June La Voz 2012

SM

SM

We appreciate your business and our partnership! We look forward to providing your

clients the opportunity to put their business with a New Mexico company. If you have

any questions, please feel free to contact your sales representative.

Bring your business home to New Mexico Mutual and celebrate

with a 5% increase in commission on NEW BUSINESS* bound with effective dates through August 31, 2012.

3900 Singer Blvd. NE • Albuquerque, NM 87109 • 505.345.7260 or 800.788.8851 • www.NewMexicoMutual.com*Excludes accounts that were insured with New Mexico Mutual in the previous 6 months, short-term policies, rewritten policies, and renewal policies.

New Mexico’s Experts in Workers’ Compensation Insurance.

To celebrate we are extending our5% new business commission program.

WE LOVEYOUR BUSINESS!

IIANM Staff

2011-2012 Officers

ChairScott JonesVice-ChairPJ WolffSecretary/TreasurerDiana HobbsNational DirectorSam ConleeImmediate Past ChairKathy Yeager

FeaturesThis publication is intended to provide accurate and authoritative information on the subject matter covered, but is distributed with the understanding that neither IIANM, nor any contributing author, publisher, contributor or advertiser is rendering legal, accounting or any other professional service and assume no liability whatsoever in connection with its use. Further, the electronic links to our advertisers and/or contributors found in this publication are provided as a courtesy to our readers and do not necessarily indicate an endorsement by IIANM.

News items from members of Independent Insurance Agents of New Mexico and the general insurance industry are encouraged. The advertising deadline is the fifteenth day of the month, preceding publication.

Advertising rates are available upon request.

Please contact Rachel Sheffield at [email protected] for details

Among Those Shopping for Car Insurance, More Are Switching Insurers 05

IIANM's Southern Seminar! 15 hours of CE in Las Cruces, NM 06

Fireman's Fund Insurance Made The Golden Gate Bridge A Reality 08

5 Keys to Effective Time Management 11

Unlock Your Big "I" Benefits 13

When Residents Have No Coverage... and Worse 17

IIANM Welcomes New VP of Member Services, Consuelo Trujillo 18

Help Clients Achieve Long-Term Financial Stability 20

Lessons Learned About Agency Contracts 22

"Cat Skinning" (a.k.a. Risk Managing an ATV Exposure) 24

2012 IIANM Company Partners 26

Death by Powerpoint 28

Workers Comp Premium Likely to Rise 30

Tech Talk 14

ABEN - The Next Big Thing in Continuing Education 25

June's Clickable Calendar 32

Odds n Ends 33

In Every Issue

Advertiser Index

"The Voice" of Independent Agents since 1934

President/CEOThom Turbett

Vice PresidentLorri Gaffney

Communications DirectorRachel Sheffield

Insurance Programs AdministratorJulie A. Franchini

Member Services Associate Renee Trujillo

“La Voz” is the official monthly e-publication of the

Independent Insurance Agents of NM 1511 University Blvd. NE Albuquerque, NM 87102.

(505) 843-7231. Fax (505) 243-3367. Web site www.iianm.org.

La

oVZ

Acuity 19 Burns & Wilcox 10Hallmark Insurance Company 05Litchfield Special Risks 09Lovelace Health Plan 21Market Finders, Inc. 16MexiPass 23Mountain States Insurance Group 12New Mexico Health Insurance Alliance (NMHIA) 23New Mexico Mutual 02Trustco 34

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mailto:[email protected]



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http://www.iianm.org

There is a new Hallmark Personal Lines, dedicated to providing our New Mexico agents, policy holders, and claimants the most responsive, personalized customer service in the industry.

Hallmark couples this renewed focus on service with highly competitive rates, generouscommissions and an exclusive contingency bonus program for personal auto business.

For more information, contact our business support specialists at 800-486-5616 or [email protected]. Your success is essential to our success, which is why ”Service is our Hallmark.”

90% of Calls Answered within

30 Seconds. *

*2012 Goal

Independent Insurance Agents of New Mexico - www.iianm.org - * June 2012 Page 5

The auto insurance shopping rate has reached the lowest point in the past five years, with only 25 percent of insur-ance customers indicating they shopped for a new insurer in the past 12 months, down eight percentage points from 2011, according to the J.D. Power and Associates 2012 U.S. Insurance Shopping StudySM released today.

The study, now in its sixth year, examines consumer shopping and purchasing behaviors and overall satisfac-tion among buyers who recently purchased insurance across three factors (in order of importance): distribution channel; policy offerings; and price.

While only one-fourth of auto insurance customers shopped for a new policy, 43 percent of those shoppers switched providers--the highest rate since the study first began measuring retention in 2008, and an increase of 3 percentage points from 2011.

"Although fewer consumers are shopping for insurance, more current customers who do are willing to make a switch based on competitive quotes," said Jeremy Bowler, senior director of the global insurance practice at J.D. Power and Associates. "The increase in the propor-tion of shoppers actually switching suggests that fewer price-checkers are gathering quotes they are less likely to act upon, perhaps a direct result of the lower typical sav-ings derived from switching, which has decreased from an average of $412 in 2010 to only $359 in the past 12 months."

Bowler notes that customer retention rates are increasing at a time when auto insurance companies are spend-ing more money to entice customers to switch insurers. Industry-wide, advertising expenditures increased by 12 percent in 2011, compared with 2010, according to an analysis of statutory filings data for 2011 performed by Dowling and Partners, LLC.

"The industry spent $5.7 billion on advertising and allow-ances in 2011, but this increased spend does not appear to have generated a commensurate increase in market churn," said Bowler.

The study finds that 52 percent of auto insurance shop-pers start their shopping process online, and 73 percent visit at least one insurer's Web site at some point during their shopping experience. More significantly, 32 percent of customers solely obtain quotes online, and today 34 percent of all recent shoppers state they would most pre-fer to purchase their new policy online.

"Shoppers now expect to be able to visit an insurer's Web site and complete their purchase in the same visit," said Bowler. "In most cases, shoppers can compare many policies online and narrow down their search field entirely via this self-service paradigm. From that point, they can then decide if they need to speak with an agent or to con-tinue their online purchase process."

Insurance Shopper Customer Satisfaction RankingsThe Hartford ranks highest among auto insurers in pro-viding a satisfying shopping experience, and receives a score of 857 (on a 1,000-point scale). The Hartford performs particularly well in policy offerings and price. Rounding out the top three highest-ranked insurers are Liberty Mutual (850) and American Family (845).

This year's report management discussion is available for download, please click here. The management discus-sion examines the role of the Web in consumer shopping behavior, and highlights the strategic choices available to insurers as they strive to adapt their traditional sales models to better align with rapidly evolving customer preferences.

The 2012 U.S. Insurance Shopping Study is based on re-sponses from more than 16,100 shoppers who requested an auto insurance price quote from at least one competi-tive insurer in the past 12 months and includes more than 50,000 unique insurer evaluations. The study was fielded from January to February 2012.About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company operating in key business sectors including market research, forecasting, performance improvement, Web intelligence and customer satisfaction. The com-pany's quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

Among those Shopping for Auto Insurance, More Are Switching Insurers


Attention southern New Mexico

Get your 15 hours of Continuing Education for both Property & Casualty and Life & Health Licenses.

Southern Seminar2012

16th annual

We know how important education is to you!So we’ve put together our best classes...

Please join us at the New Mexico State University Campus on July 10th & 11th.

Page 6 Independent Insurance Agents of New Mexico - www.iianm.org - * June 2012


Southern Seminar2012

16th annual

Southern Seminar Continuing Education:

P&C Pre-licensing Exam Review Course:

EXHIBITORSCompany Sponsors & Exhibitors:

Page 6 Independent Insurance Agents of New Mexico - www.iianm.org - * June 2012 Independent Insurance Agents of New Mexico - www.iianm.org - * June 2012 Page 7

(ACSR class credit)

http://www.iiaba.net/cbsupx/education/evtpreview.aspx?evt=12666

https://www.iiaba.net/webfolder/nm/seminar/2012%20So%20Sem/Registration.pdf

https://www.iiaba.net/webfolder/nm/seminar/2012%20So%20Sem/exhibitor%20form.pdf




San Francisco’s Golden Gate Bridge – a bridge that has become a global icon of the San Francisco Bay Area – recently celebrated their 75th anniversary. A little-known fact is the San Francisco insurance company that contrib-uted to making this possible.

