Ride-sharing Raises Insurance Concerns · concern, which states and localities are starting to...

Ride-sharing Raises Insurance Concerns

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PIA CONNECTIONNATIONAL ASSOCIATION OF PROFESSIONAL INSURANCE AGENTS

SEPTEMBER 2014

THE IMPORTANCE OF SALES MEETINGS

DONE AND UNDONE ON CAPITOL HILL

TEN YEARS OF PIA AND HARTFORD FLOOD

The biggest thing he’s feeling now is a

fl ood of disappointment.

In you.( )

Gary was sure this would never happen to him. After all, he didn’t live in a high risk area. Too bad. Because that flood insurance policy he turned down would have saved him tens of thousands of dollars right about now. Make sure your clients know that anywhere it rains, it can flood. For an annual policy that starts at just $129, Gary, and your reputation, could have been protected. Find out more at Agents.FloodSmart.gov/speakflood.

Agents.FloodSmart.govSpeak Flood

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PIA CONNECTION | www.pianet.com September 2014 | 3

PIA and The Hartfo

rd

Celebrate

10th Anniversary

PresidentJohn G. Lee, CIC, CPIA, LUTCF (VA/DC)[email protected]

President-ElectRichard A. Clements, CIC (LA)[email protected]

Vice President/TreasurerRobert W. Hansen, Jr., LUTCF (NE/IA)[email protected]

Secretary/Assistant TreasurerGareth W. Blackwell, Jr., CPCU (ME)[email protected]

Immediate Past PresidentAndrew C. Harris, CIC, CPCU, ARM, AIS, CRM (NJ)[email protected]

PIA National Image Committee ChairmanSue Peachey, CPIA (KS)[email protected]

Executive Vice President/CEOMike Becker (PIA National)[email protected]

Publisher/Editor-in-ChiefTed [email protected]

Managing EditorSpencer [email protected]

Advertising DirectorAlexi Papandon, [email protected]

Government/Regulatory Affairs Executive EditorPatricia A. Borowski, [email protected]

Contributing EditorsJon GentileJenn Webb

Production EditorLaurel Prucha [email protected]

PIA Connection is published ten times yearly by the National Association of Professional Insurance Agents.

400 North Washington Street,Alexandria, Virginia 22314©2014 All rights reserved.

The information in this publication is general in nature and is not intended to serve as legal, accounting, financial, insurance, investment advisory or other professional advice as to any reader’s particular situation. Users are encouraged to consult with compe-tent legal, financial, insurance, investment advisory and or other professional advisors concerning specific matters before making any decisions and we disclaim any responsibility for any decisions or actions by readers.

All PIA members receive PIA Connection at the member sub-scription rate of $12.00 per year.

Non-member subscriptions available at $24.00 per year ppd.

For additional information on any of the subjects addressed in this publication, please access the PIA National website at www.pianet.com.

PIA CONNECTIONNATIONAL ASSOCIATION OF PROFESSIONAL INSURANCE AGENTS

SEPTEMBER 2014

CONTENTSTHE BOOM IN RIDE-SHARING RAISES ISSUES 10What’s the difference between hailing a taxi and summoning a ride-share with an app? Insurance and liability. That’s causing concern, which states and localities are starting to address.

TEN YEARS OF PIA AND HARTFORD FLOOD 13PIA National and The Hartford celebrate the tenth anniversary of the creation of a PIA-endorsed flood insurance program for PIA members.

DONE AND UNDONE ON CAPITOL HILL 14As the clock winds down to on the 2014 elections, insurance issues are not at the top of the Hill agenda.

THE IMPORTANCE OF SALES MEETINGS 16Why are sales meetings in agencies sometimes seen as less-than-important? Author David Connelly believes that sales meetings are sacred, and he offers tips on how they should be conducted.

DEPARTMENTSFrom the President. . . . . . . . . . . . . . 5From the CEO . . . . . . . . . . . . . . . . 5News Brief. . . . . . . . . . . . . . . . . . 7Capitol Hill Report . . . . . . . . . . . . . . 9PIA Legal Analysis . . . . . . . . . . . . 10PIA Product Spotlight . . . . . . . . . . . 19PIA Marketplace . . . . . . . . . . . . . . 19PIA Affiliate Listing . . . . . . . . . . . . 20Member Benefits . . . . . . . . . . . . . 21The Last Word . . . . . . . . . . . . . . . 22

Cover image: Getty Images

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FROM THE PRESIDENT

FROM THE CEO

IT HAS INDEED BEEN AN HONOR and a privilege to serve as your President this past year. As my term comes to an end, I feel confident that PIA National is continuing to provide our members with the excellent value they need.

The value that PIA provides is convincing more agents to join us. In a time when many associations are experiencing declines, we had a net growth in membership. My predecessor, Andy Harris, challenged us to grow, and I continued that challenge. I want to thank the PIA affiliates, as well as the Membership Committee led by Stan Logan, for their help in this achievement.

PIA is firmly committed to continuing to expand the full range of services that we provide on behalf of our members.

PIA’s agent-owned captive PIAPRO is closing in on the $1 million mark in written premium. The success of this program demonstrates that it fulfills a need of more and more PIA agents for quality, afford-able E&O coverage from their own association.

The advocacy that PIA engages in on behalf of all of our members is a key part of the value that PIA delivers. We will continue to speak up for our agent members and be a strong voice for them. Of course, there will always be external threats to our success. That’s why PIA devotes so much to advocacy.

We lobby Congress, regulatory agencies like the National Association of Insurance Commissioners (NAIC), federal regulators, state regulators and state lawmakers. As advocates of our American free enterprise system, we must guard against those who would legis-late or regulate our agencies and our carrier partners out of business.

Our agency-company council, The PIA Partnership, provides agents with business-building tools and conducts cutting-edge research on our issues; and we greatly appreciate the commitment of our carrier partners.

PIA is highly respected as a major player in our industry. When we speak, people listen. We have credibility. It is no accident that PIA

members are regularly featured on the cover of the National Underwriter and in Rough Notes, Insurance Journal and other leading industry publications.

We now have a new executive leader at the helm. Mike Becker has been energetic and dynamic since taking over as CEO of PIA National in December 2013. His efforts will help us make our organization stronger while also providing additional value to our affiliates and members. He has been a joy to work with, and I know he was the right person for the job.

I also can’t say enough about our staff at PIA’s National headquar-ters. They have really come together as a unit to help us better serve our affiliates and members. We will truly need to depend on all of them as we look toward the future.

I have the utmost respect for the job Andy Harris did in leading our association last year. It was a joy to work with him and learn from him. As I pass the reins of the PIA presidency over to my good friend and colleague Richie Clements, I know our association will be in good hands. I know that Rob Hansen and Gary Blackwell will also provide excellent leadership.

As I always say, I can’t think of a better time to be a Professional Insurance Agent. Ours is a great business. I am thankful that I chose it. We have a bright future because customers continue to value what we, as agents, provide. It is really that simple.

It has been my privilege and honor to serve you as president of PIA.

John G. LeePresident

THE FUTURE IS BRIGHT for Professional Insurance Agents, although it won’t be without challenges and hurdles. But I’m here to remind you that PIA is standing with you every step of the way as you increase your success and growth in the market.

PIA is a vocal, unabashed, grassroots advocate for professional independent insurance agents. We are an association of agents with a well-defined mission to protect the agency distribution system and enable the success of our members. We have a passionate and involved membership, a cause that is just and a deep wellspring of talent and expertise. And like all families, when we face threats, we stick together and defend each other.

PIA is a highly-respected, influential player on your behalf, both on the local and national levels. We advocate for you in state legisla-tures, on Capitol Hill in Washington, D.C., before regulatory agen-cies and in the court of public opinion. The work of our company council, PIA Partnership, is cutting-edge and produces effective tools to help our members grow their businesses. PIA’s profile in our

industry is very high. Since becoming CEO, I have had

the pleasure of visiting with many of our state affiliate associations and meeting with PIA members across the country. What I have found is a unity of purpose that sustains us. There is a deep, abiding commit-ment to PIA that has transcended decades and generations. It is that commitment that will ensure the success of PIA and its members for many decades to come.

