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More “News, Satire & Opinions for Independent Agents from Independent Agents” at www.fyigeorgiaviews.com
EXPRESS
“What You Don’t Know Can’t Help You!” … Eddie K. Emmett, Editor / Publisher
To Dream the
Impossible Dream:
24 / 7 Service Plus
In This Issue
Drive Insurance from folks who may be buying insurance
To Dream The Impossible Progressive recently published the in some other way, such as 1-800
Dream: .........................................1 following results of their Young #s and the Internet.
Agent Survey. They did not send
Facing The Faceless Companies Here’s a snapshot of one of our
the survey to me. It must have
.....................................................8 recent conversations:
something to do with my white
Come-Backs For Direct mustache. Dean: As you know I have
Commercials.............................10 been trying to get our carriers to
Top Five Most Significant help their independent agents write
Assumptions - Errors - Challenges Faced by an business after hours. I call it
Omissions .................................12 Independent Agency "Service Plus" where we could
Insurance Got You Puzzled?...15 1. Attracting write them "on line" and
new customers still give them local service
Referrals: The Keys To Success
after the sale. For
...................................................16 2. Increasing example, 65% of
Is This The Party To Whom I Am competition from Progressive’s new
Speaking? .................................19 companies selling business is written on-line.
direct
Share & Share Alike .................22 More people are being
3. Finding and turned off by "800" sales
retaining good people and want to go on
people line to purchase without
4. Having the anyone's assistance.
variety of markets and products to People can get a quote from my
meet customers’ needs web sites but cannot get coverage
bound. We need people who can
5. Retaining existing help us do on line quoting and on
customers line binding. It may mean getting a
Dean “Don Quixote” Auten is quote, and if they like it, call for
one of my heroes. His staff in binder. Surely we have someone
within our network of agents and
Happy Halloween! Brunswick, GA does a great job
vendors that can help us.
writing most of the quotes but he
wants more! He’s always looking Continued on page 2
for ways to sell and service the
FYI EXPRESS Page 1 October, 2006
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Commercial Lines Personal Lines
GARAGE KEEPERS LEGAL LIABILITY &
NON-STANDARD PRIVATE PASSENGER AUTO
DEALERS OPEN LOT (PHYSICAL DAMAGE)
Dealers (used car sales) Peachtree Casualty Insurance Company (GA, FL)
Non-Dealers (garages, car washes)
Rated “ B++ “ by A. M. Best
COMMERCIAL AUTO Effective May, 2006- New Lower Rates &
Truck Physical Damage- Sand, Gravel, Log and Lower Down Payment
Garbage Haulers and Dump Trucks. Fleets OK.
15% Commission on new and renewal business
Motor Truck Cargo (Excluding Household Movers)
Commercial Property “We are there to help you achieve your goals”
Apartments, Mercantile & Office, Warehouses and
Many More. Limits of $500,000.
www.finusa.com
COMING SOON!!!!
GARAGE LIABILITY PROGRAM
All Commercial Programs are available in Georgia
& Florida, offering top commissions and service - A
rated carriers. For EZ app and a Speed Quote call
Sherry McGriff at ext. 138.
First Insurance Network is dedicated to providing our agents and customers with timesaving tools to make their
jobs easier and more efficient. We also recognize the value of the Internet and wish to use it to its full potential.
Our agents and customers can now use the internet to check the status of their accounts and information.
Agents can also download applications and change of information forms so that you never run out of forms
again!
Please call, Marketing, at (800) 282-4151 or (770) 436-7575, ext. 115 with any questions. 5/06
Impossible Dream we would transfer to the carrier’s 24/7 people giving
them our agency code. The carrier’s 24/7 people would
Continued from page 1 write the insurance and bind coverage if wanted. I still
90% of independent agents are not able to be open think that was a good suggestion.
24/7; however, if we could advertise locally "OUR WEB Today I am interested in ways our carriers can help us
SITE IS OPEN 24/7 AND WE CAN PROVIDE do more business from our WEB site.
IMMEDIATE COVERAGE. AFTER THE SALE, WE
WILL BE HERE FOR FACE TO FACE SERVICE", it I was not surprised at the number of those buying on
could mean a lot of sales. the web over the phone has increased. People are
becoming "phone shy".
Eddie: Help is on the way. Check out InSite Support
Services (www.insitesupport.com). InSite has live agents If I have a choice of calling an 800 number to using a
standing by 24 / 7 to quote, sell and service policies on web site to order anything, I use the web site. I see this
your behalf. trend increasing as more and more market people are
making calling 800 numbers a bad experience.
Dean: Over the years I have sent our carriers a lot of
suggestions on how to get more business from their What I am talking about is advertising our web sites
independent agents. One suggestion I sent you was for (mine is www.georgiaauten.com and www.ais-
the carrier to arrange a way for us to transfer our "after georgia.com) as being open for business 24/7.
office calls" to the company’s website. We would take
the call (at office closing, office number transferred to
our cell phones and we would then take calls) and then Continued on page 3
FYI EXPRESS Page 2 October, 2006
More “News, Satire & Opinions for Independent Agents from Independent Agents” at www.fyigeorgiaviews.com
Impossible Dream
Continued from page 2
I saw an info commercial (lasted over 15 minutes) of
Great News!
an appliance store where they emphasized that they
were not open on Sundays but that their web site was STRICKLAND
open 24/7. For example: A person would go to our web
site and they would be transferred to a Drive 24/7 web GENERAL
site (if they were looking for auto insurance).
