through written means? Should you send an e-mail, should you pick up the phone, or should you visit the individual in person?
3
3) Prepare for your communication. Make sure you have all your facts straight and decide what you want to say. Prioritize the various points and put them in order from most to least important. In addition to preparing to present your communication, prepare for how your communication will be received. What are the possible reactions and how will you respond to those reactions?
4 5
4) Be direct and specific. Use as few words as possible while still giving all the detail necessary. Include the who, what, where, why, how, and under what conditions. 5) Whenever possible, communicate directly with the person or people you want to get your message out to. When you ask someone to give information to someone else, your message will not have the same meaning as if you deliver it yourself. The message may be only slightly different, but it will be different. In addition, you may give the recipient the impression that he is not
Page 8
Independent Insurance Agents of New Mexico - www.iianm.org - * May 2012
important enough for you to take the time to deliver the message personally. Gauge the importance of the message. If the message is important, deliver it yourself, if it is not of major importance, you can delegate it—just make sure the person ultimately delivering the message is clear about the point you’re trying to convey.
6
6) When you want someone to do something, ask directly.
communicating with. Give the benefit of the doubt wherever possible.
12
12) Take notes when communicating if appropriate. If you are given a simple task you probably don’t need to take notes; however, often communications can quickly become complex. Take good notes and read them back to make sure you understand them correctly.
13
Ask him to do it, explain what the objective of the task is, and let him know why the task is important. When you ask in this way, you show consideration for the other person and make him feel important. As a result, the person will generally do a better job for you.
7
13) Act on communication as soon as possible. The facts are the clearest in your mind immediately after the communication has taken place. If you wait for several days to act, or even several hours, you may find that you have forgotten crucial pieces of the conversation.
7) Document communication when appropriate. Having the facts in black and white will make sure everyone has the same understanding and is on the same page. This will also help establish responsibility and a timeline.
8 9
We realize those are a lot of steps to keep straight. However, not all steps will apply to every communication. Just keep this list handy and take a glance at it before you communicate something important.
8) Communicate often. A lack of communication can lead to problems. When you don’t communicate with someone, you begin to slowly grow apart from him. 9) Don’t avoid communicating bad news. One of the biggest customer complaints is a lack of communication. Letting bad news sit can only make the situation worse. People realize that things won’t always go perfectly, and while they won’t be happy to hear bad news, the majority will appreciate it.
10
10) If you are communicating about a problem or challenge, go into the conversation with some solutions. If the situation puts you in a position where you need to compromise, know in advance what you are looking for, how far you are willing to bend, and what you are willing to accept.
11
John Chapin is an award winning sales speaker, sales trainer, coach, and co-author of the goldmedal winning "Sales E ncyclopedia" a comprehensive how-to guide on selling. "Sales Encyclopedia" is written for sales professionals in all industries at any level of experience. Utilizing more than 21 years of sales experience and as a number one salesperson in three industries, John co-founded Complete Selling Incorporated, a company helping salespeople double their sales and find their motivation. If you would like access to John's free white paper on what it takes to be successful in sales along with a monthly newsletter, you can visit John's website
11) Don’t argue or find blame.
at http://www.completeselling.com For permission to
Try to take a team approach to the problem and put yourself on the same side of the table as those you are
reprint, or to reach John, email him at johnchapin@completeselling.com.
Independent Insurance Agents of New Mexico - www.iianm.org - * May 2012
Page 9
WE’VE GOT YOUR BACK.
www.acuity.com Page 10
Introducing Eva & Ella, the ACUITY Cuties facebook.com/acuitywow Independent Insurance Agents of New Mexico - www.iianm.org - * May 2012
accidental ulty
VU Fac
dischargs vs. sewer backup
sewers or drains. Also, the damage is caused by the overflow of near potable water because it has nowhere to go, not the backup of sewage water.
"I have an insured with an HO3. When the washer is run, water is filling up the sinks and toilet and overflowing from these appliances into the bathrooms. Tile flooring, carpet, interior doors, and a first floor ceiling is damaged as a result. We have determined that the drain lines in the house are either worn out or clogged. We have also determined that tree roots have closed the drain line that runs to the sewer connection in the street. There are no service issues with the sewer line in the street or with sewer and water services supplied by the city." This issue has been debated for some time... we've had it come up several times in the past year. To my knowledge, there is no definitive legal precedent or interpretation, but we tend to agree with you that this type of claim is covered... in many cases. The courts have often wrestled with the question of whether the policy excludes these losses as sewer backup or covers them under the peril of accidental plumbing discharge. A number of state courts have felt that when the problem is in the insured's plumbing system, before it connects to the city sewer main, that it should be covered as accidental discharge from the insured's plumbing system. The courts reasoning is usually that the intent of the sewer backup exclusion is to remove coverage only for those losses that "reverse flow" from the sewer utility lines. Basically, it boils down to a covered peril vs. an exclusion. The following type of loss is covered (it's a named peril, e.g., in the HO2 and an implied one in the HO3): 12. Accidental discharge or overflow of water or steam from within a plumbing, heating, air conditioning or automatic fire protective sprinkler system or from within a household appliance. We also pay for tearing out and replacing any part of the building on the "residence premises" necessary to repair the system or appliance from which the water or steam escaped. Here's the exclusion that it's bumping up against: 3. Water Damage, meaning: b. Water which backs up through sewers or drains or which overflows from a sump; One argument for coverage is that virtually all overflow of water from "within" a plumbing system involves blockage of a drain. If the exclusion is applied to any blockage, then the overflow coverage is of no value. The exclusion, then, should be applied narrowly to the "backing up THROUGH"
Another argument is that the efficient proximate cause of the overflow is the backing up of a sewer line or drain; that, without the blockage, there would be no overflow. That position supports the premise that the covered peril should be restricted to normal potable water supply line breaks and not to any nonpotable water that backs up from a sewer or drain. Persons taking this position say that "overflow" refers to a tub, sink or malfunctioning washer that overflows its containment (though it's hard to see how the overflow is from "within" the plumbing system). I can see an argument for both sides but, at best, this dichotomy appears to arise out of an ambiguity. When that exists, courts will usually take the side of coverage. According to the Property Loss Research Bureau (PLRB), "The sewer backup exclusion was given widespread use after heavy rains in the late 1950s resulted in extensive basement flooding. The continual expansion of cities resulted in a frequent overload of antiquated and inadequate municipal sewerage systems. Insurers were not prepared to assume these regularly occurring, nearly catastrophic losses, and the exclusion was inserted."
