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INSIDE Nebraska’s 36th Annual CIC & CRM Conferment Ceremony »8 Rate Trends — Surplus Lines Rates Slowing, too »14 What’s your 2015 E&O goal? »18 Walmart Enters Health Insurance Biz »25

Cover Photo Credit: Rich Herrmann - Last Light (Iowa)

October 2014 | Published Monthly

Insuring the Midlands Since 1891 Andy Kraus, CPCU Vice President of Agencies 800-742-7433 akraus@fmne.com

Did you know that PIA has figured out a way to make selling flood insurance easier? PIA has entered into an exclusive partnership with Floodbroker.com which allows PIA membersâ€™ clients and prospects to learn about their flood risks and request a quote for flood insurance from their local, participating PIA member agency. Floodbroker has automated the process of obtaining a flood insurance quote through the National Flood Insurance Program (NFIP) and makes this technology available to participating PIA member agents through their very own agency-branded, flood insurance microsites. Agents direct their clients and prospective insureds to their Floodbroker microsite where they can learn what flood zone they are in and request a flood insurance quote. After answering a few simple questions the quote is emailed to their agent who completes the sale offline using their agencyâ€™s regular flood insurance carrier. Even in cases where an actual quote cannot be generated online, the prospect can still submit the information they have input into the form so that their agent can get back to them and continue the flood insurance sale offline. Learn more about this program at www.pianet.com/floodbroker. Not a PIA member? Please consider joining the association that arms agents with the tools they need to succeed. 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

Montana’s Insurance Industry has Oldest Workers | 7 The oldest workers in the nation are in the state of Montana. In 2013 the 483,000 working in Montana over 40,000 were 65 and older. Professional Insurance Agents NE IA and The National Alliance held Nebraska’s 36th Annual CIC & CRM Conferment Ceremony | 8

September Rates — MarketScout | 24 MarketScout released its September look at insurance rates. Walmart Enters Health Insurance Biz | 25 Six months ago Walmart entered the auto insurance market and started selling auto insurance in its stores.

Rate Trends — Surplus Lines Rates Slowing, too | 14 For the last couple of years insurance rates have been rising.

Producers Bagging Health Insurance Sales — ObamaCare to Blame | 26 McKinsey & Co. did a survey of those selling health insurance and found producers around the country are seriously looking at leaving the health insurance business.

Cyber Security: The Problem Growing Exponentially | 15 PricewaterhouseCoopers did a survey of 9,700 executives from around the world and came to a mind-boggling, and very disconcerting conclusion.

The Sequel: Do You like Your Health Insurance Plan? You Can Keep Your Health Insurance Plan | 27 Sequels are really popular at your local theater box office. They’re not so popular when it comes to ObamaCare. Remember this?

Cyber Security: Taking a Look at JPMorgan & the Latest Hacking Disasters | 16 Early on JPMorgan Chase pooh-poohed its data breach. In a way it still is. What’s your 2015 E&O goal? | 18 With the 4th and final quarter of 2014 under way, most agencies are looking to finish strong and start goal setting for 2015. Americans & a Survey: The World is Getting Riskier | 20 This is the second year Travelers has done this survey.

PIA NE IA Events Earn Your CE Credits | 28 Free CE Details for Members | 29 Upcoming Events Calendar 2014 | 30

Advertisements Wanted, For Sale and Opportunities | 32 Contact us to place a classified ad.

October 2014 | Main Street Industry News | www.pianeia.com | 4

Advertise Your Agency On Radio PIA’s new radio ads make it easy! If you’ve been looking for new ways to build your agency’s brand, or just looking to replace some tired advertising, PIA’s new radio advertisements may be the answer. PIA members now have access to 28 radio ads that they can run in their local markets. Each ad can be tagged with your agency contact information and the name of a company you represent. Simply download the pre-recorded ads from PIA National’s website and send them to your local radio station to have your tag added. It’s that simple. Even better, the ads are included in the cost of PIA membership. You only pay for the air time.

