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INDEPENDENT AGENT FEBRUARY 2017
THE STATE OF THE INSURANCE INDUSTRY PAGE 4
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INDEPENDENT AGENT FEBRUARY 2017 Eric Schwartz, Editor
Open Door Policy The State of the Independent Agency Channel Is Strong! . . . . . . . . . . . . . . . . . . . . . 4 Virtual University Ask An Expert Briefs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Government Affairs Walker Delivers State of the State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
On The Cover…
Technology The Insurance Impact of Self-Driving Cars and Shared Mobility . . . . . . . . . . . . . . . .10
Matt Banaszynski’s article focuses on
Commentary From Counsel Proposed Pay Raise for Wisconsin Judges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Agency Management & Perpetuation The Time Is Now to Sell Your Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18 Errors & Omissions Strange but True E&O Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Industry Regulations Endorsement Updates from the WCRB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Sales 10 Ways to Thank Your Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
the state of the insurance industry, and the current and future outlook is positive, strong, and full of ideas and possibilities. Check it out on page 4. The insert in the magazine details our new convention sponsorship opportunities for companies. Be part of the buzz that’s already being
Marketing Is Your Agency Website Mobile Responsive? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
generated. Please contact Katie@IIAW.
Members in the News . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
com for more information and register
Annual Convention Network with the Best in the Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
for convention at IIAW.com!
Independent Insurance Agents of Wisconsin 725 John Nolen Drive, Madison, Wisconsin 53713 Phone: (608) 256-4429 or (800) 362-7441 ■ Fax: (608) 256-0170 ■ Web: www.iiaw.com Executive Vice President - Matt Banaszynski 2016-2017 Executive Committee President....................................................... Matt Weimer 100 North Corporate Dr., #100, Brookfield, WI 53045 President-Elect................................. Lise Meyer Kobussen P.O. Box 633, Sauk City, WI 53583 Secretary-Treasurer ............................................ Jason Bott 330 East Kilbourn Ave., Milwaukee, WI 53202 Chairman of the Board .................................. Steve Leitch P.O. Box 85, River Falls, WI 54022 State National Director ................................ Linda Steiner 555 Main Street #320, Racine, WI 53403 2016-2017 Board of Directors Mike Ansay 101 East Grand Ave. #11, Port Washington, WI 53704 Cindy Burns 500 South Central Ave., Marshfield, WI 54449 Gerald Couri 379 West Main Street, Waukesha, WI 53186 Jack Demski 101 East Grand Ave. #11, Port Washington, WI 53074
Jack Riesch P.O. Box 1610, Waukesha, WI 53187-1610
> ADVERTISERS & INFORMATION AAA Wisconsin ................................................ 34 Acuity Insurance ............................................ 35
Pam Utpadel 100 West Lawrence St. Suite 313, Appleton, WI 54911
AmTrust North America ................................... 12
Darrel Zaleski 4233 Southtowne Drive, Eau Claire, WI 54701
Badger Mutual ................................................. 21 Berkshire Hathaway/Guard ............................ 20
2016-2017 Committee Chairs Agency Services ............................................ Kim Dandrea N19 W24200 Riverwood Dr., Waukesha, WI 53188 Automation/Technology ............... Cathleen Christensen P.O. Box 949, Fond du Lac, WI 54936-0949 Emerging Leaders ...........................................Jack Demski 101 East Grand Ave. #11, Port Washington, WI 53074 Employee Benefits.......................................... Mike Farrell 1300 South Green Bay Rd., Racine, WI 53406 Government Affairs .......................................Skip Hansen 100 North Corporate Drive #100 Brookfield, WI 53045 Carrier Relations ......................................... Kevin Murray 525 Junction Road, Madison, WI 53717
Ryan McClone 150 Main St. Suite 102, Menasha, WI 54952
Marketing & Membership Development ........... Jeff Thiel P.O. Box 1610, Waukesha, WI 53187-1610
Marc Petersen 15171 W. National Ave., New Berlin, WI 53151
Technical ...............................................Timothy Kakuska P.O. Box 547, La Crosse, WI 54602-0547
Burns & Wilcox ................................................. 7 Convention w/David Spade ................Back Cover EMC Insurance................................................ 32 IIAW Flood, Online CE ................................ 13, 33 IIAW 2017 Prelicensing Classes........................ 19 Pekin Insurance.............................................. 30 Robertson Ryan & Associates...........................11 Society Insurance............................................. 8 The IMT Group ................................................ 27 West Bend ........................................................ 2 Western National............................................. 14 Wilson Mutual .................................................. 16
WISCONSIN INDEPENDENT AGENT
FEBRUARY 2017 | 3
OPEN DOOR POLICY
THE STATE OF THE INDEPENDENT AGENCY CHANNEL IS STRONG! The State of the Independent Agency Channel is STRONG! Hey InsurTech Companies, OVER HERE! The state of the independent agency (IA) channel is strong and instead of trying to replace or displace us, embrace us! Independent agents know a few things about innovation, disruption and evolution. We have been doing it for well over 120 years. Many are quick to point out all the challenges facing our industry and our channel, but in difficulty lies opportunity. This is an exciting time for independent agents. It’s true, historically our channel and industry have been slow to adapt to changes in technology, but those days are over. More and more independent agency principals are making significant investments in their agency, staff and technology to remain successful and competitive for another 120 years. It’s time for all entrepreneurs, venture capitalists and insurance carriers that are trying to
personal lines growth across the U.S. adding $6.7 billion (or 29%) to their bottom lines from 2013 to 2014. The captive carriers still maintained their hold on about half of the market nationally. Since 1995, direct writers have seen their market share decrease almost 10% while regional IA carriers have seen their market share increase over 7% and national IA carriers have seen their market share decrease almost 6%. Interestingly, direct to consumer carriers have increased their market share over 8%. We have seen that these direct to consumer carriers are taking most of their market share from the direct writer channel. Nationally, IAs continue to write 35% of all personal lines premiums.
From 2012 to 2014 IA carriers increased their Wisconsin personal lines market share by roughly 1%. In 2012, national IA carriers
Independent agency carriers and their agents saw explosive growth, increasing their market share in Wisconsin from 79.5% in 2012 to 84.7% in 2014. In 2012, national IA carriers wrote 41% of Wisconsin commercial lines business and in 2014 they increased that percentage to over 47%. Regional IA carriers from 2012 to 2014 maintained roughly
revolutionize the insurance industry to turn their sights on finding new, creative ways to empower and unleash the independent agent. All you ever hear about in the InsurTech space is how all these new innovative companies are changing the way our industry does business. That’s great, but let’s refocus our attention to a business model that has well over 100 years of proven success — the Independent Insurance Agency. According the Independent Insurance Agents & Brokers of America’s (IIABA) 2016 PropertyCasualty Insurance Market Share Report, for the fourth year in a row, all property casualty insurance premium lines grew. Using the most recent A.M. Best data from 2014, combined, the market grew by $23 billion in 2014 over its 2013 levels. After four years of strong growth, both personal and commercial lines have exceeded prerecession volumes and, combined, are now generating $555 billion in annual premiums.
wrote only 6% of personal lines business in Wisconsin while in 2014 they increased that number to 7.5%. Regional IA carriers wrote 37% of Wisconsin personal lines business in 2012 and that remained roughly the same in 2014. The direct writers wrote 49% in 2012 and that decreased slightly to 47% in 2014. The direct to consumer carriers wrote roughly 8% in 2012 and increased that percentage to 9% in 2014. National Commercial Lines Data Nationally, the commercial lines market grew by nearly $10 billion in total premiums written. This sector has grown by nearly $45 billion since the market rebound began in 2011. National IA carriers were the big winners in the commercial marketplace for 2014, picking up nearly 16% in new premiums from 2013 to 2014 amounting to $18 billion. Over the last six years, national IA carriers have increased their commercial lines market share by almost 3% from 46.2% in 2008 to 49.1%
38% of the Wisconsin commercial market. Direct writers wrote 20% of the Wisconsin commercial lines business in 2012. That market share decreased to under 15% in 2014 while direct to consumer carriers have almost no commercial lines market share in Wisconsin. Nationally, IAs still control much of the entire property casualty market, writing just over 58% of $555 billion in total annual premiums. These are compelling statistics that illustrate how the IA channel is thriving and adapting to the evolving needs of their customers by increasing their value proposition. While the majority in the InsurTech space may see our channel as an opportunity to take revenue from, why not strategically partner with a distribution channel hungry for integrating new technologies into a successful business model with a proven track record? Still not convinced that your next InsurTech startup company should be agent/broker focused?
National Personal Lines Data National IA carriers were the big winners in
4 | FEBRUARY 2017
Wisconsin Personal Lines Data
in 2014. During that same time, regional IA carriers experienced stagnant growth (32%) while direct writers have seen their market share decrease a little over 2% from 20% in 2008 to 18% in 2014. The nearly $10 billion in premium growth in the commercial market remained in the regional and national IAs shares. IAs write nearly $8 of every $10 in premiums (nationally) in this sector or $225 billion (out of $276 billion in commercial premiums).
Wisconsin Commercial Lines Data
WISCONSIN INDEPENDENT AGENT
OPEN DOOR POLICY Let’s examine the IIABA’s Agency Universe Study for additional insight into what’s on the minds of Independent Agents.
