the oregon agent, fall 2012

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Untitled-2 1 3/12/2012 11:22:37 AM

Fall 2012 • The Oregon Agent 3

IIABO Office5550 SW Macadam Suite 305

Portland, OR 97239Phone: 503-274-4000Fax: 503-274-0062

Toll Free: 866-774-4226

IIABO Staff DirectoryExecutive Vice President

Jim [email protected]

Vice PresidentMarketing & Communications

Barb [email protected]

Assistant Vice PresidentEducation & Finance

Tyra [email protected]

DirectorAgency Products & Services

Abby [email protected]

IIABO LobbyistRoger Beyer

[email protected]

For more information on advertising,contact Jim Aitkins

Blue Water Publishers22727 - 161st Avenue SE

Monroe, WA 98272360-805-6474 fax: [email protected]

The Oregon Agent is the official magazine of the Independent Insurance Agents and Brokers of Oregon

and is published four times yearly. IIABO does not necessarily endorse any of the companies advertising in

this publication or the views of its writers.

FALL 2012

INSIDE THIS ISSUE:

THANK YOU ADVERTISERS:

6 Letter from the President

8 IIABO 2012-2013 Leadership

10 “Bring Your Own Device” Opportunities and Risks

14 Negotiating the Sale

16 IIABO 84th Annual Convention & Trade Show Photo Recap

18 The Asset Protection Model

25 2012 Trusted Choice® Big “I” National Golf Championship

26 Agency Strategies to Send & Receive Personal Data Securely

29 The Reality of Texting for Insurance Agencies

AAA 13

Agency Software 21

Astonish Results 31

Burns & Wilcox 9

Capital Insurance Group 25

CharityFirst Insurance 11

Cooper Construction Co. 23

Grange Inc. 5

Griffin Underwriting 2

Hull & Company, Inc. 23

IES 7

Imperial PFS 28

J. R. Johnson 19

Liberty Northwest 32

Preferred Property Program 21

Ron Rothert Insurance Services 15

Superior Underwriters 15

TAPCO 23

Western National Ins Group 3

Winery Pak 19

4 The Oregon Agent • Fall 2012

It is a great honor to be elected to a second consecutive term as IIABO President. One year in the office leaves much yet to understand and to accomplish.

Before commenting on the future, I would be remiss if I didn’t reflect on the recent 84th Annual Convention, “GET HIGH WITH THE BIG I”. Jon Schallert’s two workshops were among the very best I have ever attended. They were absolutely packed and brought value to agents, exhibitors and company partners alike. Monday night, the comedy and impressions of Jason Hewlett left all in stitches. He was the perfect entertainment for young and old alike.

We are also very excited about the Consumer Agent Portal (CAP). We learned much more about CAP from IIABA National Chairman Mike Donohoe and the CAP team of Paul Banuski and Marty Agather.

As always, the IIABO staff did a remarkable job of creating a great program and making it run “effortlessly”.

As to the next year of my term, I am committed to find ways to get younger agents more involved in the association. The IIABO board has discussed this issue and we have been in conversations with several company partners. It is critical that we develop the next generation of producers who will evolve into the owners and managers of the future. Activities will be planned that will help make them better at sales, communications, loss control and management.

This is a great business, and we perform services critical to industry and commerce. Our products provide the indemnity and resources to rebuild both property and lives after a loss. We should be proud of what we do and strive to communicate how insurance serves and facilitates commerce.

I’m looking forward to the next year. I’d love to hear from you. Tell me how we can build a better association and bring more value to our members. If you would like to get involved please give me a call.

Your association staff:

Executive VP Jim Perucca 503-274-0583 [email protected] & Communications Barb Demings 503-274-4000 ext. 26 [email protected] & Finance Tyra Dressel 503-274-4000 ext. 31 [email protected] & Services Abby Kahl 503-274-4000 ext. 23 [email protected]

Toll Free Numbers: 1-866-77-IIABO or 1-866-774-4226

FROM THE PRESIDENT

Gary GithensBeecher Carlson541-749-4954

Gary Githens


20Years

. . . . . . .

7

Ryan MillerFinance Chair

Miller InsuranceTualatin

Brian WilburNational Director

Pacific Insurance PartnersForest Grove

Steve WilsonVice President/Education Chair

Ashland Insurance, Inc.Ashland

Keith BlackerbyBoard Member

Bisnett Insurance, Inc.Lake Oswego

Steve FitzwalterBoard Member

Rogers, Fitzwalter & PowellPortland

2012 - 2013 IIABO LEADERSHIP

Bradd HillBoard Member

Chet Hill InsurancePortland

Trish FulwilerBoard Member

J.D. Fulwiler & Co.Portland

John TimmBoard Member

Timmco Insurance, Inc.Portland

Tom BeLuskoImmediate Past President

Waltz, Sheridan, CrawfordForest Grove

Debbie KrambealBoard Member

CAL/OR Insurance Specialists, Inc.Harbor

Jim GingerBoard Member

KPD Insurance, Inc.Springfield

Gary GithensPresident

Beecher CarlsonBend

Adam HarrisBoard Member

LaPorte & Associates, Inc.Portland

Ed DavisBoard Member/Legislative ChairMaPS Insurance Services, LLC

Salem

Brett SlaterBoard Member

Slater & Assoc. Insurance, Inc.Tualatin

Matthew PidcockBoard Member

Valley InsuranceLaGrande

Greg HornerBoard MemberUSI Northwest

Portland


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What Is BYOD? Many workers today expect the companies they work

for to allow them to use their personal mobile devices and personal computers at the office, and/or to provide remote connectivity to the office via personal devices. Technologists dub this trend “BYOD” (bring your own device).

Why is BYOD Important? Mobile devices — along with their applications and on-the-go

Internet access — provide attractive options for speed, connectivity and productivity. Many people wouldn’t think of spending their work-day without a Blackberry, iPhone, Android, iPad or other device to access company systems and data. Most important, senior managers want to use these devices and are using their organization’s technology more because of them.

Many employees see their own personal devices as superior to those pro-vided by their employers. Employees also tend to believe they are more productive if allowed to use their own devices for work and data syncing between office and home.

