INSIDE Opinion: PIA National Publishes Important Small Business Research » 7 Organic Growth: Agents & Brokers see 5.9% » 14 Towers Watson Shareholders Sue » 17 NARAB: FIO & Obama Administration Standing Still » 23
Cover Photo Credit: Phil Roeder, Balloons & Corn
August 2015 | Published Monthly
Did you know that PIA’s company council, The PIA Partnership, has conducted nationwide research about the insurance buying preferences of small business owners? The research is encouraging because it found that small business owners strongly prefer independent insurance agents as they make choices in today’s online world. However, the results also serve as a wake-up call that agents must take steps to continue to demonstrate their value and also be more engaged online. PIA and the companies belonging to The PIA Partnership have created a public website that helps agents understand PIA’s findings. PIA members also have access to a private website containing a series of strategies and tools to help them stay ahead of online competition in commercial lines. To access the newest PIA Partnership project, Small Business Insurance & The Internet — The Voice of the Commercial Lines Customer, visit us at www.pianet.com/voiceoftheclcustomer. If you are not a PIA member and want to access all of the tools available through this program, contact us for a membership application or visit us online at www.pianet.com/joinpia.
National Association of Professional Insurance Agents 400 N. Washington St., Alexandria, VA 22314-2353 www.pianet.com | membership@pianet.org | (703) 836-9340
Top Stories Opinion: PIA National Publishes Important Small Business Research | 7 PIA National has done it again. It has produced a document proving — one more time — how valuable you are to the business community and to individuals. AGENTS WIN: Groundbreaking Research by The PIA Partnership | 10 Extensive nationwide research conducted by The PIA Partnership has found that small business owners (SBOs) strongly prefer independent insurance agents as they make choices in today’s online world, but that agents must take steps to continue to demonstrate their value and also be more engaged online. Commissions Fall with Commercial Pricing | 12 For insurance it seems to be either boom or bust. Industry Employment: Up & Recovering from Recession | 14 Industry watchers constantly warn of the drain of talent from insurance. Organic Growth: Agents & Brokers see 5.9% | 14 The second quarter of 2015 was good to agents and brokers. You Need to Know: Cell Phone Contracts Changing | 15 Cell phone contracts are going away. The industry standard used to be two-years. Millennials — Unhappy at Work & Why | 16 Disclaimer. Many of the statements in this story are generalities.
Congress to Take on C Corp. Tax Reform | 17 Before the August recess Congress was looking at tax reform for C Corporations. C corporations are the nation’s largest. Towers Watson Shareholders Sue | 17 The $18 billion merger of the Willis Group Holdings with Towers Watson isn’t setting well with the Towers Watson stockholders. Cyber Security & Agents: What You Need to Know | 18 The hottest line of insurance these days is cyber. Agents & Brokers Critical to ObamaCare Success | 21 PIA National — and other insurance groups — pushed for agent and broker participation in the Affordable Care Act when it was being crafted in 2010. NARAB: FIO & Obama Administration Standing Still | 23 Congress established the National Association of Registered Agents and Brokers (NARAB) eight months ago.
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Opinion
PIA National Publishes Important Small Business Research PIA National has done it again. It has produced a document proving — one more time — how valuable you are to the business community and to individuals. You are independent insurance agents. Some of you are part of large agencies and others are truly independent and are one-person shops. Even more of you lie somewhere in between. You all have one thing in common and that is the ability to truly serve your clients and to do so one-on-one. A few years ago this publication did an interview with Mike McGavick, who then headed up Safeco. He passionately pushed the idea of the value of the independent insurance agent and said, as an industry, we don’t do — to put it bluntly — enough bragging about ourselves. The industry employs thousands and thousands of people and is critical to the economic health of the United States. Trickle that down and make it personal and we find you are pillars in your community. You are movers and shakers. You solve problems. And most importantly, you care.