Thank you for being part of the PIA family. You’ve made the right choice.

Mike BeckerExecutive Vice President & CEO

6 | September 2014 www.pianet.com | PIA CONNECTION

A MAJOR CONTROVERSY has erupted concerning a proposal by the International Association of Insurance Supervisors (IAIS)—an organization of insurance supervisors and regulators from around the world—to close its meetings to outside observers. It plans to keep its deliberations private and only invite select parties to the closed meetings when it wants their input.

The action by the IAIS comes as the group rushes to develop global capital rules for the insurance market. The first of these new proposed rules will be put to leaders of the Group of 20 economies, which includes the United States, for endorsement when they meet in November 2014.

The international group has been highly critical of the state-based system of insurance regulation in the United States, suggesting that the U.S. adopt a broader federal regulatory regime. This has brought sharp opposition from the National Association of Insurance Commissioners

(NAIC); the National Conference of Insurance Legislators (NCOIL); multiple insurance trade associations, such as the Property Casualty Insurers Association of America (PCI); the National Association of Mutual Insurance Companies (NAMIC); as well as members of Congress.

The proposal by the IAIS to bar com-panies and trade groups from its meetings has sparked outrage. State insurance com-missioners, industry groups and consumer representatives have united in opposition. The NAIC, an active IAIS member, will send comments criticizing the changes to the IAIS over the next few weeks.

Regulators and insurance companies spoke out against the IAIS action during the just-completed NAIC summer meeting in Louisville, Kentucky. “It becomes a com-petition of who can gain undue influence,”

David Snyder, vice president of interna-tional policy for PCI, told news service SNL. “This is an absolutely fundamental and critical crossroads.” Connecticut Insurance Commissioner Thomas Leonardi added, “It is very disturbing, quite frankly.”

While IAIS action is not legally binding on U.S. states or U.S. companies, the orga-nization is an immensely persuasive force, particularly on the regulation of globally

active insurance groups. The proposal by IAIS to close its meetings is being viewed by some as an attempt to silence opposi-tion from U.S regulators and other groups. PIA joins the NAIC, NCOIL, PCI, NAMIC, members of Congress and others in opposi-tion to the IAIS’s lack of transparency.

MOVE TO CLOSE INSURANCE MEETINGS SPARKS OUTRAGE IAIS Proposes Retreat From Transparency

“It is very disturbing.”

— Connecticut Insurance Commissioner Thomas Leonardi

Vinnie [email protected]

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NEWS BRIEF!WINE COUNTRY QUAKEJust 6 days before a magnitude 6.1 earthquake struck in the heart of wine-making country in Napa Valley, California, on August 24, an industry group issued a prescient press release. The Insurance Information Institute (I.I.I.) reported that despite the fact that the risk of earthquakes is rising, the take-up rate for earthquake insurance

is falling. Nationwide, only seven percent of homeowners have earthquake insurance. Meanwhile, updated maps from the U.S. Geological Survey show 42 states are at risk of suffering an earthquake, with 16 states at high risk.

Even though the damage from this quake was extensive, scientists said that residents of the region were lucky

the quake did not cause greater devastation; they noted that the 1906 San Francisco earthquake was 500 times stronger than the recent temblor in Napa Valley.

PIA WEST SAYS “BE PREPARED”William (Bill) Prentiss, ARM, president of the PIA Group States (California, Arizona,

Two-percent probability of exceedance in 50 years map of peak ground acceleration

0 500 1,000 KILOMETERS

0 500 1,000 MILES

70°80°90°100°110°120°

45°

40°

35°

30°

25°

Areas where suspected nontectonic earthquakes have been deleted

0.80.40.30.20.140.10.060.040.020

EXPLANATIONPeak acceleration, expressed as a fraction of standard gravity (g)

Source: U.S. Geological Survey

RISK OF EARTHQUAKE

CONTINUED ON PAGE 8

7%OF AMERICAN HOMEOWNERS HAVE EARTHQUAKE INSURANCE

93%OF AMERICAN HOMEOWNERS DO NOT HAVE EARTHQUAKE INSURANCE


Nevada, New Mexico), urged his fellow Californians to use the Napa Valley earthquake as a wakeup call. He says they need to be ready for disaster, in whatever form it takes.

“What this shows is that people need to be prepared. All of us need to take a step back before something happens and ask ourselves, ‘What are we doing to protect our homes, businesses and families?’” he said.

Nothing to celebrate: 2015 will mark the 10th anniversary of Hurricane Katrina. PIA agents in the storm’s path in Louisiana had their lives changed in many ways. From PIA Connection in 2005:

“One agent came to the PIA headquarters seeking help after losing his father in Hurricane Katrina. Two other members of PIA of Louisiana suffered terrible losses, one losing

his father, the other his mother, in a nursing home flood. Weeks later, another agent who was finally able to go back to what was left of his office in New Orleans had to walk by dead bodies in the street to get there.”

Next year, we will look back at the spate of hurricanes that hit in 2004-2005, and share stories of tragedy—and hope—from PIA members who lived through it.

IGNOMINIOUS ANNIVERSARY

NEWS BRIEF!CONTINUED FROM PAGE 7

GOT CHANGE?Ever been so upset about getting a traffic ticket that you were tempted it pay it with coins—lots of coins?

An insurance broker in Rancho Cucamonga, California, paid $21,000 to settle a lawsuit, with coins. Bags of nickels, dimes and quarters.

Eight employees arrived at the plaintiff lawyer’s office while he was in court and left 16 big buckets of quarters, nickels, dimes and pennies in the building’s lobby.

YOUNG AGENTS SAY TECHNOLOGY NOT #1If you think that young agents value technology above everything else—think again. Vertafore recently surveyed young agents across the country.

Millennials consider technology a given, they expect it. They’re also happy to be in insurance: 84 percent say they plan on staying in the industry for “as long as possible.”

WHAT KEEPS MILLENIALS IN THE INSURANCE WORKFORCE?

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THE NONPARTISAN Government Accountability Office (GAO) recently released two reports on healthcare issues important to PIA. These reports have no functional power but are used by policy-makers to make their arguments on vari-ous policy issues.

MLR AND REBATES One report focused on the Medical Loss

Ratio (MLR) requirements and rebates in the Affordable Care Act (ACA). The ACA included new MLR formulas that require insurance carriers to spend 80% of their pre-mium dollars (individual and small group plans) or 85% of their premium dollars (large group plans) directly on medical care. Agent compensation was included as part of the so-called “administrative” expenses, which has led to a steep decline in agents being compensated for their work.

When an insurer’s MLR is lower than the applicable MLR standard they must pay a rebate to the consumer. The GAO report

found that excluding producer compensa-tion from MLR calculations in 2012 would have cut total MLR rebate payments by 74 percent.

PIA helped develop bipartisan legisla-tion H.R. 2328/S. 650, introduced by Rep. Mike Rogers (R-MI) and Senator Mary Landrieu (D-LA), to reform the law’s MLR requirements to exclude certain agent compensation from being included in the MLR formula. While this report certainly impacts our efforts to advance H.R. 2328/S. 650, PIA will continue to work with law-makers to explain the devastating impact

the MLR is having on agent compensation and urge Congress to remedy this with a legislative solution.

GAO INVESTIGATIONThe GAO also released a preliminary

report on July 23 where investigators were able to obtain health plans and federal subsidies for bogus applicants using false documents via the federal health insurance marketplace. GAO agents went undercover and created fictitious identities to apply for insurance subsidies online, over the phone and in person. Investigators were able to get subsidized healthcare under fake names in 11 out of 12 attempts, mostly through call centers that handled applications for thousands of consumers unable to get through online.