By Danielle JohnsonDirector of IT, InsurBanc

“Bring Your Own Device”Opportunities & Risks

The opportunities of BYOD are present

— and here to stay. As an analogy, home

security is more complex for a bigger

house with more entrances and windows.

So too is systems security more compli-

cated as smartphones and other remote

devices present new entry points to be

analyzed and protected.


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Thus, BYOD is significant because employee-owned devices are now accessing company systems and being used for work purposes presenting security and privacy concerns to the employer.

Employers see the inherent value in a more mobile, more connected and more productive workforce. Many employees and managers have no problem connecting and addressing work issues after hours and/or on the weekends. It can be considered a motivational strategy.

What Are the Security Risks? BYOD mobility offers access to enterprise data, systems

and corporate email. Employees can store and process data and connect to networks.

While BYOD may be considered necessary and con-venient, this type of connectivity can raise significant data security and privacy concerns which lead to potential legal and liability risks.

Consider: 1. The device gets lost or stolen with access to company data

and systems. 2. The device contracts a virus or has malware installed that

can obtain company logins and data from that device. 3. The personal device user — however good his/her in-

tentions are — can in effect be circumventing company security standards.

4. The company cannot control the use of the personal device should the employee allow children or friends to use the device.

5. The employee may use the device to place files in personal applications in the cloud which may not be secure.

6. The employee plugs a mobile device into the USB port of his or her office computer thereby transmitting a virus to the office desktop.

Here are some facts to consider when trying to balance personal device access with security:

Employees don’t perceive the risk. Many employees perceive the use of their own devices at work as placing no extra burden on technical support. But dealing with any data or system secu-rity issue requires know-how and technical resources.

Executives perceive the risk, but aren’t fully ready. In August of 2011, a Deloitte webcast poll of more than 1,000 U.S. information technology and business executives found that 28 percent of respondents believe there are unauthorized personal digital assistants (PDAs) and/or tablets connecting to company systems, especially to email servers. About 87 percent of respondents think their systems are at risk for a cyber attack originating from a mobile security lapse, the poll reported.

The same poll found 40 percent of respondents are

unaware of whether their organiza-tions have strategies or controls to enforce mobile security. Further, it found that only 24 percent of respondents believe that “all de-vices connecting to my intranet are authorized.” Only 17 percent reported that they monitor for rogue connections.

Malware is on the move. Malware that targets mobile devices is increasing, report-ed IBM Security Solutions researchers in a fall 2011 whitepaper. Citing an IBM security research report, the whitepaper presented statistics showing that mobile operat-ing systems vulnerabilities tripled from 60 to a projected 180+ from 2009 to 2011.

Enterprise systems and mobile systems are catching up with each other. While many corporations have for years allowed Blackberry-based access to email and other company systems, users are now demanding that iPhone/Android-based smart-phones and tablet computers be provided access to these same services.

How do you proceed once BYOD is determined necessary? Since there are risks to the mingling of personal devices and work systems, companies must take the lead in assessing and managing the risks so as to safeguard their systems and data. Some simple steps include:

1. Institute a strong written BYOD Policy that is consistent with the organization’s Employee Handbook policies such as the IT Policy and Acceptable Use Policy.

2. Determine which data to protect. 3. Define what devices will be supported. 4. Determine which employees need remote access via per-

sonal devices. Do not open BYOD participation beyond those employees that have a strong business reason for mobile access.

5. Define security requirements. 6. Train and educate employees concerning policy and BYOD

use. 7. Monitor employee mobile devices for compliance with

your organization’s policy. 8. Secure employee’s authorization to “wipe” the employee’s

mobile device remotely (restore to the original factory state), as a condition of giving access to any of the busi-ness’s systems.


9. Place controls over access to and use of the company’s wireless internet. For example: do not broadcast your wire-less SSID, restrict access to employees only using MAC address filtering in the router and invoke WPA 2 on the router.

Security Solutions 1. If an enterprise is allowing employees to use their own

mobile devices, the following security measures should be implemented.

2. Require strong phone startup PIN which is at least 6 – 8 characters long. If not supported, use the maximum al-lowed. Reduce the PIN required timeout setting to no longer than 10 minutes.

3. Require specified encryption and anti-malware software on each device.

4. Require and install mobile tracking software/applications which allow online access to track the location of a lost/stolen phone and the ability to perform a lock/scream and/or remote data wipe. Secure employee’s authorization to take these actions on the device if the device is misplaced, lost or stolen, as a condition to giving the employee access to the business’s systems and data.

5. Do not allow “broken”/”rooted”/“jailbroken” devices on your network. These phones have removed limitations in-stalled on the phone by the carrier allowing the user to run apps and files not approved by carriers. This process opens the device up to security risks.

6. Large enterprises monitoring multiple devices and plat-forms should consider Mobile Device Management (MDM) software. MDM software centrally controls and protects the data and configuration settings for all mobile devices in the network. MDM can also provide a secure document delivery platform and end to end data transmis-sion encryption.

The opportunities of BYOD are present — and here to stay. As an analogy, home security is more complex for a bigger house with more entrances and windows. So too is systems security more complicated as smartphones and other remote devices present new entry points to be analyzed and protected.

All of the security tips presented here are simply guidelines to aid agencies in diminishing security and privacy risks and managing them. However, none can be guaranteed 100% effec-tive.

Danielle Johnson is the VP, Director of Information Technology at InsurBanc, which IIABA and the W.R. Berkley Corporation established to assist independent agencies with their specific banking needs. This article reflects the views of the author and should not be construed as an official statement by ACT.

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A sale is made at the conclusion of a successful negotia-tion. Buying a car is also a negotiation. Deciding with your spouse on vacation plans is also a negotiation. As a matter a fact, everything we do in life is done through

negotiations. More importantly, everything that you want is in the control of others. In order to fulfill your wants or needs, you must somehow get other people to accept or modify your desires.