No one knows that. We don’t toot our own horns enough. Insurance makes people whole and many of you are the people that make that happen. Most of what we hear about insurance in media is negative. In fact, these days the only positive you hear about insurance is the self-serving commercials on television and they’re industry produced. A few years ago Heidi Duncan of Duncan & Associates Insurance Brokers in Olympia, Washington was president of PIA Washington/ Alaska. She talked to the association at one of the annual meetings about growing up in the insurance industry and how her father was a super hero. In a crisis, he saved the day. There are many other examples we can use of the power of the importance of the independent insurance agent. These two are the best examples of how important you are that I’ve come across in the 10-years this editor has worked for the association and this publication.
August 2015 | Main Street Industry News |www.pianeia.com| 7
Top Stories The study is from PIA National’s agencycompany council the PIA Partnership and is titled Small Business Insurance & The Internet—The Voice of the Commercial Lines Customer. It may be an online world these days but these businesses want — and more importantly need — the advice and experience of a professional independent insurance agent. But this isn’t to say that the Internet is not important to them and the study comes with a warning. The Internet and it’s online lure is powerful. Independent agents must be proactive to continue to demonstrate the value of the independent agency system to business. PIA National Executive Vice President Mike Becker said the purpose of this PIA effort is to give you more tools to use to meet the challenges faced by online providers and direct writers. “Our results affirm that while small business owners continue to greatly value the professional advice and personal service of an independent agent, there is an expectation that their agent will be more capable of online interaction concerning their accounts and that the agency will have a fully credible online presence,” he said. Becker calls the study a wakeup call and an affirmation. “Commercial lines customers want agents as experts who are backed by the efficiency of the Internet,” Becker added. In other words, you are critical to your business clients but it’s time to find ways to blend that all important personal contact with the convenience of the Internet. Not surprisingly — and what other PIA studies and the studies of other insurance associations have found — is what your clients find important about you and what you have to offer: • Belief in the person or company • Having a person who understands my
business • Quick service response • Personal attention • Providing me with confidence that I am making the right insurance decisions PIA National President Richard Clements said independent insurance agents have always been up to whatever challenge they face. These days it is competition from direct writers and giants like Google. “Much has been said and written about plans by companies such as Google attempting to challenge the dominance of independent insurance agents in commercial lines. That’s why we asked commercial lines customers what they want. We found they want what we provide, and that they also want us to provide more. As for competition, I say what agents have always said: ‘Bring it on!’” he said. PIA Partnership chair John Petrucci said adaptability is also what small business likes about you. At the same time, they, too are adapting to an Internet world and the value of an online evaluation of insurance before the purchase. “Some studies backed by direct writers and captives had contended that buyers of small and midsize business owners policies (BOP) wanted to purchase such coverages online. We decided that a more objective picture of buyer preferences was required,” he said. And — Petrucci added — the message of the study is clear. “The Internet is here to stay. It is not the opponent of agents. But while it can be a source for competition, it can also provide an opportunity for agents when they use it to their own advantage. Responding is about evolution, not revolution. The changes taking place in the marketplace provide an excellent opportunity for independent agents to increase their dominance in the CL market, but the one thing that is not an option for independent agents is inaction.”
