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How Risk Assessment Tool in Insurance Broker CRM Improves Quoting Precision
Insurance brokers play a vital role between clients and insurance providers. Risk assessment is the lifeline of their professional practice. Brokers who assess risks with precision build strong business relationships that work for everyone involved. The precision of quote generation has a direct impact on client satisfaction. Customers who receive tailored quotes feel valued by the insurers, which helps in building trust from the start. This original positive connection guides them toward higher conversion rates and better client retention. A full picture of risk assessment helps brokers protect themselves from potential liability issues. Brokers who document risk factors and match appropriate coverage shield themselves from claims of negligence. Their professional dedication creates a reputation for reliability that spreads through client networks. A modern CRM for insurance agency operations makes risk assessment more streamlined. Insurance brokers who utilize specialized insurance agent CRM software work faster while keeping their risk evaluations accurate. Embedded Risk Assessment Tool in Insurance Broker CRM: Improving Quoting Precision Insurance agent CRM software serves as a central hub that organizes client data and streamlines communication to boost efficiency. The CRM for insurance brokers does much more than simple contact management. It includes specialized risk assessment tools that revolutionize the quoting process. The native risk assessment module in insurance CRM solutions enables brokers to evaluate risks using diverse factors. Smart algorithms assess client data, industry trends, and historical data to discover potential risks that brokers might disregard during a manual assessment approach. This enables brokers to recommend coverage options that target certain vulnerabilities rather than generic scenarios. These platforms come with immediate practical benefits: Risk assessment tools automatically gather and analyze client information, reducing manual data entry errors. This automation ensures consistent evaluation standards across all client assessments. Cloud-based systems enable team members to access and update risk profiles from any location. Multiple brokers can collaborate on complex cases without version control issues or communication delays. Customizable risk templates ensure all brokers follow the same evaluation procedures. This standardization improves quality control and reduces assessment inconsistencies between team members. CRM for life insurance agents really shines when tracking health changes and life events that affect policy needs. Advanced platforms blend with third-party data services. This gives brokers rich information about properties, businesses, and individuals without needing multiple subscriptions or research tools. Such a combined approach saves time and improves accuracy in assessments. Visual Metrics Offered By Risk Assessment Tool in Insurance Agency CRM Visual intelligence leads modern CRM for insurance agency solutions. These powerful graphical tools turn complex risk data into useful information that insurance professionals can understand quickly. 1. Client Risk Scorecards Client risk scorecards offered by the risk assessment tools show detailed visual snapshots of each client's risk profile. Color-coded scorecards help brokers spot high-risk areas and coverage gaps right away. Insurance professionals can detect patterns and unusual trends to make better recommendations. The scorecards work well as communication tools that explain risk factors to clients and make abstract concepts easy to understand. 2. Portfolio Risk Distribu... Dynamic visualizations in insurance CRM solutions help brokers understand risk distribution throughout their client base. Insurance agent CRM software with portfolio charts enables professionals to spot risk concentrations by industry, geography, or coverage type. This broader viewpoint helps agencies balance their business and prepare for market changes before they affect profits. 3. Exposure Maps and Geospatial Heatmaps Geospatial tools create visual maps of risk across locations. CRM for life insurance agents uses these maps to show geographic concentrations of health risks or mortality factors. Property insurance professionals use them to identify natural disaster zones, crime hotspots, and location-based risk factors that shape pricing and coverage decisions. 4. Claims Propensity and Claims Velocity Charts These visualization tools show past claims patterns and predict future activity. Brokers learn about clients or industries with higher claim frequency. This knowledge helps them tackle potential problems before they turn into losses. Key Ways Risk Assessment Tool Embedded in Insurance CRM Drive Modernization Risk assessment tools within insurance agent CRM software are driving a technological revolution in the brokerage industry. These integrated systems are reshaping traditional insurance practices through several key innovations. I. Enhancing Underwriting Precision with Informed Analysis Modern CRM for insurance agency operations uses sophisticated analytics to refine the underwriting process. The system assesses client histories, discovers patterns, and forecasts future risk scenarios with greater precision. This enables brokers to make decisions based on extensive factors rather than basic information or intuition. II. Improving