A lot of good local advertising could be done to
AGENCY, INC.
promote "24/7 web site auto insurance" by a local agent.
In one program I came up with the "Local Service Plus"
theme. "Local Service Plus" was my way to let people New Features and Enhancements:
know they not only had 24/7 Company support but the Improved quick quote format –
services of a local agent. (commercial and personal lines)
The advantages to the carriers would be: Certificate request
1. More people, I think, would use the web site Filings request
purchasing if they knew they would have local service Driver Change request
from a local agent. Loss Run Request
2. They would be getting 100% of the auto insurance
referrals going to agent’s web site. Endorsement request
3. More advertising of the insurance company brand if Policy Status Request – (renewal status,
local agent advertises their "Local Service Plus" in local payment status or cancellation status)
media (I would think the carrier would want to co-op Rating Software request –
some of the advertising). (for new installations only)
The advantages to agent:
1. More auto insurance business. Applications – PDF format
Contact Us – including contact name,
2. Better credibility as an agent that offers more than a
"9 to 5" office. I have been trying for years to find
extension and email address
employees that could help us extend our hours and Specialty Programs – (commercial)
every time I think I am ready, I lose an employee. Brokerage Programs – (commercial)
Last Friday I learned that all my requests for help from
one of our carriers to accomplish my "local service plus" If you have any questions please let me know.
is a dead issue. We would, I was told, be doing business
"direct" and that was the business of "Direct Writers" and
not "Independent Agents". I think they are making a “Think Strickland First”
mistake, and I told them so, because eventually agents
will find a way to advertise and sell auto insurance 24/7
and they will be successful because they will be Rob Sherwood
advertising in their local media--"Do business with a local Strickland General Agency, Inc.
Face!!" "Buy online but come to us for face to face
service", "We are part of your community and we offer
Phone: (800) 825-5742 ,
Great Service", etc. (678) 259-3700 ext-125
Fax: (678) 259-3701
I now know that if a company has its own direct
operations they are not going to help independent Email: rsherwood@sgainga.com
agents write business "after office hours". Now I want to Web Site: www.sgainga.com
see what other ways we can write business 24/7.
P. O. Box 4084 Duluth, Georgia 30096-0064
Continued on page 4 678-259-3700 * 800-825-5742 Fax 678-259-3701
FYI EXPRESS Page 3 October, 2006
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Impossible Dream Strickland we had a law suit over an agent that left apps
at a dealer. The agent, Strickland, Northland insurance
Continued from page 3 Company and the Auto Dealers were all sued. It was
When I first started (Nationwide) in 1963 I had two one of the reasons Northland left the Alabama market
dealers that would give me 30 new sales a month each. I and chose to not offer auto in Georgia.
had the time then to go to them to get the business. I do Eddie: Help is on the way, my friend. I’ve been looking
not think I would have made it as a new insurance agent at alternate methods for independent agents to sell and
without them. The people they gave me also became service “outside of the office box”.
my source for home, life and health insurance and
referrals for more business. They were good sales as You mentioned the legal problems from leaving apps
they included comprehensive and collision. at a dealership. I have good news for you. Check out
www.zipdealer.com. It provides the link you seek
Recently I did an analysis of my business and I found between agency and dealership.
most of my business was "liability only" and, while my
number of sales has increased, my average premium Alternate methods using 1-800 #’s & the Internet are
per sale is down. This is directly related to our stopping not new. A 2005 survey showed that 87% of consumers
dealer business. I lost the last person I had who would shop for auto insurance online and 55% are willing to
go to the dealers to write the coverage two years ago. A purchase policies online.
lot has changed since I started in 1963. I could not For example, Esurance (www.esurance.com) provides
make it on 60 sales a month today. We need ways we personal auto insurance direct to consumers online and
can do business "direct" ---but "direct with local service" I through select online agents. Through their website,
may not be pretty but I have some pretty people. People customers can get instant quotes, buy a policy and print
who are not afraid to show you "their face". The future their proof of insurance card – all in minutes.
looks good!! Policyholders may also make policy changes and file
Locally we have agents that leave applications at claims online 24 / 7.
dealerships but I am afraid to do that. When I was at Continued on page 5
FYI EXPRESS Page 4 October, 2006
More “News, Satire & Opinions for Independent Agents from Independent Agents” at www.fyigeorgiaviews.com
GIAA MEMBERSHIP HAS ITS Impossible Dream
ADVANTAGES!
Continued from page 4
GIAA members get 10% discount on R.S.
Thomas Training Associates Classes. Combining real-live agents with the Internet is
becoming the latest trend. Recently Esurance partnered
R. S. THOMAS TRAINING ASSOCIATES, with Answer Financial (www.answerfinancial.com), one
INC. PRESENTS of the nation’s largest independent insurance agencies.
Consumers can consult with one of Answer Financial’s
THE NATIONALLY ACCLAIMED 400 licensed insurance agents by phone or buy their
2006 INSURANCE AGENTS AND ADJUSTERS policy online.
21st Century Insurance Group is now selling auto
QUALIFICATION SCHOOLS insurance directly to consumers in Georgia as well as 11
R.S. Thomas Training Associates, Inc. has built other states. Smart move. According to A.M. Best
a reputation of excellence in the insurance industry. companies that rely on insurance agents lost more than
2.7% of personal lines market share between 1999 and
Noted as one of the Nation’s Consistently Rated
2004. Conversely, direct-to-consumer companies like
Top 10 Insurance Schools, we can prepare you 21st Century, GEICO and Progressive Direct increased
during the week and on weekends to pass the their market share by 4.8% during the same period.
insurance licensing examination on the first
Starting in October Direct General is appointing
attempt. independent agents in rural areas. Progressive Direct’s
latest TV commercials convey the message that
We Guarantee It! potential customers can also talk with a real-live,
breathing human being. You can’t see their face but I
1000 Circle 75 Parkway, NW, Suite 005 predict that with video streaming becoming easier you
Atlanta, Georgia 30339 can expect to soon converse online and see the person
to whom you are speaking.
