PIA Reporter Feb. 15, 2008 1

Professional Insurance Agents of New Jersey Inc. Feb. 15, 2008PIANJ CEO/Agency Conference highlights ways to grow business

Growth in today’s soft insurance market takeswork, plus the right attitude and proven systems,according to a panel of sales consultants who coachedparticipants at a recent conference hosted by PIANJ.

Seeking ways to Grow your top line, more than120 people attended the 2008 PIANJ CEO/AgencyConference. The session brought together agents,company executives and a panel specializing in variousaspects of insurance sales, including: David Schuppler,president and CEO of David Schuppler & Assocs.;Michael Beck, the “Insurance & Advisor Coach” andKevin Shulman, president of Shulman & Assocs.

“A number of current measurements suggest aprolonged soft market,” warned Nicholas SanFilippo,a member of the PIANJ board of directors, whointroduced the program. “To grow, agencies needsupport from their companies that will help theminvest in tools to sell more business.”

Program moderator, Paul Monacelli, CIC, CPIA,past president of PIANJ, told participants that the 2008program was designed to continue the theme of agentspartnering with companies to build a sales culture, thefocus of the 2007 CEO/Agency Conference. “Did youall go back to your offices last year and check whetheryour processes help or hinder your ability to grow?”Monacelli asked. “Service is fine, but there’s nothingto service until somebody sells something.”

Schuppler, the first panelist to speak, explainedthe system he uses for targeting specific classes ofprospects “like a rifle shot.” Using a Web-basedmarketing system called SaleSource, his Wisconsin-based agency sends letters with graphics attachments

to pre-selected prospects to build familiarity and pavethe way for a sales call. “It takes work, but if you’re notafraid of work, there is so much opportunity out there,”Schuppler said.

Beck added to the discussion by outlining variousmethods for developing prospects and why some aremore effective than others. “I favor active ways ofidentifying prospects, which means ways that bringyour people skills into play from the start,” Beck said.“How you do things is as important as what you do.Building rapport and relationships is the key to effectiveprospecting.”

Last to speak was Shulman, who talked aboutbehaviors, techniques and attitudes that go into success-ful selling. “I want to see a paradigm shift to where youare auditioning a potential client during a sales call—not auditioning for the client,” he said. “If the prospectfails to qualify by needing your product, being able toafford it and having the authority to decide on purchas-ing it, then you can disqualify them and move onto thenext appointment without any negative ‘head trash.’”

During a lengthy question and answer session, thepanelists were asked what companies can do to supporttheir agents, beyond the obvious types of support,like cooperative advertising and the PIA Branding Cam-paign Local Agents Serving Main Street AmericaSM.

“Qualify your agents like your agents qualify theirprospects,” Monacelli suggested. “It’s not about size—it’s about growth, about being engaged and workingto develop a sales culture. Then sit down with them,get to know the agency and come up with a plantogether.”—Kiehl

Call for nominations: Distinction of Professionalism awardsPIANJ is accepting nominations for the 2008

Distinction of Professionalism awards. PIANJ takesgreat pride in its professionalism, and considers itimportant to recognize the professionalism of othersin the insurance industry.

At the upcoming PIANJ Annual BusinessConference, June 8-10, at Trump Taj Mahal CasinoResort, PIANJ will honor insurance professionals who

exemplify the qualities and actions that serve as anexample of industry excellence to us all.

Nominate someone for the following awards:Professional Agent of the Year; Company Person of theYear; Distinguished Insurance Service; or CommunityService award. Nominations are due April 18, 2008.

For the nomination form, see here: www.pia.org/NJ/2008NominationForm.pdf.—Czupryna

Association

PIANJ offers An Agency Guide to Comparative Rating

PIA is excited to offer a new member-exclusivebenefit, An Agency Guide to Comparative Rating.This one-of-a-kind guide provides a comprehensiveresource that PIA commissioned to help agents andbrokers evaluate and implement comparative-ratingsolutions in their agencies. It’s a great tool for anyagency that is looking to be more competitive,boost agency profitability and provide faster quotesto customers.

This 93-page resource guide was written byautomation/sales expert, Steve Anderson, of theAnderson Network, and executive editor of TheAutomated Agency Report (known as TAAR), atthe request of PIA of New York State, New Jersey,Connecticut and New Hampshire. Throughout theguide, Anderson takes you through the differentmethods and vendors of comparative rating and tellshow it can improve agency workflow.