August 2015 | Main Street Industry News | www.pianeia.com | 8
Top Stories Here’s what else the study found: • In order to be competitive, independent agents must have a full, credible online presence. • Small business owners most value agents with professional, industry-specific knowledge. • Most small business owners who shop insurance online still lack confidence in themselves to make ideal insurance choices, and they want help. • Agents need to sell their value. Without more frequent demonstration of value, alternatives like bypassing the agent by going online will encroach further. To sum it up: small business owners will start the insurance process online. But they depend on you to check and confirm what they learn there. And they overwhelmingly prefer personal contact throughout the insurance purchase process. Sometimes we forget how important we are to our small business clients and our personal lines clients. You are — indeed and as Heidi Duncan said — super heroes. The current PIA Partnership companies are: • Encompass Insurance • Erie Insurance • Harleysville Insurance • Liberty Mutual Insurance • MetLife Auto & Home • Progressive Insurance • Selective Insurance Group • State Auto Group • The Central Insurance Companies • The Hanover Insurance Group • The Hartford • The Motorists Insurance Group n August 2015 | Main Street Industry News |www.pianeia.com| 9
Top Stories
Agents Win:
Groundbreaking Research by The PIA Partnership Extensive nationwide research conducted by The PIA Partnership has found that small business owners (SBOs) strongly prefer independent insurance agents as they make choices in today’s online world, but that agents must take steps to continue to demonstrate their value and also be more engaged online. The research results are part of “Small Business Insurance & The Internet—The Voice of the Commercial Lines Customer,” the latest project of PIA and The PIA Partnership, designed to provide independent insurance agents with tools to meet the new challenges posed by online providers and direct writers. “Our results affirm that while small business owners continue to greatly value the professional advice and personal service of an independent agent, there is an expectation that their agent will be more capable of online interaction concerning their accounts and that the agency will have a fully credible online presence,” said PIA National Executive Vice President & CEO Mike Becker. “This is both an affirmation and a wake-up call for agents.” The research by PIA and The PIA Partnership also found that what is evolving over time is how some customers would like to see what they value delivered when it comes to their insurance in today’s online business environment. This presents new opportunities for independent agents in how they reach and serve their customers. “Some studies backed by direct writers and captives had contended that buyers of small and midsize business owners policies wanted to purchase such coverages online,” said PIA Partnership Chairman John Petrucci. “We decided that a more objective picture of buyer preferences was required.”
“The message is clear,” said Petrucci. “The Internet is here to stay. It is not the opponent of agents. But while it can be a source for competition, it can also provide an opportunity for agents when they use it to their own advantage. Responding is about evolution, not revolution. The changes taking place in the marketplace provide an excellent opportunity for independent agents to increase their dominance in the CL market, but the one thing that is not an option for independent agents is inaction.” “Much has been said and written about plans by companies such as Google attempting to challenge the dominance of independent insurance agents in commercial lines,” said PIA National President Richard A. Clements. “That’s why we asked commercial lines customers what they want. We found they want what we provide, and that they also want us to provide more. As for competition, I say what agents have always said: ‘Bring it on!’” For more detailed research results, see the project website: Click Here The PIA Partnership, originally established as the Company Council of Executive Officers (CCEO) in 1996, is a group of insurance companies that work collaboratively with PIA National to conduct research and develop tools and resources designed to benefit professional independent insurance agents. Current PIA Partnership companies include: Encompass Insurance; Erie Insurance; Harleysville Insurance; Liberty Mutual Insurance; MetLife Auto & Home; Progressive Insurance; Selective Insurance Group; State Auto Group; The Central Insurance Companies; The Hanover Insurance Group; The Hartford; and The Motorists Insurance Group. n Study: Small-business Owners Prefer Digitally Engaged, Responsive Independent Agents (National Underwriter 8/10/15) PIA Press Release (8/10/15)
August 2015 | Main Street Industry News | www.pianeia.com | 10
But agents can’t be complacent! The Internet is here to stay and agents need to respond. The PIA Partnership (and participating companies) have recently completed an extensive research project examining the perspective of small business owners as they make insurance choices and receive value added service in today’s online world. The research found that while choosing a professional independent agent continues to be their clear preference, small businesses are adapting to change and they want their agents to adapt with them. PIA and The Partnership are offering resources agents can use as they compete in today’s online environment.