Policy Personalization and Product Suitability Insurance agencies can invest in the development of a tailored CRM for insurance brokers to manage and access extensive client profiles. CRM for life insurance agents makes it easier to recommend appropriate coverage options that align with their customers' needs. This approach replaces the generic marketing approach that dominated the insurance sector in the past. III. Accelerating Decision-Making and Policy Issuance The automated workflows in insurance CRM systems accelerate the quote-to-policy process. Tasks that once took days now take hours or even minutes to accomplish, improving policy issuance effectiveness and client satisfaction. IV. Strengthening Fraud Detection and Prevention Mechanisms Smart risk assessment algorithms in insurance CRM systems can discover suspicious patterns or inaccuracies that might denote fraudulent activity. These tools flag potential problems before policy distribution, which protects the reputation of insurance firms. V. Supporting Regulatory Compliance and Risk Governance The CRM for insurance brokers meets complex regulatory requirements by automating compliance checks and documentation. Agencies can remain compliant while focusing their energy on serving clients instead of managing paperwork. Final Words Modern risk assessment tools in insurance broker CRM systems are reshaping how professionals assess client needs and create accurate quotes. These tools help brokers make evidence-based decisions instead of relying on gut feelings or limited data. So, agencies now offer precise coverage recommendations that target specific risks rather than one-size-fits-all solutions. Risk scorecards, distribution charts, and geospatial mapping give brokers quick insights that once took hours to analyze. Professionals can spot patterns fast, predict problems, and explain complex ideas to clients clearly. This better communication builds trust and strengthens client relationships right from the first meeting. These integrated systems represent more than just better operations. They signal a transformation toward precision, personalization, and proactive risk management.

Insurance Agent/Broker Licensing
INSURANCE AGENT/BROKER LICENSING by Marcus Ramsey Growing your agency's business might require you to obtain licenses in other states. Most experienced agents/brokers comprehend and are willing to do what it takes to ensure that the commercial side of the transaction succeeds. However, some seem to forget all this hard work is wasted if project planning fails to allow adequate time to obtain proper licensing in the target state(s). 'Ramsey's Rules' outlined below will direct you toward obtaining and maintaining proper licenses to help your new venture prosper. (I assume that anyone who reads this article already holds insurance licenses in one or more states but needs (at least one) additional license in another state to take advantage of a business opportunity. RAMSEY'S RULE #1: NEVER RELY SOLELY ON THE FREELY GIVEN ADVICE OF OTHERS. I am constantly reminded of the number of intelligent, thoughtful agency executives who for all intents and purposes jeopardize their business by accepting half-baked advice from someone they would not trust with their car and daughter on prom night. Obtaining the licensing information as the first step of your new project/program (not your third, 15th or 23rd step). How do you go about obtaining this information? Contact the agent licensing section of the department of insurance of the target state and request a copy of its agent/broker license instructions and application forms (see the State Insurance Department Directory in back). Most states have their own specific, easy-to-follow instructions on the licensing process. Get this packet and quickly read through it even if you intend to delegate the project of obtaining the license to a member of your staff or retain a consultant or licensing service. In fact, reading over the instructions will give you a good idea of the time and effort involved in obtaining the necessary license and whether you or a staff member will have the time to prepare, file, and follow up on license issuance within the time constraints you are working under. You should consider retaining outside assistance when you plan to seek licenses in several states at the same time. Be sure that whoever is going to do this work can focus the necessary attention on the project to complete it as quickly as possible. RAMSEY'S RULE #2: IF SOMEBODY ELSE IS DOING THE WORK FOR YOU, MAKE SURE YOU KNOW AT LEAST GENERALLY WHAT IS INVOLVED, REQUIRE PERIODIC PROGRESS REPORTS, AND QUESTION ANYTHING THAT SEEMS WRONG TO YOU. Remember, it is YOUR business and you had better look out for its best interests unless you are looking for a career change. RAMSEY'S RULE #3: RELATE THE LICENSING REQUIREMENTS TO YOUR ACTUAL BUSINESS SITUATION. Clearly define how you intend to operate and identify the key points to be covered in licensing. Licensing services and consultants who do licensing work usually ask the client to complete a form which requests most of the information contained on state application forms. This information is then typed onto the appropriate state forms and returned to the client for rechecking, signature, and attachment of the proper fees. The problem with this approach is that planned operations might not match license authorization. That can mean trouble later, unless someone is willing to take a couple of extra minutes to be