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Coverage Lines Media

Allstate does their

Progressive Impression

Allstate Has You in Their Crosshairs: Are You Ready? Page 9

In this issue:

Agency ManagementWishlist: Top 7

Retail Agents: Are We HP or Apple?

LinkedIn Questions:Agents vs. Direct Carriers

866NSURANCE to ChangeInsurance For Good

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FIRST INSURANCE NETWORK, INC.P.O. Box 720713 · Atlanta, GA 30358-2713

Phone: (800)282-4151 · Fax: (770)438-7228

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We work hard to forge the most complete relationships with our agents. Its easier than ever to profitably satisfy your clients.

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SEPTEMEBER 2011Coverage Lines Media

Baking up fresh insurance ideas daily!

Allstate does their

Progressive Impression

Allstate Has You in Their Crosshairs: Are You Ready? Page 5

09/2011coveragelines.com

In this issue:

Agency ManagementWishlist: Top 7

Retail Agents: Are We HP or Apple?

LinkedIn Questions:Agents vs. Direct Carriers

866NSURANCE to ChangeInsurance For Good

Cover Story

Allstate Has You in Their Crosshairs: Are You Ready? Pages 9 & 10

Retail Agents: Are We HP or Apple?

LinkedIn Questions: Agents vs. Direct Carriers

866NSURANCE to Change Insurance For Good

Agency Management Wishlist: Top 711

7

15

4

I heard S&P downgraded the Virginia earthquake to a 3.6 on the reichter scale.

- David Gilliss

Around The Watercooler

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NSD Agents Are On A Road More Profitable

B a k i n g U p F r e s h i n s u r a n c e I d e a s D a i l y !

Coverage Lines Media

Because direct sellers are selling their product. There are lots of companies selling products. You are selling yourself. There is only one of you.- Mitch Krayton (selected as Best Answer)

Mitch makes a trite but correct observation. All we have is us. We are the value add and if we lose that then the direct carriers win! We don't sell products, we sell service and relationships!

Ryan,

The IIABA has pioneered a nationwide initiative to help the local independent agent compete with the direct and captive agents. The working title for this effort is the Consumer Agent Portal, and my firm has been engaged to assist. At a local level, retail agents need to optimize themselves for local search, but that is just the tip of the iceberg.

DM me if you would like additional information.- Martin Agather

The industry is long overdue for a collective initiative to change the course of retail agents. I plan on getting more details from Marty when he finishes up in Arizona next week.

As a consumer of insurance products for many years, I rarely ever saw real value added by local agents. Once I was sold the policy, 90% of my interactions were with HQ through the mail or recently via the internet. I do get a calendar and a birthday card from my agent, usually signed my the office manager. So, I suppose my input is to add value beyond just the products.- Brian Casto

LinkedIn Answers

How can retail auto insurance agents compete with direct carriers?

More and more carriers are refocusing their attention direct channels of acquisition and the facts are startling. Its time for retail agents to do something to stem these trends and start to compete again - but how?

Shameful! So many agents focus their efforts on acquiring new customers and totally overlook the good customers who continue to pay their bills. Brian tells it from the consumer's perspective. We're losing customers like Brian every day.

I am a relationship guy. I just went direct beacasue my agent retired and the agent that inherited his book of business never called me to introduce himself until I called to his office with a question that his secretary answered. I went direct because there is no relationship locally. I would be looking for an agent that knows me and my goals and is reviewing my file and suggesting options proactively thus earning my business and the commision.- Peter C. Rathmann

Yet another insurance customer directly speaking out. The fact that someone not in the insurance business being inclined to speak out at all tells you that our customers want this to change!

Direct carriers are, in my opinion, trying to create a blue ocean ( an area where your product is without competition) by changing the "emotional orientation" (or "relationship based") sale to a "functional orientation" or making the process efficient enough so a consumer/customer/client does not need additional advice or advocacy.

Insurers provide "risk bearing" services. Risk bearing services without risk management advice is not really worth a whole lot. An asymmetry exists between the knowledge of the use of insurance on the part of the consumer and the part of an agent properly dispensing risk management advice. This information asymmetry Have we really allowed insurance to become

a product and not a service? Read more @ coveragelines.com

is the value the agent bring to the table that the insurers do not understand.

And further, at the time of claim there is such a strong conflict between the objectives of an insurer and the objectives of a claimant that there is nearly always a role for education of the consumer and support for the consumer.