Back in the 1930s, construction of the Golden Gate Bridge was insured by a local Bay Area company, and that company still exists today – Fireman’s Fund Insur-ance Company.

According to the Golden Gate Bridge: “History of the World and People,” on November 4, 1930, voters within the recently designated Golden Gate Bridge and Highway District went to the polls and put up their homes, farms and business properties as collateral to support a $35 million bond issue to finance the bridge. Fireman’s Fund underwrote the construction surety bond for what - at the time - was a staggering amount of money. Opponents of the bridge felt that the timing of the bond election was considered economically reckless, as it would create bonded indebtedness during the Great Depression; pro-ponents saw the construction as economic relief from the Depression.

In the final vote, 145,697 voted for construction, while just 47,005 opposed the idea. Having the construction bond insured by Fireman’s Fund helped to create confidence in the project.

"We are so proud to share in the rich history of this iconic bridge whose extraordinary architecture and beauty has led it to become a symbol of the gateway to San Fran-cisco," said Lori Fouché, President and CEO of Fireman’s Fund. “Since 1863, Fireman’s Fund has been an integral part of the San Francisco Bay Area, partnering with so many innovative businesses and families that call the Bay Area home.”

Insuring the building of the Golden Gate Bridge was not the first time that Fireman’s Fund had demonstrated specialized expertise, dependability and innovation in its underwriting.

Below is a timeline that illustrates Fireman’s Fund’s his-tory of insuring major events:

Great Chicago Fire (1871) While many insurers went bankrupt, Fireman’s Fund paid

all claims, even though its losses exceeded its assets. This demonstration of endurance earned the company a na-tional reputation.

Boston Fire (1872) One year after the Chicago fire, a major fire destroyed Bos-ton. Fireman’s Fund paid all claims.

San Francisco Earthquake (1906) The company’s headquarters were completely destroyed, but Fireman’s Fund paid the claims of all policyholders, with a combination of cash and stock.

Charles Lindbergh’s Trans-Atlantic Flight (1927) Fireman’s Fund insured the construction of the Spirit of St. Louis, which Lindbergh flew nonstop from New York to Paris.

The “Talkies” (in the late 1920s) Fireman’s Fund insured movie studios concerned about the risk of introducing movies with sound – the “talkies.” Since then the company has played a significant role in underwrit-ing insurance for major motion pictures.

Refurbish of the Golden Gate Bridge (1982) Again, Fireman’s Fund stepped up and underwrote the construction bond for the refurbishing of the Golden Gate Bridge. About Fireman’s Fund Insurance Company

Founded in 1863, Fireman’s Fund Insurance Company is a premier prop-erty and casualty insurance company providing personal and commercial insurance products backed by industry-leading claims and risk manage-ment solutions. Since 2004, it has donated more than $29 million in grants to local fire departments across the U.S. as part of its commitment to safer communities. For additional information, visit www.firemansfund.com.

Insurance Made Golden Gate

Bridge A Reality

Source: Business Wire, Inc.

Did you know?The Fireman’s Fund Errors & Omissions Policy for insurance agents is one of the best deals in the marketplace today. Call Julie Franchini for a quote on this IIANM endorsed product. 505-999-5802


mailto:julie%40iianm.org?subject=




If you cannot place all of your clients’ personal insurance needs, they will find someone who can.

• Commercial• Personal • Professional • Brokerage • Binding • Risk Management Services

When it comes to personal insurance, every part matters. Because when one piece goes missing, the entire account could come undone. At Burns & Wilcox, we can insure individual portions of their coverage or the whole account. So you do not have to turn away any business. We have the expertise, resources and experience that can only come from being the largest independent wholesale broker and underwriting manager. Need help with personal insurance? No one has you covered like Burns & Wilcox.

Albuquerque, New Mexico | 505.822.0018toll free 866.643.8538 | fax 505.822.0092scottsdale.burnsandwilcox.com

30760_BURNS_NM1-La Voz_Personal.indd 1 4/13/12 10:27 AM



John Chapin is an award winning sales speaker, sales trainer, coach, and co-author of the gold-medal winning "Sales Encyclo-pedia" a comprehensive how-to guide on selling. "Sales Encyclopedia" is written for sales professionals in all industries at any level of experience. Utilizing more than 21 years of sales experience and as a num-

ber one salesperson in three industries, John co-founded Complete Selling Incorporated, a company helping sales-people double their sales and find their motivation.

If you would like access to John's free white paper on what it takes to be successful in sales along with a month-ly newsletter, you can visit John's website at http://www.completeselling.com For permission to reprint, or to reach John, email him at [email protected].


We all have the same amount of time in a day - 24 hours. So why do some people seem to get a week’s worth of work done in a day, while others get a day’s worth of work done in a week? More often than not, the amount of work people get done during the day comes down to how effective they are at managing their time. So how can we get more done in less time and make the most effective use of our 24 hours each day?

1) Have a plan. You may have heard the saying: If you fail to plan, you plan to fail. Without a plan, you’re like a rudderless ship trying to navigate the open ocean and your business will more than likely end up on the rocks.

Your plan does not have to be big and complicated, in fact, you want it to be as simple and easy to follow as possible. The most effective “simple” plan is a list of important items you need to get done during the day, pri-oritized from most important to least important. The most effective way to follow your plan is to start with the most important task and work on it until it is done. After you fin-ish the first task, move to the second most important item on your list and work on that one until complete. Continue in this fashion until you finish your items or run out of time in the work day. At the end of each day, make a list of items for the following day.

Point to keep in mind: Studies have shown that every 15 minutes of planning saves you an hour of work.

2) Have the self-discipline to stick to your plan.Once you have a plan, you have to have the self-disci-pline to stick to the plan. Phone calls, e-mails, and other items, both business related and personal, will try to throw you off during the day. Your objective is to stick to your plan and not allow other distractions to get in your way. Granted, there will be times when you have to respond to other items during the day and temporarily jump off your plan, the goal though is to keep those to a minimum. Remember, if you don’t stick to your plan, even the best plan in the world will be ineffective.

Point to keep in mind: If you leave a task, it takes an average of 10 minutes to get back to where you were before you left the task.

3) Get organized.How much time do you spend during the day looking for things like car keys, that important piece of paper, or someone’s phone number or mailing address? It’s amazing how much of the day can be consumed look-ing for items in a messy, unorganized home, office, or workspace. Keep these areas clean and know where everything is. Keep similar items such as business cards,

contact information, files on clients, and other items in one location. Keep keys, and items you use every day, in the same spot each time so you don’t have to remember where you left them. If you’re messy by nature, take five minutes at the end of the day to clean, organize, and get your work area uncluttered.

Point to keep in mind: The average person spends 24 minutes a day looking for things they’ve misplaced. That’s

almost 3 1/2 full work weeks a year.

4) Find out where you’re wasting your time.Keep a time log for a week and keep track of where you spend your time during the day: Two hours on personal calls, 35 minutes on Sudoku, 24 minutes looking for Joe’s e-mail with contact information, an hour and 45 minutes at lunch with Keith, 11 minutes in line at Costco. If you haven’t done this exercise before, you will be amazed where you end up spending, and wasting, a lot of time.

Point to keep in mind: Come up with solutions to this wasted time: time limits on calls, going shopping at slower times, etc.

5) Work hard, work smartWork when you’re at work. Develop a sense of urgency and work hard only on work at work. Do just one more thing in the morning and another before you quit for the day. If you have to, start your day earlier and stay later. Be the hardest working person you know.

Follow the 80/20 Rule. This rule states that 20% of your work produces 80% of your results and vice versa. Spend time on doing the 20% really well and delegate as much of the 80% as possible. Also, use best practices, don’t reinvent the wheel. Find the really successful people who are getting a lot done and find out what they do.

The five steps above can double, triple, and even quadru-ple the amount you get done in the same amount of time. The bottom line: Have a plan along with the self-discipline to do what needs to be done when it needs to be done. Work smart, but be willing to work as hard as you have to when you have to in order to get the job done.

5 Keys to Effective Time Management


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Page 10 Independent Insurance Agents of New Mexico - www.iianm.org - * June 2012Page 28 Independent Insurance Agents of New Mexico - www.iianm.org - * June 2012

Mountain States Insurance Group is pleased to introduce a new suite of property enhancement endorsements.

The following are some highlights of our Premier Endorsement. Contact your underwriter for more details and pricing.

