Tague Alliance likes to keep it's members updated on recent CDI rate change approvals as a way to help stay up to speed on coming changes that impact our marketplace.
Monday, April 12, 2010
Monday, March 29, 2010
How To Improve Your Auto Insurance Loss Ratio
How to Improve Auto Insurance Loss Ratio article by eHow.com
- Step 1:Check out the area where the individual lives. Although insurance companies know where the highest crime rates occur, these are often in chart form and as averages. You have the advantage because you know your town well. Don't market to these areas.
- Step 2:Use several different companies for quotes. If you find iffy behavior in your client, don't quote companies that offer a bonus for improved loss ratio. You can't refuse to sell insurance, but you don't have to use the same company for every client.
- Step 3:Watch the client's behavior on the cell phone. If it rings constantly while you're interviewing him and he responds, chances are he answers while he drives. This can cause accidents, so use an alternative company for his application.
- Step 4:Direct your marketing list to married men and families, because married men often have fewer accidents than single men the same age. Younger women statistically have fewer accidents and tickets than men the same age, so marketing to women is another option.
- Step 5:Recommend higher deductibles for your clients. Many accidents are fender-benders that don't meet high deductibles or are so close that clients prefer to pay for the damage themselves rather than incur a claim. By recommending a higher deductible, you lower the amount of premium you receive. But that doesn't matter because the potential payouts keep your loss ratio a lot lower.
- Step 6:Secure referrals from clients you know have excellent records. Most people enjoy the company of people similar to them. The maniac driver is seldom included in the carpool-driving list. Ask your clients for names of people they consider good drivers. Explain that the fewer accidents paid by the company, the lower the premium becomes in the future.
- Step 7:Include all the information you can when you're writing an application for clients, and select your marketing list carefully. Ask about any drivers who frequently use the car. A good driver might have a crazy boyfriend or girlfriend who often drives the car. Know your clients well. Include all the information about them on
Tuesday, March 23, 2010
Recruiting Young Producers Can Pay Big Dividends
The article below is from National Underwriter online and is good food for thought for all agency owners.
Recruiting Young Producers Can Pay Big Dividends, Study Finds
Given mentoring and the proper resources, college recruits excel
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Many in the industry have long held the view that hiring young production talent is a bad idea. You often hear people say “young people can’t command the respect of the clients, so they probably can’t be successful,” or “they will just leave us in a few years after we’ve invested in their training,” or “young people have never worked out for us.”
In the summer and fall of 2009, Reagan Consulting—in conjunction with The Council of Insurance Agents and Brokers, UNUM, Chubb and Hanover—conducted “The Young Producer Study” to test the validity of these assumptions. (You can access the entire Young Producer Study at 
The study was designed to determine if there was an opportunity to hire more young production talent and document the best practices in hiring young producers.
Young producers were defined as producers hired when they were under the age of 30, hired in the last 10 years, and selling commercial property and casualty insurance or employee benefits.
The first part of the study was an assessment of the industry as a whole to determine the baseline level of hiring for these young producers. The survey included 206 agents and brokers (firms) throughout the country, with the data used as a proxy for the industry as a whole.
Based on the survey results, the success of young producers (48.6 percent) was approaching the success rate of all producers in the industry (53.0 percent), with the success of 23.4 percent of the young producers still unclear.
This data confirmed our belief that some firms were having success attracting, hiring and retaining young producers, and that there is an opportunity to learn from the best practices they were employing.
The next step was a deeper investigation of the firms and producers identified in the baseline study that were experiencing success. Fifty-four firms agreed to complete a detailed survey on their hiring and development practices for young producers. The firms also agreed to identify one or two young producers they considered successful.
A total of 91 successful young producers were indentified, completing a detailed survey about their educational background, a personality and behavioral assessment, and an interview. The firms also provided data on each successful young producer’s production history.
During this process we met and interviewed an extremely talented group of successful young producers and developed a deep understanding of the best practices employed by the successful firms in regards to attracting, hiring, developing and retaining young producers. There were three primary takeaways from our look at successful young producers:
• College Recruiting Works.
The 91 successful young producers that participated in the study were recruited from various sources, including other industries, other firms, college, insurance companies and in-firm transfers.
College, however, was easily the most popular source for successful young production talent. This certainly makes sense given that colleges and universities are concentrated sources of talented individuals, but it also contradicts conventional industry wisdom regarding college hiring.
Further, the success of producers hired directly from college was similar to that of those hired via other sources with regard to production numbers and time to validate.
• Well-Rounded Individuals Often Perform Best.