PIA has created: • General agency branding ads • Auto insurance ads • Homeowners insurance ads • Commercial lines ads

Preview PIA’s radio ads online at www.pianet.com/piabrandingprogram Brought to you by

The PIA Branding Program Local Agents Serving Main Street America

Print and radio advertising that sets PIA members apart from — and above — their competition.

National Association of Professional Insurance Agents 400 N. Washington St. • Alexandria, VA 22314-2353 (703) 836-9340 (phone) • (703) 836-1279 (fax) www.PIANET.com • piabrandingprogram@pianet.org “Local Agents Serving Main Street America” collectively describes the membership of the National Association of Professional Insurance Agents and it’s affiliate associations. It bears no relation to The Main Street America Group, also known as MSA Group, or its subsidiary companies. SM

IS YOUR E&O X-DATE HERE? PIA for Nebraska and Iowa PIA Association for Nebraska and Iowa is committed to focusing its resources in ways that cast the most favorable light on its constituents. We are dedicated to providing the type of programs, the level of advocacy, and the dissemination of information that best supports the perpetuation and prosperity of our members. We pledge to always conduct ourselves in a manner that enhances the public image of PIA and adds real value to our members.

SUBSCRIBE or comment Professional Insurance Agents NE IA Attention: Editorial Main Street Industry News 920 S 107 Avenue, Ste. 305 Omaha, NE 68114 Email: office@pianeia.com Ph: 402-392-1611 www.pianeia.com

Considering a change? Let the PIA quote your E&O Phil Fried (402) 392-1611 Phil@pianeia.com

The PIA NE IA, Main Street Industry News reserves the right to edit your comments to fit space available. We respectfully ask that you keep the comments to 200-300 words. Join Our Facebook Fan Page

Professional Insurance Agents of NE IA

Advertising Questions Cathy Klasi, Executive Director (402) 392-1611

This publication is designed by Strubel Studios.

E&O Coordinator Phil Fried

Top Stories

Montana’s Insurance Industry has Oldest Workers The oldest workers in the nation are in the state of Montana. In 2013 the 483,000 working in Montana over 40,000 were 65 and older. That’s 8.3% of the workforce. Nationwide the average is almost 5%. So Montana touches on a little over 3% higher than the rest of the country. Why older workers are still working in Montana — and elsewhere — is a complex question. The short answer is loss of retirement investments and retirement income from the recession is generally listed as the top reason. The stats come from the Bureau of Labor Statistics who tracks such things. Since 2010 the number working age 65 and over has jumped considerably. Those with the oldest workers have seen an increase of 1% on average. Wyoming had the biggest rise and went to 7.12% from 4.31%. n

Source: Insurance Business America

Here is the list of the top-10 states with the oldest workers. State

% Oldest Workers

Montana

8.3%

Wyoming

7.12%

Nebraska

7.1%

South Dakota

7.1%

Vermont

6.39%

New Jersey

6.39%

New Mexico

6.37%

Delaware

6.37%

Rhode Island

6.36%

Oklahoma

6.36%

October 2014 | Main Street Industry News |www.pianeia.com| 7

Top Stories

Professional Insurance Agents NE IA and The National Alliance held Nebraska’s 36th Annual CIC & CRM Conferment Ceremony Professional Insurance Agents NE IA along with The National Alliance held Nebraska’s 36th Annual CIC & CRM Conferment Ceremony on October 16th, 2014. The luncheon took place at the Omaha Marriott and recognized those in Nebraska who earned their CIC or CRM designation within the past year. There were 24 CIC’s who earned their designation, joining the 283 statewide CICs. There are only 8 CRM designees in Nebraska and one more was conferred this year. The ceremony began with a welcome and introduction from David Mathias, CIC, LUTCF, Education Consultant for the State of Nebraska. Eight CIC’s were in attendance at the ceremony and received their CIC pin from William C. Toll, CIC, a National Alliance Faculty Member. Ed Ficenec, Jr., CIC, AAI, a Nebraska CIC Committee Member, read the names of the conferees. The Iowa Outstanding Customer Service Rep of the year, Becky Plagge from First Gabrielson Agency in Clear Lake, IA, was also in attendance and received her award plaque. PIA NE IA is looking forward to another successful ceremony for Iowa Conferees in November.