sure everything is right. The answer to simple questions such as, 'Will you write Life/Disability or Property/Casualty coverages or both?' and 'Do you intend to open an office in the target state or do you plan to operate from your existing office?' will help define the types of licenses needed. Whether you intend to conduct business as an individual, partnership, or corporation can have a direct bearing on whether a license can be obtained for that entity (a few states, such as Alabama, issue nonresident licenses only to individuals, not to partnerships or corporations). If you are seeking a license for a corporation, make sure that an application for individual licenses are also filed. When you receive an approval, make sure you have approval for the corporation and all individual transactors. By carefully outlining how operations will be conducted, you can dictate whether you need to seek licensure as an agent, broker, managing general agency, surplus line broker, etc. Sometimes you find that you do not need to obtain a license in another state. For example, some states, such as California, do not require nonresidents to obtain a license to insure risks with incidental exposures in the state as long as the unlicensed nonresident does not enter the state to solicit, service, or inspect the entities insured; However, other states, such a Texas, do require nonresidents to be licensed under the same circumstances. Keep in mind that 'entering' the state may include obtaining information by mail and telephone as well as physical presence inside the state. Also, many states will not issue a surplus line broker's license to a nonresident except in connection with a risk retention group. If your activities will involve related services by the same or by one or more related entities, such as a third-party administrator or claims adjuster, check to see if those activities require licensing as well and, if they are, be sure that those licenses are obtained as well for the corporations and all individuals involved. 'FC&S Bulletins' published by the National Underwriter Company and the 'State Licensing Requirements Guide' published by Pictorial, Inc. offer helpful summaries of state licensing procedures and provide invaluable overviews of each state's licensing and continuing education requirements. Even if someone else is going to do the licensing work for you, you should at least review the state's overview/summary. RAMSEY'S RULE #4: OBTAIN AND REVIEW EACH STATE'S INSURANCE CODE. If someone else will actually do the licensing work for you, it may be enough for you to review a state overview or summary during the application process. However, the individual handling the licensing work for you MUST obtain and review all applicable sections of the target state's insurance code. Once the license has been obtained, you will need access to a copy of the state insurance code, regulations, and bulletins. How can you obtain another state's insurance code? Some state departments of insurance sell or can refer you to a source for a relatively inexpensive copy of the state insurance code, the department's regulations, and the department's bulletins. Otherwise, contact the National Insurance Law Service (NILS) or another law book publisher. If you are comfortable 'surfing the net,' you will find pricey but instant access to on-line law libraries on the Internet. Another possible source is the law library maintained by a local bar association or a nearby law school. RAMSEY'S RULE #5: IF THE WORK NECESSARY TO OBTAIN THE LICENSE(S) SEEMS TOO EASY OR QUICK, YOU ARE PROBABLY ON THE WRONG TRACK. This sounds cynical, but the people who drafted agent/broker licensing laws and regulations never considered whether the requirements being adopted would make it easier for the agent/broker to make a living. Just filling out the forms won't suffice. Most states require that you provide a copy of your license certified by your home state insurance department. If you are seeking licenses for a corporation, you probably will also need to obtain a copy of the articles of incorporation and/or certificate of good standing certified by your home state's Secretary of State. As a rule of thumb, it takes 30 to 60 days to gather all the information necessary to file the application. Once the application has been filed, don't expect to receive the approval by return mail: approval time frames of 60 to 90 days or even longer are not uncommon in certain states for certain types of licenses. Because the licensing process can be terribly slow (even when the process moves quickly, it is very slow), you need to begin as soon as possible. Since you cannot start writing the program/account until you have the necessary licenses, processing delays may push you beyond your frustration tolerance level. However, all you can do is relax, breathe deeply, and try to make sure that you aren't the reason for the delay. Keep the ball in the department's court by making certain the application and any required supplemental information are complete in every respect. Many states will simply return an incomplete application without action. Once the application and all necessary supplements have been submitted, your application will be 'ripened' according to the season of the year in a big pile of similar forms. Discount any claims by license services or consultants that they can obtain the license you need significantly faster than anyone else on earth. To deliver on such a promise, it would be necessary to