Agency Universe Study The IIABA Agency Universe study has been conducted for over 20 years. It’s a cooperative effort with the IIABA, state associations, and more than 16 leading independent insurance agency companies. The primary focus of this study is to provide information on the size and characteristics of the independent agency system. This is beneficial for developing more effective marketing and business practices. Highlights identified in the report are as follows:
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In 2016, the estimated total number of independent property/casualty agents and brokers in the U.S. stands at 38,000.
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Small agencies (revenues less than $150,000) make up 21% of the population and Jumbo agencies ($10+ million in revenue) almost 2%, and it seems Small agencies are gravitating towards large metro areas and away from rural, small towns. After a decrease in the proportion of Small agencies last wave (to 15% in 2014 from 28% in 2012), this year sees a reversal of that pattern to Small agency representation approaching (but still under) that seen in 2012. Since 2014, Small agencies have also become more concentrated in large metro areas (57% of Small agencies this year, compared to 50% in 2014).
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Business conditions remain favorable, as they have for the past several AUS waves. In fact, the 74% of agencies that saw increases in revenues between 2014 and 2015 and report higher percentage increases than those reported in 2014 (averaging a 23% increase, versus 19% in 2014).
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Most agencies continue to use market access providers (72%), although use has declined this wave (from 80% in 2014). The slightly lower use of market access providers may be due to a higher number of direct appointments with carriers reported in the 2016 survey. Agencies also seem to be spreading commercial lines business across a larger number of carriers, as evidenced by a decrease in percent of commercial lines premium placed with their top three carriers.
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Although perceived challenges associated with retention of experienced producers and staff members has declined this wave relative to 2014, lack of available talent for succession is considered a key impediment to future agency ownership plans. Questions around agency net worth are also a key impediment to future agency ownership plans for smaller agencies. Similarly, roughly two in ten agencies would like more information and support for perpetuation tools associated with buying out principals’ interest or having family take over.
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Agencies (particularly smaller agencies) are more immediately concerned about the impact of emerging purchase channels than the impact of technological advancements or the sharing economy. One-third believe direct purchase through carriers will significantly impact their agency. Concern is highest among Small agencies (43%), although even two in ten Jumbo agencies are concerned. One-fourth of Small agencies also believe non-insurance websites and retail stores will significantly impact their agency within the next two years. In contrast, less than two in ten agencies – regardless of agency size – feel the sharing economy, driverless cars, or drones will impact them in the next two years.
+ Social media use is on the rise, with less
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Aging of the independent agency universe may be slowing. At the same time, more than three-fourths of agencies have no plans for a significant change in agency ownership within the next three years. 2016 represents the first AUS wave since 2010 in which the average age of agency principals has not increased. This year, the average age of principals with 20% or more ownership is 55 years old, with 17% ages 66+. In 2014, 18% were 66+ with an average age of 56. In both 2014 and 2016, however, few agencies anticipate an imminent change in agency ownership. WISCONSIN INDEPENDENT AGENT
reliance on print marketing strategies. 56% of agencies included social media/digital marketing in their 2015 marketing activities, up from 48% in 2013. Facebook and LinkedIn are by far the social media channels used most frequently.
+ At the same time, agencies continue to face challenges in marketing themselves effectively on the Internet. 57% of agencies report that marketing their agency effectively on the Internet is among their top three technological challenges, a significant increase over the to 46% of agencies citing the same challenge in 2014.
This study contains even more persuasive data then what is highlighted and demonstrates Independent agents are hungry for new ways (technology) to address deficiencies while increasing productivity and profitability. It should also illustrate the opportunity that exists to help agencies address these challenges and improve their business model by finding new ways to increase the IA’s value proposition. There is so much actionable content in the Agency Universe Study to extrapolate and these highlights only begin to scratch the surface.
Listen to the Consumer According to the J.D. Power 2016 U.S. Auto Claims Satisfaction Survey, overall satisfaction is highest among customers who first contact their agent when filing a claim at 882 (on a 1,000-point scale), compared with 848 among those who file a claim directly through the website. In fact, only 7 percent of customers overall prefer to use digital channels (web or app) to report their claim. The authors go on to say that the preference for agent-directed claims is being reported at a time when some insurance carriers are reducing the role of agents in the claims process. Agent involvement in the claims process is vital to their customer centric business model. It’s where they demonstrate their value and retain their business. Perhaps this is another area that could use a technological upgrade? The U.S. insurance landscape and the customer mindset are changing more rapidly than perhaps ever before. Yet, in the midst of this uncertainty lies opportunity. Don’t waste it by focusing on the new shiny object (aka InsurTech companies). Invest in a distribution force as resilient as time itself. Independent agency leaders are being forced to think more strategically and respond more aggressively than ever before. Join us as we develop a new group of dynamic, industryleading individuals who are committed to charting a course for the future success of the IA channel. Innovate and disrupt the > Matt Banaszynski is insurance industry with the Executive Vice President of the us rather than working Independent Insurance against us. The numbers Agents of Wisconsin. don’t lie and neither Contact him at matt@ iiaw.com. will your bottom line.
FEBRUARY 2017 | 5
ASK AN EXPERT: QUICK Q&AS ABOUT LLCS AND HOLDING COMPANIES Q:
Extending Umbrella/Excess Coverage to a Holding Company Is it possible to get excess coverage on a holding company although the three LLCs do not have common majority ownership? Three brothers own apartment buildings but all three are separate entities.
A:
Q:
ISO’s Rules for Assigning Payroll to Members and Managers of LLCs We recently had one of our carriers tell us the base payroll for members of an LLC is now the same as that for corporate officers. In the past, we have always used the amount assignable to individuals and partners. This is the only carrier we have that is doing this, even NCCI does not put an LLC in the same payroll category as a corporation. Can you please advise?
A:
The carrier is right – sort of. Here is the ISO rule: m. The payroll of executive officers of a corporation and individual insureds and co-partners. Use the payroll shown on the state exceptions under Rule 24. For the purposes of payroll determination, managers of limited liability companies shall be considered executive officers and members of limited liability companies shall be considered co-partners…
Traditionally, holding companies own assets but do not conduct any operations. Obviously, based on your question, you want to insure the operations (the individual LLCs) and protect the holding company as well. Let’s start by considering from which policy or policies coverage for the holding company may extend right now. Who are the members of each LLC? If the holding company is a member of each LLC it is already protected in each LLC’s commercial general liability (CGL) policy because the definition of who is an insured includes the members of the LLC. The holding company doesn’t have to be specifically listed on each policy to be granted coverage – again, provided it is a member of each LLC. If there is excess coverage or an umbrella, the holding company should already be protected. But maybe the real questions are: 1. Excess over what?
Managers - those actively managing the day-to-day operations of the business - are charged like corporate officers. Members - those individuals with ownership interest in, but no operational management duties - are charged like partners. So the ultimate premium basis is a function of the person’s duties.
6 | FEBRUARY 2017
The Virtual University is a Big “I” members-only resource. Many articles are based on real-life questions received by the Ask an Expert service. This service ensures that the information is current and topical. Go to www.independentagent. com/Education/VU/. You will need to login with your IIABA username and password before using the VU. The IIABA does not assume and has no responsibility for liability or damage which may result from the use of any of this information.
2. Excess for what?
Depending on the relationship between the LLCs and the holding company, it may already have the desired general liability protection. If not a member of each LLC, then the decision to provide excess coverage for just the holding company is an underwriting decision.
> Various faculty members of the Virtual University contributed to this article.
WISCONSIN INDEPENDENT AGENT
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Fine coverage instead of fine print. Small detail. Big difference. At Society, we keep it simple and protect your customer’s outdoor property the same way we do their building—and that includes coverage for wind damage. In our experience, signage, fencing or satellite dishes are more likely to be damaged by wind than anything else. Ironically, some insurance companies don’t include this common risk in their outdoor property coverage. If you agree that details like these can make a big difference, give us a call at 888-5-SOCIETY or visit societyinsurance.com.