October 2014 | Main Street Industry News | www.pianeia.com | 8

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35th Annual Nebraska CIC Conferment Ceremony

Mr. Kelly Kadavy, CIC, CISR, AU Cornerstone Insurance Group York, NE

CIC Conferees

Mr. Jeffrey Kehr, CIC, AU Marcotte Insurance Omaha, NE

Ms. Laurel Beth Buck, CIC Continental Insurance Group Lincoln, NE

Mr. Brett Kramer, CIC Northeast Nebraska Insurance Agency Wayne, NE

Ms. Angela Charf, CIC, AAI The Harry A. Koch Company Omaha, NE

Ms. Karla C. Krogman-Sauer, CIC, CISR Pharmacists Mutual Insurance Companies Gretna, NE

Mr. Jon Michael Daniels, CIC Gregoryâ€™s Insurance, Inc. Chadron, NE

Mr. Thomas Lancaster, CIC Town & Country Insurance Valentine, NE

Ms. Meredith A. Ehrman, CIC Allied Insurance Lincoln, NE

Mr. Daniel R. Marburg, CIC Ellergrock-Norris Insurance Agency Omaha, NE

Mr. Jeremiah Steven Gudding, CIC Allied Insurance Lincoln, NE

Mr. John D. Marshall, CIC J. G. Elliott Company Scottsbluff, NE

Mr. James Gulson, CIC Silverstone Group Insurance Omaha, NE

Mr. Joshua Lee Nordin, CIC Midwest Insurance Agency Alliance Lincoln, NE

Ms. Laurie L. Hall, CIC, AAI The Harry A. Koch Company Omaha, NE

Mr. Duke J. Retzlaff, CIC, AU Allied Insurance Lincoln, NE

Ms. Laura Jean Hays, CIC Allied Insurance Lincoln, NE

Ms. Lori N. Ruzicka, CIC, CISR SilverStone Group Omaha, NE

Ms. Ann L. Hurst, CIC, CISR Cornerstone Insurance Group York, NE

Ms. Holly M. Smith, CIC The Harry A. Koch Company Omaha, NE

Ms. Tiffany A. Jacox, CIC Loring & Company Omaha, NE

Mr. Seth T. Solomon, CIC, AU Allied Insurance Lincoln, NE October 2014 | Main Street Industry News |www.pianeia.com| 9

Top Stories Ms. Kimberly Ann Thiel, CIC Omaha Insurance Services, Inc. Omaha, NE Mr. Scott L. Wagner, CIC, CISR INSPRO Insurance Lincoln, NE National CIC Statistics Total Participants: 65,638 Total Designated: 30,723 Nebraska CIC Statistics Total Participants: 725 Total Designated: 283 CICs Conferred Today: 24

5th Annual Nebraska CRM Conferment Ceremony

CRM Conferees Mr. Jon J. Buck, CIC, CRM, CPCU, AU Great West Casualty Company South Sioux City, NE National CRM Statistics Total Participants: 19,650 Total Designated: 3,653 Nebraska CRM Statistics Total Participants: 90 Total Designated: 8 CRMs Conferred Today: 2

This special conferment ceremony was conducted by: William Toll, CIC â€“ Member of the National Faculty for the Society of CIC. October 2014 | Main Street Industry News | www.pianeia.com | 10

Top Stories

2015 Iowa CSR of the Year: Becky Plagge - First Gabrielson Agency, Clear Lake, IA

(L-R) Bill Toll, CIC (Conferment Speaker); Laurie Hall – Harry A Koch Co.; Meredith Ehrman – Allied Insurance; Dan Marburg – Ellerbrock-Norris; Tiffany Jacox – Loring & Co.; Kelly Kadavy – Cornerstone Insurance Gp.; Angie Charf – Harry A Koch Co. David Mathias, CIC, LUTCF - NE Educational Consultant; Kim Thiel – Omaha Insurance Services