So for agents to retain the business and be of value they have to look at the insurance relationship on a long term basis rather than a short term basis as the insurers have educated the agents. Insurers look at the agent customer relationship as a point of sale relationship at a point in time. In fact, the management or a customer relationship by a competent agent is looked at as a series of events that must be managed on behalf of the insured and the insurer.

Buying insurance without a constant stream of objective advice is like buying a and old fire extinguisher at a yard sale and hanging it up in your kitchen in case a fire occurs. You have not the slightest idea if it will work until the fire occurs.

We have been working on defining a "commodity" to elucidate what the value of an agent really is... Like is below:

Links: http://hecandage.com/blog/- Howard Candage, CPCU, CIC, CRM

Precisely! This comes from one of the best. Re-evaluate your relationship with your customers. Are you formulating a long term plan? Are you communicating as such? Are your customers sure of what's to occur when they have to use the "fire extinguisher" you sold them?

Build a more personal relationship with the client where price is matters less, because the level of value is prevalent.-Steve DiMichele

Its all about the relationship - like its been said before, without that insurance is just a product. Once its been reduced to a product alone then why not buy it off the shelves of Wal*Mart?

Read more online @ CoverageLines.com

Back in 2001 HP saw the need to upgrade their business model and enter the mobile space. Their answer was to purchase Palm for $1.2 Billion... Apple, however, introduced the first ever iPod. And the approach even a decade ago couldn't have been any different.

Doing The Same Thing DifferentlyMoving into the mobile space for HP was clearly a good move. Their approach, however, has now come into question after they announced their exit from the hardware community. HP, who was at one point the world's leading computer manufacturer, has announced their leaving the space and forging new software developments.

Going mobile the same way they got into the PC market didn't work out. Acquiring Palm didn't do anything to fully integrate their products into HP's already existing hardware gems. Ten years later and they're out.

The primary competitor who is driving them out of the hardware marketplace, Apple, is now thriving and recently became the largest corporation in the world.

The difference being that one organization attempted to do the same thing they've always done but on a different platform (mobile) and the other realized that a whole new approach was the ticket to owning the market.

How The Lesson Applies To InsuranceChanges occurred in the automobile insurance market just after the dot com

Retail Agents:Are We HP or Apple?

boom of the late nineties. Large direct carriers got the memo first and have really jumped onto the self-service opportunities the internet afforded them to no longer depend on retailer production and margins. The likes of Progressive and GEICO has put a huge hit on retail production and these figures continue to slide in their favor. What has been the retailer's answer to this? Similar to HP's actually, if any moves were made at all that is.

Larger organizations would acquire the smaller ones hoping to organically plump up their revenue sheets. All the while they were hoping the tides would wane and they'd come out ahead with the additional acquisition centers and volume. That has not panned out. Meanwhile, Apple -- I mean Progressive, continues taking large chunks of retail production into their direct coffers. Allstate made their own landmark move to get in on the action by combining HP & Apple's approach into the acquisition of both Esurance and Answer Financial.

Huge changes are sweeping the marketplace and the large companies

saw it years ago. I remember speaking with mid-market carriers about the ides of March as it was taking form and being told that their clients do not use computers or aren't savvy enough to be online. They lost that bet.

Getting back to HP's recent astonishing news. They got to the point of attempting to fight the fight on Apple's turf and lost in a matter of months. They simply got to the party late and had the presence of mind enough to jump ship before it totally sank on them. HP is abandoning their mobile efforts even after a billion dollar acquisition, years of development, and a huge marketing push to deploy their tablets in a tablet crazed market. Nothing worked.

Steve Jobs' entire outlook on market fulfillment is to create the product prior to the desire occurring. If you wait until their is a desire then you are already too late. Being one of the last ones to join the game when its been played for a few years will certainly not provide you much leverage on the field.

Are We HP or Apple?Certainly our economic impact on our surrounding territories is nothing close to either HP or Apple. One thing we do have in common is being involved in a fast changing market in which we all used to see higher success. Other organizations do well to take pages out of successful companies' play books so why not us? Will retailers continue to do the same things differently or will they begin to different things to hit their unchanging goals?

This lesson has been learned the hard way by Blockbuster, Wal-Mart's music store, Kmart, and Circuit City all within this same timeframe. People are fretting over the economy but we have to remind ourselves - the economy is a net zero operation. Money doesn't diminish into thin air it simply changes hands.

The winds of change are occurring across numerous very large industries and sweeping up the money from one school of thought to another.