overcome the Universal Laws of Orderly Bureaucratic Work Flow and Form Processing. While occasional triumphs over this inertia have been reported, they are rarely confirmed by reliable sources or any documented evidence. Only a complete application will allow unimpeded progress step to step. Again, if you make it your business to know generally what's involved in obtaining the license(s) you need and if you monitor activities through periodic progress reports, you should be able to assess the quality and timeliness of the work being done on your behalf. RAMSEY'S RULE #6: ONCE YOU OBTAIN THE NECESSARY LICENSE, KEEP IT CURRENT TO AVOID REPEATING THE RIGMAROLE. You should apply this rule to all licenses, permits, and/or corporate authorizations held. For example, don't assume that meeting your home state's continuing education requirements will be sufficient to retain the license(s) obtained from other states. If your home state does not have a continuing education requirement, you will probably need to meet the continuing education requirements for each state in which you are licensed. Also, maintaining corporate authority usually requires making one or two filings each year. Make sure that you, your attorney, a consultant you have retained, or someone on your staff is assigned to monitor and ensure that all requirements are met when due, that all necessary filings are made in a timely manner. Demand that your files be clearly documented to show what must be done, what has been done, when it was done, who received copies, the check number, the date, the amount of any fees paid, etc. In summary, obtaining agent/broker licenses in new states can sometimes be a frustrating, humbling, time-consuming exercise which is nonetheless a necessary part of an agent/broker's success. In many ways, producer licensing is a lot like building a campfire: In the warmth of the glow, one can scarcely remember gathering the wood. STATE INSURANCE DEPARTMENT DIRECTORY Alabama, 135 S. Union St., Montgomery, AL 36130, (205) 269-3570 Alaska, P.O. Box 110805, Juneau, AK 99811, (907) 465-2515 Arizona, 2910 N. 44th St., #210 Phoenix, AZ 85018, (602) 912-8466 Arkansas, 1123 University Ave., #400 Little Rock, AR 72204, (501) 686-2900 California, 700 L St., 4th Floor, Sacramento, CA 95814, (916) 322-3555 Colorado, 1560 Broadway, #850, Denver, CO 80202, (303) 894-7499 Connecticut, P.O. Box 816, Hartford, CT 06142, (203) 297-3800 Delaware, 841 Silver Lake Blvd., Dover, DE 19901, (302) 739-4251 Dist of Columbia...) 266-8699 Wyoming, 122 W. 25th St., Cheyenne, WY 82002, (307) 777-7401 This article was written by Marcus Ramsey, CPCU, principal of Ramsey Consulting Services, 14026 Donart Drive, Poway, CA 92064, (619) 748-6315.

Tips To Forward Your Career As An Insurance Broker
If you think you’re right for a career in insurance, you’ll have to know the right path to travel to reach the peak of your potential. Networking and internships should help you get started in the industry while you’re still being educated, but there’s much more to come after you’re done with school. Take some time to start planning for the future, and make the moves you need to succeed. Here is a brief look at a few tips to help you forward your career as an insurance broker. Determine a clear goal within the insurance sector There are nine different ways you can go when you’re working your way into an entry-level position in insurance. It’s important to mark out your path early on in your journey, so you can properly prepare for what’s to come. You can choose to go the route of a broker, underwriter, loss adjuster, risk manager, claims investigator, loss control specialist, actuary, marketing representative, or appraiser. Each position has its own specialties, so figure out what to learn while your journey is young. Work to obtain a professional designation The path you choose for entry into the insurance world will require specific certifications and licenses, but you can also work towards the CIP (Chartered Insurance Professional) designation. A CIP designation shows that you have the foundational qualities to meet basic industry standards. If possible, do what you can to start this designation while you’re still in school. Research employers and thoroughly prep for interviews When it’s time to step into your profession, you don’t want to take a position that doesn’t really fit. Research is key. Just as there are several entry points in insurance, there are many different types of insurance companies. When you’re applying for a job in the field, you need to clearly identify your goals. Your goals are important for identifying your own path, but they also look good on your application. Remember you’re always selling yourself If you’re in the business of insurance, you’re selling much more than a coverage policy. Whether you’re on the job or just working towards getting a job, you need to be able to sell yourself as well as the insurance. Once you’re practicing your specialties, you'll need to know how to market what you are selling as well. If you want to be an overachiever for your agency or yourself, learn how to apply SEO to insurance. Taking your profession to the digital level is always a great way to expand your business potential. Work on developing your communication skills Working in insurance means you’re working with people. If you don’t have good people skills, you may not have the desired outcome in the long term. Invest in developing your communication skills on a business and personal level....