770.933.4199 –Phone or 770.933.4195 – fax
GEICO is appointing independent agents. I didn’t think
www.RSThomas.net it would ever get that cold in Georgia for that to happen!
20 / 40 Hour Pre-Licensing Qualification School Web Site Usage
P&C & Life, Accident & Sickness (LAS) 1. Only 11 percent of young independent agents
have an interactive web site where people can
ATLANTA SITE quote, buy and contact them.
Oct 13-15: 20-22 Weekend 2. 34 percent have a static website where people
can learn more about their agency and the
Oct 02-06 Weekday services they provide.
Nov 03-05; 10-12 Weekend 3. 40 percent do not have a website at all.
Nov 13-17 Weekday Source: Drive Insurance from Progressive Young
Agent Survey
DULUTH SITE
Out of Sight
Nov 27 – Dec 01 Weekday-LAS (PIA)
But our biggest problem is using a company that has
Nov 06-10 Weekday-P&C (PIA) no problem with allowing their independent agents to
bind coverage sight unseen and without “wet” signatures
Dec 04 – 08 Weekday-P&C (PIA) at the point of sale. It’s difficult but not impossible. There
are some carriers that represent independent agents
and also sell online. They obviously worked out the finer
We also offer 8 Hr. Variable Products, details.
Safeco Insurance Companies seem to have worked
Securities Licensing Series 6 & 63
out that dilemma and now hopes to better leverage their
Download Registration Flyers at website (www.safeco.com) using Internet advertising,
direct marketing and other promotions to reach
HTTP://WWW.RSTHOMAS.NET/INSURNACQSCHL.HTM consumers who want to buy policies online.
Continued on page 6
FYI EXPRESS Page 5 October, 2006
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Impossible Dream
Continued from page 5 No word on if the online premiums are less but the
company proudly proclaims “savings of up to 20%
Those consumers will be given the choice of closing because the company streamlines the marketing efforts
the sale by themselves without being assigned an and passes the savings on to the consumer”. Launched
independent agent. However, agents will be featured on in February 2006, Unitrin Direct is in 20 states. Georgia
the Safeco website, giving consumers the choice in how is not one of those states … yet.
they want to do business with Safeco. One of Safeco’s
five principles in their Internet strategy is to resolve Drive Insurance from Progressive has access to all of
distribution conflicts in favor of customer choice first, the the state-of-the-art systems utilized by Progressive
agent second and Safeco third. I do not know if the Direct. If they can do it, why can’t the independent
online premium is less than that offered through the agent?
independent channel. At the recent Drive meetings, the company was
Earlier this year Unitrin Direct was rolled out to strongly advising its independent agents to more fully
Washington State drivers. Most of the new policyholders utilize the available online tool. One suggestion was to
electronically sign the documents and many use send a “Thank You” via e-mail the same day the policy
“EasyPay” to automatically pay their premiums and was purchased and suggest the satisfied customer
renewals. Over two-thirds of Unitrin Direct’s new forward it with a personal recommendation to everyone
Washington policies are Internet-driven from quotes on in their personal e-mail address book. What a great idea!
their website. A portion of the new policies is generated Obviously, Drive Insurance from Progressive believes
from phone-center calls. Unitrin Direct offers the option in the potential of electronic communication with our
of talking directly with an in-house agent because some clients.
people prefer that level of service.
Continued on page 7
FYI EXPRESS Page 6 October, 2006
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These companies have the
technology. They have worked out
every possible obstacle to quoting and
binding sight unseen. There is no
apparent reason why they cannot make
these processes available for their
independent agents to add this
“Service Plus” to the agency website.
So who is going to be the first
company to give 24 / 7 online binding
authority to the Independent Agent?
It might not be such an “Impossible
Dream”, after all.
The Five Most Important
Things Carriers Can Offer an
Independent Insurance Agency
1. Competitive rates
2. Technology that helps them
more easily write business and
service customers
3. A variety of markets and
products (auto, home, umbrella)
that meets customers; needs
4. Competitive commissions
5. Support provided by dedicated
service personnel via phone
Source: Drive Insurance from
Progressive Young Agent Survey
Join GIAA
Now!
Impossible Dream MY OPINION
Continued from page 6
& WELCOME TO IT!
Attention: Company & Agency
Permanent General (www.thegeneral.com) has a
Personnel ... Got a comment on
separate direct-to-consumer division called “The
something you read in the FYI Express?
General”.
Want to express yourself about a trend in the
Get a Free Auto Insurance Quote in 2 Insurance Industry? Think you’ll feel better sharing your
Minutes or Less. thoughts with folks in the same situation?
The General says, “Give us two minutes and we'll give If you wish to be kept anonymous, just say so. I have
you an auto insurance quote. It's that easy. Then, if you yet to betray a confidence.
like our rates (and we're pretty sure you will), simply
purchase your policy online with a credit card or check Otherwise, the Insurance Industry will read your
and we'll provide you with immediate proof of insurance.” thoughts in the next issue!