The critical elements in every sale negotiation are: (1) the time element, (2) the knowledge (or information) element, and (3) the power element. Besides these three elements, the key to a successful sale is the meshing of the personality types of the buyer and seller. You may have the best product in the world at the lowest price but, if the buyer hates you or if you dislike the buyer, you probably won’t make the sale.

In the sales process, the customer will normally try to exert his POWER, require you to work under his TIME constraints, and LIMIT the information to the minimum required in order to accom-plish his goal. Your goal, on the other hand, is to gain as much infor-mation about the client as possible, assure yourself sufficient time to go the job done comfortably and professionally, and to balance the power between you and the buyer so that you both treat each other as professionals in a “win/win” scenario.

In order to achieve a win/win scenario, you must never permit your negotiations to narrow to just one issue (i.e., price). Of course, cost is always a prime consideration of every insurance buying cus-tomer. However, the chances are that he/she has not gone to market solely because of the cost. Your job is to uncover the other issues that have caused the buyer to seek or accept alternative proposals. Some buyers are actually looking for you to hit their “hot buttons” without them bringing them up. However unless we have crystal balls or extremely good luck, we are better off delving to uncover all potential issues before proposing solutions.

The second requirement of a win/win scenario is your under-standing that different customers want different things. Too many insurance sales people have a single sales methodology that they try to fit in every situation. You must change your sales scenarios to fit the personality of the customer. Finally, price is important, but not all-important...if you accept the premise that the only thing a customer is looking for is price, then we don’t need a salesman do we?! All we need to do is offer a quote machine like many term life

insurance agents have done recently.The three stages of negotiating a sale are:1. Understanding your prospect’s desires.2. Gathering sufficient information to respond to the cus-

tomer’s need.3. Solving the customer’s problem in a way comfortable to

him.

Understanding Your Prospect. Learning your prospect’s desires involves asking open ended questions and keeping your mouth shut -- listen to your customer. Believe it or not, the customer will tell you all of his problems and their solutions if you ask properly and listen rather than speak. Your goal in this section of the negotiation is simply to find out what he wants until you are satisfied that you now understand all of his desires (not just the most important one).

Gathering Sufficient Information. Many of us gather insurance data mechanically. The use of survey forms is a good idea but should only be the jumping off place, not the “Bible” of information. In the search for information you should think like an underwriter. If you have not gathered sufficient data to make an underwriter comfort-able with the risk and the pricing, gather more data. Open ended questions work well here to identify what the incumbent and any competition has suggested as solutions to the customers problems. Write a lot, speak a little.

Solving the Problem. The final part of the negotiation is the delivery of your offer of solutions to the customer’s problems. The information that you have gathered should give you sufficient data to formulate a proposal and quote. However, the information that you have written about your customer’s desires (not his needs) should give you all of the ammunition you need to formulate your proposal in a user-friendly way to respond to your customer’s personal desires in a way acceptable to him.

If you follow these rules of negotiating a sale, and do so diligently, you will find your hit rate rising, and your retention rate based on a relationship that you build with your customers, rather than on price alone.

Copyright 1996-2011 by Agency Consulting Group, Inc. Used with permission.

Negotiating the Sale For many years we have criticized the common practice of price quoting as the insurance agent’s primary sales method. Price is certainly important. But it’s rarely the only issue facing insurance customers and, while it is the easiest issue to address, there are often more important triggers to buying decisions than price. This article discusses means to negotiate the sale other than price.

By Al Diamond

IIABO 84th Annual Convention & Trade ShowSunriver Resort, Sunriver, ORAugust 26 – August 28, 2012

“GET HIGH WITH THE BIG ‘I’”

Keith Blackerby; and Adam Harris Tyra Dressel; Sheryl Holland; and Jim Perucca

Mike Donohoe, Chairman IIABA

Sunday Balloon Fest Party

Sunday Balloon Fest Party Ann & John Timm; and Barb Casey

John Schallert Workshop

Monday Banquet

“I just opened my agency and found the information I gained at the con-ference to be invaluable. I was able to gather information in just one day that normally takes weeks.”

Linda DuganLinda Dugan Insurance

“I was very impressed with the content of the classes and how well attended the convention was. I will most certainly be back next year. I felt it was a good investment of time and money. ”

Jason Jordan, Ross & Associates Insurance Services, Inc.

“I was curious how the event would turn out without CE. Very pleasantly surprised! Jon Schallert is an excel-lent speaker and the information was great! He made being creative sound “doable”!”

Pat Morrill, SAIF Corporation

“Very impressed with this great group of agents and the IIABO organization. Feels good to see a group of profes-sionals getting together and doing some forward thinking for their industry, instead of sitting around just waiting and hoping for a shift in the market. Keep up the good work!”

Darren EversoleIndemnity Excess & Surplus Agency

“Year after year, the staff of the IIABO continue to do an outstanding job showing appreciation to sponsors and exhibitors!”

Cindy Brunner, Imperial PFS

“Great marketing and networking event….and, I learned a lot!”

John Cowdrey, JC4 Incorporated


IES - Jeremy Reedal; and Darren Eversole

Brian Pargeter; Jim & Pat Ginger; and Penny Pargeter

Frank Lemma; Neen & Steve Fitzwater; and Ed Davis

Barb Demings; Jim Perucca; and Tyra Dressel

Rick & Diane Holland

Lance & Jacki Adams; and Chris Greig

Adam & Emily Rothert; and Jan & Mark Rothert

Sunday Balloon Fest Party

Out to Pasture Sanctuary Raffle

Exhibit Hall

“This conference is one of the most cost-effective opportunities we have to take the pulse of what’s happen-ing for independent agents and the companies and vendors that serve them. And it’s a lot of fun!.”

Charles Anderson, MULTICO

“The convention is a great oppor-tunity to experience face to face conversations with many individuals and companies associated with our industry.!”

Jim Ruiz, Miller Insurance

“If you’re an agency owner con-cerned about the future, legislative issues, growth of the independent agency system as well as your agency, you don’t want to miss an IIABO convention!”

John ForsythField Waldo Insurance, Inc.

“Anyone who missed the IIABO convention presentations by Jon Schallert has a lot of catching up to do. Those of us who stayed indoors at Sunriver have a leg up on our competitors and are already trans-forming our agencies into destination businesses.”