There wasn’t one characteristic of the successful young producers that stands out. Rather, what was apparent after analyzing the backgrounds of these individuals was their capacity to be involved in many activities and leadership roles while maintaining strong academic credentials.
However, interestingly, in terms of months until validation (when the commissions a producer generates at least equals their personal compensation, so they are in effect paying for themselves), a grade point average over 3.5 did not indicate greater success than that of those with a lower GPA, and within the group the producers with the highest GPA validated slowest.
Also, neither prior sales experience nor a specialty focus indicated success at a greater rate than that of those without prior sales experience or those that were generalists.
• Young Producer Economics Are Attractive.
When compared to hiring other experienced producers, the economics associated with hiring young producers can be attractive. As might be expected, the initial investment (salary) in a young producer is typically much lower than that of an experienced producer.
However, we also determined that successful young producers can perform at a level comparable to successful producers of all ages when give the appropriate resources.
Given the difficult economic environment we find ourselves in, both the relatively low initial investment of a young producer and the ability to generate organic growth for the firm could prove to be attractive.
With all that said, hiring, training and retaining young producers is a different game. Those firms that will succeed must do four things well.
• First, if they want to recruit college kids, they must establish a presence on college campuses as a means to identify the best talent.
• Second, the firms should invest in mentoring of the young producers to the point that mentoring becomes part of their firm’s culture.
• Third, young producers should be hired in classes, fostering a collegial bond among the young producers.
• Fourth, the young producers should be provided with resources that will make them successful.
In summary, young producers will not be able to rely only on experience to win business, and firms that can provide support to young producers via experienced producers or in-house risk management or other resources will have greater success.
None of this is to say that hiring experienced or “older producers” is a bad idea. However, “The Young Producer Study” confirmed our suspicion that a large, untapped resource exists for firms in their search for production talent.
There are compelling advantages young producers can bring to firms from a cultural perspective in the form of energy and enthusiasm, as well as practical advantages from the perspective of shareholder return and client relationship perpetuation.
While it won’t work for everyone, the opportunity to hire and develop young producers is compelling and worth exploring.
Brian McNeely (Bmcneely@reaganconsulting.com) is a consultant and Angi Bemiss(Angi@reaganconsulting.com) is senior vice president at Reagan Consulting Inc., an Atlanta-based management consulting firm that developed and produces the “Independent Insurance Agents and Brokers of America Best Practices Study.” More information about the firm can be found at www.reaganconsulting.com.
Wednesday, March 3, 2010
Tague Alliance - Home Insurance and Auto Insurance Questions
The questions below will prove helpful in determining a client's needs regarding their auto insurance and home insurance.
AUTOMOBILE INSURANCE
1. Have you considered increasing your deductible to lower your premiums?
2. Are your liability limits adequate to protect your income and assets from a negligent lawsuit?
3. Do you presently insure all of the vehicles in your household?
4. Are all the licensed drivers in your household listed on your automobile policy?
5. If you own a pickup or a van, does it contain any customized equipment?
6. Do you own any camping or recreational vehicles (including electric or gasoline driven golf cart)?
7. Do you have a non-factory installed stereo system?
8. Do you have a vehicle, not your own, furnished for your use?
9. Do you have rental car coverage in the event your car is damaged in an accident?
10. Have you reviewed your auto insurance in the last two years?
11. Would you like to review the current limits and other coverage's on your vehicles to see if they are still suited to your needs?
HOMEOWNERS INSURANCE / RENTERS INSURANCE1
1. Do you own any antiques, fine art, or paintings?
2. Do you own any jewelry, furs, or silverware valued over $500?
3. Do you own any guns?
4. Do you have replacement cost contents coverage added to your policy?
5. Do you presently have either a burglar, fire or smoke alarm in your home?
6. Have you remodeled your home recently? Do you plan to in the near future?
7. Would you like an estimate of your home's replacement cost at today's prices?
8. Do you own a second home or any other real property such as a mountain cabin or farm property?
9. Do you conduct any business or give private lessons in your home?
10. Do you own any rental or investment property?
11. Do you have an Excess Liability (umbrella) policy which extends your automobile and homeowners liability coverage to $1,000,000 or more?