Stable – Secure – Permanentwww.msig-nm.com - 505.764.1400

5051 Journal Center Boulevard N.E., Albuquerque, New Mexico, 87109

ADDED COVERAGES

Business Income & Extra Expense Actual Loss Sustained – Up To 12 Months $250,000 From Dependent Properties $50,000Expanded Blanket Limit $250,000Accounts Receivable Valuable Papers and Records (Other then Electronic Data) Debris Removal Outdoor Signs not Attached to Buildings Expanded Crime Blanket Limit $25,000 Employee Dishonesty Forgery or Alteration Money and Securities Money Orders and Counterfeit Money Credit Card Invoices Computer Fraud Computers, Media & Electronic Data - In One Policy Year $100,000Foundation $25,000Lock Replacement $2,500Covered Crime Reward $10,000Brands and Labels $25,000Business Personal Property - Seasonal Increase 25% or $50,000

INCREASED LIMITS

Outdoor Property $25,000Tree, Shrub or Plant $2,000Pollutant Cleanup & Removal $25,000Ordinance or Law Coverage $250,000Property of Others $25,000Property Off-Premises $25,000Fine Arts $25,000Sewer & Drain Backup $25,000




Page 10 Independent Insurance Agents of New Mexico - www.iianm.org - * June 2012Page 28 Independent Insurance Agents of New Mexico - www.iianm.org - * June 2012

Unlock Your Big “I” Benefits!

What will your email address and password help you access on the Big “I” Website?

Virtual Universitywww.iiaba.net/vu

• Research Library• Ask the Expert• Register for on-line CE classes and webinars• Sign-up for the free newsletter

IA Magazinewww.iamagazine.com

Access online articles from the monthly print publication and read your weekly Insurance News & Views newsletter.

Legal Advocacywww.iiaba.net (Click on “Legal Advocacy”) or visit iianm’s Advocacy page.

• Carrier Contract Reviews • Hot topics on Capitol Hill • Information on insurance related Federal court cases • Industry Legal Issues FAQ’s & ‘white’ papers

Big “I” Marketswww.bigimarkets.com

Access commercial and personal lines products such as af-fluent homeowners and commercial package products from top carriers, with no fees and no production minimums.

Member Marketing Activity Centerwww.iiaba.net/mmac

Access a suite of marketing resources including leads, postcards and email campaign ideas.

Big “I” Professional Liability Virtual Risk Consultantwww.iiaba.net/vrc

Use your login credentials to purchase the on-line under-writing and sales reference library.

Big “I” Professional Liability Risk manage-ment Website “E&O Happens”www.iiaba.net/eohappens

Dive into a wealth of resk management resources avail-able to Swiss Re policyhold-ers.

Trusted Choicewww.trustedchoice.com/agents

Access logos, advertising material, branding guidelines plus your agency’s profile and account information.

Member DirectoryThis Directory is extremely useful to IIANM’s members.

It contains:

A listing for all Agency, Associate and Affiliate members of IIANM

A section that includes the numbers for the State of New Mexico Insurance Division, contacts for IIABA National De-partments, and ‘Frequently Called Insurance Organizations’

It is important that names and email addresses for each agency employee be listed in our member database. Many of our website pages are proprietary and may only be accessed with your user ID and password. Your email address is your user ID. If you don’t know your password select the “Forgot username or password?” option listed on any page of the IIANM website (www.iianm.org) and it will be sent to you.

Feel free to contact us at (800) 221-7917 with questions on these resources or other member benefits.

Did you know?The Big I website is actually TWO sites in one? Go to www.iianm.org and you will be on the New Mexico specific homepage. If you click on the “IIABA” in the top menu bar, you will be taken to the national association site.

You can also access many areas of the national site from links on the IIANM pages, or use the direct addresses below to go directly to specific pages.

Log in and see what treasures you may find!




http://www.iiaba.net/NM/04_GovernmentAffairs/NAV_Advocacy?ContentPreference=nm&ActiveState=nm&ActiveTab=STATE&ContentLevel1=ADVOCACY&ContentLevel2=

http://www.iiaba.net/NM/04_GovernmentAffairs/NAV_Advocacy?ContentPreference=nm&ActiveState=nm&ActiveTab=STATE&ContentLevel1=ADVOCACY&ContentLevel2=

http://www.iiaba.net/NM/02_News/03_NewspapersPublications/06_Newsletter/NAV_NEWSPublication6?ContentPreference=NM&ActiveState=NM&ActiveTab=NA&ContentLevel1=NEWS&ContentLevel2=NEWSPUB&ContentLevel3=NEWSPU6



by Matthew Marko

SteveANdErsoN.com

by, Steve Anderson

Video is a powerful way to share information and educate both clients and prospects. The challenge in creating video is that it takes a bit more than writing a simple article. Writing an article is relatively easily and you can simply hit Submit. Your content is then instantly available online and searchable by various search engines.

Video is not complicated but it does take a bit more work. For starters, someone has to be in the video, on camera, unless you're doing animation or something else. At the very least you need decent (if not great) lighting and good quality audio. Furthermore, it does matter, at least a little bit, how you look in your video -- presentation does matter.

One of the biggest reasons insurance agencies don't use video as a strategy is because there's a misconception about production value. Many agency owners believe the video has to be high-end and then produced and edited by a pro. That's simply not the case anymore.

The public's expectation of video has changed. There are customers and prospects who can get value from the information you have to share. So here are three different types of videos you can create and add into your marketing strategy right away.

1. Make a video case study.This can be as simple as setting up a web cam or flip video and interviewing one of your customers, then mixing that video with a very simple editor or presentation tool (these are low cost and some are even free). This is authentic, off the cuff, and tells your agency story better than you can. The video can be shared via your website, through email, and on different social platforms.

2. Make a video article.You should keep in mind that different people want differ-ent kinds of content. You can create a simple video article by turning on your web cam and hitting Record. I would suggest you create an outline of what you would like to say, but would suggest you don't read a finished written article. You want to sound like a conversation between you and the person watching. Again, a simple web editor tool can allow you to very quickly and elegantly add other visuals, so your

viewers aren't just seeing a talking head the whole time. This can also save you a lot of time and frustration if you are not as comfortable writing.

3. Coverage explanations.Insurance is complicated. Most people don't really understand what an insurance policy covers and how a piece of paper will protect them if they have an accident. By creating a series of short coverage explanation videos, you will create a library that people can go back to again and again. These videos should be quick (less than three minutes), edited, and then shared via several different mediums.

There are a number of agencies that are being very cre-ative in their use of videos to communicate and educate both prospects and clients. When you begin experimenting with video you will be amazed at the impact it can have to enhance relationships.

Learn the Basics of Web Video... The Right Way

There can be a lot to learn with web video. So many strange terms, so much confusing technology and so many people saying this, that and the other thing. For most agents, it can be overwhelming.

But wouldn’t it be great if you could cut through all the hype and have a simple, plain blueprint that you could follow... a blueprint that would tell you exactly what to do... step by step... for creating high-quality videos and getting them online?

In other words, just the stuff you need to know to get great looking videos online... all in a straight to the point, no-nonsense format.

It’s in a new course called Web Video ABC’s. This course is designed specifically for beginners. Or people who started, got frustrated and stopped. Or anyone who wants to know the basics of doing web video the right way.

I have personally taken this course and can highly recom-mend it.

Click here to take a look to see if it’s right for you.

Three Videos Every Agency Should Create


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http://www.webvideouniversity.com/webvideoabc/



Check and Update Your Trusted Choice Profile

If your agency is a member of IIANM then you have likely been hearing a lot about the changes in the Trusted Choice program and the coming launch of the Consumer Agent Portal. This portal will help consumers discover your agency by using the Agency Locator hosted at the Trusted Choice website.

As the advertising initiative gears up, hopefully con-sumers will find your agency online and contact you for more information and quotes. You should make sure the information listed at Trusted Choice for your agency is complete and accurate. Take these simple steps to verify your profile:

1. Go to TrustedChoice.com and search for your agency by zip code.

2. To change or update the information go to Trust-edChoice.com/agents and log in to the site using your User ID (likely your email address) and Password. If you don't know them or don't yet have an account, follow the instructions on the site to retrieve your password or set up a new account.