Available online at: VoiceOfTheCLCustomer.com The PIA Partnership, originally established in 1996, is a group of insurance companies that share resources and work closely with PIA to conduct research and develop tools and resources designed to benefit professional independent insurance agents. PIA members have access to all of the Partnership’s research, tools and resources via the PIA National website at http://pianet.com/
Current PIA Partnership companies include: Central Insurance Cos. Encompass Insurance Erie Insurance Hanover Insurance Group Harleysville Insurance Liberty Mutual Insurance
MetLife Auto & Home Motorists Insurance Group Progressive Insurance Selective Insurance Group State Auto Group The Hartford
August 2015 | Main Street Industry News |www.pianeia.com| 11
Top Stories
Commissions Fall with Commercial Pricing For insurance it seems to be either boom or bust. We all see the softening of the insurance market. And bust in this case means dwindling commissions. Here are some stats from the Council of Insurance Agents and Brokers (CIAB) that bear the statement out. Commission decline starts with commercial insurance pricing.
• The price drop on all commercial accounts average 2.3% • Large accounts cut prices by 3.7% on average in the first quarter of 2015. • Medium accounts dropped 2.7% To compare this year with last, in the fourth quarter of 2014 prices declined 0.7%. CIAB President and CEO Ken Crerar said the price drop is due to the growing soft market, more competition for business and from low catastrophe losses. “The trend of falling prices we saw in the fourth quarter of 2014, continued into the first quarter of this year. Last quarter, buyers gained some advantage as pricing slid across the board and across all regions for most lines of business.”
August 2015 | Main Street Industry News | www.pianeia.com | 12
Top Stories He added the relatively calm winter — other than the heavy snow experienced in the Northeast — has kept commercial property pricing down. Crerar said carriers are now hungrier for business and the CIAB survey points out that carriers: • Have a much broader appetite • Are offering lower deductibles • Are offering flexible pricing and terms • Are offering multi-year deals All of this is lowering agent and broker commissions. And it is likely to get worse before it gets better. SNL released a report last week on the future of commercial and personal lines insurance pricing. Three things are going to impact insurance and put pressure on underwriting margins over the next few years:
• Softer commercial lines pricing • How lower interest rates are going to impact management strategies • Lower levels of reserve releases SNL predicts a steady downward trend in underwriting profits. Look for them to be at break even levels over the next five-years. The impact — however — depends on the line of insurance. Some commercial lines will benefit from the soon to come — or now existing — conditions. For others, Crerar said there is light at the end of the dark tunnel. Lower and more favorable rates do open up the possibility of clients purchasing coverages they’ve passed on before like cyber liability insurance. n Source links: Insurance Business America & SNL
August 2015 | Main Street Industry News |www.pianeia.com| 13
Top Stories
Industry Employment:
Up & Recovering from Recession
Organic Growth:
Agents & Brokers see 5.9%
Industry watchers constantly warn of the drain of talent from insurance. A lot of experience is going away, and quite rapidly as the Baby Boomers retire. While the concern is there, few companies and agencies report problems replacing people who leave their employment. It turns out, there are plenty of jobs and plenty of people to take them. The U.S. Labor Department’s Bureau of Labor Statistics — the BLS — says in June of this year — on a year-over-year basis — employment is up. Some subsectors — the report notes — are up considerably. Dr. Robert Hartwig — the president of the Insurance Information Institute (I.I.I.) — analyzes the BLS data every month. He said the rise of 3,400 positions — or +0.6% — in June is the highest hike since March of 1998. Or to put it another way, in the 12-month period from June 2014 to June 2015, the industry produced 6,500 jobs. That’s a 1.2% jump. Another plus in the report. Hartwig said in the last 18-months employment has gone up and the numbers are now where they were in the late summer of 2012. Here are some details: • Agents & Brokers gained 21,800 jobs in June of 2015 compared to June of 2014. • That’s up 3.1% and the number of agents and brokers is now 734,000. • During the Great Recession the number of employed agents and brokers dropped to 638,200.
