RiskProNet News


Observations on Dealing With Millennials

Millennials rarely “get it” when it comes to insurance until they purchase a first home. Although their initial insurance purchases are modest, the unsolved challenge is to keep millennials as a future revenue source, members of the Personal Lines Practice Group agreed at a recent conference call.

Here are some of the comments:

“Our book of business is starting to mature. We are missing millennials (generally defined as people born between 1982 and 2002), and that can affect the future of our agency. Are the systems in place that millennials will gravitate to?”

“I have two of my own and they are on their phones all day. Instagram is an area where we may be able to reach them. “

“I’m pulling a lot of kids off their parents’ policies and starting them on their own. Premiums are typically really high. I try to educate them about what is important in a policy. But I think it will come down to ‘I can get it cheaper somewhere else’ once they are truly on their own. They’re all about making sure they have their coffee money and their cocktail money.”

“They give insurance serious attention when they buy a home. Until then, it is price-driven. We try to explain that they may need more than minimum insurance so they don’t have their wages garnished for the next 20 years if there is an accident. Parents gravitate to that conversation and they get it. But the millennials talk to a buddy who found cheaper insurance.”

“We’ve lost a lot of millennials, which is good because they were our biggest problems. The  revenue stream down the road is the issue. Millennials don’t feel they own anything, so it’s hard to get them to buy anything extra. We try to keep the parents informed. Every millennial is the child of a client, as we don’t write insurance for people unless we have a relationship.”

Technology is key

“We’ve complained to our carrier partners about the ease of doing business that millennials want. The determining factor may be how smart and quick our systems are going to be.”

“Technology is our weakest link for millennials.”

“They’d rather go online than pick up the phone and talk about the issues.  They’ve grown up where information is everywhere. Their feeling is ‘We can do our own research’ and we mainly want to be sure we like the person we are dealing with. Referrals and ease of doing business mean everything to millennials.”

Monoline auto

“I have no good program for monoline auto. Nothing is competitive.”

“I think the industry is aware of this but the carriers haven’t bellied up to the bar on it. So the millennials will pick up insurance from Geico or somewhere similar. The second they see a premium of over $1,500, they’re gone.”

“We had a client’s son who found auto insurance that was cheaper because he gave incorrect information on mileage driven. He only calculated the mileage that he drove to and from work. Once he calculated it correctly, we could offer a less expensive policy with better coverage. They don’t realize that the carriers with cheaper policies will check their mileage and come back to them.”

Changing Markets in Florida, California

Florida insurance agents have a new offering, StormPeace, that covers claims that typical policies exclude or that have high deductibles. These include hurricane and wind damage or debris removal when a tree falls. Most claims are paid within three days.

The California earthquake market is changing, with some companies offering a 2 percent deductible rather than the traditional 15 percent.

Uninsured motorists

Uninsured drivers continue to be an issue, with estimates of uninsured motorists ranging from 26.7 percent in Florida to 4.5 percent in Maine. “We suggest maxing out coverage on the policies and also putting it under the umbrella policy.”

Pester to retire

Practice Group Chair George Pester, who has been with JKJ for 38 years, announced that he will retire in June after a “lifetime of joy” in insurance.


Innovative Ideas for Generating Personal Lines Referrals

Suppose you could send a personalized mailing to prospective clients, using the name of a neighbor as a reference! Johnson Kendall Johnson is doing exactly that, and this was among many innovative approaches to referral marketing discussed at this month’s Personal Lines teleconference.

JKJ asks clients’ permission to use their names as references. The agency then uses reverse directories to obtain lists of neighbors.

Asking clients for referrals is most effective when you can identify the types of prospects you want, Johnson Kendall Johnson’s George Pester told the group. Collectors are particularly good prospects for example.

If a client has a valuable collection of anything from jewelry to automobiles, it’s effective to ask if they know other collectors who may be interested in comparable insurance products.