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1/4/17 4:11 PM
GOVERNMENT AFFAIRS
WALKER DELIVERS STATE OF THE STATE AMID LARGER MAJORITIES
Governor Scott Walker delivered his seventh annual State of the State address in January proclaiming that the “State of our state is strong.” Walker gave his speech before a joint session of the Wisconsin Legislature and amid the largest majorities for Republicans in decades. Legislative Republicans will begin the 2017-18 session with a 20-13 seat majority in the Senate - their biggest since 1971, and a 64-35 seat majority in the Assembly - their biggest since 1957. Both houses picked up more GOP seats as a result of the 2016 elections. For the first time in 47 years, Republicans will maintain control of both chambers and hold the Governor’s office
Walker also highlighted his decision not to accept the federal expansion of Medicaid under the Affordable Care Act (ACA), indicating that Wisconsin outranks many states nationally in the area of health care coverage and delivery. State budget plans laid out in the Governor’s speech also included a proposed cut in tuition for the UW System following four years of a tuition freeze and a total $52 million investment in rural broadband access. Walker also reiterated his promise to provide the largest increase in transportation aids to local communities since the 1990s and doing so without increasing the state gas tax or vehicle registration fees. Here are some general highlights and themes from Governor Walker’s State of the State address:
Governor Walker delivered his State of the State address on January 10. He spent much of his speech highlighting successes in the economy, education and healthcare since he first took office in 2011, and laid out his plans for the upcoming state budget and next two years. The Governor also emphasized the importance of preparing and growing the state’s workforce as a top priority for 2017. at the same time there is a Republican president and control of Congress. Walker’s 40-minute speech was delivered with minimal fanfare and was a general overview from the Governor’s perspective on the condition of the state and outlook for the future. Walker spent much of his speech highlighting successes in the economy, education and healthcare since he first took office in 2011, and laid out his plans for the upcoming state budget and next two years. The Governor emphasized the importance of preparing and growing the state’s workforce as a top priority for 2017. He praised Wisconsin’s low unemployment rate and positive business climate, while promising to further improve welfare reform and further reduce taxes in the upcoming session. WISCONSIN INDEPENDENT AGENT
> Making college more affordable and accessible for families and students by cutting tuition for all in-state undergraduate students at all UW System schools
> Increasing funding for K-12 public education statewide, as well as finding solutions for some of the unique challenges faced by rural schools such as higher transportation costs, poor access to broadband Internet, and declining enrollment > Holding the line on the tax burden for residents so property and income taxes are lower in 2018 than they were in 2010 > Investing in the state’s broadband infrastructure by providing an additional $35.5 million for the Broadband Expansion Grant Program to assist rural schools and businesses with improved connectivity > Safety and maintenance of existing state roadways by providing local governments with the largest increase in local transportation aids
since the 1990s, as well as allocating more money for state highway rehabilitation > Oppose any increases in the gas tax or vehicle registration fee > Prioritizing workforce issues such as having a trained and ready workforce, meanwhile focus on helping employers through incentives to fill available jobs > Continue to streamline and make government more efficient and accountable Governor Walker will unveil his more than $68 billion, two-year spending plan to the Legislature on February 8. This is when the real work begins and specific details emerge of proposals that will receive much scrutiny and debate. Lawmakers will subsequently spend the next several months reviewing and rewriting the Governor’s budget plan before passing it into law. The Joint Committee on Finance (JFC) will hold public hearings around the state in March and then will begin debating and voting on portions of the budget afterwards. A full budget plan is expected to pass out of the budgetwriting committee before Memorial Day and the full Legislature will likely take up the budget bill sometime in June. Every inch of Governor Walker’s budget proposal will be thoroughly scrutinized during the process and by the time it gets back to his desk for veto review and ultimately his signature, the bill will likely look considerably different than his original plan. In the meantime, Governor Walker will soon have to decide his future political plans and whether or not he chooses to run for reelection in 2018. All indications so far point to Walker running for a third term, but he will not make any > Misha Lee is Owner/ official decision Founder of Lee Government Relations, until after LLC and lobbyist enactment of the for IIAW. Follow Lee state budget later Government Relations on Twitter@mishavlee. this summer.
FEBRUARY 2017 | 9
TECHNOLOGY
THE INSURANCE IMPACT OF SELFDRIVING CARS AND SHARED MOBILITY “We’re going to see more change in the next five to 10 years than we’ve seen in the last 50,” said Mary Barra, CEO of General Motors, on record. While that statement is now more than a year old, it continues to ring true.
Self driving cars and ridesharing services such as Lyft will have an impact on the insurance industry in the years to come.
Vehicle ownership is changing and selfdriving cars will be implemented in the next decade. What will affect the insurance industry more: self-driving cars or shared mobility?
While self-driving cars will likely be much safer than human-driven vehicles once they’re widely adopted, will they really be safer when there are still people driving on the road? How do you account for the complex and elusive “human element”?
percent, 81 percent of Americans feel they are safer driving themselves. If they feel that way, will drivers be willing to pay more for the technology? Volvo recently stated that their autonomous car technology will likely add $10,000 to the car’s cost.
Which leads us to the question: What happens when insurance is brought into the picture? The traffic light was green for six seconds before the self-driving car pulled through — and it was still hit.
With consumer hesitation and other legal barriers, it may take decades before selfdriving cars are fully adopted. As a result, there will likely be a more immediate, transitional period that insurers will need to plan for — a period where both self-driving vehicles and human-driven vehicles are on the road.
Self-driving cars One of Google’s self-driving cars recently was involved in one of the most damaging driverless car collisions yet. It wasn’t the autonomous car’s fault when a driver ran a red light and collided with the side of the vehicle, causing the airbags to deploy, but it was a scenario the car did not know how to avoid.
The self-driving car
The self-driving car industry is expected to grow exponentially over the next 20 years, and insurers will have to learn to swim — industry is or sink.
expected to grow exponentially over
Auto insurance will have to adapt to this sink. impending technology in the immediate future, as well as in the long term. While self-driving cars are expected to reduce accidents by 90
the next 20 years, and insurers will have to learn to swim — or
The driver took over and applied the brakes, but it was too late to prevent a collision.
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As self-driving cars are released to the public, there may be accidents involving that “human element” as the public adapts to the technology. Insurers will have to cover these types of collisions — perhaps, ones similar to Google’s self-driving car accident — in the short term. In the future, there also will be new risks to insure, such as sensor damage, satellite failure and other new technology. Perhaps, insurance will take on a no-fault form, in which neither party is at fault, and each car owner’s insurance covers their WISCONSIN INDEPENDENT AGENT
TECHNOLOGY own vehicle. Or insurance could become similar to utility cost with a premium cost based on mileage or usage. There also may be risks involving driverless-car hacks and cybersecurity. Will insurers cover cybersecurity issues or will the manufacturer?
innovative industry. Uber is currently valued at nearly $63 billion and Lyft has seen recent record growth. Shared mobility of cars is expected to continue expanding in the coming years through ridesharing services, but also through carsharing.
The answers to these questions can’t all be determined now, but insurers will have to react to this paradigm shift sooner rather than later. Comprehensive coverage for fires, animals, floods, theft, earthquakes and vandalism will still be necessary, and that type of insurance will not need to change very much, except for replacement cost adjustments.
Carsharing, in which multiple drivers have access to the same vehicle, will likely grow in popularity in the coming years. Services, like Maven or Zipcar, that connect drivers to available vehicles will continue expanding because of increased competition and economic scale. As shared mobility is offered in more locations with focused customer segments, more transportation needs will be met. Over time, households may have less of a need for car ownership; as a result, multi-vehicle households may become singlevehicle households. Eventually, people may decide not to own a vehicle at all.
Infrastructure is also expected to change as self-driving cars become readily available, and this could impact the way that insurance operates, as well. Currently, not all roads are smoothly paved with clean, visible road lines. What about snow and other weather conditions? How long will it take before self-driving cars can drive everywhere and not only on perfectly lined, mapped roads? Self-driving cars still have a long way to go before they’re fully autonomous at SAE Level 5, but once there — if the safety claims are true — insurance costs will likely decrease for both drivers and providers.
Shared mobility Cars are parked 95 percent of the time. For that reason, and because of convenience, ridesharing services have exploded in recent years, resulting in a very profitable and
RRA_IIAW_Ad_March_16_Outlines.indd 1 AGENT WISCONSIN INDEPENDENT
While shared mobility will likely overlap with self-driving cars at some point, it may affect the insurance industry in different ways as car ownership changes. Shared mobility will have a more immediate impact on the insurance industry. Cars will wear down faster with more frequent use, and there may be more accidents with multiple drivers. Insurers will need to adapt to covering multiple drivers who may not be in the same household or family, and who may not always be driving the same vehicle. As a result, coverage will likely become more focused on driving habits with usage-
based insurance (pay how you drive) or become more centered on a pay-per-mile basis. Companies like MetroMile are already using this model, and it will likely grow in popularity as carsharing does. Instead of paying for insurance even while your car is parked, you pay based on the miles you drive. Insurance tech will also play a role with shared mobility as telematics devices can more accurately measure in real time who is driving the vehicle and how safe a driver they are.
Self-driving cars or shared mobility? While shared mobility will have a more immediate impact on the insurance industry, self-driving cars will certainly impact the insurance industry more overall. A car driving itself changes a lot more for insurers than does multiple drivers using the same vehicle. That said, the two sectors will overlap at some point in time. Self-driving features will continue to be incorporated in ridesharing, and will eventually be implemented in the carsharing industry. At that point, the two sectors will collide as insurance continues to adapt to new developing risks. Self-driving cars and shared mobility will both be disruptive for > Seth Birnbaum is the the industry — it’s CEO and co-founder of only a matter of time. EverQuote.
2/2/2016 FEBRUARY 20178:31:25 | 11AM
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A 3 CE Credit Webinar Sponsored by the Independent Insurance Agents of Wisconsin
2017 F LOOD P ROGRAM O VERVIEW !WHEN: Tuesday, March 21, 2017 from 9:00 AM – 12:00 PM CST !WHERE: Register online at IIAW.com/event/flood2017 by March 19, 2017* !HOW MUCH? IIAW Members: $40; Non-Members: $75 !CE CREDIT: 3 CE credits filed 2017 Flood Program Overview The webinar will address basic flood insurance issues and some advanced components, including policies, procedures and rules of the program.
