February 2013 Wisconsin Independent Agent by Independent Insurance Agents of Wisconsin

FEBRUARY 2013

Your customers deserve a

wisconsin

Silver Lining.

INDEPENDENT AGENT Trusted Choice

FEBRUARY 2013 Eric Schwartz, Editor

Open Door Policy Behold The Power Of Education . . . . . . . . . . . . . . . . . . . . . . . . . 5 Member Profile Servant Insurance: Dynamic Agency Uses Smart Technology To Bring Value To Clients. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Marketing Minute Your Questions Make The Sale . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Errors & Omissions Is Your Agency Passing The Mirror Test?. . . . . . . . . . . . . . . . . 13 News From ACT The Reinvention Of Big Media. . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Commentary From Counsel PPACA: IRS Rulemaking Finally Begins. . . . . . . . . . . . . . . . . . . 17 Government Affairs Get To Know Your 101st Legislature. . . . . . . . . . . . . . . . . . . . . 23

When something happens to your customer’s home, car, or business, it may not be a disaster. But no matter what it is, your customers always deserve fast and fair service from their insurance company. West Bend provides a Silver Lining, no matter what the claim may be. When the lighted outdoor sign at Bill’s restaurant was damaged in a wind storm, repairing it quickly was important for his business. So that’s just what we did. Sometimes little things mean a lot. And every day, when something bad happens to someone, West Bend makes sure your customers experience the Silver Lining. Because the worst brings out our best.®

Independent Insurance Agents of Wisconsin 725 John Nolen Drive, Madison, Wisconsin 53713 Phone: (608) 256-4429 or (800) 362-7441 ■ Fax: (608) 256-0170 ■ Web: www.iiaw.com Executive Vice President - Matt Banaszynski

On The Cover… With over 60% of the insurance industry retiring in the next seven years, it’s time to act fast to recruit those voted “Most Likely to Succeed.” Attracting the best and brightest must happen before these future leaders have considered a career path. InVEST can help. This month, IIAW Executive VP Matt Banaszynski writes about education and volunteer opportunities available through InVEST. Please turn to Open Door Policy on page 5. Find out more about InVEST by going to www.iiaw. com. Go to Education and click InVEST. Also, included with this magazine is a registration form for the 114th IIAW Annual Convention. It details the incredible program scheduled for May 8 and 9, 2013, at the Madison Marriott West in Middleton. To get immediate confirmation, register online at www.iiaw.com.

> OUR ADVERTISERS AAA................................................................. 25

2012-2013 Executive Committee

2012-2013 Committee Chairs

President........................................................ Michael Froh P.O. Box 1320 Sheboygan, WI 53082-1320

Agency Operations........................................ Kim Dandrea 1300 South Green Bay Rd. #100, Racine, WI 53406

President-elect............................................... Dave Dunker P.O. Box 443 Brookfield, WI 53008-0443

Automation/Technology................ Cathleen Christensen P.O. Box 949, Fond du Lac, WI 54936-0949

Am Trust North America................................... 16

Secretary-Treasurer..................................... John Wickhem P.O. Box 1500, Janesville, WI 53547-1500

Employee Benefits.............................................. Tim Bever 555 Main St. #320, Racine, WI 53403

Archway.......................................................... 22

Chairman of the Board......................................Mike Hierl P.O. Box 949 Fond du Lac, WI 54936-0949

Finance & Compensation...............................Skip Hansen 100 North Corporate Drive #100 Brookfield, WI 53045

Axley Brynelson.............................................. 24

State National Director................................. Linda Steiner 555 Main Street #320 Racine, WI 53403

Government Affairs........................................Skip Hansen 100 North Corporate Drive #100 Brookfield, WI 53045

Badger Mutual.................................................. 15

2012-2013 Board of Directors

Industry Relations...............................................Ted Haase P.O Box 6, Seymour, WI 54165

Big “I” Continuing Ed........................................ 8

Membership Development.................................. Jeff Thiel P.O. Box 1610, Waukesha, WI 53187-1610

Burns & Wilcox.................................................. 4

Smaller Agencies..................................... Michael Walston P.O. Box 236, Kewaunee, WI 54216-0236

EMC Insurance............................................ 18, 22

Technical.......................................................Andy Burkart P.O. Box 1320, Sheboygan, WI 53081-1320

IMT Insurance.................................................... 7

Young Agents........................................... Derek Wickhem P.O. Box 1500, Janesville, WI 53547-1500

Partners Mutual............................................... 21

Mike Ansay 101 East Grand Ave. #11, Port Washington, WI 53704 Jason Bott 330 East Kilbourn Avenue Milwaukee, WI 53202 Thomas Holter P.O. Box 938, Beloit, WI 53512-0938 Lise Meyer Kobussen P.O. Box 633, Sauk City, WI 53583 Bruce Kommers P.O. Box 66, Antigo, WI 54409-0066 Jeff Rasmussen 525 Junction Road, Madison, WI 53717 Cap Wallrich P.O. Box 90, Shawano, WI 54166-0090 Matthew Weimer 100 North Corporate Drive #100, Brookfield, WI 53045 Donald Williams P.O. Box 595, Beaver Dam, WI 53916 WISCONSIN INDEPENDENT AGENT

ACUITY Insurance............................................ 27

Pekin Insurance................................................18 West Bend......................................................... 2 Western National Insurance............................. 12 Wilson Mutual................................................... 21 FEBRUARY 2013 | 3

OPEN DOOR POLICY

BEHOLD THE POWER OF EDUCATION Benjamin Franklin said, “An investment in knowledge pays the best interest.” I know many of you, myself included, couldn’t agree more. Education got us to where we are today. While the state of Wisconsin mandates that we continually educate ourselves, we all understand the value of remaining sharp so that we may better serve our customers. As an Association we understand that continuing education and the education of the next generation is important to you.

Providing Top Notch Education We are excited to announce a plethora of new courses, instructors, and the addition of a new convention in 2013. The Smaller Agents Convention will debut this fall in northern Wisconsin. We will be partnering with the Independent Insurance Agents of Northwestern Wisconsin and the Independent Insurance Agents of Western Wisconsin in an effort to provide more value and resources than ever before. In addition, we are changing the annual convention and Young Agents Conference to be more responsive to your needs. As I mentioned in last month’s article, the 2013 annual convention will include significantly more CE. The Young Agents Conference, starting this year, will be called the Sales and Management Conference. We are bringing in some of the best consultants from around the country to

PER S ON A L IN S U R A N C E

When it comes to placing personal insurance for high-net-worth clients, your success is our success. Grow your business by partnering with Burns & Wilcox. By working with our Elite Client Solutions team, you do not have to turn away clients: We have the products to cover all their needs. Our high-net-worth specialists have the expertise to create personalized solutions. Plus, our unrivaled access to markets allows us to create solutions with speed and diligence. Making personal insurance even more personal is what Burns & Wilcox does best as the largest independent wholesale broker. Milwaukee, Wisconsin | 262.347.0266 | toll free 800.544.5700 fax 262.347.0440 | milwaukee.burnsandwilcox.com

The IIAW and InVEST are currently looking for insurance professionals willing to work with educators and school systems so students get real life perspective of the insurance industry. teach at this revamped conference. There will be two tracks, one for managers, owners and principals, and the other for young agents, producers and CSRs. We have a variety of new CE courses and new, amazing instructors. Keep your eyes peeled to the Ed Zone and other publications for more details, or contact Samantha in our education department today.