“When we get referrals, we have prospects who have the same mindset as we do,” one person said. “Our value proposition is to focus on providing protection rather than price. We spend far more time on risk assessment than in writing proposals and quotes.” 

Referrals from Commercial Lines Department

One RPNI member agency requires that a personal lines representative go to 60 percent of the commercial lines meetings with clients. “Even if you’re not part of the meeting, you get to know the person. Usually they have a question for you before the meeting is over.”

One agency gives 25 percent of the first-year commission to commercial lines account representatives who generate personal lines referrals. “Everyone know someone with a home or a car.”

Be sure commercial lines producers are aware of the quality service offered by the personal lines teams. “Some producers are reluctant to refer clients to us in case something goes wrong. When they do, we get the account nine times out of ten, and our prices are usually more competitive.”

Aftermath of natural disasters

When clients thank you for exceptional service, this is a great time to ask for a referral. In areas recently devastated by hurricanes and fires, consider asking for referrals from clients who have had good claims experiences. One teleconference member said she just received the “nicest email I have ever had” after helping a client get the most favorable claim settlement.

These were among the other suggestions at the teleconference:

More Ideas

  • Outings and seminars, especially on topics other than insurance, are a chance to network with people and “develop the kind of synergy and friendship where referrals flow.” Partnering with a referral source, such as an investment manager, can be an ideal way to develop networks.
  • Be sure social media has a link where people can refer a friend.
  • Send handwritten notes rather than emails as thank-yous.
  • Consider seminars for associations. For example, a seminar in an area with historic homes can focus on the special needs of owners of historic buildings.
  • Beware of gift cards and rebates. Is this the right image for your agency?
  • Have special training sessions for customer service staff on how to ask for referrals.
  • Develop relationships with wealth management firms. Some RPNI members have found this to be effective, while others find that investment managers are overrun with requests from brokers.
  • Presentations can be turned into online webinars. Even if In-person attendance is low, the recorded webinar that follows have been successful in attracting attention on the web.
  • The “sharing trend,” focusing on insurance issues for sharing homes, cars and ownership of recreation vehicles, is a good topic for today’s economy.

“We have the highest closing rate from referrals, no matter where they come from,” Pester said. “The referral is trusted and comes with the good wishes of the person who referred you. We all need to be sure we follow a systematic approach to getting referrals.”


Insurance’s Biggest Disruptor: Blockchain Technology

Blockchain digital record-keeping technology may be today’s biggest disruptor in the insurance arena, David Princeton, P&C claim lead at M3 Insurance told this month’s Construction Practice Group teleconference.

Blockchain technology — adopted by organizations ranging from Nasdaq to Walmart – allows for the exchange of items of value and is essentially designed to cut out the middleman, he said. It can be used, for example, on claims for loss of business income. The new technology can review past financial statements, and make calculations that cannot be edited.

Blockchain technology is among the factors that will make people look at service rather than price when they select carrier partners. RPNI members will face the challenge of providing service even when delivering a difficult message, he added.

With blockchain data and various forms of artificial intelligence providing answers to many questions (See earlier blog), brokers will be expected to answer more complex questions, he continued. “I get an email almost every minute asking for strategic guidance on a complex situation. If I don’t get back to the client until the next day, I’ve already failed him.”

Artificial intelligence can be helpful here, Princeton said, by reading incoming email and prioritizing it according to parameters assigned by the agency.

Third party claims administrators

Third party claims administrators are most effective in the workers comp arena, as it is difficult for smaller carriers to have the expertise and staff needed to provide good service in all states, Princeton said in answer to a question.

In other areas of insurance, third party vendors are less than ideal. “We want to control the claims and differentiate ourselves,” he said. “When you use third-party vendors, you lose ownership of your brand.”

Additional reading

Inc. Magazine: Blockchain Technology Is Set to Disrupt Every Industry

Business Insider: IBM wants to use the technology that underlies bitcoin to help prevent major foodborne outbreaks like salmonella


Phone Calls Out, Text Messages and Postcards In

Postcards are effective. Texts are popular. Email continues to be an excellent way to communicate with clients. But when it comes to phone calls, 84 percent of clients would prefer their insurance agents choose another method.