It's a Small World: Doing Business Abroad
The international insurance market offers a variety of benefits to independent agents and brokers. It provides a perfect tool for solidifying your Commercial Lines accounts and insulating them from inroads being made by alphabet house brokers. International insurance operations also offer an entree to new product lines and markets that will expand your facilities abroad. For example, U.S. agents can introduce their expertise in such lines as Auto, Medical, Surety, and Workers' Compensation to third-world countries that are privatizing these coverages. Canadian brokers can expand their expertise in out-of-country private Medical insurance and, potentially, Workers' Compensation. Doing business abroad can introduce agents and brokers to new international markets, both primary (with such carriers as AGF, Allianz, Generali, and Winterthur), and reinsurance/variable insurance programs (financial reinsurance, stop-loss reinsurance, catastrophe reinsurance, etc.). The international market encompasses the national accounts division of major companies, offering creativity, capacity, and flexibility, enabling the agent or broker to approach accounts on a broad basis. Examples include Aetna, AIG, Chubb, Great American, The Hartford, and Reliance National. Agents and brokers can access the captive market either by establishing a captive for a corporate client or renting a captive to facilitate international exposures, self-insured retentions, and a potential profit center. The international market has captive facilities in such locations as Bermuda, Barbados, Ireland, Guernsey (the Channel Islands), and Luxembourg. BUILDING EXPERTISE AND INTERNATIONAL KNOWLEDGE AIG Chairman Hank Greenberg highlighted the success of operating internationally at the 1992 IMMS convention in Scottsdale, AZ. Greenberg has led his very successful organization to develop business in China, the United Kingdom, Europe, South America, Canada, and the United States. For example, AIG has extended its expertise in financial banking to U.S. corporate clients that do business in Asia but find their U.S. bankers unwilling to take the risk of providing financing abroad. Similarly, many IMMS members are large surety brokers with a wealth of expertise and knowledge of their corporate clients. They can extend this expertise internationally by working with companies such as AIG, which understand foreign markets. FREE TRADE AND THE WORLD INSURANCE MARKET The U.S.-Canadian Free Trade Agreement has accelerated the growth of Canadian firms into the United States, while mid-sized U.S. firms have expanded into Canada. There has been some growth in Mexico but not to the extent experienced in Canada and the U.S. Anticipating passage of the Free Trade Agreement, many companies began to position themselves in the Canadian market during the early 1980s. They saw Canada as an entry-point for export into the United States because Canadian laws are less punitive, particularly in the areas of product liability. Many of these firms are insured by the multinational alphabet-house brokers who provide extensions of coverage from a master program established in Europe or Japan. A few IMMS members have succeeded in meeting some of the essential insurance requirements in such lines as Products Liability through major insurers in Canada, particularly those with operations in the United States. Agents have been able to access U.S. insurers that frequently include Canadian exposures under their U.S. coverage. European insurers are following their European manufacturing accounts into North America. Canadian brokers and U.S. agents are involved in placing insurance in Canada or the United States on behalf of the European insurers and their clients. Generally, European insurers believe in long-term arrangements and are eager to work with IMMS member agents and brokers to facilitate this business. The trend is to ensure an international account with a major insurer that will issue policies in the various countries either through its own subsidiary or with a friendly insurer, participating in the risk taking. The underwriting is done centrally from the parent insurer with a broker appointed in the foreign country based on regulatory requirements and facilities under the direction of a master broker. THIRD WORLD INVESTMENT AND INSURANCE The insurance industry has traditionally followed the growth of other industries. Investment from the United States and Canada in such developing regions as Eastern Europe, South America, and Asia offers opportunities to insure the manufactured and exported products. A recent example is Canadian investment in manufacturing portable sawmills in Eastern Europe, which are exported to 20 countries, including the United States and Canada. The Canadian client has requested insurance for the sawmills. In this regard, the coverage can be placed in the Canadian, U.K., or U.S. markets. ALL BROKERS AND CARRIERS AREN'T CREATED EQUAL Here are a few recommendations for choosing a CORRESPONDING BROKER: Look for individual expertise and enthusiasm. Set an equitable commission split. In most cases, this should be on a 50-50 basis. However, if the corresponding broker does the majority of the work in placing the account, its split should be higher. Negotiate a non-competition agreement. Offer the broker one or two accounts to determine the level of interest and service. Meet with the corresponding broker at least two to three times per year. Set up separate portfolios for the international business within both brokerages to measure the amount of business and related expense. To select a CARRIER for your international accounts, I would suggest that you: Bear in mind that most insurers have problems with international accounts because of policy wording, regulations, accounting, currency, and organizational differences. Work primarily with the corresponding broker in the