It can take hours to get quotes separately at eachcompany Web site, but just a fraction of that time toget comparative rates from multiple companies usinga single data set. “I’m here to tell you the comparativeinsurance raters of today are not your fathers’ compara- (Continued on page 4.)

tive raters,” Anderson writes. “Real-time, multi-company comparative rating is beginning to work again.Agents who have tried and abandoned comparativeraters should take a second look; those who have neverused them should consider how these tools could helpdrive increased efficiency in their offices.”

Along with a brief, humorous history ofcomparative rating, Anderson explains its benefits,tells how to select the right product for your agency,and provides side-by-side profiles of comparative ratingsoftware vendors.

Inside this report you also will find two“must-have” items for any agency looking atcomparative rating. The first is a pull-out section thatgives you the questions to ask when comparing vendors.This way you can evaluate apples-to-apples and selecta vendor that is the right fit for your agency. The secondis a comparison chart of different comparative ratingvendors showing what states their rates are availablefor, whether they integrate with agency managementsystems, their rating methods, the number of insurancecompanies they partner with and what lines canbe rated.

PIA Reporter Feb. 15, 20082

Address comments to:PIANJ ReporterPhone:(800) 424-4244Fax: (888) 225-6935Web site:www.pia.orgEditorial staff:Jaye Czupryna, Sr. Publications EditorJoseph D. Renzi Publications EditorKenneth BessetteMary E. ChristianoMelissa CibelliDan Corbin CPCU, CIC, LUTCDiane Fowler, CAEMatthew Guilbault, Esq.Athena HoestenEllen Kiehl, Ph.D.Nick MarchettiFinley Middleton

PIANJ Industry Resource CenterWhat is your agency worth?

Most owners of professionalindependent agencies would liketo know the answer to thisquestion. Using theindustry formula suchas the “2 or 3 timesnet commission revenue”multiple does notproperly evaluate the trueeconomics of an agency’svalue. Using this formulaignores critical factors ofthe agency’s operating risksand profitability.

PIA has a series of resource kits that

discuss several approaches to valuationused by appraisers. These kits will

cover capitalization rates,discount rates and justifi-cations for various ratesof return required bypurchasers for agencies.

To access these sixresource kits, logon to

www.pia.org and typeQS90067, QS90068,

QS90069, QS90070, QS90071and/or QS90072 in the Quick-Link box,or fax PIA’s Industry Resource Center at(888) 225-6935.—Albright

For up-to-date industry news and association information,Think PIA first. Logon to the PIANJ Web site, www.pia.org.

PIA Reporter Feb. 15, 2008 3

NationalWar of words erupts between insurance industry and the CFA

The Consumer Federation of America has launcheda new attack on the insurance industry. In a report,the CFA charges that insurers are getting rich by“methodically overcharging consumers,” reducingcoverage, underpaying claims and having taxpayerspay some of the tab for risks insurers should cover.

“Consumers ultimately pay the price for theunjustified profits, padded reserves and excessivecapitalization that exist right now in the insuranceindustry,” said J. Robert Hunter, CFA director ofinsurance, who unveiled the report at a pressconference. He said insurers have maintained“sharp limits on coverage and availability,” imposing“harsh homeowners rate increases and using computer-designed programs created to systematically underpayclaims.” Hunter said taxpayer subsidies have alsoreduced insurers’ costs, mentioning the Terrorism RiskInsurance Act Congress extended last year. Also, hecriticized the creation of state-directed “insurers oflast resort,” charging that their creation has allowedinsurers to “cherry pick,” insuring better risksthemselves and sending higher risks into state pools.

Robert Hartwig, an economist and president of theInsurance Information Institute said in a statement thatthe study is, “fatally flawed and grossly distorts thefinancial position of auto, home and business insurers.”Hartwig challenged the figures cited in the CFA reportin a number of areas; for example, he said the reportoverstates the industry’s claims paying capacity byapproximately $160 billion in 2007.

“Insurers are protecting more cars, homes andbusinesses than any time in U.S. history and havebeen an essential component of the country’s economicgrowth engine for decades,” said Hartwig. “Theinsurance industry has paid out hundreds of billionsof dollars in insured losses over the past few yearsand insurance proceeds constituted the single largestsource of critically needed funds contributing to thestabilization and recovery of the Gulf Coast’s economyafter Hurricane Katrina. So to say claims payoutscontinue to drop is absurd.”