John Timm, Timmco Insurance



We experienced a huge “surge” of contacts after our recent “DO YOU WANT FRIES WITH THAT” article discussing the cross-selling aspect

of the Asset Protection Model. Both e-mails and calls requested more information about the APM and how it works. Of course, APM agencies have already put these principals into action and are converting new clients at a rate that they never imagined before. But so many agents still don’t know the concept that we decided to release our FAQ (Frequently Asked Questions) to provide the thousands of readers a fuller insight into our Relationship Selling Model that acquires clients instead of selling insurance.

PRELUDE What We SAY Is Not What They Hear!! – “Fuged-

aboudid” Does Not Mean, “Forget About It!”When we “preach” relationship-driven instead

of price-driven client acquisitions many agents hear us say that price should not be important or relevant to a client. WE KNOW THAT ALL CLIENTS ARE CONCERNED WITH PRICE AND, FOR MANY, IT IS THEIR PRIMARY CONCERN!! We (you and I) are like that, too! We don’t like to overpay for anything and we seek price breaks without giving up quality in all of the products and services that we purchase. However, for whatever reasons (there are thousands), we do not buy the least expensive cars, clothes, or food. Other

The

The Asset Protection Model (APM) is a radical change in agency operations and relationships with both current and prospective clients. It converts agencies from price-driven quote machines always trying to ‘get it cheaper’ as a method of gaining clients to relationship-driven businesses becoming true consultants to their clients, whether the APM agency writes the insurance account or not.

By Al Diamond

AssetProtection

Model


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things enter into our buying decisions regarding those things that we feel are important in our lives. I have never heard a friend boasting about going to the cheapest surgeon to have his procedure done, have you??

Why, then, do agents be-lieve that price is the only con-sideration in clients’ insurance buying decision? Because it is a convenient excuse for not controlling a client relation-ship!! If price is the ONLY consideration, then we cannot blame our lack of relationship (lack of value added services that make our relationship with a client strong) for clients leaving us for our competitor. If price is the ONLY consideration, it supports our efforts to quote everything with everyone every year seeking the lowest price (and assuming that the lowest price will win).

Our study of insurance agencies over the last 30 years has proven that the greatest relationship builders have the most loyal clients and that those clients will stay with the agent even if the price is a little higher than that of the competition. These are the clients that may use other agents who offer quotes, but will go back to where their loyalty lies to get their insur-ance coverage. These are the clients that we want for our own agency/clients.

So we developed a Relationship Selling process that ac-knowledges that most insurance products are generic, that pric-ing is transitory (sometimes a little higher, sometimes a little lower than competitors) and that the most important things that an agency can bring to its clients are a combination of profes-sional attention to insurance programs and other value-added services that other agents can’t provide.

Our Asset Protection Model also recognizes that commer-cial exposure is only one (and sometimes not the greatest) of the client’s assets that need protection. Others, while, perhaps not as important or generating as much premium, are as critical to the client as their commercial protection. We all have a fa-vorite story about the crisis reaction of an important client to an uninsured (or underinsured) loss of relatively minor proportion (compared to the value of his business). So a part of the APM is the mandatory review of every insurable (and many uninsur-able) client assets.

FREQUENTLY ASKED QUESTIONSWhat Is It?

The Asset Protection Model (APM) is a radical change in agency operations and relationships with both current and

prospective clients. It converts agencies from price-driven quote machines always trying to ‘get it cheaper’ as a method

of gaining clients to relationship driven businesses becoming true consultants to the clients, whether the APM agency writes the insurance account or not.

How Is the APM Different from the traditional agency?

The APM will make you differ-ent than most of the

other agencies (and direct writers) in the U.S. The most visible change is the elimination of quoting. Agents who claim that price is the only objective of the insurance customer are not candidates for the APM. The next most prevalent change is the increased level of activity and dedication of producers. Every producer must be dedicated to establishing and maintaining relationships with clients and prospects. Successes are defined by the conduct (and resultant documentation) of sales calls with prospects and clients, each delivering value-added services most of which are not even available from competitor agencies. Ten to twenty sales calls each week is not unusual for APM producers. Clients and prospects are visited at least four times each year (or as often as they desire agency services). Produc-ers do NOT service or market accounts --- they are dedicated to relationship building and maintenance (the strength of most good producers).

Is the APM a Quick Fix to my production problems?NO, the APM is NOT the magic bullet that will give you

immediate results – it takes training, hard work and commit-ment. If you have “RIP” (Retired In Place) producers, they will not easily convert to a results-based, activity-required system like the APM.

Like any behavior modification (i.e. changing eating habits for life to reduce weight and mass), APM changes that are made slowly and in a disciplined manner will last while changes that are made fast will fail. The measuring stick of success of the APM is the number of sales calls that are made weekly and the development of relationships from those sales calls (as docu-mented by Call Reports and the enriched Prospect and Cus-tomer Relationship Data Bank). Whether used for one producer or for an entire agency, the extraordinary success of the APM will not be fully reflected for as much as three years (although client conversions will be made during the first year, as well).

Our study of insurance agencies over the last 30 years has proven that the greatest relationship builders have the most loyal clients and that those clients will stay with the agent even if the price is a little higher than that of the competition. These are the clients that may use other agents who offer quotes, but will go back to where their loyalty lies to get their insurance coverage. These are the clients that we want for our own agency/clients.


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The agency must stand ready to support its producers (if they are doing the right things consistently) for that period of time before the steady flow of successes become prevalent.

THE ASSET PROTECTION MODEL AND RELATIONSHIP SELLING

Relationship Selling is a misnomer. The word “selling” should not be in the title. A better title would be Relationship Acquisitions defining how the agency is to acquire new clients through the evolution of strong relationships until the client, himself, insists that the agency become his representative for insurance programs.