Agenda • • • • • • •
National Flood Insurance Program Changes Policies & Products General Rules Elements of Rating Claims Handling Process Flood Definitions Agent Resources
*Webinar Access: Access to the webinar will be sent to all registered and paid attendees from the IIAW directly. If you have questions about the webinar or registration, please contact the Independent Insurance Agents of Wisconsin at 608.256.4429. Instructor: Nina Do is a Flood Territory Manager for Selective Insurance. With more than 15 years in the insurance industry, Nina understands the agent/consumer dynamic, and is a go-to resource for understanding the ever-changing National Flood Insurance Program rules and regulations.
COMMENTARY FROM COUNSEL
Chief Justice Pat Roggensack’s request for a pay raise for Wisconsin court judges is, according to IIAW General Counsel Josh Johanningmeier, a good idea because “having highly qualified and motivated judges deciding cases is a key to fair and correct results.”
MONEY WELL SPENT: A PROPOSED PAY RAISE FOR WISCONSIN JUDGES I tend to devote this column to issues of insurance regulation, agency operations and legal developments with an impact the industry. This month, however, I am going to touch briefly on a proposal to increase government spending which actually makes sense. Chief Justice Pat Roggensack of the Wisconsin Supreme Court recently asked for a pay raise for state court judges in Wisconsin. In support of her proposal, the Chief Justice correctly cites Wisconsin’s relatively low judicial compensation when compared to the salaries of state court judges in other states. Specifically, the Chief Justice asked Governor Walker to include a 16 percent pay increase for Wisconsin judges in the forthcoming state budget proposal. If you have attended any seminar or continuing education program at which I have had the opportunity to discuss litigation and our judicial system, you know that having highly qualified and motivated judges deciding cases is a key to fair and correct results. The Chief Justice’s proposal—which would amount to a relatively modest increase in salaries—helps accomplish that goal.
Current State of Judicial Compensation Nationwide, the annual salary for trial judges ranges from $118,384 to $201,100 while the compensation for state Supreme Court justices is slightly higher—ranging from $130,136 to $233,888 per year. Wisconsin trial judges currently make WISCONSIN INDEPENDENT AGENT
$131,000 annually while state Supreme Court justices earn $147,000. Wisconsin currently ranks 41st in the nation when it comes to compensation for trial judges and 40th in the nation for state Supreme Court justice pay. Without going into an exhaustive analysis of the relative economies and legal markets in which those rankings exist, you can safely assume that Wisconsin is not 40th or 41st in any meaningful comparative category that would justify the current salary structure for its state court judges and justices.
Proposed Salary Increase Under Chief Justice Roggensack’s proposal, pay for circuit judges would rise from $131,000 to about $152,000. Appellate judges’ salaries would increase from $139,000 to $161,000, and Wisconsin Supreme Court justices’ pay would increase from $147,000 to approximately $171,000. Wisconsin currently has 249 circuit judges, 16 appellate judges, and seven Supreme Court justices. The Milwaukee Journal Sentinel estimated that Chief Justice Roggensack’s proposed increase would cost $6.4 million annually. The IIAW intends to register its support for the proposal, and several other key
lobbying groups in Wisconsin, including Wisconsin Manufacturers & Commerce and the Wisconsin Realtors Association, have already voiced their support for Chief Justice Roggensack’s proposal. The Wisconsin Trial Judges Association is working with the Chief Justice on the pay proposal and has hired a lobbyist to help press the case for a pay raise. Some state senators, however, have expressed concern about the proposal and its cost for taxpayers. Governor Walker’s spokesman indicated that it “would be premature” to state whether the pay increase will appear in the state budget.
Conclusion Chief Justice Roggensack’s proposed salary increase is likely to pass given its strong support and Wisconsin’s relatively low judicial pay. In February, Governor Walker will introduce the state budget proposal. Stay tuned for further updates.
> Josh Johanningmeier is the IIAW’s General Counsel. Call the Legal Services Hotline at (877) 236-1669.
FEBRUARY 2017 | 15
SECURA MOVES FORWARD WITH NEW HOME OFFICE
The ground breaking for SECURA’s new home office is scheduled for spring 2017. This is a rendering of the front entrance.
The 300,000 square foot facility, with proposed back terrace shown here, will be located in the Village of Fox Crossing, formerly the Town of Menasha.
SECURA Insurance and the Village of Fox Crossing (formerly the Town of Menasha) reached a final agreement for the company to build a new home office facility on the property it owns along County Highway CB. Ground breaking is targeted for spring. The deal was closed at the village’s board meeting on January 23, 2017. “SECURA has done business in northeastern Wisconsin for 117 years,” said SECURA President and CEO Dave Gross. “This new development positions us for the next 100 years. We’re committed to growing our operations and creating jobs in the Fox Valley area so policyholders, independent agents, and employees can continue to place their trust in us.” SECURA made the commitment to grow its operations in Wisconsin and, most recently, the Village of Fox Crossing, after considering various scenarios such as establishing regional offices and hiring remote workers. The company has made modifications to its current Appleton office at 2401 South Memorial Drive over the years. As a temporary solution to its need for additional WISCONSIN INDEPENDENT AGENT
operational space, it leased the building at 445 Calumet Street in Appleton and moved 100 staff members there in 2015. Future plans for these locations are in the works. The company has owned the land in Fox Crossing since 2006 as an investment. “We look forward to SECURA Insurance locating its new home office in the Village of Fox Crossing,” said Fox Crossing President Dale Youngquist. “We anticipate the beautiful proposed facility and the location of several hundred jobs will spur further development on our west side.” SECURA’s vision is to bring its peoplefocused culture, environmental heritage, and spirit of wellness to life under one roof. Building plans have been developed, and the company plans to break ground this spring.
The initial facility will be approximately 300,000 square feet with a seating capacity of 900. Growth potential is incorporated into the master plan of the site as well as the modular building design. SECURA has grown significantly over the past decade. The company has increased annual revenue nearly 80 percent and the employee base more than 40 percent in the past 10 years. Annual sales (direct written premium) for 2016 were $586 million and, at the end of 2016, the company had 135,180 policies in force in 12 states. SECURA employs more than 500 people locally who will work at the new location, 200 remotely, and expects continued employment growth.
FEBRUARY 2017 | 17
AGENCY MANAGEMENT & PERPETUATION
STUDY: THE TIME IS NOW TO SELL YOUR AGENCY If you’re at all inclined, it’s never been a better time to put your insurance agency on the market – but you’d better act fast. The number of insurance agency mergers and acquisitions in the first half of 2016 ranked as the second-most-active six-month period since 2008, with 232 announced deals, according to the OPTIS Partners’ M&A database. That level of activity is being driven by a number of factors, including strong buyer interest and agency valuations approaching their peak. “If you’re an agency owner thinking about the best time to put your agency in play, consider taking action sooner than later,”
said Daniel P. Menzer, partner with OPTIS. “Interest from buyers is high and agency valuations are near their peak.” Buyers are especially interested in property/ casualty shops, which represented 124 of the announced transactions. Property/casualty and benefits shops, meanwhile, represented 40 deals. There were 43 employee benefits agency sales. The most active buyers are private equitybacked firms with 114 transactions, followed by privately-owned brokers with 68 deals. Publiclytraded brokers announced 24 deals and banks announced 15. Insurance companies and other buyers were less active this year compared with the same period last year and remain relatively inactive.
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For information about becoming a Partners Mutual Insurance Agent please contact Brian Martin at 262.432.3439; Martin.Brian@PartnersMutual.com; Mike Ottman at 262.432.3418; Ottman.Michael@PartnersMutual.com; or Charles Becker at Becker.Charles@PartnersMutual.com or 262.432.3484.
While this is good news for those on the selling side, agencies interested in expanding their presence would do well to crunch the numbers and do due diligence in their valuations. “A premium price paid for acquisition can have significant
18 | FEBRUARY 2017
adverse implications on the long-term viability of your agency,” Menzer said. “If the agency you buy does not perform up to snuff and you do not have the capital base to absorb the shortfalls, you can get in a lot of trouble.” Agency M&A activity has climbed steadily since 2012, and Tim Cunningham, managing director of OPTIS, anticipates the “strong industry-consolidation trend” to continue – at least in the near term. “I think it’s three things. We’ve got an aging ownership base that reflects the demographics of America, and you’ve got an increasing inventory that needs an exit,” Cunningham told Insurance Business America in an earlier interview. “You’ve also got a well-capitalized buy-side group led by private equity firms. It’s the perfect storm.” Cunningham believes the agency sector will continue to consolidate, decreasing 20% to 30% in size in the next 15 to 20 years. Proponents of the sector need not worry, however. “I think that level of consolidation is a good thing,” Cunningham said. “There are a handful of inefficiencies in the system that consolidation will strip out, and we’ll still have the same number of people in the sector.” “It’s a natural progression.”
> Caitlin Bronson writes for Insurance Business America
WISCONSIN INDEPENDENT AGENT
2017 PRELICENSING CLASS SCHEDULE
Conducted at State Association Headquarters, IIAW prelicensing classes fulfill the study requirements for life, health, property and casualty. Full course materials — not just an outline — are included with registration. The classes are:
REGISTER AT IIAW.COM 2017 CLASS DATES
!Designed to help you pass your state licensing examination. !The quickest way to meet the Wisconsin education hours requirement. !Taught by experienced insurance professionals who know the business. !Conducted in a comfortable classroom with free parking. !Approved by the Office of the Commissioner of Insurance.