What it means to agents: Even though ourindustry can, and does, effectively refute Hunter’speriodic wild assertions regularly, he is in a muchstronger position with the press and the public. That’sbecause many people believe that if a “consumer group”says something, it is true unless, and until provenotherwise.

What the public, and sometimes even somemembers of Congress, fail to realize is that such aCFA “study” is, in fact, an analysis as well as anopinion, often just Hunter’s opinion. It is one pointof view. But because a “study” is “issued” by aconsumer group, many may accept it at face value.An assumption of truth and impartiality is createdwhen a consumer group comes out with what itdescribes as a “study.”

PIA has admonished Hunter publicly on manyoccasions, such as this, when he has made inaccurateand incorrect statements.—PIA National

PIANJ and NJYIP are helping college studentsfrom around the state reach potential employers onthe PIANJ Web site.

In response to the NJYIP outreach campaign,Project Y, more than 60 students have submittedresumes in search of a job. PIANJ members can viewand select these potential job candidates on a newonline database, located on the Agency StaffingAssistance Program section of the PIA Web site at:www.pia.org/IRC/asap/njresume.php.

“This database contains the resumes of brightyoung individuals who have no previous experience inthe insurance industry, but who recognize that a careerin insurance has endless rewards,” said Jack Lynn,CIC, CPIA, president of PIANJ. “The growing number

Undergrads seeking jobs, post resumes on PIANJ Web siteof resumes being submitted to NJYIP through Project Yis evidence that young people recognize opportunitiesavailable to them in this business.”

Most of the resumes come from students interestedin the insurance industry who will be graduating soon.Competition for interested students is robust; insurancecompanies and other potential employers are courtingthese undergraduates now. PIANJ advises members toconnect with these students early and consider offeringinternship opportunities; ASAP has information onstarting and maintaining an internship program.

Looking to find an undergraduate interested in aninternship or employment opportunity? Think PIA first.Contact NJYIP via e-mail at yip@pia.org, or call(800) 424-4244.—Cibelli

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(Continued from page 2.)PIANJ offers An Agency Guide to Comparative RatingTo access a copy, logon to www.pia.org and type

QS90545 in the Quick-Link box, or fax PIA’s IndustryResource Center at (888) 225-6935.

Resolve to get Real Time. The year 2008 bringswith it the opportunity to improve your businessworkflow to increase efficiency and profitability foryour agency. PIA—supporting Get Real Time—offersyou the tools to show you Real Time is right for youragency. To see how you can implement this benefit inyour agency, logon to PIA’s Web site and type QS90521

in the Quick-Link box (The Independent Agent’s RealTime Implementation Guide). Or check out additionalreal-time resources at www.getrealtime.org.PIA members also can logon here: www.pia.org/IRC/getrealtime.php.

Your one-stop technology resource. More infor-mation about these and other technology-related newsand resources is available through PIA’s Technology InfoCentral at www.pia.org/IRC/tech/. Let PIA be yourtechnology resource—Think PIA first.—Albright

PIA Reporter Feb. 15, 2008

PIA National has created a new Practical Guideto Successful Planning, which now is available toagency members online directly at www.pianet.com/ThePartnership/SuccessfulPlanning/A1.htm or bylogging on to the PIANJ Web site (www.pia.org) andclicking the “Member Resources” tab.

Created by agents—for agents, this tool kit willassist agents in their planning efforts within their ownagencies and coordinating those plans as they work withthe carriers they represent. It does not matter whetheryou are new to planning, have had previous experience

IA National’s Practical Guide To Successful Planning availableor currently are involved in planning efforts, this tool kitcan help you be more successful.

Through this tool kit, you can select your ownstarting point and then proceed from there to accessthe right tools to help you be successful in yourplanning efforts.

You need your PIA National Web site logininformation to access this tool kit. If you do not knowyour PIA National Web site login information,e-mail PIANJ’s Industry Resource Center atresourcecenter@pia.org for assistance.—Albright

PIANJ offers Spanish-language materialsAre you looking for a way to reach out to your

Spanish-speaking clients and prospects? Think PIAfirst. PIA members now have access to consumermaterials, which have been translated into Spanish.