If that historical perspective is accurate, then you could argue that the purpose of the exclusion is to exclude the catastrophic potential of water backing up from community systems through private sewer systems, as opposed to localized blockage. According to PLRB, in Hallsted v. Blue Mountain Convalescent Center, Inc., 595 P.2d 574 (Wash. App. 1979), sewage water backed up through a toilet and into a home. Since the water originated outside of the insured's plumbing system, the court said the exclusion applied. According to the decision, the accidental discharge peril did not apply because that peril only provides coverage where the water originates "from within" the insured's plumbing system. So, our position would be that, if the overflow results from a localized blockage in the plumbing system and does not constitute a backup of sewage water, then coverage should apply. This appears to be a recurring problem. Even if the sewer backup exclusion isn't applied, the HO policy contains the following exclusion: Neglect Neglect means neglect of an "insured" to use all reasonable means to save and preserve property at and after the time of loss. Therefore, the insured has an obligation to remedy the problem when the damage occurs.
Independent Insurance Agents of New Mexico - www.iianm.org - * May 2012
Page 11
Steve
Anderson.com by, Steve Anderson
How to Maximize Your
Linked Presence
may have guessed) last year's beach vacation shots might not be your best pick.
Setting up Your Basic Profile LinkedIn needs to be a part of every producer's sales toolkit. This social platform provides an easy way to learn about, and reach out to, millions of businesspeople (also called prospects). In addition, all agency staff should create a profile. Unfortunately, many producers, as well as staff, don't take full advantage of the site's capabilities even though most are free. In the next few weeks I'll share my top recommendations for maximizing LinkedIn for networking and, ultimately, making sales. The first step, if you haven't done so already, is to create your LinkedIn profile. Our first LinkedIn TechTips focuses on making your profile an effective tool: Your Name: Use your "known as" name. My given name is Stephen but I have gone by Steve for many years so that is what I use in my profile and on my business card. Headline: Also known as Title, this area provides you with a great branding opportunity. When another user searches the LinkedIn user database, your name and headline are the only things they'll see before deciding whether to click on your full profile. Make this statement count. "Commercial Producer" isn't much of a branding statement, but "Specialist in Protecting the Financial Future of Business Owners" provides more focused information. Photo: Make sure you add a photo! Upload any decentlooking, digital head-and-shoulders photo. You don't need business attire for this shot. Just use a photo that sends the message, "This is a professional person," meaning (as you
Page 12
Custom URL: Make sure your LinkedIn profile bears your own stamp in the form of a personalized URL, like http:// www.linkedin.com/in/TAAReport, if it is available. You should add this customized URL to your email signature, on your business card, and anywhere else you have your information. Summary: Here's where you can tell your own story. People buy from people, so use this freeform section to show your personality. It's OK to have fun with your LinkedIn summary. It's where you can speak to the reader (the person viewing your profile) in a human voice. Employment History: It takes only a few seconds to upload your text resume to LinkedIn, and it will save you time creating the Work History section of your profile. You can amplify this field with your proudest accomplishments or particular responsibilities you want readers to know about. It's important to include the dates (and employer names) for each past assignment so LinkedIn can match you up with colleagues who have worked alongside you. Education: Including accurate dates in the Education section of your profile will make it easy for the LinkedIn database elves to match you up with classmates who may be on LinkedIn now, waiting for you to reach out and refresh the connection. Contact: The "Contact [Person X] for" section toward the bottom of your profile is another great field because it forces you to think about what you want from LinkedIn and from your networking in general. This is where you get to decide which types of contacts you want and don't want. Which conversations are you willing to have, and which ones are a waste of your time?
Independent Insurance Agents of New Mexico - www.iianm.org - * May 2012
Advanced User Profile Settings Additional Information: Your profile’s Additional Information field lets you round out the “Story of You” with the URL for your website and/or blog, your Twitter account, honors and awards you’ve won, and your interests (the books you read, the sports you play or follow, or anything else you want to share). Remember, people buy from people they like. Sharing information about yourself makes you more human and provides additional networking points of contact. Specialties: The Specialties section of your LinkedIn profile is another great field. You can use terms like “Commercial Insurance Sales” and “Risk Management,” but you can also talk about your Irish wolfhounds and salsa dancing in this field. Prospective clients and employers want real, live, entangled, interesting people on their teams. Business is personal these days, and your outside-of-work interests (the ones you care to share, anyway) are part of your professional persona. Add Sections: A powerful new LinkedIn feature is Add Sections, which lets you amplify your profile with additional information about past jobs, projects, organization memberships, and more. Click on the Add Sections link to preview the various enhancements you can make to your profile just by providing a bit more background. Personal Information: You can list as little or as much personal information as you want on your profile. It’s your choice. Applications: This is a very powerful feature that allows you to add external information to your profile and have it updated automatically. For example, if you have a WordPress website you can link the LinkedIn WordPress application to your site and have new content added automatically to your profile. There are several applications and I could write multiple articles about them, but for now I’ll just say check them all out. By following these tips you now have a LinkedIn profile that maximizes your visibility and networking prowess.
people you know to join your first-degree (people with whom you are directly connected) network. In most cases you’ll need their email addresses. If LinkedIn gives you the opportunity (some invitation channels do, and some inexplicably don’t), change the standard boilerplate invitation language to sound more like your own voice. And you might remind the person you are requesting a connection in the invitation how you know them and/or where you met them. Be careful of sending invitations to people who aren’t expecting them - you could lose your invitation privileges that way. 2. Colleagues: The Colleagues feature lets you quickly see which LinkedIn members have worked with you during your career. That’s incredibly handy because it can be easy to forget people, and you probably don’t have current email addresses for long-ago colleagues. 3. Current Clients: At a minimum you should send a request to connect with current clients. If it is a larger organization, then you will want to send a request to connect to every contact at the organization. 4. Address Book: If you have an address book on Gmail, Hotmail, Outlook, or another popular email application, you can download your entire contact list into LinkedIn. Don’t panic - LinkedIn won’t send spam; it will just tell you which of these contacts already have a LinkedIn profile.