12. Would you like us to send a form to assist you in making an inventory of your personal property?
13. Have you reviewed your homeowners coverage in the last 2 years?
14. Do you currently have a photo inventory of your personal property?
15. Would you like a review of your current homeowners coverage?
Wednesday, February 24, 2010
Tague Alliance - Hired & Non-Owned Auto Claims
The info presented below was provided by Philadelphia Insurance and is a great case study of the loss exposure that companies create when allowing employees to use personal vehicles or hired vehicles during the course of their employment. Tague Alliance encourages our independent insurance agent members to research their client's needs to help uncover loss exposure that may exist for a client. Read the case study below:
Source Philadelphia Insurance Company
HIRED AND NON-OWNED AUTOMOBILES
Type of loss:
Bodily injury cases in excess of $1,000,000
Line of Coverage(s) involved in loss:
Hired and Non-Owned Automobile Liability (HNO) coverage
Description and narrative of the loss:
Four losses involving personal vehicles operated on company business:
• Organization incurred a $1.3M auto liability loss resulting from over-loading a 15-passenger van with luggage. An employee of the organization was driving the top-heavy van when it rolled, fatally injuring one passenger and severely injuring the other twelve.
• An employee of a social service agency was operating his personal vehicle, struck a middle-aged pedestrian moving in a crosswalk. Liability loss exposed the organization to a lawsuit and damages of $1.1M.
• Rental vehicle, operated by a policyholder employee, struck a motorcyclist while attempting to execute a left-hand turn. Motorcyclist died and the organization was sued; damages were in excess of $1M.
• Another motorcyclist was struck by an employee driving to a non-profit business meeting. The driver executed an improper U-turn killing the cyclist. Lawsuit resulted in a loss excess of $1M.
What controls were missing that would have prevented or lessened the loss?
Organizations often miss or under risk manage exposures related to the use of personal or “non-owned” vehicles for organization or company business. Whether you have an associate or volunteer “running an errand” to pick up office supplies or staffer transporting a consumer or others in their personal vehicle, the organization is ultimately responsible for the consequences of their driving. Be certain that individuals assigned to the task are screened, trained and have adequate insurance coverage. Errands and rental situations are a part of today’s business world. Let’s look at some of the basic elements of sound loss control aimed at mitigating non-owned auto loss.
Written Procedures
• Screening procedures were limited during new hire and subsequent to; motor vehicle records (MVR) checks were not conducted annually; MVR indications revealed driving infractions on one driver.
• Company Policy was missing in all of the above cases by not outlining the use of personal vehicles and what was expected of the employee regarding personal car insurance “liability limits”. This lack of planning resulted in the organization’s coverage to pick up “as excess” where personal auto policy limits were exhausted.
• There was more than one instance where personal vehicle coverage’s were basic having well less than the desired limits but while still meeting minimum statutory requirements.
• Pre-trip inspections were not completed in one case. Tires on the van that rolled over were under-inflated. There was no pre-trip vehicle inspection that day. A homemade roof rack loaded down with 1,800 pounds of luggage and gear quite possibly lead to greater instability due to the much higher center of gravity of the van and the roof mounted load.
Training
• There was some instruction but mostly geared towards on the road procedures, what to do in case of an accident, distraction policies, etc. Training typically was geared towards drivers of company vehicles.
• Weak documented efforts in defensive driver training or demonstration of such trained techniques during a road evaluation.
What recommendations apply?
DRIVER SCREENING & QUALIFICATION - Screen all drivers. Screen those that drive organization vehicles as well as those employees who may on occasion or regularly operate personally owned vehicles. Obtain (MVR) data at least annually and compare to best practice guidelines per the criteria in the Technical Bulletin provided on the main page.
PERSONAL INSURANCE - Develop and establish a policy requiring employees and volunteers to maintain adequateliability limits on their personal auto policies. The preferred limits should be at least $300,000 unless the person is transporting clients, in which case the limit should be $1,000,000.
DRIVER TRAINING - Provide all drivers with a course in defensive driver training to review fundamental techniques of collision avoidance by recognizing road hazards, understanding defensive measures and having the skill and time to act. Philadelphia Insurance Companies has a FREE web-based interactive Defensive Driver Training Course available through www.losscontrol.com.
ROAD EVALUATION - Develop and maintain a road evaluation process. This process involves drivers taking the defensive driver course and demonstration of those learned skills in an “on the road environment”.
VEHICLE INSPECTION - Develop policies of regular and documented vehicle inspection. Inspect vehicles before and after every trip. Follow through on vehicle condition reports and repair or replace defects as needed.
Other tips:
• Restrict and limit personal auto use where possible! Strive to provide and make use of agency vehicles for medical appointments, deliveries or pickups or anytime consumer transport is required.
• Review all employees and volunteers using their personal vehicles for agency business. Treat them just like any staff member using an agency vehicle would be screened. Verify backgrounds, including driving records for the past five years, even if the worker lived in a state different from where employed.