Educating Our Youth While Perpetuating Our Industry InVEST, a school-to-work insurance program, teams with high school and college educators to provide a useful insurance curriculum for students. The mission of InVEST is to improve insurance literacy in students and attract new talent to the industry. In 2013, the IIAW is renewing our commitment to educating our industry’s future leaders. Wisconsin currently has 18 schools participating in the InVEST program and we are looking for volunteers for the following schools:

Bay Lane Middle School – Muskego Belleville High School - Belleville Black Hawk Schools - South Wayne Burlington High School - Burlington Business and Economics Academy of Milwaukee - Milwaukee Elkhorn Area High School - Elkhorn Freedom High School - Freedom Grantsburg High School - Grantsburg Hartford Union High School - Hartford Holmen High School - Holmen JI Case High School - Racine Lincoln High School - Wisconsin Rapids Neillsville High School - Neillsville Northwestern High School - Maple Oconto High School - Oconto Ripon High School - Ripon Spooner High School - Spooner West High School - Madison While 18 is impressive, we can do better and you can help. The IIAW and InVEST are currently looking for insurance professionals willing to work with educators and school systems so students get real life perspective of the insurance industry. Through field trips, job shadow events and internships, students are able to see and experience firsthand what it is like to be in the insurance world. Scholarships are also available to students/schools participating in the program. The IIAW is excited to announce that we are making a $2,500 contribution so that Wisconsin students can have access to more financial aid through InVEST.

I will personally help any insurance agent or professional establish an InVEST program in your town. Working hand in hand with educators, volunteers are the primary representatives for the industry in the classroom, providing exciting, real life input. The commitment level of a volunteer is determined by you and the teacher. You may speak once a semester to students in the classroom, work with the teacher to help plan the schedule, or be as involved as offering job shadow days and internships. InVEST volunteers not only help educate students about insurance, but they have an opportunity to gain highly qualified employees. The IIAW and InVEST supplies volunteers with the tools needed to:

a Start an InVEST program a A ssist teachers with planning . of the InVEST calendar a P rovide a field trip or job shadow day . in your office a Launch an internship program a Guest speak to students about insurance a D onate to InVEST with funds being used in the classroom or for scholarships a G ain highly qualified employees - . InVEST graduates! InVEST, together with IIAW’s Careers in Insurance DVD and Internship program, will help our members educate, mentor, and hire the future leaders of our industry from high school through college. Once kids graduate from high school and leave for college, many don’t return to their hometowns. Many leave Wisconsin altogether. We can change that. From high school to college to their career, we can help you help them every step of the way. Contact me today. Together we can get started educating our youth while perpetuating our future.

> Matt Banaszynski is the Executive Vice President of the Independent Insurance Agents of Wisconsin. Contact him at matt@iiaw.com.

FEBRUARY 2013 | 5

By Eric Schwartz

MEMBER PROFILE

SERVANT INSURANCE: DYNAMIC

AGENCY USES SMART TECHNOLOGY TO BRING VALUE TO CLIENTS

Dynamis was Servant’s proprietary software; now Servant is one of Dynamis’ clients. In April 2012, Andy was charged with leading Dynamis into new territory as its own company.

Entrepreneurs always look for an edge over their competition, an innovative idea or product to keep the business fires burning. driven health care (CDHC) plan options, Mark and Dan Morrill, Servant’s VP of Employee Benefits, knew there had to be a better way to more efficiently present these options. Bulky three-ring binders and Excel spreadsheet presentations could take several meetings, many hours, and too many Advil. In April 2010, to remedy their headaches, the two men founded Dynamic Benefit Systems (now Dynamis) software to make life less complicated and to stoke the fire. “Dynamic agencies use technology to bring value to their clients,” said Mark. “We try to use smart technology to make our jobs and interactions with clients less confusing and more productive. The employee benefits sale has become increasingly complex. This software slashes meeting time. What used to take days or weeks can now be accomplished in an hour.”

Servant Insurance Services offices at 9809 S. Franklin Drive in Franklin, Wisconsin. The independent agency also has an office in Oshkosh.

Entrepreneurs always look for an edge over their competition, an innovative idea or product to keep the business fires burning. Servant Insurance Services is an independent agency that offers a full spectrum of insurance products to individuals and businesses, including group and individual health insurance. The agency has carved niche markets by partnering with great carriers to offer coverage packages to — just to name a few — the chemical industry, social service organizations, dentists, and water and sewer facilities and irrigation operations. Mark Priestaf, the agency’s principal, is acutely aware of the importance of client care and its value to achieving a

healthy bottom line. If you take care of the customer in the short term there’s a great chance they will become long-term clients. He knows that working with carriers with proven products is a solid plan to achieve positive results. These are lessons learned from his extensive ownership and management experience. Mark and his wife, Tamia, Servant’s CFO, formed the agency five years ago after holding a 50 percent ownership stake in a larger agency for nearly 30 years. After paying dues and learning the ropes, they opened their own shop and ventured into a crowded marketplace.

A SERVANT IS...

Servant Insurance draws it names from the personal characteristics exemplified by Rev. Donald Priestaf, Mark’s father. Rev. Priestaf was an incredible role model and a man whose very nature was that of a “Servant.” “In interactions with our clients, our team members and those within the communities we serve, Servant Insurance will strive to ‘Serve,’” said Mark. 6 | FEBRUARY 2013

So…what sets Servant apart? Smart technology.

Faced with consistent increases in health care premiums, employers can tailor benefits to minimize increases and take advantage of CDHC offerings. Employers also can examine the impact on employees in the form of employee payroll plan contributions of the various plan designs as well net employee out-of-pocket maximums, after the impact of HRA and/or HSA contributions are factored.

After many long meetings with clients presenting consumer-

“This is what sets Servant apart as an agency,” said Andy Nunemaker, CEO of Dynamis. “The technology frees up producers to do what they do best, and that’s sell.”

Many independent agencies have great products, finely tuned customer service, and experienced leadership and staff.

The software shows the effect of various decisions and plan options which allows employers to tweak plan offerings — in real time — and discover the costs associated with each option.

WISCONSIN INDEPENDENT AGENT

Mark Priestaf is the co-founder and managing partner of Servant Insurance. Servant has been doing business since 2008.

to seal the deal in the first prospect meeting. Agencies who have not had a demonstration don’t know what they’re missing. Right now we’re on the leading edge yet the software is priced like we have a lot of competition.”

“It’s impressive software but Servant is not a software company,” said Mark. “Andy is taking the company beyond the early-stage and they are seeing rapid growth. It’s exciting.”

With two successful businesses under his belt, Mark is poised to lead his agency into a bright future. All lines of business are set for growth.

This year, Dynamis will begin a broader sales plan to sell more licenses of the software. Up until now, there had been limited distribution of the technology. Servant had the only license in the Southeastern Wisconsin market so they have a significant jump on the competition.

“We are a hard working agency without the technology,” he said. “But welldesigned technology can help agencies differentiate themselves. That’s what we have tried to do. With technology, producers are viewed not just as salespeople but as trusted advisors. That’s what we are.”

“The insurance industry does not typically embrace change,” said Andy. “The software removes time consuming obstacles for agency sales and support staff. Agencies using the software realize their current process involves a great deal of wasted time. Now, they are able

Servant Insurance Services, Inc. has offices in Oshkosh and Franklin, Wisconsin. Find them on the Web at www.servantinsurance.com, or call 414.421.9200. Dynamis Software Corporation is headquartered in Milwaukee. Find out more what the Dynamis software can do; go to www.dynamiscorp.com, or call 877.511.7944.

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West Des Moines, IA WISCONSIN INDEPENDENT AGENT

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www.imtins.com FEBRUARY 2013 | 7

INDEPENDENT INSURANCE AGENTS OF WISCONSIN

Upcoming Continuing Education

F OR M ORE I NFORMATION & TO R EGISTER F OR T HESE I N P ERSON C LASSES , P LEASE G O T O WWW.IIAW.COM!