Now you need to begin the process of actually building your network. Here are five tips for connecting with the people you already know and are part of your existing networking group. Many of your existing contacts may already have a LinkedIn profile.
5. Classmates: Just as the Colleagues feature does, Classmates lets you reconnect with people from your past. Invite people to join your network via the Classmates channel with caution, because this is where LinkedIn invitation spam tends to congregate. As suggested above, a helpful reminder in the body of your invitation can help refresh the memory of classmates you haven’t been in touch with for a while.
1. Connections: Look for the green Add Connections bar on nearly every page of LinkedIn. Use this link to invite
Taking these steps will allow you to begin building your network of people.
Building Your Network: Basic
Independent Insurance Agents of New Mexico - www.iianm.org - * May 2012
Page 13
s . m e smi ile. fe v . o l e le. feeelltthheelov AWARDS & RECOGNITION AWARDS & RECOGNITION TOp RANkED ppO IN NEW MExICO NCQA’s Private Health Insurance Plan TOp RANkED ppO IN NEW MExICO Rankings, 2011-2012 NCQA’s Private Health Insurance Lovelace Insurance Company,Plan Inc. Rankings, 2011-2012 4-STARInsurance RATING Company, Inc. Lovelace Center for Medicare & Medicaid Services 4-STAR RATING Lovelace Health Plan Center for Medicare & Medicaid Services BEST plACES TO WORk Lovelace Health Plan Modern Healthcare Magazine for 2011 BEST plACES TO WORk Lovelace Women’s Hospital Modern Healthcare Magazine for 2011 Lovelace Westside Hospital Lovelace Women’s Hospital ROADRuNNER RECOGNITION Lovelace Westside Hospital Quality New Mexico ROADRuNNER RECOGNITION Lovelace Women’s Hospital Quality New Mexico Lovelace Westside Hospital Lovelace Women’s Hospital BREAST IMAGING CENTER Of ExCEllENCE Lovelace Westside Hospital College of Radiology BREAST IMAGING CENTER Of ExCEllENCE Lovelace Women’s Hospital’s Diagnostic College of Radiology Imaging Center Lovelace Women’s Hospital’s Diagnostic Only hospital in Albuquerque recognized as Imaging Center TOp pERfORMER ON kEy QuAlITy MEASuRES Only hospital in Albuquerque recognized as The Joint Commission TOp pERfORMER ONHospital kEy QuAlITy MEASuRES Lovelace Westside The Joint Commission Only hospital in New Mexico Lovelace Westside Hospital CARf ACCREDITED IN SIx pROGRAMS Only hospitalRehabilitation in New MexicoHospital Lovelace CARf ACCREDITED IN SIx pROGRAMS GET WITh ThE GuIDElINES Lovelace Rehabilitation Hospital STROkE SIlvER pluS pERfORMANCE AChIEvEMENT AWARD GET WITh ThE GuIDElINES American Heart Association/STROkE SIlvER pluS pERfORMANCE AChIEvEMENT AWARD American Stroke Association American Heart Association/ Lovelace Medical Center American Stroke Association BEST plACES WORk Lovelace Medical TO Center New Mexico Business Weekly for 2011 BEST plACES TO WORk Lovelace Health Plan New Mexico Business Weekly for 2011 Lovelace Health Plan LHP 976-0112 LINC 483-0112
things just keep getting better. things just keep getting better. A few years back, we began telling you that you’re going to
loveyears Lovelace. we didn’t just you tell you we began toto show A few back, But we began telling that–you’re going you. We made commitment to change the way healthcare love Lovelace. Butawe didn’t just tell you – we began to show is delivered just here in Albuquerque, the whole you. We made not a commitment to change the but wayinhealthcare state. Wenot made commitment to hard but workinand is delivered justahere in Albuquerque, the providing whole quality to recruiting the best and to state. We healthcare, made a commitment to hard workemployees and providing providing affordable, accessible plans to businesses quality healthcare, to recruiting the health best employees and to and individuals. providing affordable, accessible health plans to businesses and individuals. Our commitment is showing results. Today, Lovelace Health System is proudisto be recognized by these independent Our commitment showing results. Today, Lovelace Health organizations. But not finished. Ourindependent focus remains on System is proud to bewe’re recognized by these bringing theBut best health to you. And giving you even organizations. we’re notcare finished. Our focus remains on more to about Lovelace day.giving you even bringing thelove best health care to every you. And more to love about Lovelace every day. It’s proof positive that we’re changing the way healthcare delivered. It’sisproof positive that we’re changing the way healthcare is delivered.
Lovelace Health System, Inc. • Lovelace Insurance Company Lovelace Health System, Inc. • Lovelace Insurance Company
lovelace.com
lovelace.com
exceptional care for
O
Proposed Regulations Create New Retirement Planning Opportunities
ver the past 30 years, 401(k) plans have emerged as the dominant retirement vehicle. But many people do not realize that 401(k) plans were not created as the sole retirement plan vehicle. Ted Benna, the creative interpreter of Internal Revenue Code Section 401(k) that was a subset of profit sharing plans, postured the provision would allow for employees to contribute to the plan and not just solely rely on the employer’s contribution. At that point in the U.S. economy, the predominate plan was the defined benefit retirement plan, which provided a monthly stream of retirement income for the retiree’s lifetime and typically a 50% lifetime annuity for their spouse.
Treasury Department’s proposal would accommodate use of longevity insurance.