The second quarter of 2015 was good to agents and brokers. Organic growth — on average — hit 5.9%. The Reagan Consulting Organic Growth and Profitability (OGP) quarterly survey said it is a bit higher than the 5.8% we saw in the first quarter of this year and in the second quarter of 2014. Reagan Consulting’s Kevin Stipe said it’s a positive sign. “Industry organic growth has now been in a relatively tight band of 5% to 7% for 14 consecutive quarters. Times are good for insurance brokers.” The strong organic growth pushed profitability to 24.6%. That is the highest secondquarter performance since Reagan launched the survey in 2008 and for the first time group benefits topped commercial lines. Group benefits saw a 6.8% rate of growth. Commercial lines — now in a slump — hit just 5.4%, which is below the average.
• From then to now agents and brokers have gained 98,800 jobs — or an increase of 15%. n
Reagan — not alone in this prediction — said we’re going to see more and even deeper softening in commercial P&C lines in the future. n
Source link: PropertyCasualty360.com
Source link: PropertyCasualty360.com
August 2015 | Main Street Industry News | www.pianeia.com | 14
Top Stories
TWO
Budget phones are going to suddenly become more popular: Good but cheap phones will win out in the near future. Some technology experts say many compare with the best of the best. Finding them, however, has been tricky. That is until now.
THREE
The high cost of an iPhone means Android could pick up marketshare: Those budget phones — or at least most of them — run off of Google’s Android system. Unless Apple comes around and builds a cheaper iPhone that could be bad news for the company.
You Need to Know
FOUR
Cell phone contracts are going away. The industry standard used to be two-years. Period. And with that commitment, your provider lowered the cost of the phone or whatever mobile device you picked. Sometimes they were free.
FIVE
Cell Phone Contracts Changing
MSN Money published an article on the impact of this change on your cell phone bill. There — as with all things — positives and negatives. The online news source pointed out seven.
ONE
You will now have to pay full-price for your phones or mobile device: The two-year agreement allowed the carrier to afford to subsidize your phone cost. No more. The bad news first. You won’t get the $350 to $400 subsidy for that $650 smartphone. The good news is the carriers will still carry the cost and let you make payments. Most payment structures will be — you guessed it followed by a heavy-sigh — two-years.
More protection for phone screens: Absorbing the total high cost of a mobile device means more people will work harder to protect their screens and the body of their phones. Good news for device protection makers. Look for longer lines when Apple debuts a new phone: People aren’t going to hang onto their phones as long. So Apple’s debut phone lines will be longer.
SIX
Trying a new carrier just got easier: You aren’t locked into a contract so you can go wherever you want and quickly. If you don’t like what your current carrier does, switch. If you don’t like where you switched to, switch back.
SEVEN
Carrier data plans: You can bounce around when it comes to data usage. Think you’re going to be gobbling up data on a vacation or for a new business deal, pick up the bigger carrier data package. When things calm down, switch back to a smaller data plan. Source link: MSN Money
August 2015 | Main Street Industry News |www.pianeia.com| 15
Top Stories
Millennials
Unhappy at Work and Why Disclaimer. Many of the statements in this story are generalities. Please don’t take them as specifics. The conclusions come from discussions with 350 Millennials by Blackhawk Engagement Solutions. It’s a consulting firm that specializes in workplace incentives and engagement.
Blackhawk’s Rodney Mason said Millennials want rewards now. “All-expense-paid trips and tickets to sporting events have little appeal for millennials. Instead, they want more immediate and consistent recognition for their professional contributions and love the immediate gratification of prepaid card rewards.”
In the minds of most Millennials they’re special. It’s what they’ve been taught about themselves by parents, teachers and others in society. Theory is one thing. Reality is quite another.
Mason said he can’t emphasize that enough.
When bosses aren’t so quick with the praise and to tell these 20-somethings how wonderful they are, they get depressed and discouraged. Not only that, but the rewards that piqued the interest of their parents and grandparents — like goals where they can win special trips and cash — don’t resonate with the instant gratification generation.