Tues., Feb. 12, 2013 ‐ Ethics In Today's Changing Times (4 CE Credits Approved)  Location: IIAW State Offices ‐ 725 John Nolen Drive in Madison  Time: 8:30 AM ‐ 12:30 PM    Thurs., Feb. 14, 2013 ‐ Mold, Bacteria, & Pollution Exclusions (4 CE Credits Approved)  Location: Holiday Inn Pewaukee ‐ N14 W24145 Tower Place in Pewaukee   Time: 8:30 AM ‐ 12:30 PM    Tues., Feb. 26, 2013 ‐ E&O: An Agency Analysis (8 CE Credits Approved)  Location: Midwest General Agency/R.W. Scobie, Inc. ‐ 3300 Birch Street in Eau Claire   Time: 8:30 AM ‐ 4:30 PM    Wed., Feb. 27, 2013 ‐ E&O: An Agency Analysis (8 CE Credits Approved)  Location: IIAW State Offices ‐ 725 John Nolen Drive in Madison  Time: 8:30 AM ‐ 4:30 PM    Tues., March 12, 2013 ‐ Mold, Bacteria, & Pollution Exclusions (4 CE Credits Approved)  Location: IIAW State Offices ‐ 725 John Nolen Drive in Madison  Time: 8:30 AM ‐ 12:30 PM    May 8 & 9, 2013 ‐ 114th IIAW Annual Convention (Up To 17 CE Credits Available)  Location: Madison Marriott West ‐ 1313 John Q. Hammons Drive in Middleton, WI  Time: Registration desk opens at 8:00 AM on May 8

YOU

ALSO HAVE MANY CHOICES FOR ONLINE CE OPPORTUNITIES! CHECK OUT IIAW.ABEN.TV FOR A CATALOG LISTING OF THE CLASSES.

NOTE: FOR ABEN

C L A S S E S , YOU W ILL NEED TO CREATE A LOGIN AND PASSW ORD THE FIRST TIME YOU PURCHASE FROM THE ABEN CATALOG . Y OUR IIAW LOGIN AND PASSW ORD W ILL NOT W ORK IN THIS CATALOG .

YOU HAVE QUESTIONS, PLEASE CALL THE

IIA

WISCONSIN

(608) 256-4429.

HAVE YOUR BEST YEAR EVER By the time you read this we’re more than a month into 2013. How’s it going so far? How are you doing with your New Year’s Resolutions? Are you on track to achieve your personal and professional goals this year? If you’re not on track, these ideas will get you on track and caught up. If you are on track, these ideas can help you achieve your goals even faster and go even further.

1) Why do you want to have your best year ever? Before you take on any endeavor, you have to know why you’re doing it. This one factor will determine whether or not you are successful. What are you capable of if you set your mind to it? Pretty much anything, right? So in order to wake up every day driven and motivated to do what must be done to achieve your goals and dreams, you must have powerful reasons for doing so. Find your WHY in positive reasons for achieving your goals and negative consequences if you don’t. The start of all great achievement is a burning desire that simply must be fulfilled.

Anything worth acquiring in life requires that we work hard, get uncomfortable, and face some fears.

2) Have goals and a plan. You’ve heard it a million times but this is still the biggest factor that the most successful people attribute their success to. If you haven’t done this yet, DO IT! The top three percent of people on the planet have goals, a plan for their achievement, and they work on those goals every day. They are worth more in financial terms than the other 97 percent combined. You don’t need a huge list of goals in each area of life with elaborate plans for their achievement; in fact, the simpler you can make it, the better. At a minimum, pick one major professional goal and one major personal goal. Then put a WISCONSIN INDEPENDENT AGENT

simple, straightforward plan together and take action on both goals daily.

3) Do what you must do. Now that you know why you want to have your best year ever and you have goals and a plan, it’s time to get to work. Not tomorrow, not later today…NOW! The most successful people are people of action. They don’t put things off and they rarely hesitate once they have decided upon a goal. You must work on your goals every day whether you feel like it or not. You must work on your goals when you’re tired, sick and beaten down. Should you rest occasionally? Yes. Should you take a vacation and have balance in your life? Yes. But assuming you have the burning desire necessary to achieve your goals and dreams, you will pick yourself up in the most tiring and difficult times and press on. Anything worth acquiring in life requires that we work hard, get uncomfortable, and face some fears. Also, contrary to popular belief, willpower does work! It’s simple. You’re either going to eat that doughnut or you’re not based upon a simple decision that your parents, the economy, or your relationships have nothing to do with. Speaking of that, I give you point #4…

4) Stop making excuses and giving up control of your life. Over the years I’ve heard every excuse as to why people don’t achieve their goals. I’ve heard reasons related to health, emotions, past traumas and negative events. People blame the economy, other people, and bad breaks growing up. I have two words of advice: Stop it! Assuming you are reading this right now and comprehend it, you have no excuses.

Once you hit the age of 25 you are responsible for where you are in life. While a 13-year-old can blame his or her parents and other outside factors for their position in life, anyone older than 25 can go no further than the mirror. The faster you “get” that you determine your outcome — it’s not the economy, your parents or your boss — the quicker you will grab control of your life and live it on your terms. If you continue to blame others and outside circumstances, you will continue to be an unsuccessful victim. You are responsible, you are in control, and you decide where you end up.

5) Follow Winston Churchill’s advice. You remember his advice, right? “Never, never, never give up.” If you hang in there long enough, you’ll make it. Life is simply a game of deciding what you want, developing a plan to get it, taking daily action on that plan, seeing what works and what doesn’t, and adjusting your approach until you get to your destination. Even a ship is off course 99.9 percent of the trip. The captain simply continues to get feedback and course corrects until the ship lands safely in harbor. You can do, be, and have anything you want, but it’s going to take hard work and sacrifice. Are you willing to put in the necessary time, effort, energy and money? Are you willing to give up the excuses and other crutches and pay the price for success?

> John Chapin has more than 21 years of sales experience and is the co-founder of Complete Selling Inc. For free access to John’s whitepaper on what it takes to be successful in sales, visit completeselling.com.

FEBRUARY 2013 | 9

MARKETING MINUTE

YOUR QUESTIONS

MAKE THE SALE The selling debacle

their money. To put it simply, they don’t trust salespeople. Much of the success of Amazon. com and Apple is built on recognizing customer doubt by keeping their promises.

Even though buying cycles seem to stretch out longer as buyers require more time to make decisions, salespeople are doing their best to close quicker. Much of what’s popular in selling, such as sales techniques, figuring out a prospect’s hot buttons and schmoozing and even relationship building, can be enormously overrated.

Distrust is so fundamental today that those who ask a friend, family member or coworker for a referral, engage in their own vetting process before making a decision.

Here’s the problem. Simply put, too much of what passes for “best practices” in sales focuses on what the salesperson should do to get the order.

Creating trust

To make the concept vivid, the salesperson is like the classroom teacher of 30 or more years ago who was the “instructor,” the one who was in charge and who passed information to the often passive and less than attentive “learners.” The result? Good salespeople with great products and services that are a good fit for their customers lose sales because they take the role of “instructor,” passing information to passive and often inattentive “learnercustomers.” Such behavior is understandable. Whether it’s the unpredictability of an extended buying cycle or the fear of a competitor entering the picture, they sense the possibility of losing the sale and immediately response by getting into a “control mode,” cutting corners, taking shortcuts and jumping to the close before the customer is ready to buy.

10 | FEBRUARY 2013

Trust makes the difference Faced with such a reality every working day, it becomes clear that the critical component for making more sales is gaining the customer’s trust as quickly as possible. It has always been important, but never as much as it is today. Trust is the bond that endures no matter the length and difficulty of the selling cycle. To be totally clear about trust, it doesn’t develop from schmoozing, making unverified or exaggerated claims, or providing incomplete information. Today’s customers are doubters; they’ve been burned too often. They want value –– lots of value –– for

Salespeople understand the trust issue and they have their own views about how to develop it. We’ve heard most of the solutions: respect, acting with integrity, being responsible, sincere, honest, truthful and on and on it goes. Unfortunately, the words are generalizations, lacking specificity –– they don’t mean anything to customers.

MARKETING MINUTE is meaningless –– unless a salesperson fills it with content by taking the time to ask the right questions.

And now…the questions The goal of asking questions is to probe until it’s clear the customer is satisfied. Of course, the questions will differ based on your research of the prospect. They don’t need to be complex, but they must drill down to the heart of the issue. In emergency rooms throughout the United States, a series of three simple questions has replaced complex, computer-based calculations for assessing patients who are experiencing heart problems. The simplicity of this approach belies the careful study that went into its development. It requires an investment of up-front time

As valuable as information is for a successful sales process, asking probing questions produces more than just information. It’s the way for the sales process to become an adventure, rather than a drag. to understand the prospect, but it’s an investment well worth making.