Given the myriad of influences such as tax policy, accounting rules and global competition, many companies—and now a number of state retirement systems—shed their defined benefit pension plan in favor of a defined contribution plan, which usually involves a 401(k) provision to allow the employees to contribute. The absence of the defined benefit plan and the resulting predictably of a monthly retirement payment have left a vexing issue for workers trying to plan for retirement, including longevity risk—that is, outliving one’s retirement income. Following the 2008 recession and significant decline in the stock market, there was a renewed interest and focus by mutual providers to tighten their target date retirement funds—i.e. 2020, 2030, 2040—and other so-called guaranteed income vehicles to provide new investment and planning tools. One of the more intriguing ones has been the development of longevity insurance, which is a form of insurance that pays a benefit at a predetermined age. For example, a man who pays $50,000 for MetLife's longevity insurance product at age 50 would receive an-
nual income of $42,997 once he reaches age 85, according to the company's brochure. Assuming an inflation rate of 2.5% per year, the annual payout is equivalent to $18,118 in today's dollars. He would receive about half that amount—$21,741 per year—if he purchased the same contract at age 60, and $15,439 if he bought it at 65. That's equivalent in today's dollars to annual payments of $11,727 and $9,422, respectively. Female policyholders receive slightly less because statistically they have longer life spans. To counter the erosive effects of inflation, insurance companies, including MetLife and The Hartford, offer longevity products with an inflation hedge but the cost is significantly more. Meanwhile, a white paper by the Council of Economic Advisors estimated that, for example, a 65-year-old would have to pay $277,500 for a $20,000-ayear annuity that started immediately, but only $35,200 for one that started at age 85.
The problem is 401(k) plans have minimum required distributions (MRDs) that enforce by Dave Evans people taking their distributions beginning at age 70 1/2 if they are no longer working at their company; 5% owners must take their distributions regardless if they are still working. This creates a problem for longevity insurance taken through a retirement plan because the payment doesn’t commence for years. Recently, the Treasury Department issued proposed regulations that will accommodate the use of longevity insurance and annuities, clarifying the deferred aspect of the annuities would not violate the MRD rules within prescribed limits. The regulations cap the maximum amount of retirement plan money that could be spent on longevity insurance at 25% of the account balance, up to $100,000. Independent agents may want to monitor offerings from insurance companies to determine if they wish to offer this evolving insurance to their clients.
Independent Insurance Agents of New Mexico - www.iianm.org - * May 2012
Page 15
Page 16
Independent Insurance Agents of New Mexico - www.iianm.org - * May 2012
Adapting to Changing Technology
100
or more years ago our grandfathers and greatgrandfathers wondered if they were capable of learning and understanding the changes that were taking place with the advent of automobiles, airplanes, electricity and telephones. Our fathers asked the same question about television, appliances and portable technology. We may have asked the same question about computers, cell phones and Ipods. Don’t worry, our grandparents, our parents and we have adapted to technological breakthroughs and every subsequent generation has learned to use those adaptive devices intuitively. And don’t worry about the next generation either. They are no smarter than we have been. Our children will ask the same questions and will have the same doubts about technology not yet introduced that we and our forbearers have asked.
Here’s how to survive technology and use it to the best of our abilities. First, don’t try to be 15 again. When you’re 15 you may think you know everything, but you’re brain is still relatively empty (ask any parent) and it is available for newly arising technologies and changes. When you’re 45 you have filled your cranium with personal and business issues and knowledge to the point that adding more and newer technologies may mean that you have to let go of known “facts” that you have learned as you grew into maturity. Whether those “facts” are real or perceived, you are comfortable with them. AS LONG AS THOSE FACTS WORK IN YOUR PERSONAL AND BUSINESS LIFE, DON’T FEEL GUILTY ABOUT NEWER “FACTS” BEING AVAILABLE.
by Al Diamond
Second, realize that there are no “FACTS” in life. We sell and train relationship selling as the best way for agents to establish and retain clients for life. We have seen it work so well with the agents who have used relationship selling for decades that we are trying to convert those agents for whom the Quote/Price driven model of sales is no longer working. BUT, we have also seen Quote/Price agents succeed and do so with astounding results. They learned to change their marketing, their products, their service and, sometimes, their target market to adapt to the desired marketing process and continue to sell large numbers of insurance products and services to clients while most are faltering trying to use the old model of sales in a new technological environment. IF THE OLD WAYS AREN’T WORKING AS THEY HAD IN THE PAST, EITHER CHANGE YOUR MODEL OR CHANGE YOUR ENVIRONMENT. TECHNOLOGICAL CHANGE IS A PART OF THE ANSWER. Finally, whether you choose to change or remain the same, surround yourself with younger people (whose craniums are not yet full of their “facts”) and who will drive your business into the next generation using some of the technological advances that are thrust at us every day. Now link into this YouTube video and be prepared to shake your head in awe at what’s happening in the time it took you to read this article. By the way, when I got this link and viewed it there had already been 4,793,193 other folks who had viewed this 5 minute video. That means that an average of 18.5 people viewed this video every minute of every hour of every day (24 hours/day, 7 days/week) during the last six months that it has been posted. Now do you understand the meaning of “viral marketing”? Do you have any questions about the efficiency of information passing around the world over the internet? The question is not “Is the internet a vehicle for transmission of ideas and information?” The question is, “In what way can we use the internet EFFECTIVELY for our information and business relationships in the future?” Reprinted from the PIPELINE, the national newsletter for agency principals. The PIPELINE is published by Agency Consulting Group, Inc., a leading consulting firm for independent agents in the U.S. for over 20 years. Call 800-779-2430 for information about the content of any of these articles or PIPELINE subscription Information.