placement of the account. Additionally, a number of excellent international insurers and regional insurers can provide local underwriting, engineering, and support of an international account. Qualify the insurer using these criteria: Financial stability-a Best's rating of "A" or higher Corporate culture Multi-state facilities Ability to work with a captive Ability to "front" if required Technical expertise by specific lines of business: Personal Lines, Commercial Lines, Automobile, General Liability, Life and Health, Workers' Compensation, etc. Do not necessarily seek an all-lines insurer, since the carrier might not have the expertise across the board. What's more, the insurer might not want to write in certain regions, such as Florida, Texas, Massachusetts, British Columbia, or Quebec. Selecting the appropriate international insurer will be depend on the region, expertise, capacity, and flexibility in the strategic classes of business for your client (i.e., Auto, Product, Liability, Workers' Compensation, etc.). OF LAWS AND REGULATORY REQUIREMENTS Agents and brokers need to be aware of significant technical, legal, and regulatory differences between the U.S. and Canadian market. The U.S. requires more detailed filings for all products sold. Canada requires filings only for Auto insurance. In addition, U.S. agents are required to provide detailed rating and statistical codes for most product lines when seeking quotations from insurers. The regulatory issues for agents and brokers are generally similar, with carriers and agents/brokers regulated on the state or provincial level. In Canada, provincial regulation dovetails with self-regulation for brokers in the provinces of Quebec, Ontario, and British Columbia. Canadian insurers may be regulated by the government of the province in which they are domiciled. However, most insurers are federally regulated, which allows them to operate nationwide. U.S. insurers are required to obtain licensing in each state in which they do business. Some Canadian provinces, notably Ontario and Quebec, impose a sales tax on insurance premiums. This means the broker has to collect this tax and remit it to a provincial regulatory department. There are also rigorous requirements on brokers regarding the placement of insurance with non-licensed insurers, which could affect your international accounts. Some significant differences are found in such product lines as No-Fault Auto insurance, Environmental coverage, and Workers' Compensation. For example, since there isn't subrogation under Workers' Compensation for most industries in Canada, Comprehensive General Liability in the construction field does not have the same exposures as a similar situation in the United States would. TWO PEOPLES DIVIDED BY A COMMON LANGUAGE Agents and brokers should also consider cultural differences between the United States and Canada that can affect the conduct of business across the border. For example, the United States tends to be more forms oriented. Accounts are also larger because of the population (approximately 10 times greater than that of Canada) and the inclusion of substantial Workers' Compensation premiums. This results in a U.S. agent receiving a larger commission and anticipating a similar type of revenue in servicing a subsidiary of a Canadian account. Unfortunately, the premium account size tends to be much smaller for Canadian accounts, which leads to limited interest by some U.S. agents. The Canadian decision-making process tends to be faster. Insurers on international accounts and generally larger accounts will respond within 30 days. The process in the United States is usually much longer (60 to 90 days) because of the detail required and multi-state involvement. REVERSE FLOW BUSINESS: ON THE RISE "Reverse flow" business-involving domestic subsidiaries of foreign parents-is playing an increasingly important role in the international insurance market. These accounts will continue to grow as smaller to medium-sized U.S. accounts expand into Canada. Canadians have high technical skills in aviation, automotive, steel, and automation, competing actively on a global basis. For example, all of the Ford Windstars for the North American market are now made in Oakville, ONT. Such economic activities result in Canadian IMMS member brokers working with IMMS member agents in the United States to insure these accounts. This business can be expanded in Life & Health insurance, pension consulting, and possibly placement of insurance in emerging third-world countries. Such nations as Argentina, Brazil, Chile, China, the Czech Republic, Malaysia, Mexico, Thailand, and Vietnam are on a fast track for economic development. This growth offers a perfect opportunity to expand the IMMS network, with U.S. and Canadian members leading and coordinating the Commercial accounts for business extended or originating in these countries. MAKING YOUR MOVE Here's some advice for any agent or broker who'd like to have a piece of the action in the international insurance market: Target your existing and prospective clients who either export or provide work for international companies on a joint venture or licensing basis. Identify their exposures: Auto, Health, Marine, Products Liability, Workers' Compensation, and so forth. Make an arrangement with IMMS correspondent brokers principally in the following states: California, Illinois, Maryland, New York, Texas, Washington, D.C., Washington State. Try your first account with the corresponding broker before aligning on a permanent basis. Create a system to follow in placing your international accounts. Identify key individuals in the brokerage to handle the international accounts. Reach an agreement with the corresponding broker on the priority of international accounts. Visit your corresponding broker in advance and frequently thereafter. Talk to selected insurers about facilitating international accounts. ...