3. Select "My Account" at the bottom of the page to update your Agency Profile.

4. Add and update the agency information as neces-sary. Make sure to fully complete the information about your agency including additional locations, agency description, carriers represented, etc. A key element is to make sure your agency website address is listed. I recommend that you create a separate "Trusted Choice" landing page on your website and use that link here. Us-ing a landing page will allow you to customize the experi-ence when a consumer clicks on the link.

This short video, Updating Your Trusted Choice Profile, will walk you through the process.

It will take 24 hours for the information to be updated on the Trusted Choice website. (A quick search of several location agencies shows that there is currently limited information contained in an agency profile.)

Taking this simple step will help your agency take a small step to maximize its Internet presence and become more visible to the new digital consumer.

Page 24 Independent Insurance Agents of New Mexico - www.iianm.org - * December 2011 Independent Insurance Agents of New Mexico - www.iianm.org - * December 2011 Page 25

advertising

All Trusted Choice® agencies benefit from the program’s national advertising. But they also can capitalize on profes-sionally developed tagable TV, radio and print ads that educate consumers on the value of doing business with their Trusted Choice® agency. These TV, radio and print ads direct consumers to look for their Trusted Choice®

agency for choice of companies, customized policies and advocacy support.

Savvy agents have learned that running their own tagged advertising (tagged with their name and contact informa-tion) in conjunction with the national ad buys gives their agencies the appearance of running a much bigger cam-paign than they actually pay for.

Example: One agency is tagging the Trusted Choice®

TV spots—then bought local time on the same programs Trusted Choice® chose for its media buy. This agency also tagged a Trusted Choice® radio spot and ran that through the following month on two local radio stations that match its target demographic. The result: everyone thinks the agency made the entire ad buy, even though it spent only about $2,500.

To preview and download these customizable ads, visit the Advertising tab at www.TrustedChoice.com/agents.

Public relations

Trusted Choice® members are benefiting froma national public relations program that drives consumers to www.TrustedChoice.com, where they can find a local agent or broker. The PR campaign is focused largely on major consumer and business media. Trusted Choice®

agents can use those same PR messages on the local level. And it doesn’t cost them anything. For example, agents are building a complete calendar of media releas-es that are timed to seasonal events (e.g. holiday safety or flood season).

The releases can be downloaded from www.Trusted-Choice.com/agents and used locally with your agency’s letterhead. A list of PR ideas is available in Zoom in on Branding and under the Public Relations tab at www.TrustedChoice.com/agents.

We encourage you to embrace our new consumer brand for independent agents and incorporate it into your agen-cy’s marketing efforts. Take advantage of the abundance of free marketing resources available through TrustedChoice and use them to leverage the power of the brand in your agency. Remember, TrustedChoice® is not meant to replace or overshadow your agency’s personal identity, but it is simply another branding tool you can use to help your agency grow and gain back market share from the direct writers.

IIANMMember Benefit!

GOZip/Postal Code

FIND AN AGENT

are You Being Located by Prospects?

One of the immediate benefits of being a

Trusted Choice® agency is the ability to be found

by prospective clients searching for an indepen-

dent agent through the online Trusted Choice® agency locator. National Trusted Choice®

advertising directs consumers to TrustedChoice.

com where they can enter their zip code to find a

local agent. Only Trusted Choice® agencies are

listed.

To take full advantage of this benefit, IIANM

members are encouraged to complete their on-

line profile by logging into TrustedChoice.com/

agents and updating or adding information about

their agencies. Principals who have not received

a “welcome” e-mail or a launch kit in the mail

should contact Trusted Choice® at (800) 221-

7917 or [email protected].

TrustedChoice.com

TrustedChoice.com/agents

[email protected]

Join the Cause to Increase Your Market Share.

Ladies and Gentlemen – Life as we know is changing!

Okay, I know that is pretty dramatic when writing about insurance. However, you all know that the way we com-municate with our clients, the way we prospect for new clients, the way we market ourselves – all those things have been changing. That is not news to most of you.

Some Sobering Statistics

• ComScore, Inc. tells us that a full 75 percent of insur-ance consumers start their research for auto insurance on the web

• Allstate, Geico, Progressive Direct, and State Farm spend $2.6 billion in marketing and advertising per year, most getting consumers to shop the web for insurance

• These four insurance companies get 71% of online quotes submitted

• 28% of consumers want to interact with their insur-ance provider via their mobile device

• A whopping 84% of millenials use the comments of others to help with purchase decisions; 70% of boom-ers do the same

• Almost 1/3 of millenials won’t purchase insurance without some other commentary from other consumers

To make matters worse, the vast majority of independent agencies won’t even show up in the first few pages of the search results when a consumer does a search for personal lines insurance.

While each of these facts provides individual challenges and unique opportunities, they clearly tell us that the con-sumer expectations are growing and that to remain rel-evant, the independent insurance industry must change.

Sadly, the average consumer thinks an “independent agent” is the direct writer’s office down the street from them. Since he is a small business like we are, they often lump us all together – and we know that could not be further from the truth! We not only offer Choice – but ad-vocacy on claims and customization of coverage, as well. This is what sets us apart from the directs and captives.

So, I encourage you to visit the program website at http://www.projectcapmarketing.com and watch for more infor-mation on CAP. Then take a moment to think about the branding power that exists through this new endeavor.

~Adapted from Marty Agather’s article, “A Tip of the CAP”



http://www.TrustedChoice.com

http://www.projectcapmarketing.com

http://www.marketfindersnm.com


An agency insures a couple who has two HO-3 policies in Maryland. One property is occupied by the couple’s daughter as her primary residence, but she is not a named insured.

The daughter filed a claim for loss of her personal prop-erty because the residence was burglarized. But the insurance company denied the claim under her parents’ HO-3 because she is not a resident of their household, even though she is a relative.

“Who is right?” the agency asked Big “I” Virtual University faculty, noting that it would have written a dwelling policy for the house and suggested an HO-4 for the daughter—had it been fully notified of the living arrangements.

This type of situation is exceedingly common, and accord-ing to VU experts, the company’s denial of coverage is probably correct.

Often, an agency does not know about such revised living arrangements. Most likely, there is no real increase in risk, yet the circumstances may result in a coverage gap. In this case, VU faculty finds one for the tenant.

The daughter is not an insured as defined by the policy. She is not a named insured, nor is she a member of the named insureds' household because she would have to be living with them for that to be the case.

Instead, she's a tenant or permissive resident and has no personal property coverage, not even that which would normally be available for a guest, which is as follows:

COVERAGE C – Personal Property

We cover personal property owned or used by an "in-sured" while it is anywhere in the world. At your request, we will cover personal property owned by:

1. Others while the property is on the part of the "resi-dence premises" occupied by an "insured";

2. A guest or a "residence employee," while the property is in any residence occupied by an "insured."

As noted above, the daughter has no worldwide coverage because she is not an insured. She also has no inciden-tal on-premises coverage because the residence is not

occupied by an insured, and she has no liability coverage because she's not an insured.

Worst of all, it’s quite possible the homeown-ers themselves would have no coverage on the dwelling if it were damaged or destroyed. Coverage A applies to the dwelling "where you reside." Since her par-ents don't reside there, according to some legal decisions, there is no Coverage A. HO-3 eligibility requires owner/occupancy and, according to ISO, the instant a person no longer resides in a home, he loses his Coverage A.

Take the Maryland case, Shepard v. Keystone Ins. Co. 743 F.Supp. 429, 432-33 (D. Md. 1990). The court held that there was no coverage because the named insured(s) didn't reside there anymore.

Based on this, it is imperative that the dwelling be rewrit-ten as a dwelling program account with all haste. As noted by the agent, the daughter needs her own HO-4.

Another example of where this type of coverage gap can arise - typically without the knowledge of the agency - is when a person is in a hospital or nursing home and a decision is reached that the person will be unable to return to his home. Arguably, at the instant this decision is made, that person's HO Coverage A vanishes because he technically no longer resides there.

The full version of this story, which includes other expert responses, is on the VU. For help accessing the website, email [email protected] to request login information.

This story was also featured in the May issue of IA maga-zine with these other stories about coverage for swim-ming pools under homeowners and commercial general liability policies.

When Residents Have No Contents Coverage...