Independent Insurance Agents of New Mexico - www.iianm.org - * May 2012
Page 17
Bridging
Gap the
Between New Mexico Flooding Events & Insurance Coverage Source: El Defensor Chieftain, Socorro, NM No Author Referenced
“Many people assume that their homeowners insurance covers floods, but it usually doesn’t,”
D
espite being the nation’s number one natural disaster, statistics continue to show that most people ignore the risks associated with flooding and do not buy flood insurance. Out of more than 900,000 New Mexico households and businesses, only 17,239 have purchased flood insurance policies through the National Flood Insurance Program (NFIP). That’s only 2 percent. Meanwhile, reports show that in the last 12 years, New Mexico has received five major disaster declarations that involved flooding. Officials with the Federal Emergency Management Agency (FEMA) in Denton, Texas, the regional office that oversees Arkansas, Louisiana, New Mexico, Oklahoma and Texas, point to several reasons for a lack of participation in NFIP. “Many people assume that their homeowners insurance covers floods, but it usually doesn’t,” said FEMA Region 6 Regional Administrator Tony Russell. “Others think that if they don’t live in a flood zone then they don’t have to buy flood insurance or simply can’t because it’s not offered; both assumptions are inaccurate.”
other myths Myth: Only homeowners can purchase flood insurance. The truth is anyone in NFIP-participating communities can purchase flood insurance, including business owners, and business and residential renters. Myth: People can’t buy flood insurance if they are located in a high flood risk area. Anyone can buy flood insurance no matter where they live, as long as the community participates in the NFIP. Myth: People can’t buy flood insurance if their property has been flooded before. People are eligible to purchase a flood insurance policy after a flood, as long as the community is participating in the NFIP. Myth: People can’t buy flood insurance immediately before or during a flood. You can purchase flood insurance any time. There is usually a 30-day waiting period before the policy is effective.
For more information on flooding and flood insurance, visit www.floodsmart.gov.
In an effort to bridge the gap that exists between the high rate of flooding events and the low percentage of flood insurance policies, FEMA is urging New Mexico residents to buy flood insurance now before the next flood hits.
Service is our Hallmark. Hallmark Personal Lines is dedicated to providing New Mexico independent agents innovative insurance products at competitive rates combined with personalized, responsive client service. Your success is essential to our success, which is why �Service is our Hallmark.�
Generous Commissions Contingency Bonus
Competitive Rates Dedicated Agent Specialists
Net Cost of Having an Agent Is Small
T
he Wall Street Journal recently quoted Dick Poppa, president and CEO of IIABNY, in an article on the new commission disclosure regulations in New York (“Insurance Fees, Revealed,” March 30). The newspaper was correct to interview Poppa—he called the new rule a “solution in search of a problem”—but frankly, the story ignored his point. The article was confusing at best and focused primarily on the commission aspect of the insurance transaction. A more informative discussion would differentiate better between the unique aspects of annuities, life insurance and property-casualty insurance. It would also include all expenses of an insurance transaction, not just agent commissions.
by Paul Buse
To make the comparison, A.M. Best data by distribution model was used and broke down what it means per the item being insured. For automobiles, the calculation used total registered vehicles in 2009 and assumed 20% are uninsured via the typical private passenger insurance market. For homes, the comparison used 2000 census data for single-family homes (detached and attached) and mobile homes; added 25% of the total one to four family units; and adjusted the total by average growth rate in existing homes. It was also assumed that 5% are uninsured.
Expense Ratios of Agency and Direct Writers
Fortunately, some views expressed about the story in the online comments section shed some needed light on the matter. While no one focused on the elemental differences between annuities, life and p-c, some of the feedback posted included some real pearls: • “What's critical for the consumer to know is bottomline price, payment terms, cancellation terms, service standards, etc.” • “As a retired life insurance agent, I would have had no problems with revealing what my commission was to a client. Of course, I would expect the lawyers, CPAs, dentists and physicians I do business with to provide me with a copy of their most recent federal income tax returns.” • “Why would a consumer want to know how much the agent is making? They have a right to shop. If the purpose is to lower agent compensation, you will soon not have agents. Then you will have no advice or service. Be careful what you ask for, you just might get it.” The issue I focused on as I read the article was highlighted in the comments section by an agent and another industry employee. In fairness to both, they were clear what their biases might be; one commenter said he was an Esurance employee and another identified himself as an independent agent. The Esurance worker commented that “transparency is the coin of the realm.” In response, the independent agent noted that one should include salaries and benefits of insurance company employees that are substituted for independent agents. He also pointed out the huge dollars spent by companies on advertising expenses. On average, it costs about $30 per automobile or home to benefit from the advice, feedback, claims support and interaction of an agency writer versus a direct writer, according to an analysis of A.M. Best data. Direct writers include Internet, captive agents, direct response and affinity group marketing. Agency writers include independent agencies, brokers, general agents and career agents. Page 20
Source: 2011 A.M. Best Aggregates & Averages 2006-2010 data, U.S. Census Bureau for types of homes and Bureau of Transportation statistics for the number of private passenger registered vehicles.
So a fairer look at expenses clearly shows the difference in frictional costs of insurance is not that large between agency writers and direct writers: About the cost of seven to eight gallons of gas or the cost to have the lawn mowed. Of course, some might argue these are averages and some companies may have much lower and much higher expense ratios. To that, I would agree and note the price and value proposition of the distribution will vary; the consumer can easily shop and choose. After all, does a dinner cost more with a waiter than without one? Can you create a last will and testament cheaper by yourself instead of with the counsel of an attorney? If I were to counter with one question for a reader of the article, I would ask: Would you value 10% of your premium dollar spent on an agent to advise you, or the same 10% spent on TV commercials? I think that is the better, albeit equally simplistic, question.
Independent Insurance Agents of New Mexico - www.iianm.org - * May 2012
If you cannot place all of your clients’ personal insurance needs, they will find someone who can.
When it comes to personal insurance, every part matters. Because when one piece goes missing, the entire account could come undone. At Burns & Wilcox, we can insure individual portions of their coverage or the whole account. So you do not have to turn away any business. We have the expertise, resources and experience that can only come from being the largest independent wholesale broker and underwriting manager. Need help with personal insurance? No one has you covered like Burns & Wilcox. Albuquerque, New Mexico | 505.822.0018 toll free 866.643.8538 | fax 505.822.0092 scottsdale.burnsandwilcox.com Independent Insurance Agents of New Mexico - www.iianm.org - * May 2012
• Commercial • Personal • Professional • Brokerage • Binding • Risk Management Services
Page 21
Page 20
Independent Insurance Agents of New Mexico - www.iianm.org - * May 2012
Checkmate! Are you using coverage checklists to work with clients?