The report was requested last year by Senators Orrin Hatch (R-Utah) and Tom Coburn (R-OK) and Representatives Dave Camp (R-Mich.) and Charles Boustany (R-LA). GAO investigators also pointed

out that the government may be paying incorrect insurance subsidies to a signifi-cant share of the 5.4 million Americans who signed up for health plans for this year through the federal marketplace.

The fallout from this is expected to add fuel to efforts to repeal the healthcare law, even though such efforts—confined to the House—realistically stand no chance of success with the Senate in Democratic hands and President Obama in the White House. Even if the Senate were to flip to GOP control as a result of the 2014 elec-tions, any repeal of Obamacare world face

a certain veto by Obama. The GAO said the investigation to look for potential fraud is active and more results may be released in the next few months.

NFIP FINANCES CALLED UNSUSTAINABLE

Speaking before the Senate Homeland Security Appropriations Subcommittee on July 23, Federal Emergency Management Agency (FEMA) Administrator Craig Fugate told lawmakers that while Congress had given the agency the authority to charge affordable flood insurance rates under the National Flood Insurance Program (NFIP), it did little to address the long-term financial problems of the program.

The administrator warned that the level of debt carried by the NFIP could devastate the program if another severe storm hits the United States, especially as Congress increased FEMA’s borrowing authority to $30 billion after Hurricane Sandy. The bulk of the hearing, however, focused on FEMA’s efforts to release updated flood insurance maps, which insurers say they need to accurately determine what rates to charge policyholders.

Fugate’s testimony was part of a hearing called by Senator Mary Landrieu (D-La.), chairwoman of the subcommittee. In June, Senator Landrieu introduced a bill to fund the Department of Homeland Security (DHS), which included an additional $100 million for FEMA to update and correct flawed flood maps across the country. When added to the $121 million in fees dedicated to mapping activities, the bill provides $221 million total for updating flood maps. Fugate testified that roughly half of the flood maps produced by FEMA are considered accurate.

GAO ISSUES TWO REPORTS ON AFFORDABLE CARE ACTFEMA Administrator Fugate Says NFIP Finances “Unsustainable”

CAPITOL HILL REPORT By Jon Gentile Director, Federal Affairs

PIA National

INVESTIGATORS WERE ABLE TO GET SUBSIDIZED HEALTHCARE UNDER FAKE NAMES IN 11 OUT OF 12 ATTEMPTS.


WHAT IS RIDE-SHARING? Over the past few years, a new breed of transportation services has cropped up in U.S. cities: peer-to-peer ride-sharing ser-vices managed by transportation network companies (TNCs). TNCs work by con-necting customers with independent driv-ers operating their personal automobile via an app on the customer’s smartphone. GPS data connects the customer with the closest driver and payment is automatically cal-culated and deducted from the customer’s

bank account or credit card in the app. These new services have proven popular

with consumers, especially in larger cities. According to their websites, the two biggest ride-sharing companies, Uber and Lyft, operate in nearly 100 cities, encompass-ing nearly two-thirds of U.S. states. These companies also offer a variety of options from upmarket black sedans that Uber has dubbed “everyone’s personal driver” to more casual rides from Lyft, which encour-ages a community atmosphere and gives

drivers the option of adorning their vehicle with a fuzzy pink mustache.

Ride-sharing services are generally less regulated than traditional taxi services, but, much like the regulation of taxis, the regu-lation of ride-sharing services varies signif-icantly from city, to county, to state. Some states and major cities, like California, Colorado and Washington, D.C., have passed laws and regulations on insurance coverage and driver requirements for TNCs. A number of large municipalities,

THE BOOMING POPULARITY OF RIDE-SHARING RAISES ISSUES FOR INSURERS AND CONSUMERS

By Jennifer M. Webb, Esq.Counsel & Director of

Regulatory AffairsPIA National

Image credit:Uber


such as Nashville and New Orleans, are considering the best way to regulate the emerging industry. Meanwhile, some cities, such as Las Vegas and St. Louis, have not yet embraced ride-sharing services.

Among the municipalities that have thus far considered regulation of ride-shar-ing, consensus seems to center on the need for licensing and insurance. In some locali-ties, ride-sharing services have vowed to defy authorities and operate without being duly licensed; however, this can be viewed as a technique to leverage more favorable agreements to operate.

WHAT INSURANCE ISSUES ARISE WITH RIDE-SHARING?

The growth in popularity of ride-sharing services has not been without controversy. Unsurprisingly, the loudest voice against ride-sharing services has been the taxi industry, worried about unfair competition in what had long been a near transportation monopoly. Irrespective of the underlying competitive concerns, opponents of ride-sharing services raise important issues related to the insurance industry.

Ride-sharing insurance issues are best examined in three categories: (1) the time that the driver is logged into the TNC’s app and is available to pick up a rider; (2) the time in which a rider has been confirmed and the driver is en route to pick up; and (3) when the ride is underway.

The third category is the clearest cut, but it still raises issues. The most com-mon way a ride-sharing service works is that you agree to a pre-arranged price schedule based on distance and time. The rider accepts the price schedule in the app before starting the ride. Normally, personal auto policies contain language excluding coverage for liability arising out of for-hire or commercial use of the vehicle, but most, if not all, ride-sharing services have a commercial policy to cover the period a

customer is in the car. Commercial exclusions on personal

policies generally do not apply to a share-the-expense carpool. So what happens when a ride-sharing company operates on a donation model? At least one company sug-gests riders give donations, with donation amounts at the rider’s discretion. While on its face this falls under the carpool exemp-tion, these exemptions were originally cre-ated under the assumption that a group of individuals with personal relationships may share costs driving to work or on a road trip. So the question remains, does the assump-tion that underlies this exception change when technology allows complete strangers to carpool on demand?

Some ride-sharing companies have expanded coverage, either willingly or as a result of new legislation and regulation, to cover the time period when a driver has confirmed a ride and is en route. Whether this is considered commercial activity is ambiguous under many current personal car insurance policies. Consequently, in most cases the TNC’s policy only comes into effect if the driver’s personal policy does not. Lack of clarity over what policy controls at the time of an accident can make the claims process arduous.

One of the most complex issues is coverage during the period when a driver is logged into the app and available to pick up a driver but does not have a confirmed ride. Some states and municipalities require or are considering requiring more coverage during this timeframe, others have not. Insurance companies are con-cerned that regulation or legislation could shift business risks onto a vehicle’s personal auto insurance policy.

One argument of the insurers is that being on the app changes driver behavior, such as driving more frequently at certain high traffic times or in urban centers, and therefore typical policies may not cover drivers during this time. Ride-sharing

companies, however, have generally taken the opposite view that personal insurance policies should cover riders during this time, arguing that any change in driver behavior is insignificant, if it happens at all.

WHAT DOES THE FUTURE HOLD?

Innovation often challenges assump-tions used to underwrite insurance poli-cies. Consequently, determining how to adequately insure risks can be difficult, at least initially. Not only are TNCs changing driver and consumer behavior, but how to best handle risk-management issues, such as driver vetting and vehicle mainte-nance, are rapidly evolving at the company, regulatory and legislative level. All of these factors are relevant in determining how to properly insure TNCs and ride-share drivers.

Currently, TNCs are insured in the sur-plus lines market, but as ride-sharing grows in popularity new insurance products are likely to develop. The insurance industry is already working to develop additional personal line products for ride-sharing drivers, such as an endorsement option on a driver’s personal policy to cover ride-sharing work. MetLife and Lyft recently entered into an agreement to explore creat-ing new insurance options appropriate for the ride-sharing drivers. And depending on the outcome of regulation and legisla-tion in various states and municipalities, policies unique to local regulation on TNCs will need to develop.

With constantly evolving new technol-ogy and legislative requirements, who knows what insurance options will be available down the road. For the time being, agents should be prepared to inform clients about the limitations of their per-sonal auto insurance policies and to discuss potential alternative coverage options if the client wishes to engage in ride-sharing activities.