“The increasing number of potential clients whospeak Spanish only or are more proficient in Spanishthan English has created a need among insurance agentsfor translated marketing materials,” said Diane Fowler,CAE, executive director, PIANJ. “PIA CreativeServices has responded to this need and combinedour comprehensive knowledge of the insurance industrywith accurate Spanish-language translation to giveagents another tool for promoting their business.”

The development of Spanish-language materials isin response to repeated member requests for such items.PIA members have access to translated versions of anyof the 59 agency consumer fliers and the Agency

Staffing Assistance Program career promotionbrochures free of charge. Offered for sale are translatedversions of self-mailing consumer brochures and post-cards for personal and commercial lines, state-specificnewsletters for personal and commercial lines, all floodinsurance promotional collateral and “Go with a pro”marketing materials.

What is PIA Creative Services? It’s an in-houseadvertising agency that writes, designs and producesoriginal and on-target promotion for insurance agenciesand brokerages. Products can include a simple logo orentail an entire strategic campaign.

For more information about materials available inSpanish, or about other products available throughPIA Creative Services call (800) 424-4244 or visitwww.pia.org/COMM/cs/indexnj.shtml.—Cibelli

Fowler named to insurance advisory committee.PIA’s Executive Director Diane Fowler, CAE, wasnamed to serve on the Risk Management and InsuranceAdvisory Committee for Utica College, Utica, N.Y.

The advisory committee is charged with assistingthe college in the development and oversight of a new

major in Risk Management and Insurance. The firststudents will be enrolled in the major in the fall of 2008.

The new major will prepare students for a widevariety of career options in the insurance industry andother parts of the corporate marketplace by offeringskills development in this specialized management area.

PIA Reporter Feb. 15, 2008 5

More companies join PIA National’s branding campaign

CompanyThanks to PIANJ past President John D’Agostino

Jr. for his efforts in encouraging Farmers Mutual FireInsurance Co. of Salem County to join PIA National’sPIA Branding Campaign, Local Agents Serving MainStreet AmericaSM. Additionally, Lancer Insurance Co.also joined the campaign.

More information on the PIA Branding Programand a complete list of company sponsors can be foundhere: www.pianet.com/piabrandingprogram/.

• ACE has acquired the personal lines operationof Atlantic. According to a letter to agents, the newpersonal lines organization will be called ACE PrivateRisk ServicesSM, and will offer a new, improved packageof products called the ACE Platinum PortfolioSM.Several key states already have approved the company’shome, valuables and umbrella filings. Auto filings andthe remaining approvals should follow within the nextfew months. Territory managers are calling agents toarrange meetings this month to discuss ACE’s strategyand the benefits for agents.

• New Jersey Manufacturers Insurance Co. saidthat lower payouts on claims will result in lower rateson new policies and renewals in New Jersey. The com-pany said its auto rates will decline by an average of5 percent. The rate reductions will amount to a total ofabout $34.6 million in annual savings for policyholders.

• Venture Insurance Programs has broadened theproperty, general liability and automobile coverages ofits Preferred Club Program for golf and country clubs.The improvements include: increased tree, shrub andplant limits; an amended definition of Golf CourseNamed Perils to include the weight of ice and snow;optional golf course flood coverage. The program,which has underwriting partnerships with Chubband OneBeacon, also has additional coverageenhancements; general liability enhancements;and auto coverage enhancements.

• Allstate Corp. said its net income fell37.3 percent in the fourth quarter, hurt by catastropheclaims from California wildfires. The company saidnet earnings were $760 million, or $1.36 a share,down from $1.21 billion, or $1.93 a share, in theyear-earlier quarter.

• Aon Corp. said that fourth-quarter net incomecame in at $207 million, or 64 cents a share, down7 percent from a year earlier when the insurance broker

made $223 million, or 67 cents a share.• The Chubb Corp. reported that net income in the

fourth quarter of 2007 was $650 million or $1.68 pershare, compared to $654 million or $1.56 per share inthe fourth quarter of 2006. Operating income increasedto $620 million from $614 million in the fourth quarterof 2006. Operating income per share increased10 percent to $1.60 from $1.46.