I
by David Hulcher
n looking at the scope of an insurance agent’s job, I am constantly amazed at the knowledge and understanding of insurance that it takes to offer top-notch service to a diverse group of clients. One day it is meeting on the medical malpractice needs of a doctor, the next it’s making sure a father is comfortable with the limits of his personal umbrella policy. Let’s face it—identifying the risk exposures of clients can be difficult when dealing with such diverse operations, activities, assets and buying tendencies of clients. That’s why you can’t leave home without a coverage checklist.
Rating the Risk Coverage checklists simplify and focus your exposure analysis and are useful tools in eliminating potential E&O claims of failure to recommend coverage and other risk assessment errors. During the risk analysis process and learning about the client’s operation, sit down with clients and review the comprehensive list of exposures provided by checklists. It does not matter if it is a personal or commercial lines client. As you identify exposures for potential clients, find out if their current coverage protects against exposures and if it not, explain why this coverage is important. This will help the client understand existing exposures and allow for clarification of coverage needs. The client will be impressed with your level of professionalism and comfortable with your insurance knowledge. If you have identified an area of coverage for which your agency does not have a market to provide coverage, it is important that you address that with the client.
Document, Document Secondly, coverage checklists can assist agencies in providing documentation of client files. Too often in E&O claims, it is the client’s word against the agent’s. This makes it difficult or almost impossible for E&O carriers to make a solid defense on the agent’s behalf. Agencies also experience personnel turnover which also handcuffs the ability to defend E&O claims if there is not a well documented file. Most coverage checklists have areas beside each
coverage description allowing for the agent to check the following: no exposure exists, recommended and accepted, and recommended and rejected. They also provide an area for the client to initial next to any coverages that are rejected and for a signature at the bottom of the checklist. It may be a good idea to outline on the coverage checklist any responsibilities that the client needs to perform before coverage can be bound. Keeping this completed and signed checklist in the client’s file can prove a valuable defense tool should an E&O claim be made.
Grow the Pie A final benefit of using coverage checklists is the ability to grow your agency’s book of business. Using coverage checklists increases your agency’s ability to identify additional coverage needs of clients and to cross-sell other coverage. During the exposure analysis process, you may uncover and explain exposures the client had never contemplated. It’s an opportunity to grow your book of business. With so many types of insurance coverage, and so many different policy nuances, coupled with the diverse group of clients that insurance agents serve, coverage checklists are invaluable to agents. Reducing your agency E&O exposures for failure to recommend or identify coverage need; better documentation to the clients file and an opportunity to facilitate agency growth are all benefits of using coverage checklists. If a check doesn’t mark the spot for all of your agency’s employees, it should.
Check Marks the Spot Why should you use coverage checklists in your agency? Checklists help agents to: Eliminate E&O exposure for failing to recommend coverage Provide better documentation in client files if an E&O claim occurs. Increase growth through cross selling.
Need a good checklist plus a whole lot more? Click here!
Independent Insurance Agents of New Mexico - www.iianm.org - * May 2012
Page 23
THANK YOU
2012
independent insurance agents of new mexico
Partners Program
Loyalty to Independent Agents compared to older policyholders, fewer Remains Strong But younger consumers have an agent. by Victoria Goff
M
ost auto and homeowners who buy insurance through an agent are loyal to their intermediary, who they view as an objective advocate to represent their interests, according to survey results released recently.
“Insurance agents and their carriers are going to have to continually upgrade the capabilities they offer in order to stay competitive,” Friedman says. “If they don’t, someone else will take the business away from them.”
At least three-quarters of such respondents said an agent could identify their potential losses to make sure they’re covered, serve as an advocate to get their claims paid quickly and fairly, provide objective advice and explain their coverage more clearly, according to the survey by consultant Deloitte Research, which polled about 1,080 consumers each for auto and home insurance in June and July 2011.
But the good news, he adds, is that “all this new technology doesn’t mean that people don’t need service or don’t need advice. It doesn’t mean that they don’t need a third party.”
Policyholders using independent agents in particular showed more enthusiasm for the benefits from their agent and “their expectations of what agents can deliver in terms of price and service were the highest recorded in the survey,” according to the results. But a greater percentage of older consumers buy insurance through an agent compared to their younger counterparts, who switch insurance carriers more frequently.
The Turner Agency in Greenville, S.C., shares educational insurance information by blogging and using social media, including Facebook, Twitter and LinkedIn, as a way to reach a younger demographic, says marketing director Julie Turner, who handles social media and advertising for the independent agency celebrating 50 years of business. Content is relevant to the audience and time of year, such as information about holiday safety, social host liability, expensive gifts and newborns, she says, noting the agency often uses consumer stories from Trusted Choice®. The 18-person agency has also shared insurance information about golf carts, which are popular in its community.
Survey results showed 65% of the youngest homeowners - 25 years and under - purchase coverage directly from an insurer, while 37% of oldest policyholders - 51 years and older - do the same. Of the same age groups, 47% of the youngest drivers said they’ll likely renew their policy and almost 70% of the oldest motorists said they’ll stay with their current insurer.
Meanwhile, the agency has also reached out to longtime clients to share educational insurance information for their children, who were going to college or buying their first car or house. “We’re really just trying to position ourselves as being the education expert and just trying to find that one thing that might cause [a person to say], ‘Hmm, I may not have thought about that,’” Turner says.
“There definitely is a generation gap here,” says Sam Friedman, insurance leader for Deloitte Research. He notes 1 in 3 respondents older than 51 said they would never buy insurance without an agent, while 1 in 5 policyholders between 35 and 50 and 1 in 10 consumers between 18 and 34 said the same.