Before meeting ends questions: > What’s better or worse than what you have now? > How did you feel about this meeting? > Is there anything that seems to be missing? > Do you feel you have adequate information? > Do you feel uneasy about anything? > Where would you like to go from here? > Are my answers sufficiently understandable and complete? > Did I probe sufficiently to understand your situation, your needs?

> Was I more helping or selling? Then, what happens after the sale becomes the most important component in the sales process. Yet, salespeople often ignore it as they move on to the next “opportunity” and never look back, leaving the customer disappointed and even “jilted.” However, this is the critical point at which the customer becomes either Emissary or Enemy. This is when trust becomes real.

After the sale, follow up with questions, whether a week or a month later: >H ow do you feel about your purchase?

>D o you have any doubts, issues or concerns?

Getting started questions: So, the question remains, what do salespeople do to create trust? Answer: trust develops between customer and salesperson when the salesperson asks the right questions. It’s the questions that create value, understanding, and confidence.

>W hat questions do you have?

WISCONSIN INDEPENDENT AGENT

On top of that, it’s the way they come to recognize that their salesperson is serious, concerned and thorough. It’s through the questioning experience that customers become loyal partners, who are invested in the sales process rather than disengaged observers and passive participants. The relentless task of asking questions also helps customers clarify their thinking, discover what they may have missed, revisit their assumptions, and reconsider their opinions. It’s the way to build trust and get to the right results. In effect, the salesperson’s role is to create a stage on which the decision making process is acted out. Ultimately, it’s the way to help customers avoid making an unsatisfactory decision. They should never need to say, “I wish I had known that before I made my purchase.”

> What problems are you experiencing? > I s there anything you would like to be > What’s going on now that bothers you? >W hat do you want to accomplish and in

different?

> I s there anything you would like me to do?

what time frame? Yet, salespeople like to talk about “meeting customer needs.” They talk about it, particularly in their presentations. But what does “meeting customer needs mean? Not too much. If anything, it’s abstract and non-specific, more like a “view from 30,000 feet,” where you see everything and nothing at the same time. “Meeting customer needs”

Faced with such a reality every day, it becomes clear that the critical component for making more sales is gaining the customer’s trust as quickly as possible. It has always been important, but never as much as it is today.

> How can I improve my presentation?

>W hat have you been thinking about? The questions are key and here are examples of questions that help create trust ––

produces more than just information. It’s the most effective way to help customers become deeply involved in a dialogue –– a conversation –– that becomes an intriguing exercise in further discovery. It’s the way for the sales process to become an adventure, rather than a drag.

>W hat makes you dissatisfied with what you’re currently using?

If a feeling of trust has developed with the customer, be sure to ask for a referral.

> What do you like? What don’t you like?

Questions transform the selling process

> What do you expect from a sales rep?

As valuable as information is for a successful sales process, asking probing questions

WISCONSIN INDEPENDENT AGENT

The task of today’s salesperson goes way beyond product knowledge and even “solutions.” It’s to help customers discover possibilities they may not have considered or even thought about. It’s your questions that make the sale.

> John R. Graham of GrahamComm is a marketing and sales consultant and business writer. He publishes a monthly eNewsletter, “No Nonsense Marketing & Sales.” Contact him at johnrg31@me.com, 617.774.9759, or johnrgraham.com.

FEBRUARY 2013 | 11

ERRORS & OMISSIONS

IS YOUR INSURANCE AGENCY PASSING

THE MIRROR TEST?

In reviewing some year-end E&O results, it certainly appears that carriers are seeing an increase in E&O claims arising from failure to provide the Mirror Test. What exactly is this? As customers have been looking for pricing reductions in recent years because of the economy and the soft market, this has resulted in a tremendous amount of internal re-marketing of those accounts to ensure you retain them. When you look to move the

As customers have been looking for pricing reductions in recent years because of the economy and the soft market, this has resulted in a tremendous amount of internal re-marketing of those accounts to ensure you retain them. account from Company A to Company B to save the customer money on their premium, is there a chance that the coverage with Company B is less in some areas as compared to Company A? Most definitely and it is critical your agency identifies any coverage differences and brings them to the customer’s attention. Say you moved the account to another carrier and the coverage was not as broad in some

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areas. If the customer subsequently suffered an underlying claim that would have been covered by Company A, but was not covered or not fully covered by Company B, the customer may very well question your agency why the coverage was moved. There is also a good chance they will say they never would have approved you moving the account if they knew they were giving up coverage. This obviously speaks to the need to document these discussions with your customer. There are several areas of possible difference: sub-limits, the actual coverage grant, specific endorsements, definitions for areas such as “who is an insured,” what is excluded on one policy compared to another, and the rating of the carrier. The recommended approach is taking all the carriers you are considering and putting the details on a spreadsheet. Note all pertinent issues, limits, sub-limits, coverage grants, etc. While this will take time, it is crucial to note all differences and bring the differences, especially the reductions to the customer’s attention. This will enable the customer to see the differences and make an educated decision. Get the customer’s written approval, regardless of their final decision. This will be key if an underlying claim occurs and your customer then finds out they didn’t have the coverage they thought. Actually the above scenario can occur even if you keep the account with the same carrier. This is probably more common with Excess

& Surplus Lines business because E&S carriers are not required to give a conditional renewal notice if they want to add an exclusion on the renewal. It is extremely important to identify any differences on the renewal policy, then bring them to the customer’s attention and get their sign off. Due to the nature of E&S, it is best to do this review with the customer before you bind the coverage in case the customer subsequently decides they don’t want the coverage.

Get the customer’s written approval, regardless of their final decision. This will be key if an underlying claim occurs and your customer then finds out they didn’t have the coverage they thought. For whatever reason you would switch the coverage from one carrier to another for a customer, make sure to identify the differences, bring them to the customer’s attention and get their written sign off. Make sure to pass the Mirror Test!

FEBRUARY 2013 | 13

NEWS FROM ACT

NEWS FROM ACT storytelling and dialogue. That’s why social media’s so popular. It’s not about the word “media”; it’s about the word “social.”

old media, but rather as more relevant media because salespeople are using new ways to create value.

Unfortunately, we have community newspapers, television, radio, and news programs that are failing to build community through activity, engagement, and dialogue. Yes, they have a Website, but for the most part they are static sites that are not engaging.

3. Reinvent Media Results

So in order to move forward, big media needs to focus not just on the story, but also on the dialogue. When you add dialogue, you’re moving from the information age (where so many media companies started) to the communication age (where the audience is now).

THE REINVENTION OF BIG MEDIA

It seems that almost daily we hear another report that big media is dying thanks to the Internet. Radio stations, newspapers, magazines, and even local television stations are struggling, and many are predicting their demise. If you were to look at the balance sheets of these companies, you might even agree. But before we order the tombstone, let’s consider something: Perhaps it’s not time for media to die, but rather to reinvent itself. Realize that in the twenty-first century, the one and only thing any industry can depend

It’s about taking the best of our past and leveraging it in new ways into the future. Remember, if it can be done, it will be done. And if you don’t do it, someone else will. on is transformation. This means you can’t go backward, and you can’t stand still; you can’t keep doing what you’ve always done, even if you do your best to keep doing it better. The only way to survive, let alone thrive, is to continuously reinvent and redefine. What should media reinvent and redefine? Three key things.