E-mail them to me at eddieemmett@alltel.net
FYI EXPRESS Page 7 October, 2006
More “News, Satire & Opinions for Independent Agents from Independent Agents” at www.fyigeorgiaviews.com
Facing the Faceless Companies
Dean Auten has created a series of radio commercials What good is insurance if when you have a problem
that is a great first step in “Facing the Faceless you can't go to a real life agent and discuss your
Companies”. Here are his suggestions: problem "face to face". At Auto Insurance Service at
1801 Norwich Street, we are proud to show you our
Announcer: "Hey you! Yes, you listening to the Radio! face. In fact, most of our customers see us every month
You know the other day I called "1-800-who cares" to when they come in to pay their insurance premium, get
buy auto insurance. You know what? They did not care an Insurance Company receipt and have a cup of coffee
about me. All they wanted was my money. And then or coke. Call us at 262-9929. Come see our Face! We
when I had a question or a problem - well, I couldn't find want you to see "Our face" and we want to see “your
anyone to help me, I went back downtown to Auto face”. We are here to serve you! Call 262-9929
Insurance Service and got answers I could understand
and a really good deal. 3. Announcer: Have you bought insurance from a
"faceless insurance company"? Do you know the town
At Auto Insurance Service at 1801 Norwich Street, we they live? What kind of schools their community has?
are proud to show you our face. In fact, most of our How involved in their community they are? The answer
customers see us every month when they come in to to these questions is "probably not". Before you pay your
pay their insurance premium, get an Insurance Company next renewal we ask that you consider Auto Insurance
receipt and have a cup of coffee or coke. Call us at 262- Service, 1801 Norwich Street. We live here and we
9929. Come see our Face! We want you to see our support our community-its schools and its other
"face" and we want to see "Your face". We are here to businesses. We want you to see "Our face" and we want
serve you! Call 262-9929 to see "Your face". Call 262-9929. We are here to serve
2. Announcer says: I bought auto insurance from one you! Call 262-9929.
of those "faceless insurance companies"-you know the Continued on page 9
one with the Lizard. Big Mistake!
FYI EXPRESS Page 8 October, 2006
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Facing the Faceless Companies Every month over 2,000 of our insureds bring their
premium payment for us to computer upload to their
Continued from page 8 insurance company and give them a "company" receipt.
4. Announcer: Service Plus. When you buy auto Before you pay your next renewal we ask that you
insurance from Auto Insurance Service you will get consider Auto Insurance Service, 1801 Norwich Street.
"Service Plus". Not just a good rate but service after the We live here and we support our community, its schools
sale. Before you pay your next renewal we ask that you and its other businesses. We want you to see "Our face"
consider Auto Insurance Service, 1801 Norwich Street. and we want to see "Your face"'. Call 262-9929. We are
We live here and we support our community, its schools here to serve you!
and its other businesses. We want you to see "Our face" 7. Announcer: I like entertainment like the ad by one
and we want to see "Your face". Call 262-9929. We are insurance company that uses a Lizard. Finally they told
here to serve you! Call 262-9929 us what they really do - they entertain us. The lizard tells
5. Announcer: The Best Place to buy low Cost Auto us we can save money on auto insurance. The Cave
Insurance. Since 1989 Auto Insurance Service, the man tells us how easy it is to get a quote from them.
agency with a "face" has been known as The Best Place What they don't tell us is how we will be able discuss
to buy low Cost Auto Insurance. Before you pay your problems with them "face to face" with them. In fact, we
next renewal to some "faceless insurance company', we don't even know the town they live - we don't even know
ask that you consider Auto Insurance Service, 1801 if the person we are discussing something as important
Norwich Street. We live here and we support our as our auto insurance lives in the United States. Before
community, its schools and its other businesses. We you pay your next renewal to some "faceless insurance
want you to see "Our face” and we want to see "Your company', we ask that you consider Auto Insurance
face". Call 262-9929. We are here to serve you! Call Service, 1801 Norwich Street. We live here and we
262-9929 support our community, its schools and its other
businesses. We want you to see "Our face" and we want
6. Announcer: Save money on auto insurance and get to see "Your face". Call 262-9929. We are here to serve
local service. We don't have a lizard that will tell you that you! Call 262-9929.
you can save money by calling a "faceless insurance
company' but we do have good rates and good local
service. We call our service "Service Plus".
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Call NSD today!
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Ask for Kristie Eaton
FYI EXPRESS Page 9 October, 2006
More “News, Satire & Opinions for Independent Agents from Independent Agents” at www.fyigeorgiaviews.com
anyway. We will get your claim settled quickly and can
also intervene with an insurance company to make sure
Come-backs for Direct Commercials you are fully reimbursed for your claim. Isn't it worth
waiting a couple of hours for this extra service and
If Direct commercials say, “We can save you 15
advice?”
percent or more by eliminating that middleman insurance
agent.” If Direct commercials say, “Don't you want to deal
directly with the insurance company and eliminate the
You can respond, “The truth is, you can either pay an
middleman (agents)?”
insurance company employee somewhere at the end of
that 800#, or you can pay a local agent who employs You can say, “We are the middlemen who run
people in your area and contributes financially to your interference for you in this insurance game and we are
tax base. Do you really think a big insurance company proud of it! If you think an insurance company employee
can run more efficiently than a small, well-run insurance will always do right by you, you totally trust their
agency? And who is really going to get you the best judgment to be unbiased, and you really enjoy studying
rates over a long period of time; one company with one insurance coverages and claims practices, go for dealing
set of rates or an agent who can choose among many with the insurance company direct. You may also want
different companies?” to buy one of those do-it-yourself will kits, fill out your
own income tax forms, and learn brain surgery while you
If Direct commercials say, “When you have a claim,
are at it. But if you want to hire a professional,
we are a 24-hour toll-free, just a phone call away. “
experienced in dealing with insurance companies on a
You can respond, “We are not open 24 hours a day daily basis who can fight for your interests and explain
so we can spend quality time with our families. We complicated coverages and potential claims, you want
believe, as do you, in balancing work with family and us as your middleman. You will save time and money by
know that most insurance companies only take using us! Unless, of course, you have plenty of both.”
messages outside of working hours and never really
Continued on page 11
start working on claims until the next business day
FYI EXPRESS Page 10 October, 2006
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Come-backs for Direct Commercials Who's the Boss?