By using educational content, the agency also wants to consumers to know that “we want to be here for them when they have questions,” she adds. “This generation is by and large an educated group, and I do think that they appreciate value when they can see the difference,” she says.
With older consumers showing loyalty to their agent who they’ve worked with over time, there’s an opportunity to “capture the business and maintain the loyalty of drivers and homeowners when they are young,” the study suggests. “The people [who] work with independent agents tend to stay with them. It’s a loyal group,” Freidman says. The survey also showed that younger auto and homeowners want insurers to communicate with them in different ways, including through mobile applications and online services. About half of auto and home respondents younger than 35 said multiple channels of communication were influential in their decision to change carriers. Page 26
The agency also recently launched a mobile app, which includes capabilities such as requesting a quote, reporting a claim, paying a bill and locating nearby services such as a towing company, gas station or hospital, Turner says. While expanding communication options, the agency strives to interact with customers in the way they prefer, which can range from mail to email to text messaging, she says. “We’re moving at warp speed now and it’s not going to turn around so we’ve got to adapt,” she says. “At the same point, we’re very sensitive to our longtime consumers and we still mail letters and do the things that are important to them.”
Independent Insurance Agents of New Mexico - www.iianm.org - * May 2012
Risk Placement Services, Inc.
We cover the west with only the best! With multitudes of office locations to choose from,
Knowledge. Relationships. Trust and Confidence.
Excess & Umbrella
placing a call with us will put you on the fast track to providing the best solution for your clients.
Underwriting and Brokerage from six locations
Garage Liability & Physical Damage
(Casper, Boise, Denver, San Francisco, Scottsdale and Seattle)
General Liability
Accounting and claims handled in Scottsdale
Inland Marine
Proud members of AAMGA, NAPLSO, PLUS and various State Independent Agency Associations
Personal Lines
Excellence in service Relationship driven
For information about becoming an RPS broker call our Marketing Director at:
480.860.5555 SCOTTSDALE
www.RPSins.com/scottsdale
Professional Liability Programs Property Transportation and More! 8700 East Northsight Blvd., Suite 100 Scottsdale, AZ 85260-3671
Mountain States Insurance Group is pleased to introduce a new suite of property enhancement endorsements. The following are some highlights of our Premier Endorsement. Contact your underwriter for more details and pricing. ADDED COVERAGES Business Income & Extra Expense Actual Loss Sustained – Up To 12 Months $250,000 From Dependent Properties $50,000 Expanded Blanket Limit $250,000 Accounts Receivable Valuable Papers and Records (Other then Electronic Data) Debris Removal Outdoor Signs not Attached to Buildings Expanded Crime Blanket Limit $25,000 Employee Dishonesty Forgery or Alteration Money and Securities Money Orders and Counterfeit Money Credit Card Invoices Computer Fraud Computers, Media & Electronic Data - In One Policy Year $100,000 Foundation $25,000 Lock Replacement $2,500 Covered Crime Reward $10,000 Brands and Labels $25,000 Business Personal Property - Seasonal Increase 25% or $50,000 INCREASED LIMITS Outdoor Property $25,000 Tree, Shrub or Plant $2,000 Pollutant Cleanup & Removal $25,000 Ordinance or Law Coverage $250,000 Property of Others $25,000 Property Off-Premises $25,000 Fine Arts $25,000 Sewer & Drain Backup $25,000
Stable – Secure – Permanent Page 28
www.msig-nm.com - 505.764.1400 5051 Journal Center Boulevard N.E., Albuquerque, NewMexico Mexico, 87109 Independent Insurance Agents of New - www.iianm.org - * May 2012
1
2
3
4
Challenges
Fight the Seven
Reactive approach to brand development. Often, an event triggers brand development or rebranding. Signaling comments include, “We have a major tradeshow coming up,” or “We’re being featured in a major publication and want to place an ad, but we don’t know how to position ourselves.” With neither a plan nor procedures, your company simply “reacts” to opportunities for exposure.
5
Branding initiatives lack accountability. No formal metrics are in place to determine the effectiveness of branding initiatives, which may include advertising, direct marketing, public relations and Web activity. Often, the basis for continuing an initiative resides in gut instinct, and the effectiveness of branding initiatives is weighed after the fact. Without metrics, you can’t tell whether the result was good, bad or average. All you know is that you invested “X,” the sales result was “Y” and in the shortterm, you’re happy.
6
Can’t bring branding initiatives to conclusion. Many companies make a series of false marketing starts, or start strong and lose focus, which leads to comments like, “We have a website in development,” or “We’re working on a new corporate brochure.” The senior executive may be too involved in the process, or the project may have been delegated to an unqualified staff person. No matter how bright promising individuals can be, they may not be qualified to develop and deliver a company’s online brand single handedly, and it would have been unwise to expect them to do so. “Who are we today” syndrome. If you haven’t constructed a core brand foundation, each branding initiative represents a re-invention of the wheel that requires rethinking of your company’s position, key values, image and core focus. What should be a simple new product announcement turns into a debate about the company’s past, present and future with everyone asking, “Who do we really want to be when we grow up?” Competition “stole” the business away from us. We frequently get calls from companies that have lost a major piece of business, often to a direct or emerging competitor. The top executive will complain that the competitor is inferior, yet stole the customer. What companies in these situations fail to realize is that branding has more to do with perception than with reality. If a customer believes a competitor is better than you, it’s true, pure and simple.
7
Branding Challenges Regardless of how much money your agency earns in a year, there are a number of branding challenges common for all independent insurance agencies. How many of the following seven challenges have you found yourself facing?