• CNA Financial Corp.’s fourth-quarter net incomefell to $164 million, or 60 cents a share, from$329 million or $1.22 a share, a year earlier, hurt in partby lower net investment income and decreased currentaccident year underwriting results in it Standard Linesand Specialty Lines units.

• The Hanover Insurance Group Inc. reported arise in earnings for the fourth quarter. Fourth-quarter netwas $75.8 million compared with $45.5 million for thesame period a year earlier.

• Liberty Mutual Group said its 2007 profitdipped nearly 7 percent compared with unusually strong2006 results, as greater insurance industry competitionled to pressure to cut policyholder rates. In last year’sfourth quarter, net income was $425 million, downnearly 7 percent from $455 million in the same quartera year earlier. Revenue rose 15 percent to $6.93 billion.

• Marsh & McLennan Cos. reported fourth-quarter net income fell 62 percent on 8.1 percenthigher revenue. Earnings fell to $85 million, or 16 centsa share, from $226 million, or 40 cents, in the year-earlier period.

• Safeco Corp. said its net income fell by nearly athird in the fourth quarter due to competition in autoinsurance and losses from California wildfires. Autoinsurance premiums declined 4.1 percent in the quartercompared with a year ago and new business policies itissued were down 14.7 percent.

• Profits at Travelers Cos. fell 11 percent in the lastquarter of 2007. The company reported a consolidatedcombined ratio of 87.4 percent. Fourth-quarter netincome declined to $1.06 billion, or $1.64 a share,from $1.19 billion, or $1.68, in the year-earlier period.

• Willis Group Holdings net income for the fourthquarter was $95 million, or $0.66 per diluted share,compared with $148 million, or $0.94 per diluted share,a year ago.—Czupryna

PIA Reporter Feb. 15, 20086

PIANJ’s Company Performance Survey is herePIANJ has launched its fourth-annual Company

Performance Survey. Last year, more than 250 agentstook five minutes to rate the companies with which theydid business—and, provided valuable feedback to bothPIANY and those companies.

For the full results of the last three years of thesurvey, see here: www.pia.org/GIA/cps/index.php.

The survey gauges members’ (and nonmembers’)anonymous views of their companies. The month-longpoll will ask your opinions on companies handling ofclaims; products and pricing; technology; marketingsupport; and more. And, don’t forget to providecomments at the conclusion of the survey.

Companies are selected based upon the number

of PIA members that do business with them. In caseswhere separate business units are operated quiteindependently by the same company, agents shouldevaluate each unit separately.

Other organizations have charged more than $1,000to view the results of similar surveys. PIA will publishits results in the June issue of PIA magazine.

The survey is available online at PIA’s Web site,or a fax-back version of the survey can be foundon page 7 of this Reporter, which can be photocopied toallow you to rate more than three companies.

And, don’t forget to tell others in your officeto participate. Now is your chance to tell yourcompanies how they are doing.—Czupryna

Association (Continued)

PIA Reporter Feb. 15, 2008 7

Association (Continued)

PIANJ Calendar of EventsPresorted

First-Class MailUS Postage

PAIDGlenmont, NY

Permit #15

To register for an education event,call the Education Department at(800) 424-4244. Or, logon to thePIA Web site, click “New Jersey,”“Education” and then “Schedule.”

February

• Feb. 20—Your officeLunch ‘n’ Learn Teleconference:Risk Management for the HighProfile Personal LinesNJCE: N/A

March

• March 12-13—JamesburgPIANJ’s Annual March CE MadnessNJCE: Earn up to 16 CE credits

• March 18—East HanoverCISR IP: Insuring CommercialProperty ExposuresNJCE: 8/12 with designation

• March 19—JamesburgCISR IP: Insuring CommercialProperty ExposuresNJCE: 8/12 with designation

April

• April 1—Your officeLunch ‘n’ Learn Teleconference:Writing Condominium CoverageNJCE: N/A

• April 2—Saddle BrookNJ PAIP/CAIP Producer ProceduresCourseNJCE: 4 NJCE

PIA also offers myriad self-study online courses that provide upto 15 NJCE credits per course—earnthe CE you need without ever leav-ing your office. See www.pia.org fordetails. If you have a certain topic inmind for your staff, create your ownseminar via PIA’s Custom ClassEducation Services. Custom Classbrings tailored, CE-approved educa-tion programs into your office at atime that’s convenient for you. Call(800) 424-4244 for a free quote.