We already know that agencies’ best customers are ones with whom the owner (or producer) has developed strong business relationships. Every agent tells us of clients who trust the agency so much that they don’t go “shopping” for insur-ance every year. They simply count on their insurance profes-sional to do the “right” job for the client. Unfortunately, most clients don’t fall into that category of “strong relationships”. The rest of the clients have chosen the agency because they brought them a better price for the insurance product. And, un-less a relationship is built after the sale, they tend to shop and potentially leave the agency when a still better priced product becomes available.

The APM avoids the purely price-driven client in favor of the clients (of other agents) who are very loyal and resist any other agent (including our own) competing with their insurance agents. The APM prom-ises to deliver value added services including analysis of all insurance risk to assets, but to neither quote nor accept the prospect as a cli-ent until the clients understands the difference between the incumbent and the APM agency.

The APM training teaches producers how to establish relationship and avoid price-com-petition. Simultaneously, it teaches service staff how to support relationships by word and deed, no longer acting as highly paid message takers for the producers and owners. The APM rewards the producers with strong commissions. But it also rewards service and administrative staff with incentive compensa-tion built on their assumption of full control of the service load for their book of business.

THE ASSET PROTECTION MODEL AND CROSS-ANALYSIS OF ALL INSURABLE RISK

When we train APM to producers and to agency staff we stress that the goal of the agency is to MAKE SURE THAT THE CLI-

ENT’S ASSETS ARE PROTECTED, not to sell them insur-ance. Once you allay the client’s suspicion of your analysis (by assuring them that you will neither quote nor write the client’s insurance account unless the client asks you to become their agent) the client is much more open to the analysis and you can praise good insurance programs as well as critique coverage issues. Of course, you actually have to mean what you say – don’t quote their insurance. If you reverse yourself, then they consider you “just another insurance agent trying to sell me something”.

Asset Protection is not a matter of one line of insurance. So, regardless of the results of your initial analysis, if you’ve properly explained the uniqueness of APM and your agency, you will establish a follow-up appointment to review the next form of asset evaluation (personal lines, long term care, life insurance, health insurance….) with yourself or with the most logical person in the agency to accomplish this. The second evaluation is followed by as many as needed to assure you that you have reviewed, analyzed and made recommendations for all of the client’s insurable assets. If the client refuses, that’s fine. You’ve made the attempt and you so note in your file. But you will continue to offer because without full access to all assets for review YOU CAN’T PERFORM THE EXPANDED VALUE-ADDED SERVICE OF AN APM AGENT for that client.


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THE ASSET PROTECTION MODEL AND ANALYSIS OF NON-INSURABLE RISK

As insurance agents, we have naturally become fixated on “insurable” risks. However, many clients have un-insurable risks to their assets associated with their businesses or with their personal life. While we do not make a fee or commission for identifying and assisting in the protection against uninsur-able risks, it is a class of risk that needs to be addressed and, in most cases, is woefully lacking among most business owners. For instance government regulation requires adherence to fed-eral standards for business owners. Most small business owners either aren’t aware of the regulations at all or know what acro-nyms like FMLA, FLSA, EEOC, ADA and IRCA stand for but don’t know how to adhere to them. APM agents are taught the details of these important regulations to the employers and can audit and correct manuals and procedures to help clients avoid a myriad of fines and penalties from the government and lawsuits from unhappy employees. Other loss control, employee benefits and safety modules exist to further add value to your associa-tion with client companies.

THE ASSET PROTECTION MODEL AND PRODUCER TRAINING

Even our best producers have grown up in our industry as price-quoters. “Let us give you a quote” is a great incentive for the prospect to interact with the agency, but in most cases (aver-age agency hit rate on quotes is now 12%) a very poor way of spending agency time and money. The APM concentrates on re-training producers into ways of establishing and strengthen-ing relationships without EVER talking about quoting and, in fact, refusing to write a prospects insurance until and unless the client desires the agency to be their insurance consultant for all lines. Even if the customer thinks he’s doing us a favor by allowing us to write one line, he is diminishing our position as his APM consultant if we become “another” of his agents. Similarly, we refuse to quote one or a few carriers against other agents because it brings us down to their level of competition. We would rather evaluate those proposals and counsel the cli-ent toward the best of the group. In that way we become the “trusted advisor” and will eventually acquire all of the client’s insurance program.

THE ASSET PROTECTION MODEL AND PRODUCER COMPENSATION

Producers continue to be compensated based on the rev-enue base for which they are responsible. The APM only works if the result is strong enough relationships to assume permanent control of client’s insurance programs. However, a producer’s compensation in the APM model is more stable (a monthly compensation based on the commission size of the producer’s book of business in the last year) and is sensitive to growth

(providing bonuses during the year in which sales are made) and level of sales call activity.

Sales Call Activity as a baseline for compensation is unique to the APM and assumes that if relationships are created and strengthened through visits several times each year, that the results will be new clients from those relationships as they mature. Every relationship matures in its own time. We know it is “ripe” when it ‘falls from the tree’ – the prospect asks us to become his agent. If we try to pick the fruit before it’s ripe it will not provide the taste and nutrients we expect and there’s no way to re-hang the fruit on the tree. So we continue to build the relationships and document the growth until it ripens on its own.

The APM has a unique feature that is a Self-Terminating Producer Agreement if a producer does not follow through with the relationship building as directed. A relationship not pursued will quickly spoil and be useless. It must be pursued and nur-tured at least four times each year to mature properly. If the ac-tivity levels are not maintained, the producer acknowledges that he is less likely to convert that client and will find his monthly compensation reduced. He can certainly regain his compensa-tion position by a resurgence of contacts (we are not interested in reducing compensation unnecessarily). This compensation adjustment is in recognition that only the producer, himself/herself can motivate themselves to be active. If they are not ac-tive enough to mature the prospects into clients, they should not expect to be paid based on the expectation of a high percentage of conversions.

THE ASSET PROTECTION MODEL AND PRODUCER MANAGEMENT

Producers are not to be treated like children, having to ac-count for every moment of the day. Their activity reports will tell the agency how effectively he has spent his time. Every sales call must generate a Call Report that is used simultane-ously as a tickler for future events for that prospect and to build the prospect file with intelligence about the account. Producer compensation is dependent upon the delivery of Call Reports on every physical sales call and a Monthly Activity Report that will determine whether the sales call volume is sufficient to justify his salary or draw.