1. Reinvent Media Itself In this world of smartphones and tablets becoming our primary computer, are

14 | FEBRUARY 2013

mainframe computers dead? The answer is no. We’re still using mainframes. Of course, we’re not using them the same way that we did in the 1980s or even in early 2000. The mainframes of today are more like superservers. But they certainly didn’t go away. The point is that when new technology emerges, we tend to think that the old technology is completely dead, but that usually isn’t the case. Rather, the old technology gets repurposed and integrated to add value to the future. Let’s look at radio as an example. Many people call radio “old media,” but I would challenge that and say it’s timeless media. Today, a radio station can have a Website, which allows them to have video, interactivity, contests, and all sorts of things they couldn’t have done in the past. Not only that, but in the past you needed to buy a radio. Not so anymore. Your TV, computer, and even smartphone can be a radio. It’s no longer a physical device; rather, it’s audio-sponsored content that can be delivered anywhere, at any time. So is radio dead? No. It’s simply being reinvented. One of the keys to reinventing —

whether it’s radio, print, television, or local news — is to not deny where the future is going, but to embrace it. At the same time, you need to look at how to bring the best of the past forward. Therefore, a good question big media needs to ask is, “What are the elements of the past that are vital for us to bring into the future?” But remember, you can’t take everything — just the things that are essential for success. Then it’s about looking at how you can take those essential elements from the past and leverage them in new ways.

2. Reinvent Media Marketing For media to thrive in the future, it’s imperative that it have an integrated approach. That is true for media marketing, as well. One of the reasons ad dollars are falling for newspapers, as well as traditional media, is that they don’t fully understand the new realities of marketing. Two key shifts are taking place that media companies can no longer ignore. First, media and marketing have always been about storytelling. Advertisers have a story to tell, and the media is there to help tell it. Today, however, media and marketing go beyond mere storytelling; now it’s about WISCONSIN INDEPENDENT AGENT

Second, when we look at our traditional media players that are trying to sell advertising, they are still using the old model of media-specific ads: Radio ads just for radio, TV ads just for TV, and print ads just for print. But if you want to serve your customers well these days, you need to think in terms of a media neutral ad. Why? Because it’s not about siloed media anymore; it’s about the integrated use of media. The sooner media salespeople embrace this concept, the sooner their sales will rise. For example, someone selling newspaper ads can no longer just focus on making that print ad sale. A better approach is to say to the customer, “I’m suggesting you take an integrated approach to your advertising. I’m here today not as a newspaper ad salesperson, but as your trusted advisor. And I’m going to help you to see how integrating newspaper, Web, mobility, social, and radio advertising will give you better results.” This approach works because we’re shifting from a transaction to a relationship. It used to be about “how many transactions can I get?” Today it’s about developing long-term relationships that span price, time, and the competition. Building this kind of relationship requires a high level of trust. To get higher levels of trust, focusing on the customer and educating them on the integrated approach to advertising is key. This is how media salespeople can get away from being transaction-centric to becoming the trusted advisor. When sales reps become trusted advisors who truly serve customers and think in terms of an integrated approach, they’ll see there’s more opportunity to serve customers than ever before. Old media will no longer be seen as WISCONSIN INDEPENDENT AGENT

Finally, marketing used to be about consumer reach — about how many people you could get to see or hear your ad. As such, many companies would do national ads so they could reach more people, knowing that a certain percent will be interested in the product or service. Today, I don’t just want consumer reach. What I want, and what is even more important, is consumer engagement. In other words, it’s about getting people to take immediate action. How can I get them to take part in the ad? How can I get them to become the ad? We saw this done with Super Bowl ads, where companies got customers to create the ad they aired during the Super Bowl. That’s just one way to get engagement. Engagement can happen in many different ways, over and over again. Additionally, companies used to have unknown customers. Advertisers would place multiple ads with the hopes of increasing sales. But today we can actually know who is clicking on our ads, buying our products, and even talking about us online.

to run the ad), we’re now able to pay for results (pay for the number of people who take action on the ad). Unfortunately, many media companies are reluctant to embrace this new model. But those who do will certainly cause a revolution.

THE REINVENTION IMPERATIVE Ultimately, this is about reinventing how various media outlets work at all levels. After all, the old doesn’t always go away; often, it gets repurposed into the new. So let’s forget the concept of big media versus the Internet. It’s really big media and the Internet. It’s not an either/ or world; it’s a both/and world. It’s about taking the best of our past and leveraging it in new ways into the future. Remember, if > Daniel Burrus is the CEO of Burrus Research. Daniel it can be done, is considered one of the it will be done. world’s leading futurists And if you don’t on global trends and do it, someone innovation. Find out more else will. at www.burrus.com.

Because we have more ways of knowing who’s responding and engaging with us, tracking results is easier. We used to have hard-tomeasure results, and much of it was based on averages. But now, thanks to the digital world, it’s easy to measure exact results and get them in real time. This engagement factor is ushering in another shift in advertising. Whereas we used to pay for services (pay for someone

FEBRUARY 2013 | 15

AmTrust has the perfect blend for small businesses

COMMENTARY FROM COUNSEL

EMPLOYER OBLIGATIONS UNDER PPACA IRS RULEMAKING FINALLY BEGINS While it is rare for the business community to eagerly await action from the Internal Revenue Service (IRS), when it comes to the Patient Protection and Affordable Care Act (PPACA, aka Obamacare), action was considered long overdue as employers struggle to make decisions regarding staffing and benefits programs before the January 2014 compliance deadline for the bulk of Obamacare’s most imposing mandates. Whether your agency is assisting clients with their health insurance programs, or managing your own compliance, you need to be aware of proposed rules published by the IRS on January 2, 2013. The proposed rules — 144 pages in length — are available in the Federal Register, or at FSsys.gov. There is a public comment period, which will likely see an unprecedented level of input, ending on March 18, and public hearings beginning on April 23. This column — part one of two on the proposed rules — covers PPACA’s Employer Mandate, specifically, the IRS proposed rules on calculating the number of full-time equivalent employees, and the minimum value of coverage and maximum employee cost. Next month, calculation of potential penalties for non-compliance and industry reaction to the mandate will be discussed.

By offering a competitive businessowners policy (BOP) a’ la carte or as an accompaniment to our workers’ compensation insurance or commercial auto products, AmTrust has a brew that serves small businesses well. Better yet, we offer a 10% discount on BOP for our existing workers’ compensation policyholders. An umbrella policy is also available, with limits ranging from $1 million to $10 million to fit over our BOP and commercial auto products.

For more information about how you can write business with AmTrust, please call 877.528.7878 or visit www.amtrustnorthamerica.com.

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those working in retail during the holiday season, and others working on a seasonal basis.

Defining Minimum Value and Affordable Coverage To avoid a substantial penalty, large employers must offer at least 95% of full-time employees the opportunity to enroll in a health plan that provides at least a minimum value at an affordable rate. Minimum value means the plan covers at least 60% of total allowed costs under the plan. The IRS has promised to provide a calculator similar to the actuarial value calculator the Department of Health and Human Services (HHS) has made available for employers to input information about its plan to determine if it meets the 60% coverage requirement. The IRS and HHS will provide employers a safe-harbor checklist describing costsharing attributes of a plan as an alternate method to determine minimum value. A health plan is “affordable” if an employee’s PPACA imposes a new obligation on employers self-only contribution does not exceed 9.5% of with 50 or more full-time equivalent employees the employee’s annual household income. If an beginning in 2014. It requires employers to either employer offers multiple coverage plans, this offer a minimum level of affordable coverage for threshold applies only to the lowest-cost option. full-time employees (and, beginning in 2015, There is also a safe-harbor option for affordability, their dependents), or pay a penalty. The proposed whereby employers can avoid a penalty by rules, along with limited earlier requiring an employee contribution A health plan is “affordable” if an employee’s self-only contribution of no more than: (1) 9.5% of the guidance, provide guidance on the IRS’s enforcement guidelines in key does not exceed 9.5% of the employee’s annual household income. employee’s W-2 wages; (2) 9.5% of an areas, including: (1) how employers employee’s monthly wages if employed may calculate the number of employees and on employee status, e.g., (1) hourly or salaried; for less than a year; or (3) 9.5% of the federal hours worked in order to meet the 50-employee (2) collectively bargained or not; (3) employees of poverty level for an individual. threshold; (2) the minimum value of coverage different entities; (4) employees in different states. The shared responsibility provisions of the PPACA that must be offered and the maximum permitted For newly hired employees, an employer can are important considerations for large employers employee cost for an employer to avoid a penalty; choose an initial measurement period of between evaluating their workforce and coverage decisions and (3) how to calculate the applicable penalty for three and twelve months to evaluate whether over the next year, and especially beginning in non-compliance. the employee will be full-time, and thus subject 2014 when compliance becomes non-negotiable to coverage offer requirements. Once a full-time and significant penalties Counting to 50: Calculating Full-Time Employees employee meets other eligibility requirements, loom. There is still time to The Employer Mandate only applies to “large an employer may not impose a waiting period of comment on the proposed employers,” defined as those with at least 50 longer than 90 days before offering coverage. An IRS rules if your agency, full-time equivalent (FTE) employees. For many employer may, however, use an administrative or your agency’s clients, employers, this will be a simple calculation. For period, provided the total combined initial want to try to influence those employers on the edge of 50 employees, measurement and administrative periods do the process. Next month, owners of multiple companies with fewer than 50 not extend beyond the first full month after an the potential penalties, employees each, companies with employees outside employee has worked for a year. industry reaction and a few the United States, or with a substantial part-time or Importantly, an employer is not considered other PPACA details will be > Josh Johanningmeier seasonal workforce, it may be more complex. “large” if its workforce exceeds 50 FTEs on 120 days discussed. In the meantime, is the IIAW’s General Counsel. Call the Legal Under the IRS proposed rules, companies with or fewer during a year, and the excess employees keep an eye on the IIAW Services Hotline at (877) common owners must combine their FTEs to are seasonal workers. Seasonal employees include Website for updates. 236-1669.