• Develop policies where all drivers follow agency’s standard policies and procedures when using personal vehicles; (i.e., driver eligibility, use of seatbelts, etc).
• Employees and volunteers using a personal vehicle should provide proof of insurance, confirmation that there are no exclusion regarding vehicle use, proof of inspection and the agency should determine appropriateness of personal vehicle (i.e.,condition, type, etc).
• Implement periodic checks on employees’ and volunteers’ personal insurance and require copies of their declaration showing limit of liability carried.
Monday, February 22, 2010
Under Insured Properties - Tague Alliance
In the article below...the Insurance Journal discusses the CA DOI's desire to mandate some form of ongoing training for insurance agents in the area of replacement cost calculations for properties. This is probably a good idea as long as the CA DOI does not hold the insurance agent liable for the validity of the reconstruction estimate provided by a third party vendor.
Under insured properties cause nightmare scenarios for property owners and the insurance companies. Finding the proper replacement cost for a property is one of the most important and fundamental things that an insurance agents works on with their clients. Therefore, it makes sense that some form of ongoing training in this area be put in place for insurance agents. We do not need any type of burdensome regulation, but rather a streamlined and efficient training mechanism that keeps pace with the changing construction environment.
California Regulator Considering Regs to Alleviate Underinsurance
The California Department of Insurance is considering proposing new regulations governing standards and training for estimating replacement value on homeowners’ insurance. Among the ideas that was floated at a recent CDI workshop on the matter was to require continuing education for agents and brokers on replacement cost minimum standards, according to Steve Young, senior vice president and general counsel for Insurance Brokers and Agents of the West.
The idea for new regulations or legislation governing replacement value on homeowners insurance stems from the concern that homeowners are under-insured, explained Darrel Ng, CDI spokesman. He said the problem arises frequently after wildfires in California, when hundreds or thousands of homes in the same geographic area are destroyed, which causes construction costs to increase.
“The genesis of the issue was seen in the 2007 San Diego Fires and fires in Santa Barbara that demand surge is an issue that’s not addressed by the current model used by insurance companies,” he said. “We hold insurance recovery forums after every major wildfire, and that’s the No. 1 complaint we get most consistently, and one as a Department we’re not empowered to fix because state law currently says the homeowner is in charge of determining how much insurance to get for his or her home.”
Ng said the Department held the workshop to gather information on how to fix the policy issue.
IBA West’s Young said in his testimony that he appreciated the DOI’s and Commissioner’s “collective desire to address the pernicious issue of underinsurance in homeowner’s insurance, and for convening (the) pre-notice public discussion in order to fully evaluate not only (the DOI’s) contemplated solutions, but also alternatives.” And he noted that his association's membership shares the "desire to ensure that California homeowners better understand how the replacement cost of their insured property and contents is cacluated, and to make fully informed decisions regarding replacement cost when they select policy coverage limits."
Young noted it was “essential to understand the complex and varied reasons for the existence of the ‘problem’ of underinsurance,” such as economic incentives; the impossibility of obtaining an objective calculation because of too many variations in construction, contents, etc.; and lack of information. It is important to keep those factors in mind as the DOI contemplates imposing new duties upon insurers, producer or consumers, Young said. IBA West is concerned with any proposal that would, as a matter of law, make agents and brokers personally liable for replacement cost estimates produced by third-party vendors that insurers require broker-agents to use.
Ng said it would not be appropriate to comment on potential solutions discussed at the workshop, as the Department is still evaluating all of the information.
Friday, February 19, 2010
Paperless Insurance Agency
In the world of the independent insurance agency being efficient is one major key to being profitable. One of the easiest ways to improve agency work flow and efficiency is to be utilize paperless filing.
Tague Alliance offers our members access to management systems that allow client documents to be scanned or files attached directly to the client within the management system. If you are an independent insurance agent who is not currently paperless you should seriously consider making the switch from paper files.
The switch is not extremely expensive as you only need a decent scanner (scans at least 30ppm with sheet feeder) and a management system that allows you to attach files directly to the client. Look into the Fijitsu and the Evolution client management system.
There are many reasons beside efficiency to be paperless. With an online based management system with client documents attached you reduce potential E&O issues with date and time stamping, tracking of who is doing what on client files, no worries of fire destroying paper files, and your data is backed redundantly without you having to manage a server.
Remember, as an agency owner you need to look for every way possible to drive efficiency in your organization with the goal of continually improving your bottom line profit. Tague Alliance offers our members help with these types of issues. Call or email us if you are interested in these types of insurance agent resources.
Tague Alliance is a SIAA master agency with 52 member agencies.
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