A Warboard is developed for each producer listing all developing relationships and where each stands in terms of services provided to show them our added value as an agent.

Copyright 2007 by Agency Consulting Group, Inc. Used with permission.


The 44th Annual Trusted Choice® Big “I” National Championship, presented by Texas Mutual, took place at the University of Texas Golf Club the first week of August and is renowned as the nation’s

largest junior stroke-play golf tournament. This year’s field featured top junior golfers, ages 13-18,

from 38 states who advanced from qualifying tournaments held around the nation. The boys played to a par 71 at 7,031 yards and a course rating of 75.0. The girls played at 6,098 yards with a par of 72 and a course rating of 76.3.

Previous participants have included Tiger Woods, Phil Mickelson, Webb Simpson, Jonathan Byrd, Hunter Mahan, Kevin Na, Cristie Kerr, Cheyenne Woods and Grace Park.

This year, Oregon saw two boys and one girl qualify to go back to the National Tournament in Austin, Texas, Daniel Badaracco from Clackamas, Ethan Zickel from Hillsboro and Abby Brennan from Eugene. They all had such an amazing time with their host families, great competition and created new friendships from other players across the country.

We would like to thank our four corporate sponsors for their continued support through the years; Liberty NW, Safeco Insurance, Capital Insurance Group and Mutual of Enumclaw. Without their help, we would be unable to support our champions at the national tournament each year. Please thank your local representative from each of these companies when you visit with them again.

The 45th Annual Trusted Choice Big “I” National Championship will take place at the Country Club of North Carolina the first week in August of 2013. If you would like to learn more about this great event, go to www.bigigolf.com.

Mike EvesCommittee Chair,

IIABA Trusted Choice Big “I” Junior Golf ClassicUnified Insurance Group, Corvallis, OR

2012 Trusted Choice Big “I” National Golf

Championship

The Internet and mobility revolutions have enabled agents and their clients to live in an electronic world where the parties can work and communicate with each other from anywhere, opening up wonderful new

opportunities for agencies to reach out to new consumers and provide their clients with enhanced services and responsiveness. These developments, however, have multiplied the security risks that agencies must manage in order to protect their clients’ personal data.

It is no wonder then that E&O underwriters extending coverage for data breach to agencies increasingly are asking their applicants whether they encrypt or use other protective measures to safeguard this client personal data when it is being transmitted. This article explores approaches agencies can take to protect personal data in transit and then references a number of resources to assist agencies.

Encryption A common question agents ask is: “what is encryption?”

When you think of encryption consider those codes the military employs to keep conversations unintelligible to the enemy. You can find many definitions of encryption on the Internet, but I like this simple one from Microsoft:

Encryption is a way to enhance the security of a message or file by scrambling the contents so that it can be read only by someone who has the right encryption key to unscramble

it. For example, if you purchase something from a website, the information for the transaction (such as your address, phone number, and credit card number) is usually encrypted to help keep it safe. Use encryption when you want a strong level of protection for your information.

Requiring a strong password to gain access to your system is an important security procedure, but it is not the same as encrypting the data within the system.

Personal Data What are the types of “personal data” that are most sensitive

and need to be encrypted when transmitted? The definition of “personal data” can vary by state and is contained in the state data breach notification and privacy laws, as well as in various federal laws, such as HIPAA (PHI – Protected Health Information). Insurers, too, might employ various definitions of “personal data” in their policies, so it is incumbent upon the agency to be familiar with not only the specific laws but also the coverage definitions that apply to the agency. Note also that the applicable state law is based upon the residency of the individual whose personal data is being protected, not the location of the agency. This is an important consideration for both agencies writing business in multiple states and agencies writing policies that cover individuals who reside in multiple states.

With all of the above caveats, the most commonly mentioned types of non-public, individually identifiable

Agents are being increasingly asked by their E&O underwriters whether they encrypt their clients’ personal data when it is being transmitted. This article provides recommendations with regard to two major areas agencies need to address – secure email and securing their websites when personal data is requested. The article also discusses “encryption” and major types of “personal data” that are the subject of the various laws. Finally, the article outlines the type of resources that are available on the ACT website to help agencies address the email and website issues, as well as to develop and implement a comprehensive agency information security policy and program for their agency.

Agency Strategies to Send & Receive Personal Data Securely

By Jeff Yates



“personal data” covered in the laws are those such as: social security numbers, driver’s license numbers and other government issued ids, debit and credit card numbers and pins, bank and financial account numbers, and protected health information (PHI under HIPAA). While often not mentioned in state laws, other particularly sensitive personal data that should be protected includes information commonly used for security verification (mother’s maiden name, date & place of birth, etc.) or sensitive insurance information (such as jewelry schedules).

It is important for agencies to know what types of personal information they collect, where it is retained and who has access to it. They then need to decide whether they really need to keep this sensitive information. For example, many agencies no longer retain copies of bank checks and are careful only to pass along credit card numbers to carriers, but not to retain them, so that they do not become subject to the comprehensive PCI (Payment Card Industry) compliance requirements. These agencies are also extremely careful to shred this personal data as soon as it is no longer needed.

Further, if the agency decides it must keep particular sensitive personal data, it should limit access to it to only those employees who need to see it, to maximum extent possible. This is particularly true for Protected Health Information. Finally, the agency should be careful to make sure that this personal data is kept off of PCs, mobile devices, thumb drives, where there is a significant risk of loss or theft.

PCs & Mobile Devices Users of PCs and mobile devices should be trained to

remove any emails with personal data that may be received on these devices, as soon as they are read. In addition, the agency should audit to make sure any PCs and mobile devices that can access agency applications are password protected. Further, the agency should implement software that can wipe all of the data off of these devices should they be lost or stolen, restoring them to their original manufacturer’s state.

Secure Email Email is the first major area where agencies need to begin

to encrypt their communications to carriers and clients when personal data is included. Some prominent examples of emails likely to include personal data include: sending insurance applications to carriers for a quote or to clients to complete or to sign, and sending insurance policies to clients.