Phone calls are intrusive, and calls usually go to voicemail. People want information, but on their own time – which is often weekends and after business hours for personal lines clients.

These are the statistics compiled by Agency Revolution, and the consulting firm’s David Morton shared them at this month’s Personal Lines teleconference. Morton himself is the son of an independent broker. Agency Revolution founder Michael Jans worked in the insurance business for a number of years.

“Studies show that 86 percent of consumers are dissatisfied with communication from their insurance providers,” Morton said. “This is a daunting statistic, but it presents an opportunity.”

People want to hear from their agents, but want personalized communications rather than generic information.

Almost every agency says it differentiates itself from others because of personal service, Morton noted. Yet most clients never hear from an agency unless they initiate the contact.

“If you actually reach out to people at renewal time, you’re setting yourself apart from the competition,” Morton said.

Communications should focus on three key messages:

  1. We are looking at your policy.
  2. We care about your situation.
  3. You have choices.

A Facebook survey, he noted, showed that the most common reason for changing insurance providers was a rate increase without an explanation.

Morton, as well as RiskProNet members on the teleconference, suggested setting up individual communications plans as each new client is onboarded. High-net worth clients often have a personal risk management contact who should receive some or all of the communications.

“Find out what the frustrations were that led them to switch to your agency,” one member suggested.

Among the other suggestions and comments were these:

  • Text messages are a good way to communicate specific information requested by clients. Ninety-nine percent of text messages are opened, compared to 50 percent of emails.
  • As an incentive for referrals, a donation to charity may be more effective than gift cards.
  • Postcards are coming back into style, particularly as direct mail often goes unopened.
  • Contact by mail may be important for E&O reasons.

Additional information about marketing campaigns is available from Morton. He can be reached at dmorton@agencyrevolution.com.


Summer Challenges Discussed at Personal Lines Conference Call

George Pester, VP Private Client Group at JKJ and chair of the Personal Lines Managers Practice Group, led a roundtable discussion at a recent conference call on “Summer Challenges” including, managing staff vacations, production challenges, client issue, premium disruption and weather (hurricane season).

One new business initiative was particularly creative. JKJ teamed up with a wealth advisor, and each company invited a dozen clients to a one-hour putting lesson at a local country club, followed by a cocktail hour. It was billed as a client appreciation event rather than a sales presentation and proved to be a successful way to meet prospects.

JKJ also has purchased baseball tickets and receives tickets as part of its sponsorship of a local theater. Calling a client to offer a free ticket to an event is a low-key way of keeping in touch, and clients appreciate it, Pester said said.

Sales Contest

One member has instituted a summer sales contest with gift certificates toward a cruise and air fare as first and second prizes.

To encourage everyone – not just top producers – to participate, all staff members receive a ticket to be entered into a drawing each time they bring in a new account. The company as a whole must achieve a 5 percent revenue growth, plus enough extra to cover the cost of the contest, for the prizes to be awarded. Cross-selling and up-selling, such as an adding an umbrella to an existing account, qualify for tickets for the drawing. Increasing the limits on an existing policy does not qualify.

Quiet Time

A formal “quiet time” is helping one agency maintain productivity in the summer months. Summer work hours are 7:30 a.m. to 4:30 p.m. instead of the usually 8-5, and the phones are turned off until 8:30 a.m. This is meant as a quiet time to catch up on the things that never gone finished the day before because of interruptions. Lunch periods are reduced from 60 to 45 minutes, and employees get an extra half-day off every third week. The program has been popular with employees, and has had minimal impact on clients, as few phone calls typically come in between 4:30 and 5 p.m.

Condominium Owners as Prospects

One agency teamed up with a condominium association it insures to offer seminars explaining to condo owners exactly what the association insurance covers and what the individual owners need to insure. The invitation was a postcard with a photo of the entrance to the condos, a picture guaranteed to attract attention.