...and WorseA woman living alone at her parents’ secondary home is denied coverage for her stolen belongings.

by Bill Wilson


mailto:bill.wilson%40iiaba.net?subject=


IIANM Welcomes... Consuelo Trujillo considers herself an ‘insurance brat’, having been exposed to the industry at an early age by relatives working in insurance in her hometown of Las Vegas, New Mexico. She began her actual insurance career in 2001 under the direction of her Uncle, the late Tony Trujillo, owner of The Trujillo Agency. At the time she was working part-time while attending West Las Vegas High School.

After graduating, she began working full time as a customer service representative and later became a licensed agent for Northern Insurance in Las Vegas. While working for Northern, Consuelo also began attend-ing New Mexico Highlands University. She graduated in 2008 with a Bachelor’s Degree in Business Administra-tion & Management, and the agency rewarded her with a promotion to Operations Manager. After deciding to relocate to Albuquerque, she commuted to the Northern Insurance branch in Santa Fe, New Mexico.

Consuelo has always aspired to play a larger role in sup-porting the insurance industry, and when an opportunity to work for the Association presented itself, her boss and IIANM Vice-Chair PJ Wolff III encouraged her to apply. It seems that the stars have aligned and her insurance background, management degree, new hometown, and her vision to help the industry have all come together. She can now channel that inner insurance brat by helping independent agents and agencies to succeed.

We hope you will join us in welcoming Consuelo to our team. Her enthusiasm, work ethic, and passion for helping people will serve her well in her new role of Vice President of Member Services.

Our New Vice President of Member Services, Consuelo Trujillo!

Dear Members,We want to ask for your help in an important research project that is currently underway. The Independent Insurance Agents and Brokers of America (IIABA) recently launched the 2012 AGENCY UNIVERSE STUDY. Conducted every two years, the result of this comprehensive survey will provide critical information for the independent agency system, for our association and for the insurance carriers you represent. Future One, a cooperative effort of IIABA and more than 20 leading independent agency companies, has carried out this research since 1983. Results will be reported in Independent Agent magazine and many other industry publications, as well as be used to help other industries and consumers be better informed about our industry.

IIABA is working with Zeldis Research Associates, an independent market research firm, to carry out the survey and ensure the quality and confidentiality of the data. During the past week each member agency should have received an email from IIABA’s President & CEO Bob Rusbuldt inviting it to participate in this research. There is a proprietary link in the email to the website where you can complete the survey. We ask that all members please participate in this research project by clicking on the link and sharing their responses and opinions. Your responses will be kept com-pletely confidential and will help the independent agency system, IIABA, our state association and carriers provide the products and support you need most.

IIABA recognizes that your time is extremely valuable. As a token of its appreciation, everybody who completes the survey will be entered into a drawing for 12 prizes totaling $3,500, including a $1,000 grand prize, two $500 second prizes, four $250 third prizes and five $100 prizes.

Thank you for taking the time to participate in this important survey. Please send any questions about the survey to Madelyn Flannagan, vice president of agent development, education and research, at [email protected].


mailto:madelyn.flannagan%40iiaba.net?subject=



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Life insurance is vital for those starting families at an older age and working later in life.

With the economy sputtering along since 2008, any signs of economic improvement have been welcomed by the public. At the close of the first quarter of 2012, one positive sign is that sales of new automobiles have been improving.

One of the chief reasons given is that with rising gasoline prices, consumers were looking to purchase more fuel efficient vehicles to lower their weekly gas expenditures. With the average age of Americans’ cars at 10 years, many consumers are also looking to replace their older vehicles and take advantage of advances in technology the new cars provide.

This should generate higher personal auto commissions for independent insurance agents because newer cars typi-cally have higher auto premiums.

As consumers determine that purchasing a new car with the current low-interest rates makes sense to gain better fuel efficiency and lower their operating costs, it brings to mind a similar issue with purchasing life insurance.

Most agents have experienced the analytical client who believes that buying term and investing the difference makes the most sense. Of course, studies show that most consumers rarely follow through on investing the difference. Still, for clients who have a long-term need to provide an immediate estate and liquidity upon their death, a fresh look at the permanent versus term debate is in order.

Meanwhile, the halcyon days of high-interest rates fol-lowed by high-stock-market returns when rates began their decline are a faded memory. Many agents who sold life insurance during that time in the 1980s can remember cli-ents insisting on seeing 12% equity return assumptions for their variable life insurance proposal and 8% interest rate assumptions for their universal life illustrations.

In comparing term versus permanent life insurance, what is

a realistic long-term assumption when calculating an appro-priate discount rate and earnings assumption for an internal rate of return or net present value analysis?

With rates for 10-year Treasury bonds hovering around 2% and 30-year treasuries less than 5%, a more realistic discount rate assumption might be a net 6% or lower and a net investment return of 7% (that is, net of investment management fees and execution costs). Agents may want to discuss assumptions with clients and explain that per-manent insurance may be the more cost-effective way to purchase insurance over the long haul.

Of course, agents should always first develop the client’s life insurance need and then discuss the most efficient way to purchase the coverage. For younger clients, a combina-tion of term—using a conversion rider that allows for the ability to purchase amounts without evidence of insurabil-ity—and permanent insurance may be most appropriate.

In addition, some consumers neglect to consider that life insurance only goes up in price as the person ages. So, just like the consumer who is buying a new car to lower his future operating expenses, agents should remind their customers that permanent insurance rates go up materially at attained ages of 45 and older.

One crucial issue is that many people do not perceive a long-term need for insurance. They may be purchasing it to pay off a mortgage in the event of their death, or to provide income for college expenses for their dependents.

But many people are now getting married and having chil-dren later in life. It’s now common for people to work until an older age, and it’s possible that the eligible age for Social Security benefits will be pushed further back. Given these trends, the reality is that most families will need to guarantee replacement income in the event either spouse dies.

If agents take the time to have this conversation with clients and do the math, chances are they’ll increase their sales of life insurance while helping clients achieve financial security.

Long-Term Financial Stability

Help Clients Achieve

by Dave Evans


http://www.lovelace.com

mailto:dave.evans%40iiaba.net?subject=



















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exceptional care forPage 20 Independent Insurance Agents of New Mexico - www.iianm.org - * June 2012

http://www.lovelace.com



So if you do not want to depend on good luck, below are some lessons learned about agency contracts and getting sued.

1. Hire someone who knows the insurance industry to work with your attorney to write your contracts.I have only met a couple of attorneys that knew enough about insurance agencies to write a proper contract. It does not matter if it is an employment contract, a buy-sell contract, or even a corporation's bylaws. Independent agencies are unique. To write a proper contract, the clauses in the contract have to be specific for insurance agencies.

The attorney who writes a bad contract is not going to give you your money back and is not going to pay you damages. It is your responsibility to make sure the contract meets your needs. Do not sign the contracts your attorney provides without reading them first. I have seen agencies decimated because their attorneys wrote the wrong contracts. They did not understand insurance agencies adequately and the agency owners did not read the contracts before signing them. Frankly, in many of those cases, the agency owners deserve to wear a dunce cap because there really is no excuse for not reading the contracts once the attorney returns them. At the very least, have someone knowledgeable about insurance agencies read them on your behalf.

2. If at all possible, settle if sued. Unfortunately, in my opinion, the bar for filing a lawsuit is too low. This gives rise to my gut instinct that people should fight when sued. Some of the errors and omission (E&O) claims, employment claims, shareholder lawsuits and divorce valuations that I have seen have been so incredibly ridiculous that I often have difficulty understanding how any court would even give the plaintiff the time of day.

That said, it is very expensive to litigate principle. So when possible, the wise choice may be to settle.

3. Beware the other side's attorney who does not want to settle because he or she will not make enough money. Make sure you have a strategy to eliminate that attorney's ability to stretch out the litigation.

4. Because of #2 and #3, make sure you ALWAYS observe #1.5. The fact you haven't been sued yet often has nothing to do with skill. I have seen an agency with great E&O practices be sued multiple times. While they won 95 percent of the claims without even going to trial, they still had to endure the suits. On the other hand, an agency with absolutely the worst E&O practices I have ever witnessed has never been sued once. Never, ever believe that just because you haven't been sued that you are better than anyone else, especially if you have not taken specific actions to improve your procedures and obtain excellent agency contracts.

Similarly, I have seen horrible employment agreements, poorly written and maybe even illegal. And yet nothing ever came of them. Sometimes the agency had so much more power than the employee, the employee would not sue. But this is a poor strategy. What kind of employees will those agencies attract?