With respect to emails between agencies and carriers (and general agents), ACT recommends that TLS secure email be implemented wherever possible. TLS (Transport Layer Security) is an open standard that once implemented between an agency and a carrier (both parties must have TLS implemented), all of the emails between the partners go securely in a manner that is transparent to the end users. In other words, the agent or

carrier underwriter does not have to go to a proprietary website to pick up each email (which many underwriters will not do and is inefficient for agency employees to do). TLS is a great solution for business partners where there are frequent email communications going back and forth.

Many agencies can implement TLS if they have email servers or hosted solutions that offer TLS. We recommend that the initial TLS set up be handled by the agency’s technology person, who should also verify that the TLS is working properly with each carrier and general agent. You will find a number of resources that explain TLS secure email more thoroughly on the ACT website (see “ACT Resources” below), including a list of carriers which have advised us that they have TLS available.

Unfortunately, most agency clients will not have TLS capability and therefore, TLS is not a solution for communications with them. This will require the agency to implement a proprietary email solution as well for these clients. When the agent sends a secure email to the client using one of these proprietary solutions, the client accesses it on the email vendor’s secure website. The secure email tool also enables the client to send a secure email back to the agent, which is very helpful when the client is being asked to complete a D&O application, for example. Fortunately, there are a number of vendors which can help agencies with both TLS hosted emails and proprietary emails, as well as to provide many other useful tools. (Two examples of such vendors are AppRiver and RPost.)

Real Time Today email is used heavily to convey applications and

other information between agencies and carriers and general agents, particularly in commercial lines. It is important to note, however, that Real Time offers a more efficient and secure method to handle these communications, where the communications are automatically encrypted and kept within the agency’s and carrier’s management systems.

Agencies are heavily using Real Time for personal lines and we need to increase the usage in commercial lines. Many agencies and carriers are already using Real Time to submit commercial lines applications and make quote requests for small commercial business, and some have started to use their real-time functionality to make mid-commercial submissions.

In addition, there is great potential for the industry to use Activity Notifications to communicate other types of messages directly between the parties’ systems (such as the need for more underwriting information), without having to manage a morass of emails in employees’ mailboxes.

We urge agencies and carriers to continue to push the use of Real Time within their organizations and with their business partners, particularly for commercial lines transactions and communications. Real Time is the workflow of the future for commercial lines, as well as personal lines. Email is not.


Agency Websites It is also critical that agencies provide secure website

connections for consumers when they ask the consumer to provide personal data on the website – to receive a quote, for example. The website should create a secure “https” tunnel before the consumer can fill out any form that asks for personal data, just as you would experience when purchasing something online or banking online.

In addition, if the agency provides a “non-https” protected free-form text field which the consumer can use to contact the agency and make requests, there is some risk the consumer will enter private, personal data. Therefore, it is a best practice to take one of the following steps with regard to this free-form text field: (1) to secure it, (2) change it to specified fields that ask only for basic contact information, such as name, phone number, email, address, or (3) include a note with the free-form text field that it is not secure and should not be used to provide any private personal data.

If the agency provides clients with the capability to access their insurance information or documents online, the website should create an “https” connection before any information can be accessed. Once again, agents should work with their website provider to help them with the technical aspects of creating this secure website capability.

Some agency E&O providers also require the agency to post a privacy statement on its website(s), if there is an option for the consumer to submit personal data through the website. It is important that the agency customize its privacy statement to track the agency’s particular data collection, usage, sharing, and protection practices with regard to data collected through its website(s). Honda’s financial services website privacy statement provides a good example of the types of information that are typically included in such statements.

ACT Resources This article has covered a few of

the areas agencies must manage when protecting the security of their clients’ and employees’ personal data. ACT has developed several resources for agencies to review as they establish and implement their agency’s comprehensive information security program. All of these resources are included on the Security & Privacy page of the ACT website. These resources include a prototype agency information security policy which agencies can use as

a template to build their own customized policy or as a checklist of security issues they should address.

For more on TLS secure email, the ACT Security & Privacy page includes articles, FAQs, a recorded webinar and a list of carriers which have implemented TLS. For more on securing your website and managing potential E&O exposures arising from the website, see the article “Don’t Get Caught in the Web.”

ACT’s Security & Privacy page also includes sample website disclaimers, a recorded briefing on HIPAA-HITECH requirements for “Business Associates,” and additional articles focusing on: the E&O and security risks arising from the use of social media, precautions to take when using free, public Wi-Fi sites, and how to manage the “Bring Your Own Device” trend where employees are using their personal devices to access business applications.

Jeff Yates is Executive Director of the Agents Council for Technology (ACT) which is part of the Independent Insurance Agents & Brokers of America. Jeff can be reached at [email protected]. ACT’s website is www.iiaba.net/act. This article reflects the views of the author and should not be construed as an official statement by ACT.

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TEXTINGTEXTING

During every meeting I have attended in the last few months, there have been questions and discussions on “should an agency allow texting by its clients and staff and if so, how do we control Errors &

Omissions and documentation in our agency management system?” Empowered clients are going to communicate with agents in the manner most convenient to them, so the real issue becomes how is the agency going to manage texting if the client prefers to use it? In this article, I discuss several concerns agencies have with texting, current “best practices” for managing these communications, and the technology options for managing texts and importing them into your systems as I understand them. There may be other options and not everyone uses Microsoft Outlook. Your technology professional should be able to assist you with the details.

Agency Concerns1. If clients are texting staff members on their personal phone, a

number of issues come to my mind:a. What if your staff member is on vacation where their

phone is not functioning or they are just too busy to take care of the issue?

b. What if your staff member is ill and not able to pay attention to incoming messages on a real-time basis?

c. What if the individual is actually no longer a staff member?

d. What if the individual says they will take care of the request and does, but doesn’t document in the system and something is not correct?

I have heard more than one agency principal flatly state that they weren’t going to allow any texting. Others don’t see any way to stop people from texting but don’t know what to do with it and

how to set parameters.A number of people commented that it was seamless to

attach an email, voicemail or other documentation in their agency management system, but not so texts. Since it is difficult to manage the capture of the text information, they want to ban receiving texts. We need to remember that capturing email information in an agency management system was not always easy. Once upon a time we copied the emails and pasted them into an activity or note since we couldn’t attach anything to our agency management systems.