Continued from page 10 Everybody on earth dies and goes to heaven. (Don't
ask why or how, it just happens...)
If Direct commercials say, “Our representatives are
highly skilled professionals.” God comes and says, "I want the men to make two
lines. One line for the men that dominated their women
You can say, “Come on now. Do you really think
on earth and the other line for the men that were
some one-company employee is going to be more
dominated by their women. Also, I want all the women to
knowledgeable about insurance coverages and
go with St. Peter."
premiums than an experienced local agent who deals
with many different companies, coverages, and With that said and done, the next time God looked,
premiums on a daily basis? Who would you rather turn the women are gone and there are two lines. The line of
to for technical advice? We are the pros.” the men that were dominated by their women was 100
miles long, and in the line of men that dominated their
If Direct commercials say, “Call us or go on-line for
women, there was only one man.
a free rate quote.”
God got mad and said, "You men should be ashamed
You can say, “Of course we will give you a free
of yourselves. I created you in my image and you were
quote for your car insurance. Who in the world charges
all whipped by your mates. Look at the only one of my
for that? More word games. But not only will our quote
sons that stood up and made me proud. Learn from him!
be free, we will give you the rates of many insurance
Tell them my son, how did you manage to be the only
companies at the same time; unless you have nothing
one in this line?"
better to do than make a dozen "15 minute" phone calls.”
And the man replied, "I don't know, my wife told me
to stand here."
FYI EXPRESS Page 11 October, 2006
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(3) Get it in writing. This is particularly important on
risks other than commercial vehicle where there is more
standardization of forms and coverages.
A really big "danger" exists in asking for telephone
quotes. If you do not then get the quote in writing, with
the many exclusions and warranties shown, your
hazards multiply.
If you are getting two or three quotes from different
sources you may be trying to compare apples vs.
oranges vs. bananas.
When it comes to binding a risk even more care must
be taken. Again the telephone is not the best way. The
DANGER! U.S. Postal Service certainly is not. The FAX is the best
ASSUMPTIONS - ERRORS - OMISSIONS method to follow, but here again use caution: be sure
your FAX machine has a "proof" of receipt showing
In dealing with Commercial Brokerage Markets many actual date and time, and do not attempt to bind by any
of the same hazards exist as in personal lines; however, method when the company underwriter office is closed.
very few Guidelines are furnished to the Producer when ALWAYS get a Binder Number and name!
commercial business is written. It is therefore extremely
important to: Now it comes to "authority" to issue a Binder to the
client, or Certificate of Insurance to another party. For
(1) Know the company and underwriters you deal all intent and purposes you have no authority to do so
with; unless the company has expressed so in writing.
(2) Remember that you have no authority to do much Continued on page 13
other than give a quote;
FYI EXPRESS Page 12 October, 2006
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Does the person typing the
Certificate fully understand exactly the
Coverages to be entered? Without a
written quote how can they be sure?
Are Producers Completed Operations
included in the Code or is it a separate
Limit? What Edition of ISO is being
used, or is it even ISO based to begin
with? Is Personal & Advertising Injury
included in quote? Fire Damage?
Medical Expense? Are the quoted
Limits different from the application
submitted for quote? If not, you must
be sure to change the application to
agree with the quote when sending
the signed original to the company.
Other important matters about the
Certificate. The Policy dates,
including the exact time of binding.
The Insuring Company (not the
general agency). The allowed number
of days of "notice" to Certificate
Holder. Is the Holder also an
Additional Insured? Is this the same
as on your application or did the
underwriter quote another
Classification? In most instances
there is a Classification Limitation
Endorsement on the Policy. What if a
loss occurs before the Policy has
been issued and delivered to the
Insured? If you have something that
is different from what the underwriter
is using, be sure your E&O Policy
premium was paid before the policy
was effective.
Lastly, was the Certificate checked
and actually signed by the Authorized
Representative? Did you send a copy
to the underwriter the same day?
Bill Murrey of N-Surance Outlets,
Inc.
DANGER!
ASSUMPTIONS - ERRORS - OMISSIONS
Continued from page 12
Take a look at the most commonly misunderstood FREE Stuff on the FYI Website
and misused form: The Certificate of Insurance. Before
going any further look at the bottom right of the Form. “Commercial Lines for Beginners”
Authorized Representative. Are you? If yes, by whom? Booklet
When? In writing?
Visit today at www.fyigeorgiaviews.com
OK, so let's say you have been led to believe you are
authorized.