IIAW MEMBER PRICING: $340 - Pricing given for full class registrations.
NON-MEMBER PRICING: $355
L IFE & A CCIDENT /H EALTH February 6-9
P ROPERTY & C ASUALTY February 20-23
March 6-9
March 27-30
April 3-6
April 17-20
May 15-18
May 22-25
June 5-8
June 19-22
July 10-13
July 24-27
August 7-10
August 21-24
September 11-14
September 25-28
October 9-12
October 23-26
November 6-9
November 13-16
Day 1 (Monday) 8:30 a.m. - 4:00 p.m. ($85) SECTION A: Principles of Insurance & General WI Ins. Law Ethics Day 2 (Tuesday) 8:30 a.m. - 4:00 p.m. ($90) SECTION B: Life Policies, Terms & Concepts Day 3 (Wednesday a.m.) 8:30 - 11:30 a.m. ($45) SECTION B: Life Policies, cont. & WI Life Insurance Law Day 3 (Wednesday p.m.) Noon - 4:00 p.m. ($45) SECTION B: Accident & Health Policies, Terms & Concepts Day 4 (Thursday) 8:30 a.m. - 4:00 p.m. ($90) SECTION B: Accident & Health, cont. & WI Health Insurance Law
December 4-7
December 11-14
Property & Casualty
You may also take individual classes.
DAILY SCHEDULE Life & Accident/Health
Day 1 (Monday) 8:30 a.m. - 4:00 p.m. ($85) SECTION A: Principles of Insurance & General WI Ins. Law Ethics Day 2 (Tuesday) 8:30 a.m. - 4:00 p.m. ($90) SECTION B: Property Policies, Terms & Concepts CLASS SITE/DIRECTIONS The IIAW is located at 725 John Nolen Dr. in Madison, WI. Day 3 (Wednesday a.m.) 8:30 - 11:30 a.m. ($45) When traveling south on John Nolen, it’s the last driveway SECTION B: Property Policies, cont. & WI Property Insurance Law Day 3 (Wednesday p.m.) Noon - 4:00 p.m. ($45) before Highway 12/18 (Beltline). Located near the Alliant SECTION B: Casualty Policies, Terms & Concepts Energy Center and Sheraton Hotel. Day 4 (Thursday) 8:30 a.m. - 4:00 p.m. ($90) INCLEMENT WEATHER SECTION B: Casualty Policies, cont. & WI Casualty Insurance Law If weather conditions are questionable, use your own judgment regarding your personal safety. If Madison public ! Please contact Katie@IIAW.com for information about multiple registration discounts. schools are closed, the IIAW is closed and prelicensing is canceled for the day. Canceled classes are made up on The course fee includes all class materials. Materials are Friday. distributed on the first day of class. You receive: HOTEL INFORMATION • The Life & Accident/Health or Prop. & Casualty Insurance Students requiring lodging will receive a special rate at the Study Manual. Clarion Suites, 2110 Rimrock Rd. in Madison. Please call • The Intermediary’s Guide to Wisconsin Insurance Law. the hotel directly at 608.284.1234, and ask for the • The State of Wisconsin Ins. Licensing Candidate Handbook. independent insurance agent’s discount. This provides all the necessary information to obtain a license.
To register, click the Education tab on IIAW.com. For Wisconsin exam info, visit prometric.com.
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ERRORS & OMISSIONS
UNUSUAL E&O CLAIMS YOU MIGHT ENCOUNTER
Errors & omissions claims usually arise from a specific type of error. But once in a while, a claim comes up that’s downright bizarre. Would your agency be susceptible to a similar E&O claim?
Scenario 1: A customer comes in to complete paperwork to secure coverage on a new vehicle, but does not have money with him for the down payment. The agent offers to pay the additional premium based on a promise from the customer to return the next day and repay the agent. The customer does not return and avoids the agent’s phone calls. The following Friday, the
agent speaks to his wife. She says her husband found other insurance and asks to cancel the auto policy the agent just placed. Based on this conversation, the agent cancels the policy and asks for a premium refund. Over the weekend, the customer is involved in an auto accident. The auto carrier has to pay the claim because the agent did not have authority from the policyholder to cancel the policy. The carrier then files a claim against the agency for cancelling the policy without authority and for binding coverage on an unacceptable risk per the underwriting guidelines.
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E&O Tip: Avoid fronting money to customers for premium, and never cancel a policy unless the named insured instructs you to do so in writing. Scenario 2: A licensed agent places her own auto coverage through the agency. Unbeknownst to the agency owner, this agent places
vehicles owned by relatives on her own auto policy because the agency waives commissions for employees. When one of her relative’s vehicles is stolen and the relative files a claim, the auto carrier denies coverage because the agent/named insured does not have an insurable interest in the vehicle. The carrier rescinds coverage back to inception for the vehicle. The relative brings an E&O claim against the agency. The E&O carrier considers this a liability claim and pays the relative. The agency not only has to pay its deductible, but also must live with this claim on its loss history. E&O Tip: If employees purchase coverage through the agency, another employee—who has no interest in covering the property— should manage the account. Scenario 3: A customer sends an upsetting email to her agent. The agent sets out to forward the customer’s email to some coworkers with comments threatening bodily harm to the customer. But the agent replies to the customer’s email instead of forwarding it. The customer reads the reply and demands money for compensatory and punitive damages. The agency’s E&O carrier disclaims coverage for the claim. E&O Tip: Always ensure emails are addressed only to intended recipients and keep content professional.
> Janice S. Blanton, is an assistant vice president, claims specialist with Swiss Re Corporate Solutions.
FEBRUARY 2017 | 21
INDUSTRY REGULATIONS
WISCONSIN COMPENS RATING BUREAU ENDORSEMENT UP
The Wisconsin Compensation Rating Bureau (WCRB) recently filed and received approval from the Wisconsin Commissioner of Insurance for two changes that agents, companies and employers should be aware of if they aren’t already. With this article, I hope to also provide some clarity around the changes. More information can be found in our FAQ section at WCRB.org. Anniversary Rating Date (ARD) Endorsement Withdrawal The ARD filing amended rules in the WI Basic Manual, WI Experience Rating Manual, WI Statistical Plan Manual, and WCPAP application process by withdrawing the Anniversary Rating Date Endorsement. This was a countrywide filing. The change no longer requires the use of prior policy effective dates to govern the application of rates, rules and forms for workers compensation. 1. Carriers cannot cancel for any reason other than those listed in INS 21, CH 102, and WI Basic Manual. As such, the carrier cannot cancel simply to take advantage of a rate increase. 2. Employers may cancel at any time pursuant to the current rules. This right to cancel is not affected by the removal of the ARD rule.
22 | FEBRUARY 2017
As such, employers can cancel the policy at any time if they so choose under either the ARD rule or after the removal of the ARD rule. There is no penalty for cancellation, other than the short rate penalty, which still applies whether or not WI has the ARD rule. 3. The removal of the ARD rule does not affect the RED used to calculate the experience rating modification factor for employers; therefore, there would be no unfair discrimination for employers subject to experience rating. 4. The removal of the ARD rule puts the workers compensation line of business in line with all other commercial lines, simplifying the process. 5. Removal of the ARD rule will make it easier for businesses domiciled in Wisconsin to carry
policies in other states as those states (aside from CA – where carriers make their own filings, or any of the monopolistic states) will all be operating under a consistent set of rules. 6. The purpose of the national change is to eliminate the confusion created by anniversary rating dates. The National Council on Compensation Insurance (NCCI) previously published an 18-page document entitled “Your Guide to Understanding Anniversary Rating Date.” Due to the complexity of the guide, the NCCI determined that the ARD should simply be eliminated. As regulators and insurers can find ARD in workers compensation complex, it follows that policyholders would also likely have a very difficult time understanding its application. Removal of the endorsement requirement lends itself to a policy that is more ‘plain language’ in nature. WISCONSIN INDEPENDENT AGENT
INDUSTRY REGULATIONS
SATION
PDATES
The Wisconsin Compensation Rating Bureau recently filed and received approval from the Wisconsin Commissioner of Insurance for two changes that impact agents, companies and employers.
Example 1 A policy is effective April 30, 2017 (one day before ARD is eliminated) and has an ARD of August 1, 2017. That August 1, 2017 ARD
Answers to Some FAQs Concerning ANC
would still apply. When the renewal policy is written April 30, 2018, the rates in effect as of that policy effective date would apply for the full term of the policy.
rating purposes.
Example 2 A policy is effective September 1, 2016. The rates effective October 1, 2015 apply until the September 1, 2017 renewal. The policy is cancelled and rewritten effective May 1, 2017. No ARD applies and the rates effective October 1, 2016 are applicable to the May 1, 2017 rewritten policy.
Audit Non-Compliance (ANC) Endorsement In a system without the ARD rule, nothing would prohibit an employer from cancelling a policy to take advantage of a recent rate filing decrease. The short rate penalty exists which acts as a deterrent to an employer who cancels. That penalty would likely substantially reduce, or completely eliminate, any “gains” to be had by cancelling early to take advantage of the new, lower rates. Also, Wisconsin statute contains specific prohibitions for a carrier to cancel a policy except for issues such as nonpayment of premium, breach of the policy terms, fraud, and misrepresentation.