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THE NATIONAL Association of Professional Insurance Agents (PIA) and The Hartford are celebrating the 10th anni-versary of the creation of a PIA-endorsed flood insurance program for PIA members. The program was initially rolled out to PIA members on September 14, 2004.

Through the partnership, PIA mem-bers have access to one of the most robust and steadfast Write Your Own (WYO) carriers in the National Flood Insurance Program (NFIP). The Hartford has been writing flood insurance through the NFIP for nearly 25 years. The Hartford’s flood program is available to PIA members in all 50 states, the District of Columbia and Puerto Rico.

“PIA is proud to partner with The Hartford for our nationally endorsed flood insurance program,” said PIA National President John G. Lee. “Historically, The Hartford has been one of the most promi-nent property and casualty carriers in PIA member agencies. We are happy that over the past 10 years, many more PIA members have added flood insurance through The Hartford as a valuable part of their agency offerings to their clients.”

Highlights of the program include competitive commissions; a dedicated book transfer team; local sales directors; user-friendly online processing systems for quoting, submissions and endorsement requests; free zone determinations; online chat for service questions and interactive, real-time input assistance; hassle-free claim service with 24/7 claims reporting; training and continuing education (CE) credits; an easy enrollment process and marketing support.

“Nearly every homeowner and business has some type of flood-related risk, yet many do not have flood insurance,” said Robert Nadeau, assistant vice president of flood insurance sales at The Hartford. “Through The Hartford’s partnership with PIA, we are able to make NFIP coverage available to more property owners and help

them close a significant coverage gap. We look forward to continuing our partnership with PIA.”

In addition to The Hartford’s standard flood insurance program for independent agents, PIA members have access to The Hartford’s Flood Solutions program for businesses and homeowners. This simplified program includes a stream-lined application process with The Hartford’s Flood Insurance Processing Center doing most of the work.

“Many Americans do not realize that the typical homeowner’s insurance policy does not cover flooding,” said PIA National Executive Vice President & CEO Mike Becker. “Yet 20% of flood insurance claims originate in low to moderate risk areas as classified by the Federal Emergency Management Agency (FEMA). The risk is real, which is why flood insurance through the NFIP is an important part of any homeowners’—and business owners’—insurance coverage program.”

PIA and The Hartford work to educate agents about the importance of flood

insurance. The organizations also work through agents to help them educate their clients about the risks of flooding and changes to the NFIP that might affect poli-cyholders and prospective policyholders.

“At The Hartford, we are continually working to equip producers with effective

tools and resources to help them provide timely flood-related information to their customers,” said Nadeau.

For more information about PIA’s flood insurance program with The Hartford, please visit PIA’s website at www.pianet.com/hartfordfloodinsurance.

Founded in 1931, PIA is a national trade association that represents mem-ber insurance agents and their employ-ees who sell and service all kinds of insurance, but specialize in coverage of automobiles, homes and businesses. PIA members are Local Agents Serving Main Street AmericaSM. PIA’s web address is www.pianet.com.

PIA AND THE HARTFORD REACH FLOOD INSURANCE MILESTONEAgent Association and Insurer Celebrate Program’s Ten-year Anniversary

ABOUT THE HARTFORD

With more than 200 years of expertise, The Hartford (NYSE: HIG) is a leader in property and casualty insurance, group benefits and mutual funds. The company is widely recog-nized for its service excellence, sustainability practices, trust and integrity. More informa-tion on the company and its financial performance is available at www.thehartford.com. Join us on Facebook at www.facebook.com/TheHartford. Follow us on Twitter at www.twitter.com/TheHartford.

The Hartford is a participant in the federal WYO Program, part of the National Flood Insurance Program managed by FEMA. WYO flood policies are underwritten by the federal government and issued, sold and administered by authorized private insurance companies, including Hartford Fire Insurance Company, Hartford Fire Insurance Company of the Midwest and Hartford Underwriters Insurance Company. Accordingly, Hartford WYO flood policies are written subject to the rules, regulations, terms, conditions and availability of the National Flood Insurance Program.


20% OF FLOOD INSURANCE CLAIMS ORIGINATE IN LOW TO MODERATE RISK AREAS. —FEMA


SEPTEMBER usually marks the start of a very productive period as people return from their summer vacations; schools are back in session; and businesses operate without interruption, except for Thanks-giving, until the holiday season begins in December. More gets done.

This, of course, does not apply to Congress. Attempting to draw comparisons between Congress and the real world is an exercise fraught with peril, but it is some-thing we must do if we are to understand why so many things remain undone.

It is easier to list the insurance-related issues Congress has not addressed this year than those it has addressed. The list of accomplishments is very short, while the tally of inaction is long.

FLOOD AND TRIARenewal by Congress of the Terrorism

Risk Insurance Act (TRIA), which faces expiration at the end of this year, should have been a no-brainer. The entire insur-ance industry urged support for a seven-year reauthorization bill that was ultimately passed in the Senate in July by an over-whelming, bipartisan 93-4 vote.

Given the partisan gridlock that has paralyzed most significant legislation in Congress over the past several years, the vote was a shining example of the fact that legislators can still act when something is decidedly in the national interest.

Almost. It is usually in the House where consensus hits a brick wall. For a time, it looked like the TRIA renewal would be

exempt from this hyper-partisanship. But it was not to be.

No sooner had the Senate acted than House Financial Services Committee Chairman Jeb Hensarling (R-Tex.as) threw cold water on any idea that the House would quickly follow suit and take up TRIA reauthorization. Hensarling issued a statement sharply deriding the Senate bill and that it “is going to take several more months” to reauthorize the program.

Despite the fact that TRIA does not cost the federal government anything unless, God forbid, America suffers a terrorist attack, some House Republicans want to reduce the scope of TRIA and put it on a path to elimination. This is part of a disagreement between those who think that the federal government has a role in helping the business community, especially on matters of national interest, and those who would like to remove the “public” from successful public-private partnerships.

On one insurance issue, a full agree-ment was reached. Earlier this year, a flood insurance bill passed both the House and the Senate with overwhelming, bipartisan votes. It rolled back some flood insur-ance rate increases that were mandated in another bill Congress had passed over-whelmingly two years earlier.

Members of Congress had heard from their constituents that faced big rate increases in policies backed by the National Flood Insurance Program (NFIP), some so large that they could have lost their homes. That prompted them to contact their elected representatives and plead for relief.

So the Homeowner Flood Insurance Affordability Act of 2013 (H.R. 3370) was signed into law on March 21, 2014, by

DONE AND UNDONE: INSURANCE ISSUES REMAIN ON THE TABLE Many Bills Pending, Few See Action As 2014 Election Approaches

PERSPECTIVES By Ted Besesparis Senior Vice President, Communications

PIA National

PIA of Louisiana met with Rep. Cassidy (LA) (left) and Sen. Barrasso (WY) (right) at an event in August.

For DLD, PIA of CT hosted Rep. Himes (CT) (left) and discussed insurance issues.


President Obama. It repealed portions of the Biggert-Waters Flood Insurance Reform Act (BW-12), passed in 2012.

A major focus of BW-12 had been moving NFIP flood policies to actuarially sound rates—only, it did so too fast. “As insurance agents, we have to support risk-based rating,” said PIA National President-elect Richard A. Clements, who also chairs the Flood Insurance Producers National Committee (FIPNC). “But we want to do it on an affordable basis.” He noted that H.R. 3370 mandated an affordability study and also included key provisions on grandfa-thering and mitigation that PIA supported.

Two other insurance-related bills have cleared one chamber:

The U.S. Senate passed the Insurance Capital Standards Clarification Act (S. 2270), which would modify the Dodd-Frank law to provide the U.S. Federal Reserve with greater flexibility in tailoring capital rules for insurers deemed systemi-cally important financial institutions (SIFIs). The measure corrects the idea that capital rules for banks and insurers should be the same under the 2010 Dodd-Frank law.