FYI EXPRESS Page 13 October, 2006
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annual income from our Annual Payment: ___ Agency @ $160.00 + ___
efforts. GIAA Membership Multi-Offices ___ x $75.00 = $ ___________
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Annual Payment: ___ Individual / Retired Agent
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agents charging fees for services is against Georgia Quarterly Payment: ___ Agency @ $50.00 + ___
Statutes. Agents are not allowed to pass on increased Multi-Offices ___ x $25.00 = $ ___________
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please complete the bottom part of this invoice and mail Join now and get 15
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FYI EXPRESS Page 14 October, 2006
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CHECK OUT ALL THAT ACCU-AUTO HAS TO OFFER AT WWW.ACCUSYSTEMS.COM
INSURANCE GOT YOU PUZZLED?
In this "Circle-the-Word" puzzle, there are at least 36 insurance related terms. Can you find them all? (Hint: the terms
can be sideways, diagonal, straight-down or even up-side down!)
Do you know what they all mean or how they relate to the insurance industry?
Win a free 2007 subscription to the FYI Express by being the first person to identify all 36! First completed (& correct)
fax to me @ (770) 783-8226 wins!
A C E K C O I N S R U A N C E Q W E
R I S E N D O R S E M E N T A S D K
E P N L M N H J Y G V F A R D D S A
T Y D D A D J U S T E R C A E I F P
E A S E E S U R P L U S A D R F R P
N C L A I M U I S O Y U N I U S E L
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I O A R C T D I N S U R E D N T N C
O L F Y I: R E D T F G O L B I F S A
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COINSURANCE MANUAL IBNR UNDERINSURED
ENDORSEMENT INJURY RETENTION CALCULATE
ADJUSTER DECPAGE COLLISION REINSURANCE
CLAIM COMPREHENSIVE DEAD APPLICATION
ISO SURPLUS PROPERTY FYI
USE LIMITS UNDERWRITER GEORGIA
INSURED INDEMNITY LOSS VIEWS
SHORTRATE RISK PRORATA AND
POLICY SAFETY CANCELLATION NEWS
FYI EXPRESS Page 15 October, 2006
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REFERRALS: The Keys to Success • ... That a sustained 5% improvement in an
agency’s customer retention rate can double profits in
Did you know...? five years?
• ... That the insurance industry has the highest • ... The average customer retention rate within
customer acquisition costs of any industry? the insurance industry is only 84%?
• ... It costs seven to nine times more for an How important is renewal business?
insurance agency to attract a new customer than to
retain one? Here's a prime example: ABC Agency write auto
insurance. This year, it will write 2,000 new business
• ... That when customers tell you that they are policies and 8,000 renewal policies. Currently, ABC
satisfied with your agency there is no statistical Agency renews 80% of its business. Next year, it plans
correlation that says they will subsequently remain with to grow to 10,850 policies. If its renewal ratio stays the
your agency? same, it will have to write 2,500 new business policies,
• ... That referred customers have on average a an increase of 25%. However, if the agency can raise its
25% higher retention rate within the first three years than renewal ratio from 80% to 85% (an increase of only
customers who come from any other source? 6.25%), it can meet its goal without increasing new
business.
• ... That reducing customer defection by as little
as 2% per year is equivalent to cutting costs by over Continued on page 17
10%?
FYI EXPRESS Page 16 October, 2006
More “News, Satire & Opinions for Independent Agents from Independent Agents” at www.fyigeorgiaviews.com
REFERRALS: The Keys to Success Referrals come in different forms: (1) Advertising; (2)
Word of mouth: and (3) One-on-one requests.
Maybe your agency can boast a 90% retention rate.
Before you strain a muscle patting yourself on the back, Advertising. Are the Yellow Pages the only source
consider this ... a 90% retention over a four-year cycle of advertising utilized by your agency? If so, you’re going
results in losing one-third of your clients! You start with to get mostly price-shoppers or folks who want to make
100 customers; renew 90, then 81, then 73, the 66! their problem into your problem. There are many other
ways to inexpensively spread the word.
Visualize your book of business as a leaky bucket. As
you lose customers out of the leak in the bottom of the Word of mouth. Don’t depend too much on your
bucket, you have to continue to add new customers (the loyal clients going out of their way to tell everyone how
most expensive process) to the top of the bucket. If you great your price and service is in your agency. It’s been
can even partially plug the leak by as little as 2%, your said that if you do something good for someone, they will
bucket will stay fuller. It then takes fewer new customers tell five friends. On the other hand, if they think you “did
added to the top of the bucket to maintain the same level them dirty”, they’ll tell everybody!
of profitability. One-on-one requests. Does your agency make it
Did you know...? mandatory to ask for referrals? If the answer is no but
compensation is the same regardless what marketing
Referred customers have the lowest acquisition methods is used, this is a very expensive way to build a
costs? book of business.
A referred customer has on average a 92% retention Consider instituting a “referral” program in your
rate over the next two or three years vs. a 67% rate for a agency. Changing the compensation structure to pay
customer who is acquired through another marketing higher commissions for referred clients is one way to
method? assure that producers / CSRs are asking for referrals.
Your likelihood of closing an unknown prospect is Continued on page 18
only 1 in 20.
Your likelihood of closing a referred prospect is 1 in
6.
FYI EXPRESS Page 17 October, 2006
More “News, Satire & Opinions for Independent Agents from Independent Agents” at www.fyigeorgiaviews.com
Then be sure to give the new
policyholder an extra agency
business card (or two) and write,
“Referred by [client’s name]” on
the back.