October 2014 | Main Street Industry News |www.pianeia.com| 11

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Rate Trends Surplus Lines Rates Slowing, too For the last couple of years insurance rates have been rising. The industry has dragged itself — in an odd way, some say — out of the soft market. Some like MarketScout went so far as to declare the soft market history. And to a certain extent that may be true. Traditional insurance watchers and economists say that’s not the case, but whatever the case, rates rose and after a long soft market, it was welcome. Now rates are slowing for P&C lines and personal lines. That’s not the case for excess and surplus lines. Or so says the Moody’s

Investors Service report the U.S. Excess and Surplus Sector Profile. Both are seeing growth and strong profitability. Moody’s said the reason is because of a limited appetite on risks that have kept prices “adequate.” Moody’s emphasized that as capacity and competition increase P&C rates will continue to drop. Prices will rise for excess and surplus lines but — like its cousins on the casualty side of things — at a slower rate. A.M. Best came to the same conclusion. In a Best Special Report, the ratings firm said relatively few casualty claims in 2013 helped increase profitability for excess and surplus lines. Underwriting was more profitable and investment gains rose. Best says the market is stable. However, profits are anticipated to fall as competition grows. n Source: Insurancejournal.com

Education

Register Online for PIA NE IA education: Click here or call (402) 392-1611 October 2014 | Main Street Industry News | www.pianeia.com | 14

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Cyber Breach

The Problem Growing Exponentially PricewaterhouseCoopers did a survey of 9,700 executives from around the world and came to a mind-boggling, and very disconcerting conclusion. Cyber security breaches have hit 177,339 per day. That’s PER DAY! The results were put into a report titled The Global State of Information Security Survey 2015, a Worldwide Survey by CIO, CSO and PwC. It says since the first of the year, the number of incidents has jumped 48%. Put to numbers that’s 42.8 million. Those are incidents and not the number of identifications, credit card numbers, social security numbers, addresses, etc. stolen. It gets worse. From 2009 to today the growth rate in incidents is at 66%. The survey’s report says: “These numbers are by no means definitive, however, they represent only the total incidents detected and reported.” More on that in a bit. Here are some statistics: • Businesses with $1 billion a year or more in income saw 44% more incidents than last year. • Those with $100 million in income or less saw 5% fewer incidents. • Losses of $20 million or more have risen 92% this year. The report indicates this is good news for small companies but possibly bad news for

consumers. “The reasons are not immediately clear, but one explanation [why] may be that small companies are investing less in information security, which may leave them both incapable of detecting incidents, and a more tempting target to cyber adversaries.” On a global scale the average reported loss is $2.7 million. That’s up 34% from 2013. You’d think with the huge financial costs of a data breach that companies — of any size — would be all over technology to improve

October 2014 | Main Street Industry News |www.pianeia.com| 15

Top Stories security. But it’s not. PwC’s report said spending on security actually fell 4% this year and is still 4% or less of the information technology budgets for most companies.

Retention Association conference said it’s not if a breach will happen to a company — it’s when.

PwC’s David Berg said, “Cyber risks will never be completely eliminated, and with the rising tide of cybercrime, organizations must remain vigilant and agile in the face of a constantly evolving landscape. Organizations must shift from security that focuses on prevention and controls, to a risk-based approach that prioritizes an organization's most valuable assets and its most relevant threats. Investing in robust internal security awareness policies and processes will be critical to the ongoing success of any organization.”

One of the many panelists Ryan Johnson of Alvarez & Marshal said companies must be prepared and have their ducks in a row so they can better respond when it — finally — happens. “It's getting your incident response policy lined up, it's having counsel lined up, it's having a third party expert lined up so that when it happens, you follow your process. … Preferably that expert and that council know enough about your organization that it's not starting from zero when they get the phone call,” he said. n

That said, in spite of all efforts to prevent breaches, speakers at the recent National Risk

Sources: Insurance Business America, Business Insurance, Insurance Network News

And that goes for large companies and small.