6. Right and wrong have little to do with the outcome in court.

Lessons Learned about Agency Contracts

I read an article about an 85-year-old contractor who still does business on a handshake. Through all his years in business, he has never been involved in a lawsuit. He is proud of his track record, as he should be. But that does not mean anyone should follow his example. Perhaps part of his success is his ability to read people or perhaps he wields enough power in his business relations so he never gets sued. But at least part of his success is based on luck, and to count on luck for success is dangerous.

by Chris Burand


mailto:AgencyAdviser%40burand-associates.com?subject=

Page 22 Independent Insurance Agents of New Mexico - www.iianm.org - * June 2012 Independent Insurance Agents of New Mexico - www.iianm.org - * June 2012 Page 23

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First, if you go to court, you lose, even if you win. Second, assuming that you will win because your case is so strong is a bad assumption. Those who have been in heavily litigated cases know that truth is not the goal. The legal system is not truly designed to arrive at "the truth." It is designed so that in many cases, the least bad choice is made and whether that decision is right or wrong is not part of the equation. I have seen too many agents who were in the right lose because they either did not have the deepest pockets, the jury or judge was sympathetic to the other side, or the attorney for the other side was better. Right and wrong have little to do with the outcome.

7. Deep pockets matter. It is no secret that good attorneys cost more. My experi-ence is that hiring slightly better than average attorneys may not pay off, but hiring the best does. This is true when having contracts written and it is true when going to court.

Similarly, do not hire attorneys who are jacks of all trades and masters of none. An attorney who mostly writes contracts is rarely the attorney you want at trial. In fact, if you think you might go to trial over a contract, hire a trial attorney to analyze your contract because it is that perspective that will matter.

Deep pockets matter too when a case goes to court be-cause if the employee or insured is considered the poor plaintiff or defendant and you look like the rich capitalist, your odds of winning decrease. This is why items #1 - #6 are so important.

Agency contracts are rarely in the forefront of agency own-ers' minds until something bad happens and then, almost inevitably, the owners wish they had better contracts. Have your contracts not only written by quality attorneys, but also have them reviewed by someone who really knows the insurance industry.

Did you know?IIABA has analyzed dozens of carrier contracts and has posted the

reviews on their website. You can access the reviews by clicking on the “Legal Advocacy” menu item.



http://www.nmhia.com

VU Faculty

“cat skinning” (a.k.a. risk managing an atv exposure)

"A property owner who owns a 70-acre farm was asked to allow friends with ATV's to access the property for off-road riding. This owner is con-cerned about the liability associated with this

permission should he consent. Is there any recommended disclaimer or hold harmless form that this individual can use to protect himself against possible future damages or lawsuits should an accident occur? I realize this is a question that is best consulted about with a professional attorney, but is their some guidance that we as a commer-cial agent can reference?"

Bob...I've included excerpts from our faculty responses below. The consensus was that provid-ing "recommended disclaimer or hold harmless"

wording would come pretty close to practicing law without a license. Our faculty members had either not seen any such wording or strongly recommended that it not be the agent that supplied it...essentially, explain that this is a serious legal exposure that must necessarily be addressed by a qualified attorney.

I think you'll see from the responses below that our best suggestion would be to discourage your insured from using his property for this purpose. One of our faculty members is very strong in risk management and has seen "friendly" situations such as this escalate into extraordinary

There's an expression that says, "There's more than one way to skin a cat." In a manner of speaking, that's another way to describe the risk management process. As you'll see below, insurance isn't the only tool you have when helping your insureds manage risk.

liability claims once a serious injury transpires.

If the insured insists that he wants to do this, then he should be very aware that the situation could ("probably" might be a better word) come back to haunt him (no pun intended...this really could get serious). If so, YOU would probably be the one who would want a hold harmless agreement, though that wouldn't protect you from possible third-party actions that have been recognized in some legal jurisdictions. Again, all you can do is provide the coverage (with some REALLY big limits) and suggest that he work this out with a good attorney...better yet (again), beg him not to pursue this...just show him some of the ATV statistics provided by one of our faculty members below.

Even if he got an ironclad hold harmless agreement with the ATV owners, that wouldn't protect you from unknown riders, nor from claims by other third parties injured by the ATV's on your premises.

This scenario is a great illustration of Risk Management 101. IF your insured is insistent upon allowing this activity to take place on his property, you'd certainly want to make sure that proper coverage and high limits are in place...is he willing to pay for this to maintain these friendships? Per-haps his excuse for not allowing this would be to just show these folks how much this is going to cost him in increased insurance premiums. And, if they offer to reimburse him, let him know that, with such remuneration, he may now have a "business" exposure not covered by his policy.

Wish we could give you more specifics on this but, in this case, the old risk management technique of "avoid-

ance" is probably most appropriate...I doubt that the other RM techniques (e.g., loss

control, insurance, and risk transfer) would be feasible or affordable. Let

me know if we can help further. - Bill

P.S. Here are some web sites with info about ATV's and ac-cident statistics:

• Insurance Journal

• Children's Safety Network

• Risk Management Internet Services (subscription only)


http://www.insurancejournal.com/news/national/2005/10/08/60658.htm

http://www.cdc.gov/niosh/nasd/docs4/wi98001b.html

http://www.cdc.gov/niosh/nasd/docs4/wi98001b.html

http://www.rmis.com/sites/safsport.htm

http://www.rmis.com/sites/safsport.htm



Let me suggest caution in regard to the ATV question. I have dealt with situations involving ATV's and property owners for almost twenty years. Almost all of them were bad. Really bad.

One project was to perform a risk assessment for a private community following a catastrophic ATV mishap. They owned several thousand mountainous acres surrounding a lake and housing area. ATV use had been very popular in the com-munity. The tragedy was quite an education for everyone, the seriousness of the situation accentuated somewhat by the payment of several hundred thousand dollars not covered by insurance.

ATV operation is dangerous. A sizeable number of mostly young people are killed on these machines every year. A far larger number suffer catastrophic injury. The injury profile arising from ATV use includes a high incidence of debilitating intracranial and cervical trauma. If the riders wears helmets, the injury patterns are more upper and lower cervical, with a reduced incidence of intracranial trauma. The secondary traumatic pattern tends toward legs and pelvis areas. A not uncommon problem is brain embolism. Both primary and sec-ondary traumatic injury patterns frequently result in permanent disability or death.

ATV operators are usually young, and the costs associated with fatalities often pale in comparison to the expense of caring for a permanently and totally disabled youth. As you pose the question about reducing or transferring liability, let me suggest you assume the situation from which you have to defend your-self is a quadriplegic or catastrophic brain injured youth facing fifty years of nursing home confinement. This is more common than you think and juries are quite sympathetic.

The ATV industry reached an agreement with the U.S. Depart-ment of Justice several years ago. The industry agreed to take the three-wheeled ATV's off the market and develop safety standards for the use of the four-wheeled models. The industry has also worked to develop some procedures for the operation of ATV's on private land and address the issue of liability. The industry materials are usually available from ATV dealers. I found them to be excellent.

The issues of liability are complicated. Since each state has differing laws with regard to negligence, the involvement of an attorney is very important.

A separate problem with ATV operation is the uninvited user. If an area is used by one party, other ATV riders may show up uninvited and use the site as if it were public property. This creates a different set of problems.

With regard to insurance, it is important to make sure the ATV operators have coverage and to provide evidence. You want to trigger contractual coverage of the party using the property, even though that is likely to be of little comfort to you when you are sued for an injury or death described above.

One final comment...ATV's often cause severe erosion and soil compaction problems. The farmer in question needs to watch the impact of the ATV's on his land very closely. He may find portions of his land compacted and suitable for paving in a remarkably short period of time.

Concerned, and rightly so. I'd practice the risk management technique of avoidance and simply say "no" to the request. Even with an "agreement," you're going to wind up in court.

Though I'm not an attorney, I'm aware of a couple of problems with using a hold harmless to control the liability exposure. First, they're only effective if they're signed by each person attending, not just the riders. Second, they're not effective with minors as they're not capable of contracting.

This may be way too conservative, but I think if a client wants some suggested language for a disclaimer or hold harmless, the agent should recom-mend that the client see an attorney. I believe that an agent providing such suggested language, even “boilerplate lan-guage,” might be way too close to the line in practicing law.