“Branding doesn’t work in our industry.” This statement is often paired with, “Branding is a necessary evil.” These comments are usually spoken by casualties of poorly-executed marketing or bad marketing advice. The speakers have been stung once and won’t be so easily stung again. The truth is, branding does work, as evidenced by the successes of companies that have achieved brand status. Unrealistic expectations. “We sent out a mailing and nothing happened.” This common complaint gets back to accountability and ROBI. What did you expect from a single mailing? The biggest reason for branding failures is that companies lack the tenacity to stay the course. They bail out prematurely and cite failure. The truth is that it takes, on average, seven brand impressions to get on the radar of a qualified prospect, let alone convert that prospect into a customer. To make the most of marketing investments, you need to start tracking your spending on these activities. Next, determine whether you would be better served by investing differently. If you don’t have a budget, establish one for next year. Business-to-business companies spend an average of 2%–3% of annual sales on branding. Business-to-consumer organizations tend to spend 5% or up to 10% if they are in serious growth mode. Retailers spend even more because they rely completely on branding efforts to create selling opportunities. Averages are a good starting point for determining how much you should allocate to branding next year. Everybody Doesn’t Know You Any company in business for 10 years or more has name recognition, especially if it services a well-defined industry. The better question is, “What do people think about you?” Your customers know you for what you do for them, but they may not know your full range of capabilities, or how to make qualified referrals on your behalf. Your customer contacts may disappear, or customers may simply forget to call you in a time of need. - E.D. Ed Delia is president of Delia Associates, a company that helps businesses expand their sales opportunities through the development and implementation of highly successful branding campaigns.
Independent Insurance Agents of New Mexico - www.iianm.org - * May 2012 Page 25
page 29
May Sunday
Monday
2012
Clickable Calendar Click on class title to register
Tuesday
Wednesday
Thursday 8 CE
2
1
Golf ent am n r u o T 6 7
Saturday
AAI
82/C Multi-Lines Insurance
P&C
Friday
3
4
5
11
12
18
19
25
26
L&H
Pre-licensing Class
8
9
Pre-licensing Class
10
CE Committee Meeting
13
14
15
16 8 CE
ACSR
21
22
27
Office Closed 28
29
Classifieds
20
#1 Homeowners
23
17 8 CE
ACSR
#6 Commercial Property
30
24
31
New Mexico’s Job Bank Looking to fill a position within your agency? Trying to find a job but don’t know where to look? Whether you are looking for somewhere new to share your special skills or an employer looking for quality, professional employees, we are there to lend a helping hand. Click here to take advantage of IIANM’s Job Bank. Do you have an agency you’re trying to sell, or in the market to buy one? Check out our Classifieds!
E n s n d d d s O Know your herbs, spices, and antioxidants Some studies indicate that the herbs and spices we use in cooking might be doing more than just giving our taste buds a boost. One single gram (half a teaspoon) of cloves provides the same antioxidant benefits that a half-cup of blueberries or cranberries would. A half-cup of dried oregano is the antioxidant equivalent of half a cup of sweet potatoes. Both fresh and dried herbs and spices contain significant levels of antioxidants. Here’s a list:
Fresh:
May 11th is National Public Gardens Day, and the public gardens throughout New Mexico, including Albuquerque’s Rio Grande Botanic Garden, will be offering special educational programs, many scheduled through Mother’s Day weekend. Admission will be free courtesy of Better Homes and Gardens for those who download a voucher from http://www.bhg.com/gardening/ celebrate-national-public-gardens-day/
Mama Says, “Don’t Throw That Away!”
Dried:
• Lemon • Marjoram • Oregano • Peppermint • Sage • Thyme
• Allspice • Basil • Cinnamon • Cloves • Marjoram • Oregano • Rosemary • Saffron • Tarragon
• Thyme
• Coffee grounds. Instead of tossing them in the trash, take used coffee grounds out to your garden to use as fertilizer for roses, azaleas, and tomatoes. Or take them into the shower; they make an effective body scrub for washing away dead skin. • Jars and bottles. Once empty, they can be used as flower vases, or for storing pennies, buttons, or bath accessories. • Coca-Cola. The popular soft drink can remove stains on clothing and fabrics, remove rust from patio furniture and car bumpers, or tenderize and sweeten meat as a marinade. • Tennis balls. Cut a tennis ball along its seam, remove the material inside, and you’ve got two jar openers capable of gripping even the tightest lids. l, ntro r co t e d un fas seem ot going dretti s g n in If th re just n ario A M a ~ u o y . ugh eno Brochures Available for Your Office: Homeowners insurance typically covers property losses caused by wildfire. Insurance continues to be readily available and affordable in most wildfire prone areas, however, with increasing risk for a devastating wildfire, residents should be aware of some important factors... Feel free to stop by and pick up a stack, or let us know how many you would like and we will be happy to mail them to you. rachel@iianm.org
Independent Insurance Agents of New Mexico - www.iianm.org - * May 2012
page 31
Homeowners Catastrophe Insurance Trust
Your preferred homeowners clients deserve the broadest possible coverage for their homes and personal property. As an active member of IIANM, you have the original -- the very best such program available to you right now. The HCIT Difference in Conditions (DIC) policy supplements basic homeowners coverage by providing protection for catastrophic losses, including FLOOD and EARTHQUAKE.
Just contact:
Trustco, Inc. - HCIT Program Administrator
2063 East 3900 South Ste. 100, Salt Lake City, UT 84124 1-800-644-4334 / Fax: 801-278-9051
www.hcitins.com
Bobbi Phillips / bobbip@hcitins.com Eric Kingdon / erick@trustcoinc.com
Ex IIAN clusiv e M Dis Membe cou nt! r Now that you’ve narrowed down your candidates... Get the most out of every interview and hire more people like your top performers. When it comes to employee hiring, our consultants can help you with everything from evaluating your most promising applicants to redesigning your current selection system. You will learn what qualities are needed for success with your company, how to determine if someone has them and how to hire right the first time. How Can a Personality Assessment Help Me Hire the Best? With the Caliper Profile, our consultants can provide you with a clear, accurate picture of an individual’s strengths, limitations, motivations and potential. Then, these results are compared to our unparalleled database of information about the qualities it takes to succeed in virtually every position, as well as the information you provide about your corporate culture, your management style and the responsibilities of the job. From here, our consultants can tell you if an individual is a natural fit for that position. This is what we call “job-matching.”
Calculate the cost of turnover