Cyber Breach

Taking a Look at JPMorgan & the Latest Hacking Disasters Early on JPMorgan Chase pooh-poohed its data breach. In a way it still is. The bank said it wasn’t sure how many of its customers were compromised but officials were sure it wasn’t that many. We’re now at 83-million — 76-million households and 7-million small businesses — and the bank’s breach is pegged at one of the biggest in history. Names, addresses, phone numbers and email addresses were taken in the breach. However, the bank said there is no evidence at all that the more critical account numbers, passwords, user identification,

birthdays or Social Security numbers were compromised. Tal Klein who runs security for the cyber security experts Adallom said we have assumed — and so have experts — that a bank with security as sophisticated as JPMorgan’s would be impenetrable. Apparently not so he said. “Until now the assumption has been that the companies that get breached are the ones that have poor security practices, but we know that

October 2014 | Main Street Industry News | www.pianeia.com | 16

Top Stories JPMorgan had a good security program and that they invest heavily in this area. So what we are waking up to is that the fundamental nature of security is broken,” Klein said. JPMorgan Chase also notes it has not seen what it terms “unusual” customer fraud since the attack. Spokeswoman Patricia Wexler that the company will not offer credit monitoring to its customers because no financial information or account data or personal information to use as identification was stolen.

And each piece will likely be sold many times. Meanwhile, The Wall Street Journal reports consumer trouble is now being seen from some of the 56-million people whose credit card information was stolen from Home Depot. The newspaper said some are reporting they’ve had their bank accounts emptied. Thieves are using the information to buy prepaid cards, electronics and even groceries.

And she said people really don’t need to change their passwords or account information if they are JPMorgan Chase customers.

Home Depot officials believe the attack will cost the company at least $62 million — and maybe even more.

Former federal government cyber crime prosecutor Mark Rasch disagrees. He said be watchful if you have an account with the bank or had one in the past. “All of this data is useful to hackers and identity thieves. The kind of information that was stolen is not sensitive itself, but is frequently used to validate people’s identities.”

Also admitting a hacking is Jimmy John’s restaurants. The parent firm said an intruder broke into its payment technology vendor offices and took log-in credentials and credit and debit card information for customers from 216 of its locations. n

Another expert on cyber security is Alex Holden. He heads Hold Security and said the information gleaned by the hackers is valuable — in spite of what the bank said — and can be used for phishing. So be careful. “Hackers might send out emails saying ‘Your JPMorgan Chase account has been breached, please log into our portal and enter your information.’” When confronted with that potential problem, Wexler admitted in an online Q&A that people should watch out for phishing. Holden said the information could packed into lots based on different areas and be sold for between $1,000 and $15,000. The latter price tag is for info from wealthier zip codes.

Sources: PropertyCasualty360.com, PropertyCasualty360.com, Business Insider, Business Insider

October 2014 | Main Street Industry News |www.pianeia.com| 17

Top Stories

What’s your 2015 E&O goal? by Curtis Pearsall, President, Pearsall Associates, Inc., and Special Consultant to the Utica National E&O Program

“okay” job on a significant number, as opposed to a solid job on a more manageable number. Here are some items to consider:

With the 4th and final quarter of 2014 under way, most agencies are looking to finish strong and start goal setting for 2015. This goal setting should include some errors-andomissions goals for agencies to be successful. It appears that those agencies that continually enhance their E&O culture and commitment are being rewarded by writing more business and protecting themselves when E&O litigation arises.

Enhance your staff education. After all, agencies don’t make mistakes, people do. A strong focus on ensuring that you have a technically proficient staff that possesses strong customer service and automation skills is recommended. Work individually with each staff member to identify those areas that need improvement. Each employee’s annual performance review should include the specific goals that were agreed upon.

Now is an ideal time to begin the development of your E&O goals for 2015. This will enable your agency to implement new initiatives as early in the year as possible. A good starting point involves a “reality check” on how things are going. A review of issues, such as the following, is suggested:

Get signatures. Be a fanatic about requiring the staff (producers, account managers, CSRs, etc.) to secure customers’ signatures on the various insurance applications.

• Need for staff training • Review/update of the current agency procedures • A focus of customer education using various methods When setting your goal, it is best to focus on a handful of initiatives, at most. Trying to launch too many has the potential to result in doing an

Include a cover letter when sending out new and renewal policies. This ties in with the duty in most states for the customer to read his or her policy. Raise awareness of options and limits. Make sure your customers are aware of limit options and that higher limits are available.