This was a good article and while there is no good way to protect oneself from litigation, other than the normal remedies, we here "Up in Maine" have taken this issue one step further. Legislation was enacted (Title 14, 159-A, Limited liability for recreational or harvesting activities). Our agency does a lot of business with loggers and truckers who operate on private logging roads throughout the state. The public also has access to these same roads but "at their own risk." We have referred many subro-recovery adjusters to this law and the cases were dropped as soon as they read it in detail. It has been upheld in a number of situations. I know nothing is foolproof but maybe if more states adopted this proactive approach, many of these lawsuits might be thrown out.

- Mark Fox, Sargent, Tyler & West, Brewer, Maine

Faculty Response: Faculty Response:

Faculty Response:

Faculty Response:

- Jim Mahurin

Agent Response:

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We’ve all been there at one time or another. It’s Friday afternoon after a big lunch. As the lights dim and the laptop begins to purr, we are suddenly lulled into a semi-comatose state. The presenter prepares to introduce the first of more than 30 slides and we prepare for the grueling endurance test that lies ahead, perhaps second only to the Iditarod.

But if we dread it so much, why has it been estimated that there are more than 30 million Powerpoint presentations taking place all around the world each day? There has to be a reason that Powerpoint has been the industry program and the most common presentation software on the market since Microsoft introduced it in 1990, effectively replacing the 35mm projector, presentation boards and, in some cases, even handouts.

Unfortunately, the number one reason for Powerpoint’s popularity may be the wrong reason. Too many people have used Powerpoint as a crutch, a way to circumvent their most dreaded fear - public speaking. As one executive explained, “Fear of public speaking ranks slightly below night-landing a plane on an aircraft carrier during a storm.” But he also points out that Powerpoint can actually help those with a public speaking phobia. “When they freeze up and forget their own name, they can just read it off the first slide.”

So, it’s Powerpoint to the rescue! But in our haste to hide in the dark, glaring errors are committed that can prove lethal to even the most well thought-out presentation. In a recent survey of 750 business professionals who incorporate Power-point presentations in their business, only 22% were ultimate-ly happy with what they have accomplished, with 88% saying they felt they needed to shorten their presentation. Explains one industry leader, “Presenters mistakenly assume that if the number of slides is modest, the audience will not believe the presentation adds much value.”

The problem isn’t usually the number of slides, but what is actually on them, which in many cases is too much text. In a medium made for bullet points, why do so many people write whole paragraphs after each bullet and then recite them from the slides? This is something that particularly angers one ad-vertising VP; “If you are going to just read the slides, why not e-mail them and don’t make everyone come to the meeting?”

The slides should not serve as notes…. most grown-ups haven’t enjoyed being read to aloud since they were four years old. And if the audience is doing all the reading, then they aren’t listening to you. But before they can listen to you, they have to find you—which means don’t stay attached to your laptop at the back of the room. It’s like telling the audi-ence “Hey, don’t look at me. I’m not important, I’m just an ac-cessory to the equipment.” Use a remote, not a mouse. Get out front and lead the presentation—don’t let it lead you.

Proponents of Powerpoint tell us it can be an effective tool, one that puts powerful features at our fingertips, once we learn how to use them. “Powerpoint doesn’t bore people - people bore people,” they are quick to point out. True enough, but how do we handle those features? Perhaps the most effective way to know how to use Powerpoint to the best of our abilities is to first understand what not to do.

Here is what is referred to as the “Seven Deadly Sins of Powerpoint,” as put forth by Dr. Joseph Sommerville, head of a Houston-based firm specializing in helping professionals develop their presentation skills.

Avoid distracting special effects (fade-outs, wipes, dis-solves, etc.) and sound-effects.

Avoid clip-art. It shows a lack of creativity. Try to use only your own scanned photos or purchase a CD of good-quali-ty stock photos.

Avoid templates. Why fit your original ideas into some-body else’s pre-packaged design. Create your own distinc-tive look and put your company logo at the bottom right-hand corner.

Avoid text-heavy slides. Don’t use paragraphs, quotes or even complete sentences. Limit your slides to no more five lines of text. Don’t use your slides as speaker notes.

Avoid small type. It’s ok to read 12-pt type in this article, but for a Powerpoint presentation, a minimum of 40-pt. type is the way to go.

Avoid passing out handouts of your Powerpoint presen-tation before the event. They will be reading it rather than listening to you.

Avoid faith in technology. It’s the law of nature—ma-chines break down. Have a backup of either another ma-chine or transparencies or, at the every least, handouts.

Even though one legal scholar proposed a constitutional amendment banning Powerpoint, and we assume he was speaking in jest (maybe), millions of business people throughout the world will continue to use it and refine it, as the technology upgrades. If used correctly and in tandem with a strong and confident speaker, it can be a powerful presentation tool, one that holds the audience’s attention and accomplishes it’s ultimate goal—to drive home a single, indel-ible point.

However, if used with little foresight and preparation, with graphics that appear to have been drawn by a small child, an over-abundance of text that flies around the screen like a swarm of locust, and a narration that drones on like verbal elevator music, the result will be like comparing Powerpoint to what one expert calls “corporate karaoke”: Tough to listen to, but we all applaud each other when it’s over.

by Steve White

Death by Powerpoint Truth or Myth?


http://www.SWhitePR.com


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Sometime between now and the end of next year, agents are likely to begin hearing from customers about changes in their workers compensation premiums. Tens of thou-sands of employers can expect potentially significant increases in their workers compensation premiums based solely on a change the National Council on Compensation Insurance is making to its experience rating plan.

The Big “I” is providing member agencies with a memo-randum that includes some background information and a one-pager that member agents can give to customers. In addition, agents can look to the NCCI booklet, “The ABC’s of Experience Rating,” which explains the premise for the split point.

According to Exhibit 5 in the NCCI Circular CIF-2011-14, this filing should cause the experience mods of 17.8% of risks to increase by 0.02 points or more, 13.5% of risks to increase by 0.05 points or more, and 7.0% of risks to increase by 0.10 points or more.

Given that there are about 675,000 experience rated risks in total, this could result in an increase in the experience mod by 0.10 points or more for more than 47,000 employ-ers. For an increase in mod of 0.05 or more, this number jumps to more than 91,000, and for increases of 0.02 or more, more than 120,000 employers could be affected.

One of the hypothetical examples provided by NCCI shows a mod increase due to this change from 1.00 to 1.06. Another example shows an increase from 1.09 to 1.20.

For example, assume these employers are contractors or other businesses that perform work under contract. What are the potential implications of this increased mod? One or more of the following could occur:

• In order to cover the increased cost of workers com-pensation insurance, the contractor must increase its bids on various projects and, as a result, loses work.

• Many government entities and larger corporations will not contract with a business whose workers compensa-tion experience mod is greater than 1.00 to 1.10, thus

limiting the contractor’s ability to obtain work. (See Ad-dendum 3 for an explanation of why the mod should not be used for this purpose.)

• Because of fewer jobs due to higher bids or restric-tions on engaging entities with mods in excess of 1.xx, the contractor must lay off employees or curtail the sub-contracting of work.

• Because of reduced revenues, the business is no lon-ger viable and must shut its doors or go bankrupt—again with the loss of jobs and tax revenues.

• The business could decide to operate without insur-ance and might be inclined to issue fraudulent certificates of insurance to get work. The potential for uninsured injuries is obvious.

• If the business was considering selling or merging with another entity, the impact of a higher mod might result in the lower valuation of the business, or the inability to find a buyer or merging company.

• Aside from the effect of the increased mod itself, the workers compensation insurer might non-renew the ac-count, resulting in the risk being moved into the assigned risk plan at a higher rate and an ARAP surcharge—not to mention possible loss of scheduled credits.

• In addition to scheduled credits, at least three states (CT, IL, OR) of 13 states (AK, CT, FL, HI, IL, MD, MO, MT, NE, NM, OK, OR, VA) in NCCI’s Contracting Classifi-cation Premium Adjustment Program require participating employers to have a mod of 1.00 or less. The credits in this program can be substantial and could be lost by an employer whose mod exceeds 1.00 solely because of this rating change.

NCCI says the impact of this change is “revenue neutral,” meaning that mods will increase and decrease in a manner that results in no overall additional premium effect for all insured entities. It is not clear whether this actuarial prem-ise considers the potential premium impact of the migration of risks into assigned risk plans or nonstandard markets. Given the fragile and slowly recovering economy, re-popu-lation of the residual marketplace and the potential loss of jobs by an already imperiled construction industry, it is not something that will be looked on favorably in the current political climate.