Through communication with the various agency management vendors from their user groups, the vendors enhanced their systems to handle email attachments. From this grew the ability to easily attach various other attachments and we hope vendors will create streamlined workflows for capturing texts as well, possibly as a part of their mobile apps. The initial attachment functions were “clunky”, but as time and technology have progressed, this function has become more streamlined.

In today’s world, texting is a reality. It is not only your young clients that are engaging in this act. Texting eliminates telephone tag, and results in an almost instant response. This is what many of us are programmed to want.

Current “Best Practices”I recommend you consider taking the following approach

with regard to texting: 1. Do you want to be relevant to your client base? If so, then

you must embrace this technology.2. Set standards and best practices. These really are no different

than handling face-to-face conversations, phone calls, emails, etc. Your standard should be that all conversations with the client or with others about the client’s account are to be

By Pat Alexander

The Reality of

For Insurance Agencies

Clients are increasingly texting their agents and preferring to receive texts from their agents, creating the challenge as to how agencies manage this form of communication. In this article, the author discusses the challenges agencies face with texting, how agents can send texts to their email to document the conversation and how agents can use their email to send texts to their clients who prefer this method of communication. We are hopeful that more efficient ways to attach texts to agency management systems and to send texts from these systems will be developed in the future.


documented in the agency management system or the system which you are using to collect client data.

3. Be pro-active and determine how to best receive texts at the agency level and educate your staff and clients.

4. If your client and someone in your agency are friends, inevitably there will be a text on a person phone. Define, train and implement the process to get this moved to an agency level as quickly as possible.

I don’t see that there is any more of an errors & omissions exposure in receiving and responding to texts than there are in phone calls, emails or face-to-face conversations. The biggest issue I believe agencies have at this time is how to make this format work for them as seamlessly as possible.

Forwarding Texts to EmailHere are some thoughts I have on this process that I have

picked up from users who have already addressed this issue:

1. As soon as the initial text is received on a personal phone, forward it to your business email address. Text a response back to the client from your business Outlook account. The client’s text response will come back into the email which will let you accumulate the stream of the conversation which can then be attached to the agency management system.

2. Some phones will allow you to capture an entire text conversation. In this case it could be acceptable that the conversation continue on that phone and then be captured and sent to the business email address for attachment into the agency management system. This would be the best approach when the conversation is just a question and answer session.

3. It is important for everyone in the agency to learn how their specific phone works for text forwarding: a. iPhone – http://iphonefaq.org/archives/97335 ; Another

approach is to take a picture of your iPhone screen when the text is showing, by pressing the on/off button on the top of the phone simultaneously with the application change button on the bottom front of the phone. This approach creates an image of the entire text message and the picture can then be emailed to your Outlook account.

b. Android Phones - Each manufacturer handles this in a different way and I find even some differences within a manufacturer between their phones. It is best to check the operating information for your specific phone for this function.

Sending Texts from EmailMicrosoft Outlook can be used as a tool to manage text

messaging with your client. There are several steps to setting up and implementing the use of Microsoft Outlook. However, like anything else that you do, if you invest the time to research, implement and train a process, the rewards will be great.

The best place to start the research is on the web at Ste

Up text messaging (SMS) in Outlook. http://office.microsoft.com/en-us/outlook-help/send-and-receive-text-messages-sms-HA101823438.aspx#_Toc261416088

Microsoft has done a really good job here of explaining the options available for using Outlook and providing lots of screen shots.

Implementing an Agency Text Address I also recommend that the agency implement a way to

receive text messages directly. I understand from my tech friends that many VoiP phone systems can have a number set up for receipt of text messages. I am also advised that this works differently with every system and that you will need to work with your phone system provider to get this set up and implemented. Once set up, someone in your agency will need to monitor this number during business hours so that the expected immediate response can be managed.

If your agency does not have a VoiP system, another option available for receiving texts at a number that you control is to set up a Google Voice number at https://www.google.com/voice . In the Settings section of your Google Voice account, you will find a place to show the email address for Text Forwarding.

When you receive these text messages, they should then be forwarded to the Outlook email address of the individual in your agency who will be handling this client. Once the number is set up, you should promote it to your clients, so that those who want to communicate in this manner can do so. When agency employees receive text messages on their phones, they should let that individual also know there is a number that is attended during business hours and would get attention even when the employee is not available.

Finally, some important points about texting to keep in mind:

1. If the client texted you, that is how they would like to communicate, so at least your initial response should be in a text.

2. If the client texted you, they expect an immediate response as that is what the common expectation is with texting.

3. Your employees should know the agency’s procedures for documenting text messages in the agency’s system, just as they would other communications from clients and business partners.

Patricia Alexander, CIC is a consultant, coach and mentor with many years of experience in retail agency and MGA settings. She may be reached at [email protected]. Alexander developed this article for the Agents Council for Technology (ACT), part of the Independent Insurance Agents & Brokers of America. ACT’s Web site is www.independentagent.com/act. This article reflects the views of the author and should not be construed as an official statement by ACT.

Independent Insurance Agents and Brokers of Oregon5550 SW Macadam, Suite 305Portland, OR 97239

PRSRT STDU.S. Postage

PAIDPermit No. 592Pontiac, Illinois

Liberty Northwest, 650 NE Holladay Street, Portland, OR 97232©2012 Liberty Mutual Insurance

www.libertynorthwest-ins.com

Liberty Northwest® has been creating insurance solutions and providing superior services for businesses in the Northwest since 1923. We know how important it is for our agents to have the right resources to support the needs of their clients, which is why we pride ourselves on strong agent relationships and act with integrity and responsibility.

Your success is our success – we are proud to support the Independent Insurance Agents & Brokers of Oregon.

LNW_Solutions_Ad_IIAB_OR.8.375x10.875_BackCover.indd 1 4/26/12 4:15 PM

the oregon agent, fall 2012

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