Secure the customer’s sign-off on all rejected coverages. This is one aspect of an enhanced focus on documentation that will reap benefits if E&O litigation develops. There is a general feeling in the courts that “if it is not in the file, it didn’t happen,” so any initiative that strengthens the agency’s documentation culture and commitment is a good thing. Perform – or at least offer to perform – annual reviews with your customers. This could involve a live discussion or a form that is automatically sent to each personal and commercial lines customer 60-90 days prior to the expiration of

October 2014 | Main Street Industry News | www.pianeia.com | 18

Top Stories

his or her coverage. The goal is to secure an update of any changes in exposures so that some insurance discussions can take place. Include coverages for a customer to consider, such as flood, earthquake, home businesses, various types of personal articles floaters, umbrellas, etc. While some may believe that “it’s their job” for a CSR to identify gaps and round out the various accounts, consider an incentive or form of compensation for the staff. Many agencies have enjoyed solid success in this initiative by “rewarding” the staff. Educate your customers. Take some time and ask your staff what insurance issues are potentially misunderstood and need to be communicated. It is important to examine the issues by line of business and then develop a marketing/education campaign using the media that would be most effective. There have been a number of surveys that spoke to customers’ desire to understand the coverage they have and how it works. One of the biggest segments of the population that wants this education and advice is the 18-24 age group. Establish a strong quality control/audit process – or update your current one. The goal of an audit process is to verify that the staff meets the expectations established by the agency. Without this type of a process, how can any agency feel confident that the various tasks and requirements are being met? Maybe there is a need for further training. Be proactive – don’t wait for a claim to develop to discover some issues. Good results don’t just happen. They involve a strong culture and commitment of management and every person in the agency. As you finish up 2014, dedicate some time and thought to how you can enhance the E&O culture in your agency. Establishing some well-thought-out attainable E&O initiatives is a step in the right direction and should pay solid benefits moving forward. You may just find your agency selling some more business, too. n

October 2014 | Main Street Industry News |www.pianeia.com| 19

Top Stories

Americans and a Survey The World is Getting Riskier This is the second year Travelers has done this survey. It’s the Travelers Consumer Risk Index. The survey measures how we view the world and what we’re worried about. And the conclusion is Americans find the world risker than ever before. Six in 10 of us (60%) find the statement true. Severe weather and distracted driving are high on the list as is the loss of personal privacy and identity theft. Those 18 to 34 — AKA as the Millennials — are less worried about the risk level compared to other age groups. The survey also says we are preparing for risk and uncertainty and are proactive in managing that risk: • 85% said they do regular safety checks on their vehicle. • 82% have put smoke detectors in their homes. • 64% have put together food and water and have stored it away in case of severe weather. As noted earlier, Millennials are less worried and less likely to do the steps just listed. Getting more specific on worries and risk: Insurance: Consumers — 69% — feel they are covered pretty well when it comes to home and auto insurance. The good news is that 64% of them review their

insurance polices every year. And 35% of them have actually have conversations with their insurance agent on their policies. Lastly, 51% say they would spend more time evaluating their homeowners insurance needs if they had to insure both the home and auto. Severe Weather: 64% worry about it but only 39% think it has become frequent in their region. Just 34% think it’ll cause heavy damage to their property. People in the Northeast worry more about the weather with 55% of them saying weather is getting worse in their areas. That’s way up from last year’s 34%. Personal Privacy Loss & ID Theft: 82% say they are worried on some level. The same percentage worries about identity theft. It’s a big a worry as a personal health problem. On ID theft, we’re less concerned than we were a year ago — 23% compared to 31% — which is odd because cyber theft is increasing radically. Millennials are less concerned — 53% — about ID theft, technology and computer intrusions on personal privacy than other groups. Distracted Driving: 89% worry about getting in an accident with someone who is driving distracted yet 51% don’t worry about getting into an accident due to their own distracted driving. That said, 80% worry about 16 to 21-year drivers in their households and their distracted driving.