How Will the New ARD Rule Be Implemented? The WCRB’s standard is to file changes on a new and renewal basis, with a specific implementation date. For this particular item, this means that the ARD is eliminated for new, renewal, and rewritten policies effective May 1, 2017 and later. WISCONSIN INDEPENDENT AGENT
The intent of this endorsement is to help ensure employers submit to audits when requested. Failure to comply with the audit requirement may lead to additional expenses and questionable rate accuracy, both of which impact more than just the non-compliant employer and its carrier. If the employer does not comply with Part Five – Premium, Section G (Audit) of the policy, the employer will be considered non-compliant with the policy terms and conditions. When this occurs, the carrier MUST apply an ANC of two times (not less than or greater than) estimated premium. The carrier must make two (2) attempts to obtain the audit information and/or complete the audit. At each attempt, the carrier must notify the employer regarding the specific, required records and the amount of the ANC to be applied if the employer continues to refuse to comply with the audit.
ANC is a premium subject to premium tax. It is not a premium for ratemaking or experience
If an ANC is applied and an employer pays it, then allows the audit, the carrier must perform the final audit and determine the final policy premium based on the results of the audit. The carrier then refunds the ANC to the employer or, with the employer’s permission, applies the ANC amount, or a portion thereof, to any outstanding balance on the policy. If an ANC is applied and the employer does not pay the ANC but later allows the audit, then the carrier performs the final audit and determines the final policy premium based on the audit results. If an ANC is applied and an employer pays the ANC but does not later allow the audit OR does not pay the ANC and does not later allow the audit, the carrier does not change the previous reported unit statistical data and/or non-compliance actions. The carrier may cancel the policy midterm for ‘substantial breach of contractual duties, conditions or warranties” ((Ins 21.04 (4)(a)(3)). The ANC rule applies to mail/ e-mail, telephone, computer (remote access) and physical audits, unless otherwise provided by state law.
> > Bernard Rosauer is the president of the Wisconsin Compensation Rating Bureau. Go to WCRB. org for more info.
FEBRUARY 2017 | 23
SALES
10 WAYS TO THANK YOUR INSURANCE AGENCY CUSTOMERS I’m no relationship expert. Just ask my wife. But I know you need to go out of your way to show appreciation for the other person in any relationship, otherwise it will deteriorate and eventually die. But you don’t want relationship advice from me. Trust me. Let’s talk about your agency instead:
a
How healthy are your customer relationships?
a
Do they know how much you appreciate them?
a
Do you go out of your way to make sure they know how you really feel?
a
What are you doing to make them feel all warm and fuzzy inside?
Client relationships are just like personal ones – they require work. And if your business strategy doesn’t include processes to go out of your way to say “thank you” to your customers, they will eventually leave you. Let’s explore ways to say “Thanks!” to your insurance customers. 1) Random Thank You Phone Call A phone call from your insurance agent usually means one of two things: 1. There’s a problem 2. They’re trying to sell something Surprise your clients in a remarkable way
24 | FEBRUARY 2017
with a random phone call just to say, “Thanks for your business.” By the way, if you literally just call and say “thank you” they’re going to think you’re weird so combine your “thank you” with a question like, “We’re taking a survey, is there anything we could be doing to make you happier with our agency?” 2) Handwritten Note of Appreciation Just like a phone call out of the blue, a handwritten note for no other reason than to say thanks will surprise most people nowadays. Simple tip: Use small paper so it’s easy to fill in the whole page quickly. 3) Recommend Their Businesses For your self-employed clients and others who work on commission, there’s no WISCONSIN INDEPENDENT AGENT
SALES
You know the deal, people love to get free stuff.
better way to say thanks for their business than by sending them some, too. I know agents who keep a Rolodex of only client businesses just for this purpose and I think it’s a great idea. If you’re going to do this, make sure to show new clients that they’ve been added to your Rolodex – it’ll make them more likely to renew so they don’t get yanked out! And guess what, the more you refer other people, the more referrals you’ll get to your agency. 4) Customer Appreciation Party I know a customer appreciation party sounds a little cheesy, but not if you do it right. The key is giving people something they actually want. Customers won’t want to come party at your agency, but they’ll be happy to play a free round of golf, go watch a just-released movie, or eat at one of their favorite restaurants as long as you pay for it. 5) Write Recommendations on LinkedIn This might work a bit better for commercial than personal lines, but if you have a strong enough relationship with one of your clients, there’s no reason you can’t go to their LinkedIn profile page and write a nice recommendation about their professional aptitude. As an added bonus, there’s a decent chance they’ll turn around and write one about you, too! At the very least, you could click one of those “endorsement” buttons. That only takes a second. 6) Send a Picture of You Saying Thanks! Take a picture of all the employees at your agency holding a sign that says, “Thanks!” You can email this picture anytime someone does something you appreciate for your agency like referring a new client or just renewing a policy. Here’s a creative spin: Take the same picture of your office WISCONSIN INDEPENDENT AGENT
employees holding a blank sign. Then you could use PhotoShop or PicMonkey to personalize it to make it say anything you want in just a few moments. 7) Social Media Post Go out on your agency Facebook page and make a post for the world to see thanking one of your clients. The side benefit of this method is that it encourages your other Facebook fans to repeat the same behavior when they see how much appreciation you have for it. Bonus tip: Write a blog post on your agency website thanking your customer and share a link to that page on social media instead. It’ll drive traffic to your website where it’s easier for people to get a quote or learn more about your agency. 8) Gift Cards Okay, it’s not super creative but everyone loves free money! I know a lot of agents who give out gas cards. Personally I never liked that idea because you’re just making someone pay $51.23 at the pump instead of $56.23 and to me that’s just not a big deal. That same $5 could get your clients a car wash, a footlong hoagie, or a couple ice cream cones! In my opinion those are all cooler and more memorable than a slight price reduction at the gas pump but that’s just my opinion. 9) Give Free Agency Swag You know the deal, people love to get free stuff – even when it’s crap. You can get a lot of really cheap stuff, but what’s the lifetime value of a fake Rubik’s cube that falls apart the first day you give it out? I find if you spend a bit more on higher quality items people will use and hold on to, you’ll get more marketing value from it. Here are a few promotional items that tend to stick around: coffee mugs; pizza
cutters; refrigerator magnets with valuable information; baby bibs; and nice pens. 10) Send a Thank You eCard Saying thanks doesn’t have to be complicated or expensive. There are many websites that make it really easy to send an electronic ecard to your customers. Go for something funny; if you can inject a laugh into someone’s day that’s a very powerful thing. Here’s a bonus 12-pack of thank you ideas: > Thank You Video > Say Thanks in Your Newsletter > Give Discounts to Another Local Business > Give Tickets to the Game > Say Thanks on THEIR Facebook Page > Mail Them a Cookie > Donate to Charity > Holiday Thank You Cards (it’s probably too late for Thanksgiving though) > Birthday Phone Call > Buy Clients a Coffee > Make Them Laugh > Give Your Client Flowers
> John F. Carroll is the founder and CEO of InsuranceSplash.
FEBRUARY 2017 | 25
MARKETING
IS YOUR AGENCY WEBSITE MOBILE RESPONSIVE? Google has a test to find out. It may be wise to take the test because you are penalized in a Google search if your website is not mobile responsive. A little history. In April 2015, Google announced that they would be expanding their use of mobile friendliness as a ‘ranking signal’ to determine what websites will be displayed on the search engine results page. I talked about this in detail in a TechTip titled, Is Your Website Mobile Friendly? The information in that issue is still valid and may be worth a quick review to understand the importance of your website being mobile friendly. Go to techtips.steveanderson.com. In addition to mobile friendliness, how fast your site loads on a mobile device or desktop has been an important ranking signal for quite a while. Do you know how fast your website loads on a mobile device, laptop or desktop?
2. Mobile Loading Speed
make sure it is performing well.
3. Desktop Loading Speed
Your website is key to maximizing your Internet presence. Too often, we treat our sites as a project and, once completed, don’t think about it again. That is a mistake.
Your site is graded on a 0 to 100 scale for each of the above three criteria.
Fortunately, Google provides a testing service (testmysite.thinkwithgoogle.com) that will rank your website in three areas:
I ran several of my websites through the tool and am a bit embarrassed to show you the results. I could pretend that my site is perfect, but I decided that it actually illustrates the point I am trying to make.
1. Mobile Friendliness
You need to check your website often to
You’ll notice in the screenshot on this page that my scores were good for mobile friendliness, but were weak on mobile speed and desktop speed. This was an eye-opener as I assumed, because my website is mobile friendly, that it was fast loading also. According to Google:
Your website is key to maximizing your Internet presence. Too often, we treat our sites as a project and, once completed, don’t think about it again. That is a mistake. 26 | FEBRUARY 2017
>
People are five times more likely to leave a mobile site that isn’t mobile-friendly.