Temporary Employees

Several agencies have found college students to be a good source of temporary employees.

Refrigerator Magnets as Vacation Reminders

Send refrigerator magnets with agency contact information to clients. If they are going on vacation and have a friend caring for their house, remind the friend to call the agency if they find any signs of damage.

Electric Bicycles

Standard homeowners’ policies often fail to cover bicycles that have an electric motor to give riders a boost up hills. Be sure to ask your clients and prospects whether they are properly insured if they have e-bikes. Electric skateboards present similar challenges. One RiskProNet member suggested Markel as a source for insuring electric bicycles.


How RPNI Members Approach Personal Lines Renewals

RiskProNet members begin reviewing personal lines policies as much as 100 days in advance of renewal dates. Initial steps include talking to the client and carriers about changes that may affect client needs.

These were among the comments at this month’s Personal Lines Practice Group teleconference:

  • “Check with clients on lifestyle changes. Have they started acquiring collectibles? Inherited valuables?”
  • Face-to-face renewal meetings get clients to pay attention to the process rather than the cost. It’s a good time to offer extra products, such as travel insurance..
  • “One of the biggest challenges is getting clients to compare apples to apples. The industry has shot itself in the foot to a degree with television ads commoditizing policies.”
  • No one has had claims experience with private flood insurance claims, but prices “are out of the park” and as much as double the prices in federal programs.
  • “The question is not if the ‘big one’ will hit, but ‘when.’ We want clients to understand the value of a good policy and a reputable company that will be there if they have a claim.”
  • “We always look for upselling opportunities. Perhaps a client wants to increase the deductible and reinvest the premium in higher liability and umbrella limits.”

Also see the previous blog on factors influencing the personal lines market.

Thanks to Practice Group Chair George Pester of JKJ for chairing the discussion.


What’s Driving Cost Increases in Personal Lines

Personal lines policies are increasing in price – occasionally by double-digit percentages, Personal Lines Practice Group members agreed at this month’s teleconference.

The Consumer Price Index data shows that auto insurance costs grew by 7.6 percent in February 2017. This was among the statistics that JKJ’s George Pester, practice group chair, presented. Some of the others follow:

  • Accidents and injuries are increasing, as more people are driving now that the economy has rebounded and the price of gas has dropped.
  • The National Safety Council estimates that 40,200 people died in auto accidents in 2016, up 14 percent since 2014. This is the largest year-to-year increase in more than five decades.
  • The Federal Highway Administration shows a 9.4 increase in miles driven from 2013 to 2015. Increased congestion on the roads means a greater chance of an accident. The last two years also have brought more accidents caused by distracted driving, more complex and sophisticated auto parts and increased accident frequency and severity.
  • The cost of hospital services increased by 3.4 percent from 2016 to 2017, meaning higher bodily injury costs.
  • Vehicles are more complex than ever. Repairing a taillight broken in an accident may involve replacing an entire portion of a vehicle rather than just the taillight today. This trend affects not only comprehensive and collision claims, but also property damage liability.
  • Prices for motor vehicle bodywork are up by 3.0 percent since last year.
  • Awards in lawsuits are increasing, with a median award of $75,000 in 2014, compared to $70,000 in 2014, the latest year for which figures are available. Awards of $1 million or more accounted for 18 percent of all personal injury awards in 2013 and 2014, up 17 percent from the prior two-year period.
  • Incurred losses and loss-adjustment expenses grew by 7.6 percent in the first three quarters of 2016 versus a rise of 2.7 in the comparable period the previous year.
  • Underwriting expense grew by 2.6 percent.
  • Against this background, insurers’ investment income has dropped because of prolonged low interest rates.

A future post will discuss how RiskProNet members are handling renewals in light of these factors.


George Forrester, AHT Insurance Principal, Joins Board of RiskProNet International

George Forrester

RiskProNet International issued this press release today. We welcome George Forrester to our board of directors starting April 1.