“Millennials are accustomed to attention and praise from their earliest days, and expect regular affirmation in the workplace. They are also prepared to switch jobs earlier and more frequently than previous generations, so employers need to take particular steps to maintain Millennial engagement,” Mason added. By the way, if you’re curious, the Blackhawk study is called Happy Millennials: An Employee Rewards & Recognition Study. n Source link: PropertyCasualty360.com
August 2015 | Main Street Industry News | www.pianeia.com | 16
Top Stories
Congress to Take on C Corp.Tax Reform Before the August recess Congress was looking at tax reform for C Corporations. C corporations are the nation’s largest. They’re the Apples and the Wal-Marts and their profits are taxed separately from their owners. When the August recess is done, the reform discussions will be taken up again by the House Ways and Means Committee. The concern is the dropping numbers. In the 1980s the number of C corporations rose dramatically. What propelled the rise is profits being taxed separately from the corporation owners. Recently those numbers are declining and so is the revenue from them. The Internal Revenue Service’s latest numbers are from 2012 and there were 1.6 million of them. That’s down from 2.1 million in 2002. The IRS gets 7% to 14% of its revenue from C corporations. In the 1960s and 1970s that figure was 14% to 23%. The panel’s discussion came about from international tax reforms the committee is considering. Republicans and Democrats agree the decline is because of a tax structure that is too high. How far to drop the tax rate is where the Republicans and Democrats disagree. Proposals being weighed are:
While C corporations are declining, S corporations are on the rise. There were 3.2 million of them 10-years ago. In 2012 the IRS got returns from 4.2 million of them. An S corporation pays no income tax. Profits are sent directly to corporation owners who pay taxes on the profits. The IRS also put out information on limited liability firms, sole ownership and other business structures. They are all on the rise and none of them pay corporate income tax. The House committee is not looking at reforms in any businesses other than the C corporation. n Source link: insurancejournal.com
Towers Watson Shareholders Sue The $18 billion merger of the Willis Group Holdings with Towers Watson isn’t setting well with the Towers Watson stockholders. Since the merger on June 30th, four class action lawsuits have been filed. This factoid comes from a Willis financial report — required — that says, “Plaintiffs claim that the merger involves an unfair price, an inadequate sales process, self-dealing, unreasonable deal protection devices and inadequate disclosures. Among other remedies, the plaintiffs seek to enjoin the merger.”
• Rules to stop C corporations from reincorporating in another country to reduce its U.S. tax burden
In other words, the suit — of course — is really about money. The shareholders don’t think they are getting enough bang for the merger buck. Included in the suit are Willis, Towers Watson CEO John Haley and the Towers Watson board of directors. n
• Tax breaks on intellectual property profits
Source link: Employee Benefit News
• A tax break on foreign profits
August 2015 | Main Street Industry News |www.pianeia.com| 17
Top Stories
Cyber Security & Agents What you need to know ... The hottest line of insurance these days is cyber. While having the insurance is important, it is equally important to emphasize to your cyber insurance clients that they must take steps to make sure the records and data insured is protected. And it cannot be emphasized enough that protected means PROTECTED. Mike Pittenger of a software firm Black Duck Software said insurers are looking very carefully at what companies are doing to protect data before issuing a payout. “Insurers are denying coverage to companies that fail to take even the most obvious security measures.” Pittenger has some advice to agents to pass on to their clients: Cyber insurance has minimum requirements that must be met. Pittenger said, “Cyber coverage requires due diligence on the part of the insured and agents should be asking their clients how well they’re managing the risk of a data breach.” In other words, when patches are issued for software, they must be installed
immediately. Failure to fix patches can lead to a denial of coverage. Minimum standards: There are minimum standards for every policy and the client must be made aware of those standards. This is especially critical if they have outsourced the management of their system or their data or both. A business must stay on top of what that company is doing. A business owner or manager must also make sure to be aware of the vulnerabilities of their system and must make an effort to fix problems. That makes system monitoring critical to having coverage if there is a breach. Pittenger said this is an especially critical need for the small business. “Smaller organizations often use packaged software, and they outsource their IT management,” notes Pittenger, “so they don’t have a security center that’s doing any monitoring — or they don’t think about it.”