PPACA’s Employer Mandate

Complementary workers’ comp and BOP coverage

determine if they are a large employer. Employees working outside the United States are not counted. A full-time employee is one who, for any month, works at least 30 hours per week, or 130 hours per month. Hours of work includes all “hours of service,” meaning any hour in which an employee is paid or entitled to payment, whether or not the employee is actually performing work. Thus, employers must include time for vacation, holidays, military duty, illness, and disability when calculating their number of FTE employees. The IRS proposed rules also sweep part-time employee hours into the calculation, along with seasonal workers, new hires and anticipated workforce totals. To determine if an employer meets the 50 FTE threshold, they should take the average hours worked by their existing employees over the year. Part-time employees count towards the 50 FTE threshold by adding their total hours worked per month, and then dividing by 120 (four weeks per month*30 hours per week). For example, two part-time employees who work 15 hours per week would count as one FTE, or other combinations totaling 30 hours. Variable-hour employees are also included in the FTE calculation, under a complex measurement period/stability period regime based

WISCONSIN INDEPENDENT AGENT

FEBRUARY 2013 | 17

Cross-Sell Strategy

ASK AN EXPERT

DATA COMPROMISE COVERAGE

ARE MORTGAGE PAYMENTS BUSINESS INCOME An Expert is a great feature of the Big “I” Virtual University. There are “CONTINUING EXPENSES”? Ask questions and answers about a variety of personal and commercial insurance

“ Don’t let clients compromise on data compromise coverage.”

topics. What follows is one example of an Ask An Expert question.

“We have a client that carries business income coverage. The question came up if mortgage payments were part of the continuing expenses of an idle business. I seem to recall that I learned somewhere that only the interest part of the monthly payment was a covered expense, not the principal part. I would appreciate any help that you could provide.”

Tanya Wentzel, Des Moines Branch Marketing Manager An incident of data compromise can have a negative impact on your clients’ credibility and profits. You can help protect them by adding EMC’s data compromise coverage to their insurance program. It’s just one of the many reasons policyholders Count on EMC®.

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Offering some of the most innovative products available in the industry today, we strive to be the easiest company to do business with. Learn more. 18 | FEBRUARY 2013

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This is an interesting question...what portion, if any, of a mortgage payment is covered by business income forms as a continuing expense? Is it just the interest or the entire mortgage payment, including the principal? Let’s see what the experts have to say. Virtual University Faculty Response The principal should not be considered as a continuing expense for business income coverage. The argument is that the principal portion of the payment is going into the insured’s equity in the property, so that portion of the mortgage isn’t “lost.” I usually just say they don’t cover the principal, since escrow or other payments in addition to interest that make up the total mortgage payment are valid expenses to claim.

Virtual University Faculty Response This issue comes up often, but to my knowledge we still don’t have a definitive answer in our industry. My belief is that most adjusters will pay the interest on the loan as a continuing expense, just as the agent suggests. However, I have heard of adjusters paying nothing. There is a good argument for not paying the principal sum payments, but I would argue that interest is a covered expense. This is one of those issues that it is best to clear up with each of your carriers.

All obligatory notes payable are normal business expenses, even loan repayments to officers and employees. Their position is like saying they won’t pay all payroll because some of it is going into a retirement account. On the other hand, if the business takes out a loan to pay normal operating expenses while waiting for their insurance payments, then only the interest expense is part of the BI calculation. Building interest is not an issue because rents on untenantable premises or lease payments on damaged equipment must still be paid for several months under the contract wording.

Virtual University Faculty Response

The definition of Business Income is “Net Income plus continuing expenses.” In an accounting sense, a mortgage principal payment is not an “expense,” it is a reduction in a liability. The accounting transaction (simplified) of a mortgage payment is: Debit Mortgage Loan Payable (Liability) for Principal  Debit Interest Expense (Interest)  Credit Cash Virtual University Faculty Response As such, the “continuing expense” of the business All financial obligations are a continuing expense. is the interest payment. Now comes the tricky part A mortgage is a financial contract obligating of the answer. If it is not a continuing expense, is it the mortgagee to pay a monthly amount to the covered? Well yes, no, or maybe. mortgagor. The whole amount is due or the property The answer cannot be provided for all risks can be foreclosed upon and lost. This is a normal as a constant. Let’s go back to our accounting business expense and since it is paid out of income, transaction. If the mortgage principal was not paid it should be part of the business income calculation. from an expense, from where was it paid? Back to I have never seen an adjuster question this expense. Accounting 101...what is the definition of “Net

Income”? Net income equals gross income less cost of goods sold less operating expenses. We can determine that the mortgage payment is not a “cost of goods sold,” which is covered by direct property insurance by the way, and it is not an expense per above, so it must be part of net income. Maybe. We said that business income covers net income, so it must be covered. Well, yes, it would be covered if the insured has a net income...if the insured has a net loss. We also cover it to the extent that it reduces his/her recovery. Remember that the insurance puts the insured in the same position as before the loss. If the insured was running a net loss (expenses exceed income), insurance will not jump in to provide a net profit and thereby protect the insured from having to use its’ retained capital to pay the principal. So my short answer would be: 1. Mortgage Interest is covered as continuing expense. 2. Mortgage Principal is covered as net income in the event the insured has earned a net income sufficient to meet its ongoing accounting liabilities (not to be confused with legal liabilities which may be an expense or may be a debit to a liability). 3. Mortgage Principal is not covered and actually reduces coverage in the event the insured has earned a net loss and has used retained earnings to meet its ongoing accounting liabilities. 4. Mortgage Principal is neither covered nor a reduction in coverage when a business is in break-even mode.

Ask An Expert is a Big “I” members-only resource. Members using the Big “I” Virtual University (VU) sometimes need answers to questions that they can’t find in the Research Library or classrooms. In such instances, the VU has a volunteer faculty of experts who can usually answer, or find an answer, to your  questions. Go to www.independentagent.com/ Education/VU/AskanExpert/. You will need to login before using An An Expert WISCONSIN INDEPENDENT AGENT

FEBRUARY 2013 | 19

electronic data interchange (EDI) standards and having a solid history of download success using AL3 standards.