>
Nearly half of all visitors will leave a mobile site if the pages don’t load within three seconds. WISCONSIN INDEPENDENT AGENT
MARKETING
Fortunately, the test results provide concrete steps you can take to improve your website in each of the three areas tested. You can choose to have a report emailed to you, or you can view the information on screen once the test is completed. While some of the suggestions on what to fix are a bit technical, whoever created or manages and maintains your website should
WISCONSIN INDEPENDENT AGENT
be able to take action to correct any problems identified. There is no question that many (most?) people begin their search for insurance information online. If your agency is not visible to that online prospect, then you’ve lost the chance to help them and don’t even know it. I encourage you to test your website today
at testmysite. thinkwithgoogle. com and make sure whoever is responsible for maintaining your site is aware of and will fix any issues that are uncovered.
> Steve Anderson is the man. Go to steveanderson.com to find out why.
FEBRUARY 2017 | 27
News Members in the
and chairman of the board. Following Austin Mutual’s affiliation with Main Street America in 2012, Kusch became its Western Region president, a role he held until his appointment in 2015 as senior vice president, field operations. Prior to joining Austin Mutual, Kusch was a member of the senior audit staff at Coopers & Lybrand LLP. Kusch earned his bachelor’s degree in accounting from Winona State University, Winona, Minn. He is a Certified Public Accountant. Additionally, Kusch is a member of the board of directors of the American Association of Insurance Services (AAIS), Property Loss Research Bureau (PLRB) and the TrustedChoice.com agent referral platform. For more about Main Street America, please visit msagroup.com.
Main Street America Promotes Jeff Kusch to EVP, Insurance Operations
SECURA Insurance: A.M. Best Affirms the Financial Strength Rating of A (Excellent)
The Main Street America Group announced Jeff Kusch, who has led the company’s field Jeff Kusch sales function for the past two years, has been promoted to executive vice president, insurance operations.
A.M. Best affirmed the Financial Strength Rating of A (Excellent) with a stable outlook for SECURA Insurance, a property and casualty insurer based in Appleton. The rating is a measure of an insurance company’s ability to pay claims to its policyholders.
In addition to continuing to oversee the super-regional property/casualty insurance carrier’s sales and marketing operations, Kusch will also have responsibility for its three core product areas: commercial lines, personal lines and bonds. Product vice presidents Dan Gaynor (commercial), Nancy Giordano-Ramos (bonds) and Debbie Murphy (personal) will report to Kusch. Additionally, Main Street America’s five regional presidents will continue to report to Kusch. This includes Western Region president Tiffany Daly, whose territory covers Wisconsin and other Midwest states. Kusch will continue to report to Main Street America chairman and chief executive officer Tom Van Berkel.
The “A” rating recognizes SECURA’s solid financial stability and historically profitable underwriting and operating results. The stable outlook reflects A.M. Best’s expectation that earnings will remain positive.
“Jeff has proven himself to be an effective leader and a key member of our senior management team,” Van Berkel said. “His accomplishments as our head of field operations include partnering with our commercial lines and personal lines management teams to drive a significant production increase over the past year. In Wisconsin, we generated substantial net written premium growth in 2016 through our statewide distribution network of independent insurance agents. Jeff’s expanded role builds upon the momentum we have generated in Wisconsin and our other states across the country.” In addition to his new executive vice president position, Kusch will remain president of three Main Street America affiliate carriers: Austin Mutual Insurance Company, Grain Dealers Mutual Insurance Company and Spring Valley Mutual Insurance Company. In Wisconsin, Main Street America offers comprehensive suites of personal lines and commercial lines products to “Main Street” insureds, as well as surety and fidelity bonds. Its primary writing company in the state is Austin Mutual. Kusch joined Minnesota-domiciled Austin Mutual in 1992 as an accounting manager. His leadership roles at Austin Mutual included treasurer, secretary, president, chief executive officer
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“A.M. Best’s rating speaks beyond our financial strength,” said Dave Gross, President and CEO. “It confirms the hard work and commitment our agency partners and associates exude every day. It’s a team effort we’re proud of.” The organization recognized SECURA for key strengths such as longstanding regional business presence and strong agency relationships. Additional strengths noted by A.M. Best included a conservative balance sheet, effective reinsurance utilization, and improving risk management capabilities. A.M. Best also affirmed SECURA’s Issuer Credit Rating (ICR) of “a+” with a stable outlook. For more about SECURA, please visit secura.net.
Acuity Announces Staff Promotions Curtis Warren is promoted to Manager - Commercial Lines Products at Acuity’s corporate headquarters in Sheboygan. Curtis began his career at Acuity in January 2006 as a Claims Representative. In September 2008, he moved to the Commercial Lines Product team within the Marketing department. He was promoted to Analyst II in January 2013 and to Senior Analyst in 2014. Curtis has been the facilitator of the Trucking Business Segment team and has been Allison Schwantes involved with many commercial lines projects. A graduate of the University of Wisconsin-Eau Claire, Curtis lives in Sheboygan. Nicole Wuestenhagen is promoted to Staff Claims Consultant at Acuity’s headquarters. Nicole joined Acuity in June 2014 as a Claims Representative. She Curtis Warren WISCONSIN INDEPENDENT AGENT
graduated in December 2013 from the University of Wisconsin-Madison with majors in political science and legal studies and a certificate in criminal justice. Nicole resides in Sheboygan. Allison Schwantes is promoted to Business Analyst at Acuity’s headquarters. Allison started at Acuity in June 2013 as a Commercial Processor. She graduated in May 2013 from Wisconsin Lutheran College with a Bachelor of Science degree in mathematics. Allison lives in Manitowoc, Wisconsin.
Nicole Wuestenhagen
Acuity Grows to New Record in Revenue, Assets in 2016 Acuity announced its 2016 growth results, reporting a gain of over $46 million in total written premium. The amount brought Acuity’s revenue to an all-time high of $1.38 billion for the year. “For the past 17 years, Acuity has consistently grown faster than the insurance industry. Over the past six years alone, we have added $600 million to top-line revenue,” said Acuity President and CEO Ben Salzmann. Acuity achieved balanced growth across its business in 2016. The company achieved an incredible 20th consecutive year of premium increase in personal lines and reached a record $1 billion in written premium in commercial lines. Acuity is poised to continue its growth in 2017 due to its competitive strengths and market positioning. “Acuity’s financial success in 2016 is a tribute to the partnership between our dedicated staff and trusted agency force and the faith of our mutual customers,” said Wally Waldhart, Vice President - Sales and Communications. “We are thankful to everyone who helped us achieve another record-setting year, and we look forward to continued success in 2017.” For more about Acuity, please visit acuity.com.
in the insurance community and has made a big impact through professional service organizations and committees. Jim will continue to own and service his client book and serve as a Vice President at Robertson Ryan. Sean Paterson started his career as a mortgage broker, and then entered the insurance industry in 2000. In 2003, he joined Allied Insurance Centers and in 2004 earned the highly respected Certified Insurance Counselor designation. Over the years, Sean has developed into a specialist for hospitality Sean Paterson and apartment clients. Sean is a leader in the insurance industry and volunteers by serving on many professional insurance related committees. He will serve as a Vice President at Robertson Ryan. Nine team members total are joining Robertson Ryan including: Betsy Jesowshek – CSR Commercial, Sandra Kleiman – CSR Personal; Dimitra Lemberger – CSR Personal; Jean McCue – Office Assistant; Bruce Michels - Benefits Producer; Sean Paterson – Vice President; Heidi Patton – CSR Commercial; Jim Polaski – Vice President; and Joyce Skoney – CSR Commercial. “We are very pleased to welcome Allied Insurance Centers and their service team,” said Gary Burton, Robertson Ryan’s Chief Operating Officer. “Growth is always strategic and requires the right individuals coming onboard. We are confident Jim, Sean and their team have the insurance expertise, values and work ethic to excel with Robertson Ryan.”
RRA Welcomes New Leaders
Bill Evans
RRA Expands with the Addition of Allied Insurance Centers Robertson Ryan & Associates is happy to announce Allied Insurance Centers joined their firm on January 1, 2017. As a Top 100 US Insurance Agency, Robertson Ryan & Associates is the largest independent agency in Wisconsin and continues to grow annually. Matt Cruise
James Polaski, President at Allied Insurance Centers said: “Robertson Ryan’s agency values and vast agency resources made for an ideal match for our next chapter at Allied. The team at Allied is excited to join Robertson Ryan and be part of their robust, client focused network. After all, we are in the Jim Polaski business of helping people and we know Robertson Ryan shares that philosophy.” James Polaski joined Allied Insurance Centers in 1983 to work beside his father, Harry Polaski, who founded the agency in the 1950s. Jim became President of Allied in 1995 and enjoyed building relationships in the community and growing the family agency, which recently celebrated its 60th anniversary. He is well respected WISCONSIN INDEPENDENT AGENT
Robertson Ryan & Associates is pleased to announce two new shareholders and a new board member. “A talented and dedicated leadership team ensures Robertson Ryan & Associates will continue their strong momentum as a leading Wisconsin insurance agency and maintain their position as a Top 100 US Insurance Agency,” said Allan Degner, Robertson Ryan’s Marketing Director. Matt Cruise was voted to become a new shareholder. Matt joined Robertson Ryan & Associates in 2002. He is a second generation insurance agent and dove into the insurance industry at the early age of 18 when he became a licensed agent. He graduated with honors from the University of Wisconsin Milwaukee where he double majored in finance and marketing. Matt resides in Oconomowoc with his wife, Danielle and three young boys.