In something of a surprise, the National Windstorm Impact Reduction Act Reauthorization of 2013 (H.R. 1786) was approved by the House in July, under a suspension of House rules. Written by Rep. Randy Neugebauer (R-Texas), chairman of the House Financial Services Housing and Insurance subcommittee, it would establish the National Institute of Standards and Technology (NIST) for planning and coor-dinating the National Windstorm Impact Reduction Program (NWIRP).

EFFECT OF MIDTERM ELECTIONS

What can we expect Congress to accomplish regarding insurance issues between now and the end of the current session? Little or nothing. Why? Because we are just weeks away from the midterm elections, with members of Congress focused on their campaigns.

Many other insurance-related bills have been proposed (see chart), but few will see any action before the election.

Apart from pending legislation, federal agencies are continuing to engage in rule-making. On May 16, the Centers for

Medicare and Medicaid Services (CMS), in the Department of Health and Human Services (HHS), issued final rules that would permit unlicensed navigators to perform some of the functions of licensed insurance agents and brokers, while pro-hibiting the states from requiring that they obtain an agent or broker license.

“These new rules seem to regard efforts to protect consumers from fraud as obstacles to more people signing up for the Affordable Care Act (ACA),” said PIA National Executive Vice President & CEO Mike Becker. “Preventing states from protecting their citizens should never be viewed as a path to success; it is a

prescription for failure.”Most of the insurance proposals pend-

ing on Capitol Hill will remain bottled up in the pressure cooker of partisanship that prevents consensus on most legislation. Is there a chance that after the 2014 elections there will be more agreement? Perhaps—but then again, preparations are already underway for the 2016 elections.

And on it goes.

This article also appeared in the National Underwriter.

STUCK IN THE QUEUESome insurance-related bills awaiting action in Congress include:

The Insurance Data Protection Act (not yet introduced) would rein in the power of the Federal Insurance Office (FIO) to subpoena data from insurance companies. The bill would require the FIO to obtain data through the insurance company’s state regulator.

The Service Members Insurance Relief Act (H.R. 4669) would allow members of the U.S. military to retain their auto insurance policies when they are transferred to new bases.

Insurance Capital Standards Clarification Act of 2014 (H.R. 4510) would clarify the application of capital requirements to insurance companies that are subject to supervision by the Federal Reserve Board.

The Insurance Consumer Protection and Solvency Act of 2013 (H.R. 605) clarifies that state insurance laws govern the liquidation or rehabilitation of an insurance company.

The Risk Retention Modernization Act of 2014 (not yet introduced) would expand the authority of risk retention groups, which are a mechanism for self-insurance, to offer commercial lines of insurance, such as property and auto physical damage.

The Secure Constructing Code Incentive Act of 2013 (H.R. 1878 and S. 924) would supply extra federal help to states that strengthen their building codes.

The Catastrophe Financial Savings Account Act (H.R. 3989 and S. 1991) calls for a $5,000 tax deduction for homeowners who deposit money into a newly created type of cost savings account to offset catastrophe mitigation expenses.

The Catastrophe Savings and Resilient Building Act of 2013 (H.R. 2241) would give tax credits for more resilient construction.


NOTHING, not one thing happens in this economy until a sale is made. No raw materials are ordered, not one engine starts, and no services are performed until an order has been placed. Strong sales are the single most important asset of any for-profit company. New business is the life-blood of every company. It is the fuel that drives growth, investment and opportunity.

Considering the vital importance of sales, you would think that meetings whose sole purpose is to promote and drive sales would be considered critical. But sales meetings finish low on the list of priori-ties for many agencies. As a result, sales meetings are plagued by poor attendance, tardiness, distractions and interruptions. Sales meetings often start late, run late or are cancelled altogether. Lack of prepara-tion and a defined agenda produces terrible meetings that produce terrible results.

Sound familiar? In what professional sales organization would these behaviors be acceptable? What we expect and tolerate is what we get. This tolerance creates a perception that sales meetings are a waste of time. Nothing could be further from the truth. I believe that sales meetings are sacred. Once we understand the direct, positive impact sales meetings have on our culture, our success and our wallets, we will give them the respect they deserve.

WHY ARE SALES MEETINGS SO IMPORTANT?

We only have 24 hours in a day to take care of our family, our clients, our job, and ourselves. Given the value of our time, why waste it on meetings that don’t always appear to benefit us personally? Here is the short list of reasons why sales meetings are critical to your success.1. Culture: A Total Agency Sales Culture is

the cornerstone of every high perfor-mance agency. The underpinnings of a

total agency sales culture are activities that build, support and sustain organic growth. Effective sales meetings are one of these critical activities. Sales meetings nurture esprit de corps. They serve as a catalyst and binding agent for shared goals and objectives. They serve to rein-force and remind us that we are a team, and we share a higher purpose other than our own personal benefit. Sales meetings bring us together to accom-plish much more than we could alone. We are a sales driven industry. Sales meetings are part of the foundation that supports a thriving sales culture.

2. Communication: Many agencies are plagued by poor communication. One reason is producers are a very inde-pendent group. The nature of our job requires us to operate like sole propri-etors who manage our personal books. Sales meetings require us to come together for one hour as a team and communicate. They foster teamwork and bring to light opportunities for us to help each other. Sales meetings serve as the one consistent forum for commu-nication and connection as producers.

3. Synergy: Sales meetings create synergy. If we are not pulling together, then we are pulling apart. They create like-minded thinking and get us pulling together in the same direction.

4. Direction and Numbers: Sales meetings serve as our compass. They influence direction and indicate when course correction is required. Numbers are a direct reflection of results. Numbers are the only true, impartial measurement of success. Numbers are a true ally and friend to produc-ers. Numbers never lie, and they are brutally honest. Numbers give us hope, determination, incentive and recogni-tion for our successes. They also give us

a kick in the rear when we need it. Sales meetings are all about the numbers, and we need to fall in love with numbers.

5. Motivation: We are all motivated by different factors. For some it’s the pursuit of excellence, for others it’s money, and still others are motivated by competition. We all have personal forms of internal motivation, but peer pressure and competition are power-ful forms of external motivation that gives us that extra spark to jump-start our engines. External motivation stirs our competitive spirit. Sales meetings touch on many forms of motivation both positive and negative. Sales meet-ings create needed competition and pressure.

6. Skill Set Development and Reinforcement: Selling isn’t winning. Winning is winning. We win business from the competition by being bet-ter. Sales meetings test and hone our abilities and force us to learn and apply new skills and processes that are good for us and make us better than our competition.

7. Talent Development and Perpetuation: Agencies that have expired or been consumed by larger shops all share one thing in common; they failed to groom new talent to grow and perpetuate the agency. Experienced producers can have a huge impact on the careers of new producers by short-ening their learning curve. The oppor-tunity for a new producer to participate in meetings where experienced produc-ers discuss numbers, business plans, account strategies and selling skills is invaluable. Who will provide for your retirement? The new talent you groom to take your place. Sales meetings serve as an opportunity for seasoned agents to help grow new talent.

THE IMPORTANCE OF SALES MEETINGS

AGENCY MARKETING By David ConnollyiQ Consulting$


8. NOBs: All highly performing compa-nies embrace Non Optional Behaviors. All fortune 500 companies subscribe to NOBs that drive sales cultures based on excellence and exceptional results. Sales meetings are one specific change we can make to produce immediate results. The agencies and producers I work with experience exceptional results. Why? One reason is they all run excellent sales meetings. Producers and managers who participate in sales meetings gain significant personal and financial benefits. Increased opportu-nities and improved performance are the product of these sales meetings. They result in significant revenue that benefits everyone in the organization and secures the future of the agency. All believe that Sales Meetings Are Non Optional Behaviors. Over my 30-year career in insurance,

I have participated in and run thousands of sales meetings. Good, bad and ugly sales meetings. What I’ve learned is that sales leaders must prepare for and prac-tice running productive sales meetings. Effective sales meetings governed by rules of conduct that apply to everyone. There must be a results driven agenda that creates opportunity and a desire to attend.