WS E N E H T N I S R E B M ME SECURA Receives WELCOA Well Workplace Award The Wellness Council of America (WELCOA) recently presented its coveted Platinum Well Workplace Award to SECURA Insurance, a super-regional mutual property and casualty insurer. SECURA is only the second company in Wisconsin to receive the Platinum Well Workplace Award, which recognizes an organization for its commitment to the health and well being of its employees. This was the first time SECURA submitted its wellness program for a Well Workplace Award. It is rare for a company to achieve the Platinum level on its first submission. â&#x20AC;&#x153;Good companies know that their employees are their most valuable asset,â&#x20AC;? said WELCOA President David Hunnicutt. â&#x20AC;&#x153;Great companies adopt policies that support employeesâ&#x20AC;&#x2122; efforts to reduce health risks and motivate them through bold strategies, programs, and tactics. Great companies know that by improving their employeesâ&#x20AC;&#x2122; health, they can reduce health care costs.â&#x20AC;? From its onsite fitness center and exercise classes, to wellness programs throughout the year, to educational seminars about nutrition, physical health, and emotional well-being, SECURAâ&#x20AC;&#x2122;s commitment to wellness is evident companywide. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re proud to be in the elite ranks of Americaâ&#x20AC;&#x2122;s healthiest companies,â&#x20AC;? said SECURA President and CEO John Bykowski. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s confirmation that our long-term integration of wellness into our culture has improved the quality of life for our associates. Plus, Iâ&#x20AC;&#x2122;ve always believed that a healthy associate is happier, more productive, and provides that exceptional level of service SECURA is known for. So itâ&#x20AC;&#x2122;s a win-win-win situation for us.â&#x20AC;?

standards, and companies whose implementation of those standards have provided a solid history of success for the industry. In addition, Integrity received the 2012 ACORD User Group Information Exchange (AUGIE) Commercial Lines Download Award. This award recognizes companies for outstanding implementation based on ACORD standards, which help streamline workflows and improve the quality of data available to users who need to service their customers. â&#x20AC;&#x153;Integrity continues its commitment to providing our agency partners with the best experience possible, and a big part of that is offering an easy-to-use commercial lines processing platform,â&#x20AC;? said Jill Stache, Integrity Insuranceâ&#x20AC;&#x2122;s VP of commercial lines. â&#x20AC;&#x153;To be recognized for these offerings from industry associations such as ACORD underscores how important our Ease of Doing BusinessÂŽ philosophy is to delivering a quality customer experience.â&#x20AC;?

The Association for Cooperative Operations Research and Development (ACORD) recognized Integrity Insurance with two of its top-level awards at its 2012 Implementation Forum, which took place October 22-25 in Fort Lauderdale. Integrity, among 23 carriers and vendors, received the 2012 Property & Casualty AL3 Download Award for its ACORD-certified AL3 download. This award is given to companies who have made significant accomplishments using the current electronic data interchange

20 | FEBRUARY 2013

Also, ACUITY announced its 2012 growth results, reporting an all-time record $143 million gain in written premium revenue, which is a 17.1 percent increase over the previous year. That percentage was more than double that of 2011 and continued ACUITYâ&#x20AC;&#x2122;s trend where written premium has increased $206 million in just 24 months. â&#x20AC;&#x153;ACUITY continues to be a strong resource for independent agents, offering them pricing consistency, broad coverage, and service excellence,â&#x20AC;? said ACUITY President and CEO Ben Salzmann. â&#x20AC;&#x153;Agents have responded by writing record amounts of business with ACUITY, and we appreciate their trust.â&#x20AC;?

!"We strive to provide one-stop shopping to our agents by meeting both their Personal and Commercial Lines insurance needs.

!"All our initiatives are focused on making it easy to do business with us, with the goal of helping our agents grow their revenues.

!"#$"%&'()"*$(+$,$"-./-"-.$"+01$2$01$0-"/3$0-" model is the best distribution channel for our products both today and in the future.Â

ACUITY reached a new all-time high for revenue in 2012, at $983 million, which is quadruple that of just 14 years prior. Over the past decade, ACUITYâ&#x20AC;&#x2122;s written premium growth has been more than double that of the industry. ACUITY saw strong sales performance in both its personal and commercial lines business. In personal lines, ACUITY ended the year with $253 million in written premium, a record high, writing over 161,000 personal lines policies. In commercial lines, ACUITY wrote over $162 million in new business.

M U T U A L

I N S U R A N C E

For information about becoming a Partners Mutual Insurance agent, please contact our marketing department at Schumann.Lyn@PartnersMutual.com 20935 Swenson Drive!Waukesha, WI 53186!www.partnersmutual.com an affiliate of Penn National Insurance

Find ACUITY on the Web at acuity.com. Find Integrity on the Web at integrityinsurance.com.

Where Better Service Matters ! Since 1931

ACUITY Wins Technology Awards ACUITY received four awards at the 2012 ACORD Implementation Forum for delivering agents technology solutions that support real-time business capabilities in both personal and commercial lines. Over the past 11 years, ACUITY has received more ACORD awards than any other property-casualty insurer in the world. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re honored to be recognized by ACORD for our continued leadership in ease-of-business technology,â&#x20AC;? said Ben Salzmann, ACUITY President and CEO. â&#x20AC;&#x153;ACUITY is focused on delivering real-time capabilities to agents through management systems and comparative raters they already use in both personal and commercial lines.â&#x20AC;?

Find SECURA on the Web at www.secura.net.

Integrity Insurance Honored For Technology Achievements

a The Most Compelling Case Study Award, for demonstrating the impact ACORD Standards have made to ACUITY and independent agents.

the agent is our customer

Rely on

quali ty. Rely on Wilson. Quality . Stability . Teamwork . Service . Integrity

Quali ty in everything we do.

â&#x20AC;&#x153;Particularly in todayâ&#x20AC;&#x2122;s competitive market, agents canâ&#x20AC;&#x2122;t afford to waste time entering data multiple times,â&#x20AC;? said Neal Ruffalo, Vice President - Enterprise Technology. â&#x20AC;&#x153;ACUITY is helping agents win the â&#x20AC;&#x2DC;war on keystrokes,â&#x20AC;&#x2122; and the ACORD awards we received reflect that.â&#x20AC;?

-Wilson Mutual

In 2012, ACUITY earned: a The Property & Casualty Straight Through Processing of Data Award, which recognizes automation of the policy life cycle utilizing ACORD Standards and Forms. a The AUGIE Commercial Lines Download Award, which recognizes ACUITYâ&#x20AC;&#x2122;s use of ACORD standards to streamline workflows and improve quality of data available to users who need to service their customers. a The Property & Casualty AL3 Download Award, for using current WISCONSIN INDEPENDENT AGENT

Our people make the difference. Contact us today to see how you can become part of the Wilson Mutual family.

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Brian Christ, District Sales Manager WISCONSIN INDEPENDENT AGENT

FEBRUARY 2013 | 21

GOVERNMENT AFFAIRS

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Acquisition Strategy

#11

LOSS CONTROL SERVICES

“ Reducing losses adds value for your clients.” Chad Veach, Engineering Services Supervisor Provide more than protection to your clients. Provide the added value of EMC’s no-fee loss control services, which could help reduce the cost of their insurance. It’s just one of the many reasons policyholders Count on EMC®.

Home Office: Des Moines, IA

22 | FEBRUARY 2013

session. This marks the first session under the new redistricting maps where lawmakers have new boundaries for their respective Senate and Assembly districts for ten years.