Tell us what you think about direct carriers continuing to take retail business and what we can do to about it on Twitter: @CoverageLines

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Retail agents are becoming private enemy number one to many large national direct brands. Allstate is taking it to another level as they not only target the independent retailer but now with news of salary reductions (20% is speculated) and that nasty business of moving older agency operators on to their "early" retirement through "under performance reviews" - but perhaps you haven't sewn together some of the most recent battle plans they've released.

Two Big AcquisitionsEven amidst announcing $620MM in losses due to the flurry of tornados, Allstate purchased two assets of White Mountain Insurance Group - namely Esurance and Answer Financial. This isn't exactly "news" but putting these acquisitions into perspective may be. Answer Financial had an almost simultaneous press release announcing their new partnership with Overstock.com (O.co) to offer direct

Allstate Has You in Their Crosshairs:

Are You Ready?insurance sales through the international online retail juggernaut. We already know Esurance's appreciation for the retail agent as they advertise on every television channel available 19 hours a day.

You're A TargetWhen companies are acquiring businesses that have direct channels of business while squeezing their existing retail personnel out of income - its a sign. When this all comes on the heels of the early retirement evaluations that

were being placed on several 20+ year old businesses with operators who have been in the business at least that long - its an agenda.

These large companies are gunning for us! Its no secret. There's no sacred cows; not the experienced community retail agent who works for the company all the way up to the corporate officer who lets his tongue slip at a function which offended the CEO of its tart frankness and kurt honesty.

Fight Fire With FireMany of us here at Coverage Lines recall having discussions over the years about banding together and beating the companies at their own game. We provide a service that is lost in this transition and need to showcase that so customers continue to prefer interacting with us rather than these organizations who have no interest in regional business.

Non-action is self inflicted lethal action! As we lay dormant these companies continue to gobble up more market share. While we "woe as me" we edge closer and closer to Blockbuster's eventual fate or the demise of an entire industry the way travel agents made it to their final destination.

Mayhem is targeting our customers and their own agents. Read more @ CoverageLines.com

Today's Technology Makes It PossibleAll right already! Cell phones are grocery shopping, serving up TV shows, and Xraying your friends hands... yeah, that tricked me too. When's it going to be our turn? Well, to get the ball rolling we put together a Top 7 list of features missing from agency management software today.

REALLY, REALLY WEB BASEDOK, enough with the whole "web enabled" crap that involves terminal server, pcAnywhere, or Citrix. That's NOT online and you know it! Centralize the database already, make it easy for us to open new offices, and why shouldn't we be able to work from anywhere? And yeah that includes mobile.

EASY CUSTOMER FILE CREATIONIf you want to produce a piece of business for a company all you have to do is bridge it. If you want to put that customer into your agency management system, however, good luck! There's usually a list of steps and looking around for this file or that file. If there is any integration it feels more like a hack than it does "seamless". Where's the bridge into the management software? One button and whoosh its off. Customer account is created, paperwork generated, and away it goes.

There would probably be a series of questions related to your own business operations such as down payment receipt creation and your own internal paperwork you would like to print. Streamlining this process would create more continuity in your agency and prevent those pesky clerical errors we all seem to hate.

Agency Management Wishlist: Top 7

AUTOMATIC SYNCHRONIZATIONNow that we have the cloud we should put it to good use. Its great that Flickr has pictures of your fun run and Facebook has updated everyone you know that you love Wham! (really?) - what's it doing for your business? Its time for companies to quit being stingy with our data! Serve it up to the cloud, consolidate it, and make it easy to access either as a download or as a web service. Furthermore, this service should also be free! Again, its our data. Sorry IVANS, you'll have to find another way to monetize storing third party data.

If we could do all of our work within one system, our own, and not have to train individual insurance company websites then it truly equalizes the playing field (I'm talking to you Progressive). Furthermore, how much faster would we get things done if we didn't have to call another office to get the password only to find that the site is down anyway!?

COMPARATIVE RATING AS A WIDGETNow that we live in our own software for service and account management, how about sales? Comparative rating should be web based and updated electronically when rate changes occur. Downloads, distribution, and installs are so 1995. The rater should appear in the management system as a widget so you can give a quote whenever a customer is ready. Again with the centralization. I store the quote here but the customer goes there. Now my employee, over there, can actually pull up the same quote! None of this "but the other guy said it'd cost X" stuff.

Oh yeah, I'm sure it goes without saying - we're agents, not network administrators. We don't want to back up our servers and

maintain VPNs. We want to get to business and sell policies. Sheesh!