Here is what I consider the optimal structure, agenda and rules for running the very best sales meetings in the business.

RUNNING SALES MEETINGS THAT DRIVE SALES

STRUCTURE:• Frequency: Weekly. Create a

rhythm and expectations. Sales meetings are important.

• Day: Monday. Sales are a priority, this is the first meeting we have.

• Time: First thing Monday morning. Sales are a priority, this is the first meeting we have.

• Size: No more than 10 per meeting, only production and management personnel. If you exceed 10, break up into 2 groups of 5 and run back to back meetings.

• Duration: 1 hour. Period. When 1 hour is up, the meeting ends.

AGENDA:• 15 minutes of skill set training.• 1/2 hour of pre-appointment strate-

gies on new business prospects.• 15 minutes on the numbers where

sales managers review goals, pipe-lines, and new business written by producers.

RULES:• Rule #1: Sales meetings are not

optional. They are the most impor-tant thing we do on a weekly basis. With the exception of illness, family emergency, traffic accident or vaca-tion, producers do not miss sales meetings, ever.

• Rule #2: Producers and managers must show up early, and never late. We must respect each other and the importance of the meeting. Never be late.

• Rule #3: Leave your phones outside. Texting, emailing and taking calls in meetings is not acceptable. Our culture’s recent tolerance of this behavior needs to change.

• Rule #4: No interruptions by anyone, anytime, unless it’s a family emergency. Client’s can wait an hour for a call back, or our CSRs can handle it.

• Rule #5: Producers come prepared with one new business prospect to discuss and conduct a pre-appoint-ment strategy.

Do any doubts linger as to the benefits of sales meetings? Do you still ask, “Why should I attend sales meetings?”

If so, read 1-8 again and find a reason that resonates for you.

If 1-7 don’t get the job done, just read the last line of #8.

David Connolly is the founder of iQ Consulting, and is a recognized industry leader in helping agencies and carriers accelerate and perpetuate growth and retention. Their robust agency services platform provides professional guidance in almost every area critical to the success of your company. iQ provides agency consult-ing and leadership coaching services and focuses on producer development through training, in-field coaching and reinforce-ment resources. iQ’s approach to consult-ing and coaching is built from decades of personal experience in production, sales management, and agency leadership. David has coached thousands of insurance sales and marketing professionals in the US and Canada. David delivers performancebased seminars, keynotes, and workshops through-out North America. For more information about iQ Performance Consulting visit www.iqsalescoach.com or contact David directly at [email protected] or 612-414-5618.

LIKE THIS ARTICLE? WANT MORE LIKE IT?This article originally appeared in the 2014 PIA Agency Marketing Guide.

PIA members can read all of the marketing tips in this year’s Agency Marketing Guide on PIA National’s website: www.PIAAgencyMarketingGuide.com

PIA National wishes to thank the sponsors of the 2014 PIA Agency Marketing Guide: Allied Insurance/Harleysville Insurance, EZLynx, ITC and Rough Notes.

PIA’s Agency Marketing Guide is published as part of the PIA Branding Program, PIA’s agency marketing program (www.piabrandingprogram.com). Funding for the PIA Branding Program is provided in part by PIA’s Pinnacle Partners: Encompass Insurance, Erie Insurance, Harleysville Insurance, Progressive Insurance, State Auto Group, The Hartford, The Motorists Insurance Group, and Wright Flood.


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DOCIT IS NOW DOCIT FOR AGENTS

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PIA CONNECTION MARKETPLACE

LAST WINTER, PIA introduced a new money saving service from Drivers History Inc. called DocIt. They have recently rebranded their agent-focused offering under the name DocIT for Agents. This will help agents and others more easily distin-guish DocIt, used by an increasing number of auto insurance carriers to rate auto insurance policies, from the product which agents have been using to reduce their MVR expenses, jog applicant’s memories, find undisclosed drivers in a household and bet-ter place drivers with the right auto insur-ance carrier earlier in the quoting process.

The new destination for agents to learn about this PIA member-only service is www.pianet.com/DocITforAgents.

WHAT IS DOCIT FOR AGENTS?DocIT for Agents is an online ser-

vice that contains violation information on drivers sourced directly from court records (not the MVR). When referenced early in the applicant conversation, this

information leads to a more accurate initial quote, which greatly improves the customer experience. In addition, MVR expenses are reduced for those applicants who might otherwise drop after the policy is bound due to a subsequent premium increase when additional violations are discovered later in the process. These traffic violation reports are available to PIA mem-bers for as little as 75¢ per transaction.

HOW CAN AGENTS USE DOCIT FOR AGENTS?

At Initial Conversation: Agents can reference the information provided by DocIT for Agents early in the conversation to help prompt an applicant’s recollection of traffic violations.

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Improve Customer Experience: With DocIT for Agents you will reduce the occurrence of rate changes on subsequent quotes, thereby improving the overall customer experience.

Discover Violations for Additional Drivers in Household: Using DocIT for Agents, you can discover undisclosed house-hold members who have a violation history.

Reduce MVR Expenses: When appli-cants with violations self-select out earlier in the process, agencies reduce expenses and time spent on nonbuying customers.

LEARN MORETo learn more please contact Erin

Reilly at Drivers History at 856.673.1286 or [email protected]. Additional information, including the dates and times of upcoming PIA member webinars, can also be found on PIA National’s website at www.pianet.com/DocITforAgents.

DocIT for Agents is available exclusively to PIA members and is not available in all states.

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ALABAMAPIA of Alabama, 3805 Crestwood Pkwy NW #140, Duluth, GA 30096PHONE: (770) 921-7585 | FAX: (770) 921-7590e-mail: [email protected] | Web Site: www.piaga.com

ARKANSASPIA of Arkansas Inc. 10801 Executive Center Drive, Suite 207, Little Rock, AR 72211PHONE: (501) 225-1645 | FAX: (501) 225-2550e-mail: [email protected] | Web Site: www.piaar.com

CA/NV/AZ/NMPIA Group, 3205 Northeast 78th St #104, Vancouver, WA 98665PHONE: (888) 246-4466 | FAX: (360) 571-7600e-mail: [email protected] | Web Site: www.piawest.com

COLORADOPHONE: (703) 836-9340 | FAX: (703) 836-1279e-mail: [email protected] | Web Site: www.pianet.com

CONNECTICUTPIA of Connecticut, P.O. Box 997, Glenmont, NY 12077-0997PHONE: (800) 424-4244 | FAX: (518) 434-2342e-mail: [email protected] | Web Site: www.pia.org

DELAWAREPHONE: (703) 836-9340 | FAX: (703) 836-1279e-mail: [email protected] | Web Site: www.pianet.com

FLORIDAPIA of Florida, Inc., 1390 Timberlane Road, Tallahassee, FL 32312-1766PHONE: (850) 893-8245 | (800) 277-1171 FL only | FAX: (850) 893-8316e-mail: [email protected] | Web Site: www.piafl.org

GEORGIAThe PIA of Georgia, Inc., 3805 Crestwood Pkwy NW #140, Duluth, GA 30096PHONE: (770) 921-7585 | FAX: (770) 921-7590e-mail: [email protected] | Web Site: www.piaga.com

HAWAIIPIA of Hawaii, 1247 Kelewina St. Kailua, HI 96734PHONE: (808) 261-9460 | FAX: (808) 262-5355e-mail: [email protected] | Web Site: www.piahawaii.com

ILLINOISPHONE: (703) 836-9340 | FAX: (703) 836-1279e-mail: [email protected] | Web Site: www.pianet.com

INDIANAPIA of Indiana, 50 E. 91 Street Ste. 207 Indianapolis, IN 46240PHONE: (317) 899-9200 | FAX: (317) 493-0408e-mail: [email protected] | Web Site: www.indianapia.com