LEESBURG, Va. – George J. Forrester, principal and senior vice president of the manufacturing division of AHT Insurance in Leesburg, Va., has been elected to the board of directors of RiskProNet International, an association of leading independent insurance brokers in North America.

RiskProNet member firms have combined annual revenues of $548 million and more than $5.5 billion in annual written premium.

Forrester, who joined AHT Insurance in 1996, brings more than 20 years of experience in insurance for manufacturing, construction and hospitality companies as well as specialized private financial institutions.

He has worked with trade associations, industrial engineers, American National Standards Institute committees and litigation advisers.

He is a frequent speaker at insurance and product safety events and has authored articles and white papers for industry publication.

Forrester is a graduate of Lynchburg College in Lynchburg, Va. He holds the professional designation of Certified Insurance Counselor.

AHT Insurance, founded 96 years ago, is employee-owned and one of the largest independent insurance brokerages in the nation. Other offices are located in Chicago, New York, San Francisco, Seattle and Washington, D.C.

Each RiskProNet member is an equal owner in the association, which gives the network the geographic diversity and shared knowledge base to serve clients with national, international or highly specialized exposures to risk.

In addition to AHT Insurance, RiskProNet members are BFL Canada Insurance Services, Inc. in Canada; BHS, Michigan; Brady, Chapman, Holland & Associates, Texas; Buckner Company, Inc., Utah; Connor & Gallagher Insurance Services, Inc., Illinois; Crane Agency, Missouri; Dawson Companies, Ohio; Eustis Insurance & Benefits, Louisiana; Herbert L. Jamison Co., LLC, New Jersey; InterWest Insurance Services, Inc., California; Johnson, Kendall & Johnson, Inc., Pennsylvania; M3 Insurance, Wisconsin; Moody Insurance Agency, Inc., Colorado; ONI Risk Partners, Indiana; Regions Insurance, Inc., Arkansas; Reynolds & Reynolds, Inc., Iowa; SterlingRisk, New York; SullivanCurtisMonroe Insurance Services, LLC, California; and Watson Insurance, North Carolina.

RiskProNet International is headquartered in Menlo Park, Calif. Additional information is at www.riskpronet.com or at (650) 323-1929.

For additional information about AHT, visit www.ahtins.com or call (800) 648-4807.



Chubb Updates Personal Lines Mgrs

Group chairman George Pester welcomed Cass Thomas, AVP Business Development, Chubb, Personal Risk. The discussion included progress to date, including planned expanded services, how to drive more customers through marketing and advertising, milestones and upcoming enhancements.

Check out his PP presentation here…>  chubb-pers-lines-feb-2017

Contact George Pester for more info.


Checklist for Insuring Tangible Assets

What do clients need to know about insuring tangible assets?

Colleen Boyle, senior vice president-national sales director of Pall Mall Art Advisors, suggested these points in a recent Personal Lines Practice Group focusing on fine art, antiques, wine, silver, jewelry and other collectibles.

  • Be sure clients understand the difference between the fair market value and retail replacement. For insurance purposes, look at the retail market. Few people want to wait until a replacement item comes up at an auction where the price may be lower.
  • Educate the client on the importance of due diligence in purchasing art and collectibles. While clients would almost certainly exercise due diligence in purchasing a $3 million home, most do not take the same care when purchasing a $3 million painting.
  • Consider title insurance on expensive purchases.
  • If a client plans to sell art or other collectibles, stress the importance of having a plan for the sales. Everything is negotiable.
  • Use specialized transit services, and have valuable objects packed professionally.
  • Three key tips for clients:
    • Understand the value of your tangible objects.
    • Create a risk and wealth plan.
    • Engage professionals to build an effective risk management program.

A previous blog post discussed the market and valuations for tangible assets.

Colleen will be pleased to work with RiskProNet members. She can be reached at cboyle@pallmallartadvisor.com (610) 470-5340.


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