Jeff Frank was voted to become a new shareholder. He graduated from the University of Wisconsin Madison and began his insurance career in 2004 as a business development underwriter at West Bend Mutual Insurance Company. In 2009 Jeff joined his father, Howard Frank at RRA. Jeff lives in Whitefish Bay with his wife Megan and their three daughters. Jeff Frank
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FEBRUARY 2017 | 29
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Bill Evans was voted onto the board of directors at Robertson Ryan & Associates for a three-year term. Bill has a degree in Business Management from the University of Wisconsin Parkside. Bill started at RRA in 2003 and became a partner in 2013. Bill and his wife Laura have four children and reside in Oconomowoc. “We are very pleased to welcome Matt and Jeff as shareholders at Robertson Ryan,” said Gary Burton, Robertson Ryan’s Chief Operating Officer. “As young professionals and the next generation of agents, they have demonstrated the knowledge and professionalism to continue leading our agency forward. Bill has demonstrated care for leading our organization and a strong understanding of our culture.” For more about Robertson Ryan, please visit robertsonryan.com.
Integrity Promotes Trochil to Director of Commercial Lines Underwriting Integrity Insurance is proud to announce the promotion of Dan Trochil to Director – Commercial Lines Underwriting. Trochil joined Integrity in 2012 as Commercial Field Underwriter. In 2014 he was promoted to Commercial Lines Underwriting Manager where he successfully helped the team achieve goals and increase Integrity’s presence in the marketplace. In his new role as Director – Dan Trochil Commercial Lines Underwriting, Trochil will work closely with the Commercial Lines leadership team at Grange Insurance (affiliate partner) in addition to overseeing strategic planning and portfolio management. “I’m excited for Dan to take this next step in his career as he has proven to be a key player on Integrity’s Commercial Lines management team,” said Integrity President Jill Wagner Kelly. “He exemplifies strong leadership qualities that have helped Integrity generate profitable growth and drive success.” Trochil earned his bachelor’s degree in business administration from the University of Iowa and is currently working toward his CPCU designation. For more about Integrity, please visit integrityinsurance.com.
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ANNUAL CONVENTION
NETWORK WITH THE BEST IN THE INDUSTRY
You’re the best of the best. You know what you want. The 2017 IIAW Annual Convention is designed with you in mind. The IIAW strives to create and provide an
professionals. The Convention Showcase
Last year’s event was a roaring success and we
event for independent agents and brokers who are looking to stay current in today’s evolving insurance industry.
kicks off at 4:30 PM, complete with lights, sounds, and a cityscape backdrop, creating a New York City-style atmosphere throughout, courtesy of Logan Productions, Inc. Food
expect our 2017 event to engage an estimated 700 participants. We are excited to host our many familiar attendees and exhibitors along with new companies and agencies that offer valuable products and services to our industry!
Join us for discussions about timely industry topics, including professional development and marketing techniques, future technology within the industry – such as autonomous vehicles – and current legislative topics. Hear from top executives in the industry, including representatives from Acuity, SECURA Insurance, and The Hanover Insurance Group during the revitalized CEO Panel. Hear from P. Artell Smith, adjunct faculty for the University of Wisconsin-Madison, as he touches on the technology “tidal wave,” and how to effectively pursue the aspects of technology that can expand your business. Engage with innovators during the Convention Showcase. Enjoy a relaxed, evening atmosphere with food and beverages available throughout the Showcase as you network with like-minded WISCONSIN INDEPENDENT AGENT
Attendees will have actionable tactics and strategies they can implement in their insurance business immediately. More importantly, they’ll have the confidence and inspiration to improve their customer experience and grow in the modern marketplace. Don’t miss out on the premier insurance industry event of the season!
and beverage stations will be conveniently situated amongst exhibitor booths and super door prize and cash giveaways will be abundant during the Showcase. Network with the movers and shakers of the industry throughout the day and at the can’t-miss evening entertainment. Join us for an evening comedy show complete with stars, drinks and plenty of laughs! Headlining the show will be actor and comedian David Spade with special guest Kevin Farley as the opener!
Learn from the top speakers within the industry. Network at the Convention Showcase. Elevate your business. Grow your brand. Attend the 118th IIAW Annual Convention on May 3-4, 2017, at the Madison Marriott West. You know you want to. Visit IIAWConvention. com and register today!
> Katie Goswitz is the IIAW Events & Education Coordinator. Contact her at Katie@ IIAW.com.
FEBRUARY 2017 | 31
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CONTINUING EDUCATION
ABEN ONLINE CE CLASSES
IIAW ONLINE CE CLASSES
Insuring Condominiums 3 CE Credits Approved Date: February 21, 2017 Location: ABEN Online – iiaw.aben.tv Time: 9:00 – 11:00 AM
Who Is An Insured? 3 CE Credits Approved Date: February 22, 2017 Location: IIAW Webinar – iiaw.com/events Time: 8:00 – 11:00 AM
Cyber Gaps, UASs and TNCs 3 CE Credits Approved Date: February 23, 2017 Location: ABEN Online – iiaw.aben.tv Time: 1:00 – 4:00 PM
Commercial Property Coverages 3 CE Credits Approved Date: February 23, 2017 Location: IIAW Webinar – iiaw.com/events Time: 8:00 – 11:00 AM
E&O Risk Management: Meeting the Challenge of Change 6 CE Credits Approved Date: March 7, 2017 Location: ABEN Online – iiaw.aben.tv Time: 8:00 AM – 2:45 PM
From Medicaid to the Exchange: What Every Agent Should Know 4 CE Credits Approved Date: March 14, 2017 Location: ABEN Online – iiaw.aben.tv Time: 8:30 – 11:50 AM
Commercial Property Endorsements That Can Make You Money 2 CE Credits Approved Date: March 16, 2017 Location: ABEN Online – iiaw.aben.tv Time: 9:00 – 11:00 AM
Commercial Lines Claims That Cause Problems 2 CE Credits Approved Date: March 21, 2017 Location: ABEN Online – iiaw.aben.tv Time: 8:00 – 10:00 AM
Ethics in Today’s Changing Times 4 CE Credits Approved Date: March 23, 2017 Location: ABEN Online – iiaw.aben.tv Time: 2:00 – 6:00 PM
The Dirty Dozen 3 CE Credits Approved Date: February 27, 2017 Location: IIAW Webinar – iiaw.com/events Time: 12:00 – 3:00 PM
It’s Not My Fault or Is It? Liability Issues in Personal Lines Policies 3 CE Credits Approved Date: March 7, 2017 Location: IIAW Webinar – iiaw.com/events Time: 12:00 – 3:00 PM
E&O Risk Management: Meeting the Challenge of Change, Part 1 3 CE Credits Approved Date: March 8, 2017 Location: IIAW Webinar – iiaw.com/events Time: 8:00 – 11:00 AM
E&O Risk Management: Meeting the Challenge of Change, Part 2 3 CE Credits Approved Date: March 8, 2017 Location: IIAW Webinar – iiaw.com/events Time: 12:00 – 3:00 PM
Business Auto Coverages 3 CE Credits Approved Date: March 9, 2017 Location: IIAW Webinar – iiaw.com/events Time: 12:00 – 3:00 PM
F OR MORE CLASSES AND TO REGISTER, P LEASE G O TO IIAW.COM
FOOD FOR THOUGHT TAKING A SELFIE? YOU MIGHT GET A HERNIA
In December 1975, Eastman Kodak engineer, Steve Sasson, invented the world’s first digital camera. It captured .01 megapixel black and white images, was the size of a toaster, and weighed 8 pounds. The images were stored on cassette tape, taking 23 seconds to write. To play back Steve Sasson with his invention: the images, data was read from the tape world’s first digital camera. and then displayed on a TV set. In 2007, Sasson said: “It had a lens that we took from a used parts bin from the Super 8 movie camera production line. On the side…, we shoehorned in a portable digital cassette instrumentation recorder. Add to that 16 nickel cadmium batteries, a highly temperamental new type of CCD imaging area array, an a/d converter implementation stolen from a digital voltmeter application, several dozen digital and analog circuits all wired together on approximately half a dozen circuit boards, and you have our interpretation of what a portable all electronic still camera might look like.” Source: allday.com & petapixel.com
RADIOACTIVE MONEY MACHINE
While taking a bath, inventor John Shepherd-Barron devised what is hailed as the world’s first automatic teller machine, although his claim to the title is a matter of dispute (Google Jim Goodfellow). He pitched the device to the British bank Barclays. It accepted immediately, and the first model was built and installed in London in 1967. Though the machine used PIN (personal identification number) codes, a concept Shepherd-Barron also claims to have invented, it was dependent on checks impregnated with the (slightly) radioactive isotope carbon 14 to initiate a withdrawal, as the magnetic coding for ATM cards had not yet been developed. One other difference from its ubiquitous modern counterpart: it didn’t charge a fee. Source: time.com
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118th IIAW
ANNUAL CONVENTION DAVID SPADE LIVE Appearing May 3
MAY 3¯4, 2017
MADISON MARRIOTT MADISON, WI
VISIT IIAWCONVENTION.COM