Milwaukee Branch: 800.236.1800

On January 7, 2013, the 101st Wisconsin Legislature was sworn in for the 2013-14 biennial legislative

WISCONSIN INDEPENDENT AGENT

The new Republican-controlled Legislature consists of 18 Senate Republicans and 15 Senate Democrats and an Assembly with 60 Republicans and 39 Democrats. There is nothing remarkably unusual to reveal so far in the make-up of the 101st Legislature, but here is a statistic that should grab your attention: More than one-third of the 33-member Senate and more than one-half of the 99-member Assembly are comprised of members in just their first or second terms. That’s a significant number of relatively new faces serving in our state Legislature. Four of those elected officials are freshman senators and 24 are freshman representatives. Many of these legislators are vice-chairs of a committee and all of them serve on multiple committees with oversight of many different areas of expertise and issues. The Assembly Insurance Committee, chaired by State Representative Kevin Petersen (R-Waupaca) who was elected in 2006, has six of its fifteen members that are newly elected. Another five members of the committee are serving in just their second term. That’s more than two-thirds of the committee with two years or less experience governing. I emphasize this point only because I believe the level of inexperience will likely be one of IIAW’s biggest political challenges over the next two years. Hundreds of proposed bills are introduced and thousands of issues arise each legislative session running the gambit from mining, tax policy, tort reform, education, liquor distribution, health care, worker’s compensation, and, most vital to you, WISCONSIN INDEPENDENT AGENT

insurance. Many lawmakers come to the State Capitol with a certain area of expertise or interest, but certainly none of them are experts on every issue. The challenge for IIAW, and frankly every other organization and industry with a direct stake in the laws and regulations coming out of Madison, is the ability to effectively communicate and educate them about the IIAW, the fundamental importance of why an agent exists, and the

As a former legislative staffer, I know firsthand that legislators also value and are directly influenced by hearing feedback from their constituents back home. issues that directly impact you and your customers. Recently, the IIAW under the direction of your executive vice president, Matt Banaszynski, made the strategic decision to hire me with the purpose of providing your organization with a greater presence at the State Capitol and to better protect your interests. I will candidly tell you that I cannot be successful at this goal alone. I am reminded of several years ago when a former well-known Wisconsin Congressman wrote an appeal to businesses titled, “Dig a Well Before You’re Thirsty.” The article called on business leaders urging them to get more involved in the political and legislative process and to take the time to get to know their legislators.

He encouraged the business community to invest the same level of time, energy and resources spent on marketing their brand and products to also advocating for their business and industry with policy makers. After all, all it takes is one small onerous regulation or burdensome state law to potentially cost your business millions of dollars and impact how you service your customers and operate your business. As your lobbyist in Madison, I will work diligently on your behalf to help protect your business and industry. I likewise am encouraging each and every one of you to reach out and get to know your legislators. Call your senator or representative and go have coffee with them. Tell them what’s on your mind and the issues you are concerned about. As agents you can be a powerful resource for legislators. A lobbyist can provide tremendous value for an organization looking to become more engaged and involved in the process. But as a former legislative staffer who worked in both houses of the Legislature, I know firsthand that legislators also value and are directly influenced by hearing feedback from their constituents back home. Working together, one lawmaker at a time, the IIAW can > Misha Lee is Owner/ be a leading voice Founder of Lee for the industry and Government Relations, agents all across LLC and lobbyist for IIAW. Wisconsin.

FEBRUARY 2013 | 23

FROM THE ARCHIVES

IN MEMORIAM

R. Dwayne Wolstad, 79, of West Salem died on Saturday, Dec. 29, 2012, at Bethany St. Joseph Care Center in La Crosse. He was born Feb. 5, 1933 in Fillmore County, Minn. to Reuben and Doris (Johnson) Wolstad. He was baptized and confirmed at Mabel First Lutheran Church. A standout athlete, he attended public school in Mabel, Minn. and graduated from Luther College in Decorah, Iowa. On Nov. 26, 1953 Dwayne married childhood schoolmate, Mavis Larson at First

Lutheran Church in Decorah. He had a long, successful career in the insurance industry, holding positions with Liberty Mutual in Rockford, Ill.; Ohio Casualty/West American in Milwaukee; and Heritage Insurance (now ACUITY) in Sheboygan. In 1976, Dwayne earned the Fieldperson of the Year Award from the WIMA (now the Professional Insurance Agents of Wisconsin) for dedicated service to his industry, Association and community. In 1978, he became owner of an independent agency, Wolstad Insurance, in La Crosse. In 1981, he earned his Certified Insurance Counselor designation. In retirement, Dwayne and Mavis enjoyed many happy years at their homes in West Salem and Sun City Center, Florida. He loved sports, real estate, cars, golf, and an array of family pets. In 2004, his hometown honored him with the Mabel 20th Century Athletic Hall of Fame Award for his skilled and spirited contributions to the Wildcats

basketball team. He had a great time playing with enthusiastic teammates under Coach Don Moore. Dwayne is survived by his wife, Mavis of West Salem; son, Steven (Ann) Wolstad of West Salem; daughter, Natalie (Paul) Geyer of Onalaska; granddaughters, Emily (Julio) Arnau of Chicago, Ill.; and Allison Geyer and Christen Geyer of Onalaska; and numerous extended family members. He was preceded in death by his parents; step-mother, Lois (Haagenson) Wolstad; brother, Roger Wolstad; infant grandson, Alexander Geyer; as well as a host of extended family members and dear friends. A memorial service was held at 11:00 a.m. on Friday, January 18th, at First Congregational Church, 2503 Main St., La Crosse. The Rev. Bill Hoglund officiated. The family would like to thank Dr. Scott Escher and Dr. David Momont of Gundersen Lutheran Medical Center, and the staff at Bethany St. Joseph Care Center for the wonderful care Dwayne received.

Circa 1950, a group of students pose for a picture while attending a Luther Mackall course in Madison. Luther E. Mackall was born in 1882 and was probably best known as the author of The Principles of Surety Underwriting, a book originally published in

24 | FEBRUARY 2013

WISCONSIN INDEPENDENT AGENT

1917. He received an undergraduate law degree from the University of Maryland. He worked as the assistant general manager at the National Surety Company and later went on to become the VP of the Metropolitan Casualty Insurance Company in New York.

FEBRUARY 2013 | 25

FOOD FOR THOUGHT

RELAX. WE’VE GOT YOUR BACK. 100 YEARS AND NO END IN SIGHT

INCREASED STORM WARNINGS

On February 12, 1913, the 16th Amendment to the U.S. Constitution went into full force. The amendment granted Congress the authority to collect income taxes. If only our government had restraint, common sense and a clue on how to cut spending. The ratification of the 16th Amendment was a ploy to “soak the rich” (sound familiar) and backfired horribly. To beat the taxman, the wealthy set up charitable foundations to shelter their money. Long before the federal income tax was in place, multimillionaires such as John D. Rockefeller (who once said “I want to own nothing and control everything”), J.P. Morgan and Andrew Carnegie had their foundations set up and operating. To be fair, at first hardly anyone had to file a tax return because the tax did not apply to the vast majority of America’s work-a-day citizens. For example, in 1939, 26 years after the Sixteenth Amendment was adopted, only five percent of the population, counting both taxpayers and their dependents, was required to file returns. Today, more than 80 percent of the population is under the income tax.

Increase Allen Lapham was born on March 7, 1811. A Milwaukee scientist, Lapham was the catalyst for the creation of the agency that would eventually become the weather service. In the 1860s, Lapham supported a storm warning service for the Great Lakes and sent frequent clippings of maritime deaths to General Halbert E. Paine, U.S. Congressman for Milwaukee.

Sources: Library of Congress and W. Cleon Skousen

Paine recognized the importance of Lapham’s cause and, in 1870, introduced a Joint Congressional Resolution requiring the Secretary of War “to provide for taking meteorological observations at the military stations in the interior of the continent and at other points in the States and Territories...and for giving notice on the northern (Great) lakes and on the seacoast by magnetic telegraph and marine signals, of the approach and force of storms.” The resolution was passed by Congress and signed into law on Feb. 9, 1870, by President Ulysses S. Grant. On Nov. 8, 1870, Lapham assumed responsibility for the Great Lakes region (with a salary of $167 per month), and Lapham obliged by issuing the very first storm warning that same day. Not quite as straightforward or catchy as “National Weather Service,” the agency’s first name was “The Division of Telegrams and Reports for the Benefit of Commerce.” Source: USA Today

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FOR ALL

THAT MATTERS

>*#1#%)#*$",%4+%?@ABACABC?DE% "-%FG$#*$",H&&&I#(5"$(#$=5";%+"149J www.acuity.com Insurance underwritten by Auto Club Insurance Association or Auto Club Group Insurance Company.

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