LETTER GENERATION WITH E-SIGNATURELets generate our own form letters with mail merging ability. We need to be able to put any data field we store into a letter and when we want to. No more requesting from the management software company and weeks later its not slated to be on the one annual update! We should be able to create and save letter templates at will, print whenever we want, and how about even creating a set of parameters for batch printing? Lets say you're moving one of your offices and you'd like to send the same notice to all customers assigned to that location - with a snap. Yeah, it really should be that easy.

Signature pads are everywhere - why can't we take signature, embed it on the documents, and print already emblazoned? We'd automatically have a copy of all signed documents for future reference (you know when you'll need it) and prevent our employees from completing the transaction with missing signatures. Very E&O friendly.

I'd like to send a letter to everyone in my database advertising our great renter's insurance rates who indicated that they rent and aren't already renter's policyholders. How would you do that today? See what I mean?

TRUE COMMUNICATION INTEGRATIONI'm in a customers file because underwriting called me. I update the customer file and place notes in the system. Wouldn't it be great if I could quickly and simply send the customer an email and/or a text message directly from the system? Sure, integrating email in the system has been done before. I'm talking real intuition. Some artificial intelligence to recognize what the last action taken on the customer file was, some canned message to start me off, and a way for me to enter specifics.

If you want landmark changes in Agency Management attend one of our meetings! We talk about new ways to approach business and work with software companies to make it happen! Find out more @ CoverageLines.com.

Want to make more

money on every sale? Its

easy and your customers get a

great benefit too!Contact Nation Safe Drivers:

1-800-338-2680

Text messaging, or so the young people call it, has a much higher read rate. Your email probably ends up like billing notices; right into the trash bin.

I want to use VOiP phones that mate up with my management software. When I take an incoming call I want the caller id to pull up the appropriate customer's account so I'm at the ready to help them out. While we're at it, how about logging the time between answering the phone and hanging up? How long do your employees stay on the phone and with whome? Good luck figuring that out.

AGENTS APP STOREAnd the coup de grâce - the management system should be an open system with lots of documentation for third parties to create apps that work within the same space. I want to premium finance but creating the contract, formulating the figures, and printing the paperwork is a pain the ass!

However, with an app, someone like ETI could develop a module that could easily be added to the interwebs and

simply allow the agency owner to set it up with their agency's information.

Then the premium finance functions are embedded directly into the system and voila, it all works together. The same could be said for add on products, etc.

Perhaps a company wants to develop a time card or a project management add in that you could simply search for, install (through the web), and instantly begin using? That's what I'm talking about.

Some of this probably seems radical considering the current management system landscape but then again so did the iPhone in 2007.

Agency Management Wishlist: Top 7continued...

Enough Is Enough

Direct Carriers are going too far in their pursuit to drive retail agents out of business. At least that's the view of the new group of insurance mavericks who started 866NSURANCE, LLC.

The aim of 866NSURANCE is to provide retail insurance agents with the tools and service components that large direct carriers are using to set themselves apart.

Power In Numbers

866NSURANCE's idea is to band retail insurance agents together and take the competition to those who are actually hurting their business. Many retailers concern themselves of other insurance agents in the state but the reality is that consumers are rarely going to purchase insurance more than 15 miles away from either their home or business. How, then, is your agency in Marietta a competitor with another agent in Macon?

An Equalizing Effect

Companies like Progressive, GEICO, and Esurance tout their world class service and purchase tools that are available in any way you can pretty much imagine. 866NSURANCE provides retailers with 24/7 options that customers can choose from including voice, sms, internet, mobile, and of course - in person through an agent.

866NSURANCE will:

1. Provide consumer facing comparative rating for all the companies their agency base represents - not just those Progressive likes to show.

2. Allow consumers to purchase & service their policies online, over the phone, via mobile, and most definitely through agents.

3. Allow consumers to choose an agent that is closest to where they want to service their policies - even if performed electronically.

866NSURANCE in essence becomes the face of a collection of agents in their pursuit to fight back at the direct carriers.

How It Works

1. Business is coded to the agent in the zip code the insured lives or works in - the insured's choice. This means agents receive 100% of the premium commission of business produced and serviced in their zip codes.

2. Payments taken by 866NSURANCE call center personnel or web services will incur a $5.00 convenience fee. Installment commission is still 100% earned by the agent of record.

3. 866NSURANCE will never take or sell any agent's business from any zip code.

4.Prime Time

866NSURANCE is going live January 15, 2012.

If you are interested in joining in and taking your business back from direct carriers give Ryan Freeze a call at: 678-232-3753 or email him: rfreeze@866nsurance.com.

866NSURANCE To Change

Insurance For Good