What happens if the
producer / CSR doesn’t want to
participate? Referral
development can only be done if
they are held responsible for
their activity (or lack of!). Most
folks know that if they don’t
show up on time or stay until the
office closes, they will be
terminated. Most know that if
they wear improper clothes to
the office, they will be
terminated. That if they swear,
curse or abuse a customer, they
will be terminated. What’s wrong
with adding another duty to the
list? You don’t have to hold it up
as a threat only as a job
requirement. If they fulfill or
exceed the job expectations ...
compensate!
Every agency’s personnel
has limited amount of time and
energy. The main question is
“Do you want to spend your time
on customers that will stay or
leave?” It seems that many
agencies spend more of their
precious time on those
policyholders who will not even
make it past the first payment.
Late payment problems are
inevitably related to the same
clients, month after month, year
after year. These clients cost the
agency more than twice as
much as the preferred client who
cares to be financially
responsible. I say more than
twice because you have to
handle the file once to write it
and another time to finalize the short-term cancellation.
REFERRALS: The Keys to Success The agency loses money because they have to spend
too much time rewriting, reinstating, collecting, and
Continued from page 17 following up for no additional income.
When do you ask for a referral? The customer is No one has a crystal ball to accurately predict which
happiest with their purchase at the close, so that’s when of your customers will be short-timers but coming to your
you must ask for the referral. The best would be for the agency with no prior coverage within an understandable
customer to get their referral on the phone and then lapse period is a very strong indicator. You had better
hand it to the agent. Is that too much to ask? cover your costs in the down payment because you may
never see any more money from this group!
FYI EXPRESS Page 18 October, 2006
More “News, Satire & Opinions for Independent Agents from Independent Agents” at www.fyigeorgiaviews.com
I was pretty sure they
couldn't do it in N.C. and when
the web site didn't disclose the
information I decided to call the
toll free number on the upper
right of the Progressive Direct
web page and they answer it
“Drive Insurance”. When I told
the rep that I called the number
on the web site he said I
couldn't have because it should
go to Progressive Direct. I gave
him the number and he came
back to me and said when he
called it they answered
Progressive Direct. Here's the
rub....dialed from my office
number their system answers
“Drive Insurance”. When I call
the same number from my cell
phone its answered
Progressive Direct. We are
always told they are separate
companies and they don't share
info. You try it from your agency
and see what happens. I know
this is a small thing but it
always seems like there are
screwy things with Progressive.
The second thing is that
when I started the quote I filled
in my name and address and
clicked next. The next screen
pulls up a list of all of my
vehicles and asked which ones
I want to insure. I never had to
put in a VIN. number or
searched for the right make and
model which made it really
quick to rate. They have the
direct rating tied into DMV. Why
don’t they give that to us as
well???
The reason I think it matters
is that their sales reps are saying that there are two
different companies and that they are really interested in
Is this the party to whom I am speaking? growing the agents business. If I understand the process
Editor’s note: Independent agents from sea to shining of how calls are identified and directed it sounds like the
sea share with me many examples of puzzling Progressive Direct would get the majority of the quote.
situations. Here’s one from North Carolina … Editor’s note: I too was puzzled so I asked the
I don't mean to beat a dead horse, but I decided to do “Movers & Shakers”, an informal group of agents & reps
a quote today on Progressive Direct because I wanted to with whom I have developed a network of expertise
see the other Insurance Companies quotes since they unmatched in the industry. I got an immediate reply from
spend so much money advertising that they can give it to a Georgia agent …
you. Continued on page 20
FYI EXPRESS Page 19 October, 2006
More “News, Satire & Opinions for Independent Agents from Independent Agents” at www.fyigeorgiaviews.com
Is this the party to whom I am speaking? First, where the agent got "Drive Insurance" on their
office phone, but "Progressive Direct" on their cell
Continued from page 19 phone: If an agent calls any Progressive phone number
Eddie, from a phone number that our system recognizes as
belonging to an agent, the system automatically
I have known of this for approximately 18 months transfers the call to the agent contact team in the call
now. Progressive has a system that captures telephone center - where it is answered as Drive. So no matter
numbers & then associates them with either agency or what Progressive phone number these agents called, if
direct business. The phone systems notify the customer they called from their office phone we're going to switch
service rep as the call is dropping in to them which them to an agent rep in the call center to be answered.
channel the caller is associated with. In this case, the system didn't recognize their cell phone
In some cases the phone system will even play one numbers as belonging to them, so it didn't transfer those
of two pre-recorded greetings, either agency or direct, so calls and they went through to Direct.
the rep doesn't have the possibility of thanking the We do this automatic transfer for two reasons:
customer for calling the wrong channel. Of course this is
done so that reps may service both channels which As a convenience to agents. If an agent forgets the
lowers their cost. agent contact number or calls the wrong number
accidentally, he'll still talk to the right person immediately
This phone technology is the remnant of the “Agents
First for Service” campaign that the company We want the call center reps who are trained to deal
unsuccessfully launched about 18 months ago. with agents to be the ones talking to them. We don't
want Direct reps or even Drive reps who aren't agent-
Keith Vickers put the pieces of the puzzle together for ready to get an agent on the line (agent contact team
us in the following response … reps get more training and have more experience than
Thank you so much for contacting me. Let me do reps who only deal with consumers)
address both issues: Continued on page 21
FYI EXPRESS Page 20 October, 2006
More “News, Satire & Opinions for Independent Agents from Independent Agents” at www.fyigeorgiaviews.com
Is this the party to whom I am speaking? We will also pay close attention to the economics, to
make sure the conversion rate of quotes turned into
Continued from page 20 sales is high enough to justify the expense of pre-filling
Second, where the agent started a quote in the fields from vendor databases.