October 2014 | Main Street Industry News | www.pianeia.com | 20

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Tips to help keep you safe if there is a wildfire. Travelers Claims VP Patrick Gee as to its purpose: “We developed the Travelers Consumer Risk Index to identify people’s daily concerns and encourage them to find ways to manage risk. We expected to see many of these risks among the top concerns for consumers. What’s interesting is the disparity between the perception of risk and the mindset that ‘it can’t happen to me’ when it comes to issues such as distracted driving and severe weather.” The point is to help people prepare for risk. The survey is done by the Travelers Institute and is part of the Travelers Consumer Insurance Education symposia series. You can find more information on Travelers Prepare and Prevent website: Click Here n Source: Insurancebroadcasting.com

FLOODBROKER.COM is a flood quoting Web portal, for PIA members only. Now YOUR AGENCY’S WEBSITE can offer online flood quotes—while documenting against E&O losses. Engage your clients and SELL MORE FLOOD POLICIES with this new tool.

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Why Sell Flood Insurance? With existing property insurance customers, you’re already in good position to cross-sell flood insurance. It builds good agency-customer relationships and further rounds out each customer’s book of business with your agency. www.Agents.Floodsmart.gov can help you “speak flood” with your clients. The site includes resources, such as talking points, marketing tips and interactive tools that help illustrate flood risk to your customers. Also, if you aren’t currently registered, sign-up for the free Agent Referral Program, which drives free, qualified leads directly to you. But don’t delay. Most policies take 30 days to go into effect, so the time to tell your customers about the availability of flood insurance is now.

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September Rates

MarketScout

Here’s a summary of insurance classes — all of the percentages are up:

MarketScout released its September look at insurance rates. On average commercial insurance rates rose 1.5%. While rates are up, MarketScout CEO Richard Kerr said overall things are trending down. “We are measuring changes with a high degree of sensitivity because the monthly changes are ever so slight. However, rates clearly continue to drift downward.”

• Commercial Property 2% • BOP 2% • General Liability 2% • Umbrella/Excess 2% • Commercial Auto 2% • Workers’ Comp 2% • D&O Liability 2%

Looking at account sizes: • Small accounts: up to $25,000 — rose 3% • Medium accounts: $25,000 to $250,000 — increased 2% • Large accounts: $250,000 to $1 million — up 1% • Jumbo accounts: $1 million or more — stayed even at 0% increase

• EPLI 2% • Professional Liability 1% • Business Interruption 1% • Inland Marine 1% • Fiduciary 1% • Crime 1% • Surety 1%

Industry Class — All percentages are increases: • Contracting 4% • Transportation 3% • Service Up 2% • Manufacturing 1% • Habitational 1% • Public Entity 1%

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MarketScout also released September’s personal lines statistics: • Homeowners: homes under $1 million — up 4%

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October 2014 | Main Street Industry News | www.pianeia.com | 24

• Homeowners: homes over $1 million — up 3% • Auto — up 2% • Personal articles: up 1% Sources: Insurancebroadcasting. com, PropertyCasualty360.com

Top Stories

Walmart Enters Health Insurance Biz Six months ago Walmart entered the auto insurance market and started selling auto insurance in its stores. Last week the retail giant announced it will do the same with health insurance. Walmart is going to partner in this endeavor with its auto insurance partner TZ Insurance Solutions’ health unit DirectHealth.com. Labeed Diab is the president of Wal-Mart’s health and wellness division. He said, “For years, our customers have told us that there is too much complexity when it comes to understanding their health insurance options. We saw a need to bring more transparency and simplicity. The more we can broaden the assortment, the more we can educate our customer, the better off we will be.” PIA National Executive Vice President and CEO Mike Becker disagrees with Diab and with Walmart and is critical of the decision to move into health insurance. He — like others in the industry — suggest it is best to go through an independent insurance agent for such purchases.

will have access to 300 carriers. By the way, the superstore says it will receive no commission from the sale of health insurance in its stores. At the same time Walmart announced plans to sell health insurance in its stores, the company said it is cutting health insurance coverage for 30,000 of its part-time employees. These are people working less than 30-hours a week.