His advice? Think about it.
August 2015 | Main Street Industry News | www.pianeia.com | 18
Top Stories
Know the software being used. Pittenger said, “Understand the software you’re using, its security measures and vulnerabilities” Make sure your client knows where their information is at all times and that they know what applications control that information. Knowing these things helps prioritize security efforts. Advise them to have policies and procedures in place and when software updates pop up, make sure they’re done. If they outsource, make sure that firm has policies and procedures as well. And check to make sure the update was done.
Know where the data is stored: “Small retailers or similar businesses often outsource PCI [payment card industry] compliance. When your dry cleaner swipes
your credit card, the information often goes to a third party processor,” Pittenger said. Just because data is outsourced doesn’t mean the client is off the hook. Clients need to know they still have the primary liability for the security of that data. “Advise your clients to be sure they’re not storing credit card numbers on any electronic devices or local computers” Pittenger said.
Make sure to comply with federal and state regs: The federal government and state governments have rules in place on the storage of data. So a breach where a client is found negligent could open them up to federal and state fines or prosecution in addition to lawsuits from the clients whose data is lost. n Source link: PropertyCasualty360.com
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Agents & Brokers Critical to ObamaCare Success do know much of its success with consumers comes from the independent insurance agent and broker. Or so says a Kaiser Family Foundation report titled the 2015 Kaiser Foundation Survey of Health Insurance Marketplace Assister Programs and Brokers.
PIA National — and other insurance groups — pushed for agent and broker participation in the Affordable Care Act when it was being crafted in 2010. Those pleas fell on deaf ears. Much to the chagrin of the health insurance industry, the Obama administration and congressional Democrats pushed for the creation of “neutral” navigators to assist consumers with enrollment. It didn’t make sense because these navigators — for the most part — aren’t insurance professionals, aren’t required to have licenses, and in many instances, background checks or errors and omissions insurance. Plus, the taxpayer has to fork over dollars for the salaries of the assister workforce. Independent agents and brokers — who by the way, are already trained and experienced in the sale of health insurance — would not cost the taxpayer a dime. What wasn’t lost on consumers in all of this — and as the exchanges went into operation a couple of years ago — is the value of health insurance experts to the process of enrollment. So while some are still debating whether the Affordable Care Act is actually working, we
In it some brokers and agents — 20% — say in this year’s open-enrollment period they helped 100 or more individuals with enrollment for healthcare coverage through the federal or state insurance exchanges — also known as marketplaces. The survey found 60% helped 50 or more enroll. In year-one these agents and brokers also connected deeply with their clients and most opted to continue working with them in yeartwo. This beats what the assister programs — or the so-called navigators — have been able to do. And Kelly Fristoe — who is the president and CEO of Texas-based Financial Partners — put it in perspective. “Every day that health insurance becomes more complicated, the value of what we do for or customers becomes more valuable. We have more dialogue with our customers. They are our source of revenue. It comes down to customer service. One of our primary goals is to make sure we take care of people,” he said. Part of the reason health insurance agents and brokers are able to be of better service to consumers is because of their connection to the insurance company. “We as agents get that information from insurance companies, so
August 2015 | Main Street Industry News |www.pianeia.com| 21
Top Stories we’re able to reach back out to our clients and have a conversation with them now, so that when we get into open enrollment, we can find something suitable for them. And we can help them learn how an HMO will work and what it will mean to them, since many of them have been consumers of a PPO for the past few years,” Fristoe added.
Education
Agents and brokers — the survey found — are very good helping consumers compare plans and select qualified plans. They also assisted with the application of premium tax credits and resolved enrollment problems. That said, there are areas where assisters — or navigators — were more effective than agents and brokers: • Assister programs were better at engaging in public education outreach — 80% to 33% • Assister programs were also more likely to help a consumer with an appeal on eligibility decisions — 58% to 39%.