Progressive Direct and saw that the vehicle screens Again, thank you for giving me a chance to respond.
were "pre-filled": Please feel free to call me if you have any questions.
We are going to be piloting pre-fill in 4 states starting Keith Vickers
in November of this year. We will be pre-filling vehicle
information into our agents' ForAgentsOnly.com rating GA/SC/NC Regional Sales Manager
software. During the pilot, we will test to make sure the 1-800-274-4055, ext 54394 / 770-690-6213 local
"pre-fill" feature works well within agency offices.
kvickers@driveinsurance.com
Editor’s note:
Some important questions to
ask:
Should Progressive have
disclosed this?
Is this really two companies?
Does it matter that a company
phone rep can do both?
Is it these same types of
annoying things that continue to
cause immense distrust with
Progressive?
If a Drive customer has a
previous association with their
phone system but calls in for a
Direct quote, how is that handled?
Would the Direct rep provide a
competing quote? Would the
phone system route the call and
identify it as an agency customer?
If a Drive customer never called
in to the Progressive phone system
and therefore had no association to
identify, would they be routed to
Direct or Drive?
If a Drive customer that never
called in to the Progressive phone
system and therefore had no
association to identify called in to
Direct to be rewritten due to a non
pay cancellation after the agents
business hours how would that call
e handled?
These are the collective
thoughts of the “Movers & Shakers.
Tell us about yours.
My e-mail address is
eddieemmett@alltel.net.
FYI EXPRESS Page 21 October, 2006
More “News, Satire & Opinions for Independent Agents from Independent Agents” at www.fyigeorgiaviews.com
We have quite a number of
contracts in our office, and
we've had inquiries from a
couple of agencies that would
like to write business through
us, mostly commercial. The
concern we have is the
"brokering" clause in most
contracts. There must be a
way that these agencies are
getting past that, but I'm not
sure how.
I thought that you might
have come in contact with this
over the years and have some
idea of how these
arrangements are put
together. Any ideas?
We would like to help
some of these other agents,
and increase our volume as
well, but we have E&O
questions as well as the
legalities. Any input would be
good.
Thanks.
David W. Cook, LUTCF,
CIC
Good morning, David.
I've seen many such
arrangements over the years
and all of them fall apart
whenever there's a question
of contractual liability and / or
ownership.
All you have is a lot of
finger-pointing.
Most agency - company
agreements prohibit brokering
business. Many E&O policies
do not automatically cover
Share & Share Alike such activities.
Eddie, I’ll share your question with the "Movers & Shakers".
They may have found one that actually works as
Here’s a quick question. I know that there are several intended!
agencies out there that have "working arrangements"
with each other wherein they "share" contracts. My Eke
understanding is that, in some of them, they have an Opinions from “Movers & Shakers” on
agreement that, after a certain number of years, the page 23
person running the agency can then buy out the other
agency and go off on their own. Join GIAA NOW!
FYI EXPRESS Page 22 October, 2006
More “News, Satire & Opinions for Independent Agents from Independent Agents” at www.fyigeorgiaviews.com
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Share & Share Alike (continued)
Eddie, 1. Make sure his current E & O policy covers
wholesaling activities. If not, some may endorse those
I understand that most agreements described are activities for an additional premium. Otherwise, he might
basically handshake agreements where the principal have to look for another carrier (we, of course, could
holding the contract advises their carrier that said help out with that).
principal has some sort of ownership stake with the
newly contracted sub producer. As such, the principal 2. Mandate that all producing agencies carry their
holds all rights to the expirations, liabilities for E&O, and own E & O (and that those policies cover the business
usually the owner keeps and enjoys all profit bonus’s, if being written).
any. The producer is hoping in good faith that at some 3. Due diligence on the agents he plans to work with.
agreed appointed time, if any, they may obtain their own Make sure they are knowledgeable & professional.
contract and purchase the book of business they
produced for the principal contract for a fee from the 4. Make sure the companies he plans to write with
principal. allow sub-producers (some agencies that wholesale
some business don't do this because it's very difficult for
Sounds shaky huh? However, this is exactly how I the company to find out, but it's the ethical thing to
got my start 6 years ago and this crazy scheme worked. do....and if there ever is a problem, the company cannot
Chris Beeler "escape" liability by stating that they didn't know about
the relationship).
Eddie,
Hope this helps.
You may want to let David know that if the primary
concern is E & O liability, he cannot escape that. He can Kind Regards,
(and very well may) be "dragged" into a suit as a 3rd Javier Naranjo, Vice President
party whether or not they committed a wrongful act. I
see this many times with the wholesalers & MGA's that Key Accounts
we write. Whenever you act as a wholesaler, there is Modern Insurance Consultants, Inc.
always tangential liability--meaning that their producer's
exposure "meshes" with theirs because they are part of 1348 Old Dixie Highway
the insurance transaction chain. This is why Homestead, FL 33030
wholesalers/brokers/MGA's are harder to place and
generally pay more premium than retail agencies. PH: 305.248.9495
That being said, it can be a good idea in order to FAX: 305.248.9496
increase commissions. But he has to safeguard his
www.modernins.com
agency as much as possible. Some suggestions are:
FYI EXPRESS Page 23 October, 2006
More “News, Satire & Opinions for Independent Agents from Independent Agents” at www.fyigeorgiaviews.com
GEORGIA AGENTS!
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Canton, GA 30114
Eddie K. Emmett, Publisher / Editor
eddieemmett@alltel.net
www.fyigeorgiaviews.com
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FYI EXPRESS Page 24 October, 2006
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