KANSASKansas Association of Professional Insurance Agents216 SW 7th Ave, Topeka, KS 66603PHONE: (785) 232-4143 | FAX: (785) 232-0272e-mail: [email protected] | Web Site: www.kansaspia.org

KENTUCKYPIA of Kentucky, P.O. Box 4205, Frankfort, KY 40604-4205PHONE: (502) 875-3888 | FAX: (502) 227-0839e-mail: [email protected] | Web Site: www.piaky.org

LOUISIANAPIA of Louisiana Inc., 8064 Summa Avenue, Suite C, Baton Rouge, LA 70809PHONE: (225) 766-7770 | (800) 349-3434 LA only | FAX: (225) 766-1601e-mail: [email protected] | Web Site: www.piaoflouisiana.com

MAINEMaine Insurance Agents Association, 17 Carriage Lane, Hallowell, ME 04347PHONE: (207) 623-1875 | FAX: (207) 626-0275e-mail: [email protected] | Web Site: www.maineagents.com

MARYLANDInsurance Agents & Brokers of Maryland P.O. Box 2023, Mechanicsburg, PA 17055-0763PHONE: (717) 795-9100 | FAX: (717) 795-8347e-mail: [email protected] | Web Site: www.iabgroup.com

MASSACHUSETTSPHONE: (703) 836-9340 | FAX: (703) 836-1279e-mail: [email protected] | Web Site: www.pianet.com

MICHIGANMichigan PIA, P.O. Box 99579 Troy, Michigan, 48099PHONE: (616) 454-4461 | FAX: (616) 454-4491e-mail: [email protected] | Web Site: www.mipia.com

MINNESOTAPIA of Minnesota, 8646 Eagle Creek Circle, Suite 202, Savage, MN 55378PHONE: (866) 694-7070 | FAX: (866) 749-8678e-mail: [email protected] | Web Site: www.piamn.com

MISSISSIPPIPIA Association of Mississippi, 4744 I-55 North, Jackson, MS 39211PHONE: (601) 984-8855 | FAX: (601) 984-9008 | (800) 898-0136 MS onlye-mail: [email protected] | Web Site: www.piams.com

MISSOURIMissouri Association of Insurance AgentsP.O. Box 1785, Jefferson City, MO 65102-1785PHONE: 573-893-4301 | FAX: 573-893-3708e-mail: [email protected] | Web Site: www.missouriagent.org

MONTANAPIA of Montana, 3205 NE 78th St Ste 104, Vancouver, WA 98665-0697PHONE: (888) 246-4466 | FAX: (360) 571-7600e-mail: [email protected] | Web Site: www.piawest.com

NEBRASKA/IOWAPIA of Nebraska/Iowa, 920 South 107th Avenue, Suite 305, Omaha, NE 68114PHONE: (402) 392-1611 | FAX: (402) 392-2228e-mail: [email protected] | Web Site: www.pianeia.com

NEW HAMPSHIREPIA of New Hampshire, P.O. Box 997, Glenmont NY 12077-0997PHONE: (800) 424-4244 | FAX: (518) 434-2342e-mail: [email protected] | Web Site: www.pia.org

NEW JERSEYPIA New Jersey, P.O. Box 997, Glenmont NY 12077-0997PHONE: (800) 424-4244 | FAX: (518) 434-2342e-mail: [email protected] | Web Site: www.pia.org

NEW YORKPIA New York, P.O. Box 997, Glenmont NY 12077-0997PHONE: (800) 424-4244 | FAX: (518) 434-2342e-mail: [email protected] | Web Site: www.pia.org

NORTH CAROLINAPIANC, PO Box 1387 Davidson, NC 28036PHONE: (877) 401-6822 | (877) 98PIANCe-mail: [email protected] | Web Site: www.piaofnc.com

NORTH DAKOTAPIA of North Dakota1211 Memorial Hwy Holiday Park Office #6, Bismarck, ND 58504-5213PHONE: (701) 223-5025 | (800) 733-1050 ND&MN onlyFAX: (701) 223-9456 | e-mail: [email protected] Site: www.piand.com

OHIOPIA of Ohio, Inc., 600 Cross Pointe Road, Gahanna, OH 43230PHONE: (614) 552-8000 | (800) 555-1742 | FAX: (614) 552-0115e-mail: [email protected] | Web Site: www.piaaohio.com

OKLAHOMAPIA of Oklahoma, P.O. Box 12921, Oklahoma City, OK 73157PHONE: (405) 942-1119 | FAX: (405) 943-4380e-mail: [email protected] | Web Site: www.piaok.com

OREGON/IDAHOPIA of Oregon/Idaho, 3205 Northeast 78th Street, #104, Vancouver, WA 98665PHONE: (503) 287-7570 | FAX: (360) 571-7600e-mail: [email protected] | Web Site: www.piawest.com

PENNSYLVANIAPHONE: (703) 836-9340 | FAX: (703) 836-1279e-mail: [email protected] | Web Site: www.pianet.com

PUERTO RICO & CARIBBEANPIA of Puerto Rico and the Caribbean IncPO Box 192389, San Juan, PR 00919-2389PHONE: (787) 792-7849 | FAX: (787) 792-4745e-mail: [email protected] | Web Site: www.piaofpr.com

RHODE ISLANDPHONE: (703) 836-9340 | FAX: (703) 836-1279e-mail: [email protected] | Web Site: www.pianet.com

SOUTH CAROLINAPIA of South Carolina, PO Box 21367, Columbia, SC 29221-1367PHONE: (803) 772-0557 | (888) 742-6372 | FAX: (803) 772-0846e-mail: [email protected] | Web Site: www.piasc.net

SOUTH DAKOTAPHONE: (703) 836-9340 | FAX: (703) 836-1279e-mail: [email protected] | Web Site: www.pianet.com

TENNESSEEPIA of Tennessee Inc, 504 Autumn Springs Court Suite A-2, Franklin, TN 37067PHONE: (615) 771-1177 | FAX: (615) 771-3456e-mail: [email protected] | Web Site: www.piatn.com

TEXASTexas Insurance Professionals 3632 Frankford Rd, #200B, Dallas, TX 75287PHONE: (972) 862-3333 | FAX: (972) 307-7888e-mail: [email protected] | Web Site: www.piatx.org

UTAHUtah Association of Independent Insurance Agents4885 S. 900 E., Suite 302, Salt Lake City, UT 84117PHONE: (801) 269-1200 | FAX: (801) 269-1265e-mail: [email protected] | Web Site: www.uaiia.org

VERMONTVermont Insurance Agents Association, P.O. Box 1387, Montpelier, VT 05601PHONE: (802) 229-5884 | FAX: (802) 223-0868e-mail: [email protected] | Web Site: www.viaa.org

VIRGINIA/DCPIA Assn of Virginia & DC, 8751 Park Central Dr., Ste 140, Richmond, VA 23227PHONE: (804) 264-2582 | FAX: (804) 266-1075e-mail: [email protected] | Web Site: www.piavadc.com

WASHINGTON/ALASKAPIA of WA/AK, 3205 Northeast 78th Street, #104, Vancouver, WA 98665PHONE: (360) 571-7100 | FAX: (360) 571-7600e-mail: [email protected] | Web Site: www.piawest.com

WEST VIRGINIAPHONE: (703) 836-9340 | FAX: (703) 836-1279e-mail: [email protected] | Web Site: www.pianet.com

WISCONSINPIA of Wisconsin, Inc., 6401 Odana Road, Madison, WI 53719-1126PHONE: (608) 274-8188 | (800) 261-7429 | FAX: (608) 274-8195e-mail: [email protected] | Web Site: www.piaw.org

WYOMINGAssoc. of Wyoming Ins. Agents, PO Box 799, Sundance, WY 82729-0799PHONE: (307) 283-2052 | FAX: (775) 796-3122e-mail: [email protected] | Web Site: www.awia.com

PIA AFFILIATES

P INNAC L E PARTNER Encompass Insurance

Erie Insurance Harleysville Insurance Progressive Insurance

State Auto Group The Hartford

The Motorists Insurance GroupWright Flood

2014 PIA NATIONAL PINNACLE PARTNERS

BUSINESS-BUILDING TOOLS

✦ PIA BRANDING PROGRAM. Promote your agency with our print and radio ads, available in English and Spanish. www.piabrandingprogram.com

✦ HARTFORD FLOOD INSURANCE. PIA’s endorsed flood provider since 2004. Dedicated local sales directors and book transfer/rollover team plus great commissions for PIA members. Call (860) 547-5006.