Register Online for PIA NE IA education: Click here or call (402) 392-1611
On the other hand, agents and brokers are more effective — 34% to 9% — when helping small business select coverage. The survey also noted: • 66% say it takes more time to sell a non-group policy than it did before the implementation of the marketplaces in 2014. • 57% say revenue per policy is down. • 40% say overall revenue is up. • Another 40% say overall revenue is down. • 60% — however — say they sell more non-group policies than ever. • On average they sell one outside policy to every two marketplace policies sold. n Source links: Employee Benefit News and insurancejournal.com
August 2015 | Main Street Industry News | www.pianeia.com | 22
Top Stories
NARAB FIO & Obama Administration Standing Still
Here’s how the establishment of the national registry works. The White House — and by inference the Federal Insurance Office (FIO — has to nominate a governing board. There are 13 members on that board. Of the 13, eight must have insurance regulations in their background. The National Association of Insurance Commissioners (NAIC) has already sent 14 regulatory names to the White House. They were sent in April. No action yet from the White House. Bernd Heinze — who represents the American Association of Managing General Agents (AAMGA) — sent a letter to Michael McRaith who runs the Federal Insurance Office. He and his group are demanding action — and now. “Unfortunately, the benefits of NARAB II are not able to be realized until such time as a board is appointed.” That implementation is going to be complicated — his group notes — and the sooner the administration gets moving, the better. “It is vitally important that the law be implemented as soon as possible. Industry has worked diligently for eight years, and now that the provisions of the legislation have been signed into law eight months ago, we respectfully request your immediate selection and appointment of the NARAB board members,” he said.
Michael McRaith
Congress established the National Association of Registered Agents and Brokers (NARAB) eight months ago. It was part of the legislation that extended the Terrorism Risk Insurance Act (TRIA). Not much has happened since and the industry is getting restless.
NARAB’s non-resident licensing system helps agents, brokers and agencies do business easier in states other than their home states. It’s a major league positive for insurance and for consumers and businesses. No response yet from the FIO. n Source links: insurancejournal.com and Insurance Business America
August 2015 | Main Street Industry News |www.pianeia.com| 23
money It’s nice to have more
Commercial lines producers with the CIC designation earn 30% more money.
Certified Insurance Counselors make more than the other agents.
The Certified Insurance Counselors program—more than just CE.
Register @ www.TheNationalAlliance.com or call
800-633-2165
Statistic from Producer Profile
PIA NE IA Events
Upcoming
Events Calendar 2014-2015 For information and to register Click Here or call (402) 392-1611. Date
Class/Webinar
Where
When
September 17, 2015
CISR: Agency Operations
West Des Moines
LaMair - Mulock Condon Insurance (LMC)
September 22, 2015
CPIA 3: Sustain Success
Lincoln
Marriott Courtyard
September 23 - 25, 2015 CIC: Agency Management Institute
Lincoln
Marriott Courtyard
October 7, 2015
CISR: Insuring Commercial Property
Cedar Rapids
Kirkwood Continuing Education Training Center
October 13, 2015
CPIA 3: Sustain Success
Des Moines
Hilton Garden Inn Des Moines/Urbandale
October 14 - 16, 2015
CIC: Agency Management Institute
West Des Moines
Holiday Inn Hotel & Suites
October 15, 2015
CISR: Personal Lines Miscellaneous
Des Moines
Hilton Garden Inn Des Moines/Urbandale
October 20, 2015
CPSR: Residential Property
Pierce
Town & Country Insurance
November 5, 2015
CISR: Agency Operations
Davenport
Saint Ambrose University
November 11 - 13, 2015
CIC: Commercial Property Institute
La Vista
Embassy Suites Omaha - La Vista
November 16 - 17, 2015
Ruble: Graduate Seminar (IA)
West Des Moines
Holiday Inn Hotel & Suites
November 18, 2015
CISR: Insuring Personal Residential Property
Des Moines
Hilton Garden Inn Des Moines/Urbandale
August 2015 | Main Street Industry News |www.pianeia.com| 25
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