Workers Comp Premiums Likely to RiseBig “I” offers guidance on NCCI experience rating change that

would affect premiums.by Bill Wilson, Big “I” vice president of education and research. Agents may email Wilson with any questions.


mailto:bill.wilson%40iiaba.net?subject=

Independent Insurance Agents of New Mexico - www.iianm.org - * June 2012 page 31 Page 25

One of the problems with this filing is that there is no indi-vidual employer cap on how much a mod may increase as a result of this change. The closest thing is a general maxi-mum debit mod that is also being changed in this filing.

According to NCCI, the change in the maximum debit mod formula “will increase the mod cap for small poli-cies.” Given the lower credibility of the actual loss data of very small risks, one would think the maximum mod cap should be lower—not larger—for such risks.

In addition, “revenue neutral” in the aggregate is a hard pill to swallow if a business is one of the tens of thou-sands of employers whose experience mod will increase by 0.10 or more, solely because of this change.

Imagine the impact if this change is coupled with an unexpected bad loss or two, a manual rate increase, loss of carrier and movement to the assigned risk plan, ap-plication of an ARAP surcharge, and/or loss of scheduled credits (and/or addition of scheduled debits). It is difficult to explain to such employers why this change is fair be-cause it’s “revenue neutral.” It’s rather like pricing a can of green beans at a grocery store at 50 cents, then charging a lot of people only 10 cents and a few people $10 and saying it’s fair because it’s “revenue neutral” to the store.

The “fairness” of this rating plan is not likely to be under-stood by those most adversely affected, keeping in mind that the entire experience rating scheme is not based on immutable physical laws of the universe, but rather on probabilistic actuarial formulas and theories.

And this is just the beginning. The potential impact above is based on an increase in the experience mod calcula-tion split point from $5,000 to $10,000 in 2013. The filing increases the split point to $13,500 in 2014 and to an “indexed” $15,000 in 2015. Beginning in 2015 and going forward, the split point will change annually based on an inflationary index.

Currently, NCCI is predicting that, because of this index-ing, the actual 2015 split point will be closer to $17,500 than the publicized and filed “indexed $15,000”—more than triple the current split point. According to NCCI, the average workers compensation claim cost is $8,787, as of Jan. 1, 2011.

To compound the problem for agents and their custom-ers, the rating factors necessary to project what the new mod will be with certainty will not be available until late summer for a few states and possibly September or October for most other states. Employers will likely have completed their budgets long before they are aware of what their workers compensation premium will be.

Until that rating information is filed and approved, NCCI will be making preliminary mods available based on actual loss data, but using factors (for example, D-ratios) based on the current $5,000 split point.

Employers can access their experience rating worksheets at least two months prior to their rating effective date at www.ncci.com/worksheets by entering their Risk ID and a PIN number supplied by NCCI.

Prior to publication of mods based on the new $10,000 split point, NCCI says that employers can ballpark their new mod by recalculating the mod using $10,000 instead of $5,000 as a split point and increasing the D-ratios on the worksheet by 50%. Use of an automated tool like Zywave’s ModMaster® software should simplify this process.

In a Casualty Actuarial Society presentation, NCCI said, “If an employer has no losses, or no losses greater than $5K, [this filing] will reduce their mod…If an employer has a relatively large [number of] losses approaching or exceed-ing $10K, [this filing] will increase their mod.”

To determine the effective date of this filing for your state, refer to Addendum 1.

So, with this information, what can agents do?• First, communicate this change to customers. Mem-bers can use this one-pager (Addendum 2) to communi-cate this information to clients.

• Second, if agents have insureds that have debit mods, they can provide a copy of their experience rat-ing worksheets. If they are based on preliminary mods, agents can use the “ballpark” method outlined above to project the mod following the split point change.

• Third, keep state and national Big “I” associations aware of any marketplace problems, including very large mod increases that are attributable to this change, in-ability to bid on projects due to a mod greater than 1.00 (and the increase due to this filing), and any potential political repercussions of influential business owners who might seek a regulatory or legislative remedy.

If customers experience problems with contract bids that hinge on the experience mod, Addendum 3 can be provid-ed to the contracting party. This document explains in detail why using the workers compensation experience mod to pre-qualify contractors or other employers for work is not an intended or valid use of this insurance rating factor.

To learn more about workers compensation experience rating, the Big “I” offers a two-hour webinar that details everything agents would want to know about the current experience rating methodology. It also includes a compre-hensive reference manual, dozens of real-life examples with explanations of how to identify and correct worksheet errors, and frequently-asked-questions documents with more than 100 questions and answers.

To access the webinar and to learn more about it, go to http://tinyurl.com/ExperienceRatingWebinar.



http://tinyurl.com/ExperienceRatingWebinar


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Looking to fill a position within your agency? Trying to find a job but don’t know where to look?Whether you are looking for somewhere new to share your special skills or an employer looking for quality, professional employees, we are there to lend a helping hand. Click here to take advantage of IIANM’s Job Bank.Do you have an agency you’re trying to sell, or in the market to buy one? Check out our Classifieds!

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Independent Insurance Agents of New Mexico - www.iianm.org - * June 2012 page 33

Don’t get caught without an updated business card

An acquaintance who asks for your business card is paying you a professional compliment. Don’t blow the opportunity. Always have a card handy, and follow these tips:

• Set a goal. You’ll be less likely to forget your cards if you have a plan for using them strategically. For instance, you might set a goal of giving out five to 10 cards every day.

• Invest in a good design. Make sure your cards look pro-fessional and attractive so you’ll enjoy handing them out. This will also serve as a motivation to keep your cards with you.

• Practice your presentation. How are you going to intro-duce yourself and offer your card? How are you going to make a positive impression?

• Keep your cards neat. Buy a nice business card case instead of jamming cards into your pocket or wallet where they’ll get bent.

• Keep business cards everywhere. Store them in your glove compartment, in your gym bag, in your desk drawer, in your coat pocket, and in your brief-case so you never have to admit, “I don’t have one with me right now.”

June is the month with the longest daylight hours of the year in the Northern Hemi-sphere and the shortest daylight hours of the year in the Southern Hemisphere.

In Iceland, folklore says that if you bathe naked in the morning dew on the morning of June 24, you are supposed to keep aging at bay for longer.

OddsEnds

June is known for the large number of marriages that occur over the course of the month. According to one etymology, June is named after Juno (Hera). Juno was the goddess of

marriage and a married couple's household, so some consider it good luck to be married in this month.

Events this month...

June 8 Albuquerque Comic Expo Comic book, pop culture & entertainment convention. Exhibitors, vendors, a gaming area, Artist Alley...

June 7-16 Savor Albuquerque 10 day festival celebrating Abq’s finest arts, culture, cuisine and culminates with the Centennial celebration.

June 10-16 Festival Flamenco Distinguished as the most important and longest standing flamenco event outside of Spain...

June 16 New Mexico Centennial Summerfest Explore the cultural history of NM’s statehood through a free day-long celebration of arts, dance, music, cuisine, science and the exciting atmosphere of Route 66

For more details and a complete event listing, visit:www.itsatrip.org

n

Clean up your air with the right houseplants

Clean air is essential to good health at home and in the workplace. One simple way to keep the air you breathe fresh and free of odors and chemicals is to keep a few houseplants around. They’ll clean the atmosphere and make your surroundings more pleasant and relaxing. Pick up some of these:

• English ivy. This climbing vine grows in hanging baskets and low planters, and it helps clear away formaldehyde. (Be aware that it requires regular misting, especially during the winter months.)

• Peace lily. A flowering plant, the peace lily will eradicate toxins like acetone, benzene, and ammo¬nia from the air. Remember to wash the leaves every once in a while.

• Rubber plant. This plant is hardy enough to survive cool temperatures and low light, making it ideal even if you’re not particularly good with plants. Like the English ivy, it acts to reduce formaldehyde in the air as long as it gets plenty of water.


http://www.itsatrip.org/events/featured/summer/default.aspx

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With the Caliper Profile, our consultants can provide you with a clear, accurate picture of an individual’s strengths, limitations, motivations and potential. Then, these results are compared to our unparalleled database of information about the qualities it takes to succeed in virtually every position, as well as the information you provide about your corporate culture, your management style and the responsibilities of the job. From here, our consultants can tell you if an individual is a natural fit for that position. This is what we call “job-matching.”

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Documents

June La Voz 2012