✦ FLOODBROKER.COM. Sell more flood insurance with a flood quoting Web portal. A PIA member exclusive!

✦ PIA AGENCY MARKETING GUIDE. Hands-on marketing tips from industry experts. Published annually.

✦ ROUGH NOTES PRODUCER ONLINE. Identifies risk exposures. Provides detailed coverage analysis. PIA member price $500 annually (reg. $1,695). Call 800-428-4384. Use your PIA member ID# above name on mailing label.

✦ DOCIT FROM DRIVERS HISTORY. DocIT's online database of driver violation data helps agents align applicants with the right carrier so they order fewer MVRs.

✦ ENHANCE INSURANCE BY AGORAGATE. Increase your visibility online when people search for insurance.

✦ AGENCY REVENUE TOOLS. Boost personal lines sales by engaging in employee worksite marketing using your appointed markets at regular commission rates.

✦ AGENCY WEBSITES FROM EMERALD. Cutting-edge websites tailored specifically to insurance agents.

✦ PIA LOGO. Put the PIA logo on your business card, website, stationery and signage. Order items with the PIA logo in our online store.

✦ CONSUMER BROCHURES. Answer your customers’ questions with PIA’s attractive brochures.

INSURANCE PRODUCTS

✦ E&O INSURANCE. E&O coverage from PIAPRO (the PIA Professional Liability Insurance Company) and additional admitted and non-admitted markets with differing appetites. www.pianet.com/eando

✦ PIA AGENTS UMBRELLA PROGRAM. Excess insurance protection includes E&O and business liability coverage, with available endorsements for EPL and personal coverage.

✦ INDIVIDUAL AND GROUP INSURANCE PRODUCTS. Basic, voluntary and dependent term life; long/short term disability; AD&D; business overhead expense; and hospital income protection. www.piatrust.com

TOOLS FROM THE PIA PARTNERSHIP, PIA’S COMPANY COUNCIL

✦ CLOSING THE GAP — GROWTH & PROFIT. Use Partnership calculators to plan for new business growth and profitability. Includes three proven, turnkey approaches for improving retention, sales and account-rounding.

✦ AGENCY TOUCH POINTS — THE VOICE OF THE CUSTOMER. Capitalize on Partnership research to give personal lines customers what they really want.

✦ REACHING GEN Y. Understand and reach Gen Y age group insurance consumers so you can convert them into loyal agency customers.

✦ PERPETUATION CENTRAL. PIA’s interactive tool to guide you through the many phases of your agency’s lifecycle.

✦ PRACTICAL GUIDE TO SUCCESSFUL PLANNING. Plan for success within your own agency while coordinating with your carriers.

AGENCY MANAGEMENT TOOLS

✦ AGENCY AGREEMENT REVIEW SERVICE. Free to members and carriers, PIA recommends changes to carriers and highlights concerns for members.

✦ AGENCY PREPAREDNESS AND RECOVERY PLAN. The PIA guide to creating an agency-specific business contingency plan.

✦ EMPLOYEE PROFILING. Hire the right people with OMNIA.

✦ PRESCRIPTION DISCOUNTS. Save money on prescriptions not covered by insurance. Available to PIA members and their clients.

✦ Discounts on producer licensing, car rentals, shipping with UPS, and calendars from Mines Press.

✦ Free subscriptions to industry publications.

LEGISLATIVE & REGULATORY OUTREACH

✦ GRASSROOTS ALERTS. Send pre-written, fully-editable letters directly to your elected officials. www.piagrassroots.com

✦ PIA FEDERAL LEGISLATIVE SUMMIT. Every spring, PIA members visit Capitol Hill to meet with their elected representatives. www.piafls.com

✦ DISTRICT LOBBYING DAY…CAPITOL HILL IN YOUR BACKYARD. Every August, PIA members meet with Members of Congress in their district offices. www.piadld.com

✦ PIA POLITICAL ACTION COMMITTEE (PIAPAC). PIAPAC contributes to the campaigns of candidates to federal office who share our pro-insurance, pro-business perspective and who support our issues. www.piapac.com

YOUR MEMBER BENEFITS FROM PIA NATIONAL

Learn more about these PIA National member benefits at www.pianet.com.



THE LAST WORD

LET’S MIMIC THE MOUSEJOHN M. PETRUCCI, VP-SALES, STATE AUTO GROUP CHAIRMAN, THE PIA PARTNERSHIP

ONE OF my favorite quotes is, “Facts are stubborn things.” It’s actually part of a larger quote, delivered by John Adams in his argument in defense of the soldiers in the Boston Massacre Trials in December 1790. “Facts are stubborn things; and whatever may be our wishes, our inclina-tions, or the dictates of our passion, they cannot alter the state of facts and evidence.” It should be noted that Adams was defending British soldiers at this trial—a trial he won. Facts are indeed stubborn things.

One perception the industry has seemed to adopt is that price is the primary variable in the insurance purchasing decision. We see companies advertise price and we see agencies “sell” price. Yet I would submit for your consideration, price is not the primary reason people buy anything, including insurance.

I believe consumers buy based on a value equation, which reads V=WIG/P, or Value = What I Get / Price. Let’s say you and I were going to buy a car today from GM. You buy a Cadillac, and I buy a Malibu. Who pays more for their car? You do, of course. Yet, our value equations could be exactly the same. You pay more money because you get more car; I pay less money because I get less car. The “V” in those two equations can be identical, even though our numerators and denominators are different.

This equation points to the fact that price is a lagging factor, in which consumers decide what they will pay based on what they’re going to get. It’s not the omnipotent factor that’s the current perception in our industry today. If you don’t believe that, then let’s talk Disney!

Anyone who visits a Disney Resort knows they’ll take a hit in the wallet. There’s some grum-bling about costs but never a complaint. That’s because Disney knows the value equation cold.

When you go to Disney, you’re not paying for the room, the rides or the recreation. When you go to Disney, you’re not paying for the characters, the cartoons or the charm. When you go to Disney you’re paying for one thing—memories.

Disney’s value proposition is that no other company can create the memories it can. Creating those memories costs money. People have been, are and will continue to be willing to pay that price as long as the memories keep coming.

What is sorely lacking in our industry today, and among many agencies, is a true value propo-sition. Absent this, companies and agents hawk their wares based on providing the consumer the ‘lowest price.’ They add no value, allowing price to dominate.

Abraham Lincoln once said, “A lawyer’s time and advice are his stock in trade.” The knowl-edge and insight of the independent agent should be worth something in the value equation. We need to raise the public’s awareness of what Independent Agents bring to the table, and why that experience is worth something extra.

There is probably no more highly respected investor in the world today than Warren Buffet. Buffet shared this insight regarding value and price: “Price is what you pay. Value is what you get.” Sounds like Warren Buffet and Walt Disney were cut from the same cloth.

As you finish up 2014 and make plans for 2015, keep the ‘Mouse’ in mind. Educate your cli-ents and prospects about all the wonderful things your agency does for them outside of provid-ing a policy. When you lead with what they’ll get, price takes a back seat.

“A LAWYER’S

TIME AND ADVICE

ARE HIS STOCK IN

TRADE.”

ABRAHAM

LINCOLN

800-595-2373ASTONISH.COM

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