“Buying any kind of insurance through a local, independent insurance agent whose only business is insurance is much better than doing it through Walmart or any other discount retailer. Professional independent insurance agents can shop many different insurance companies. They are also uniquely qualified to provide consumers with expert advice on obtaining their choice of coverage and price. You can’t get that kind of service from a kiosk.”

It’s about 5% of its 1.4 million person work force and in doing so Walmart is following a trend set by Target, Home Depot and others. The company said it will use third party organizations to help these employees find alternatives to the company insurance.

For those over age 65, Walmart said it will offer 1,700 plans from 12 carriers. People under 65

Sources: Insurance Business America, Insurance Business America

One last announcement. IKEA also said it will start selling homeowners insurance at select stores in the next few weeks. n

October 2014 | Main Street Industry News |www.pianeia.com| 25

Top Stories

ObamaCare Producers Bagging Health Insurance Sales ObamaCare to Blame McKinsey & Co. did a survey of those selling health insurance and found producers around the country are seriously looking at leaving the health insurance business. The figure — of the over 1,000 surveyed — is a full third or 33%.

Here’s what some of those being surveyed said: • I think the time of the independent agent may be coming to an end. • I think there is going to be an exodus of agents over the next 5 years. Folks will slowly retire or partner with larger firms. • Of those staying in the business, 29% said ObamaCare hindered business and didn’t really help. Here’s more: • 23% are worried about premium stability for their customers. • 16% worry about issues relating to long- term financial health and the sustainability of ObamaCare. The survey asked a lot of interesting questions. One is: If business is worse, what changes are you making — if any — to improve your business?

Here are the top three answers: • Changing focus to other segments/ products. • Investing in marketing. • Investing in customer service.

The biggest complaint about ObamaCare from the 1,000 agents surveyed is that ObamaCare isn’t improving their business. Complaints reign about the huge amount of paperwork and the administrative tasks that come along with participation. Some 65% said they spend too much time answering questions that won’t ever be asked again and collecting customer information.

Here’s what a person taking the survey said: • There has been a 300 percent increase in time spent sharing information compared to the past — about three hours per enrolled life. And that leads to another big reason many are looking at exiting health insurance sales. Less than 5% thought ObamaCare is going to lead to growth in their business of 50% or more anytime in the near future. n Source: Insurance Business America

October 2014 | Main Street Industry News | www.pianeia.com | 26

Top Stories

The Sequel: Do You like Your Health Insurance Plan? You Can Keep Your Health Insurance Plan Sequels are really popular at your local theater box office. They’re not so popular when it comes to ObamaCare. Remember this? If you like your health care plan, you can keep your health care plan. That was the promise. This is what President Obama told the American Medical Association in 2009. “If you like your doctor, you will be able to keep your doctor. Period. If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what,” Obama said. Then a year ago when plans got canceled that didn’t meet Affordable Care Act minimums, thousands of people lost insurance plans they liked and wanted. It led to an explosion of criticism from every corner of the country.

But not all. So here we are again. Same issue. Different year. A dozen states are moving as this is being written to do away with policies not in compliance with the Affordable Care Act. It will be interesting to see how the Obama administration responds to this being that it happens so close to the general election. Or so says Jim Capretta of the Ethics and Public Policy Center. “It looks like several hundred thousand people across the country will receive notices in the coming days and weeks.”

The Obama administration — much to the consternation of insurance regulators and insurance companies — changed the rules to allow those plans to continue. Some regulators allowed it and so did some insurers.

A lot of those people will also not be able to keep their doctors as was also promised by President Obama when the Affordable Care Act was being formed. Higher deductibles and more out-of-pocket expenses loom on the horizon. n Source: FoxNews.com

October 2014 | Main Street Industry News |www.pianeia.com| 27

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September NE or IA 9/4: National Healthcare Reform Nebraska 9/12: E&O & The Legal & Ethical Duties Iowa 9/22: ISO General Liability NE or IA 9/23: Business Income NE or IA 9/25: Ethics for Ins. Pros NE or IA 9/25: Social Networking NE or IA 9/26: It’s Personal 2hr courses are certified for 2 CE hrs 3hr courses are certified for 3 CE hrs

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