Insurance Distribution Trends And The Effects Of Change
INSURANCE DISTRIBUTION TRENDS AND THE EFFECTS OF CHANGE It's remarkable that the insurance industry has experienced only evolutionary - not revolutionary - change in its structure, processes, systems, and culture over the past 50 years. This is due partly to the regulatory nature of the industry and partly to exclusive and/or vertical agency agreements between insurance providers and agents. In this regard, the insurance industry is similar to banking and many other investor-owned utilities that are price regulated by the states and obligated to serve society. This situation is about to change because several external and internal factors are putting increasing pressure on the industry at a faster pace. The drivers of change include financial pressures, consolidation, advances in technology, regulation, and rising consumer expectations and empowerment. Interestingly, these are the same forces that are already impacting other industries in profound ways. Financial pressures in the personal computer industry caused by declining margins, rapid product obsolescence, and growth of the consumer market created havoc among franchised distribution companies such as ComputerLand and Entre. This resulted in the formation of a two-tier distribution system (distributors and dealers) as a means of addressing both financial constraints and market demand. Now companies such as Dell and Gateway are trying to shift the distribution system further by selling directly to end users. The rapid growth of the Internet is clearly responsible for the unprecedented market cap of Charles Schwab in contrast to the largest securities brokerage firm, Merrill Lynch. Electronic trading, available 24 hours a day, seven days a week, is restructuring commission fee arrangements and transforming brokers from order takers into financial advisors and knowledge workers. Rapid deregulation of the airline industry in the late 1970s and early 1980s permanently reshaped the relationship between airlines and travel agents. Today travel agents are more focused on the end-user (corporate and consumer), and are becoming fee-based service providers. Furthermore, many are consolidating and becoming super-retailers to counterbalance the power of bigger airlines and global alliances. The exclusive franchise system that has served the automobile industry for generations is giving way to the popularity of auto superstores such as CarMax and AutoNation, a consequence of channel consolidation and rising consumer expectations. This recent transformation is propelling auto makers such as Ford and General Motors to buy out their independent dealers and form separate equity-owned distribution companies, similar to what Coca-Cola did with its independent bottlers through the creation of Coca-Cola Enterprises in the mid-1980s. This research study attempts to uncover the changes that have occurred in other industries confronted by the same drivers of change. We chose travel agencies, personal-computer dealers, securities brokerages, and automobile dealers for the reasons discussed above. We also interviewed independent insurance agents for their opinions and observations of necessary and desired changes that the independent insurance agency system must engage in the coming years to survive and grow the business. It's inevitable that insurance agencies will continue to consolidate to become full-service agencies on a national scale. However, small boutique insurance agencies specializing in niche marketing or unique insurance products will also keep growing. Similarly, independent insurance agents will be disintermediated (eliminated as the middleman) by the Internet, although only for selective product lines, e.g., low-margin commodity products that consumers are willing to purchase without an agent's advice. At the same time, there will be fee-based reintermediation (in which intermediaries are introduced into new relationships or their roles and responsibilities are expanded). And insurance agents will emerge as infomediaries. Finally, both insurance companies and independent agents will learn to cooperate and collaborate with each other to serve end users more effectively and efficiently. At the same time, it's likely that some insurance companies will acquire or invest in their distribution partners in the same way pharmaceutical companies dealt with their distributors (Merck buying Medco and Baxter acquiring Hospital Supply Corp.). Not all the observations, conclusions, and recommendations found in this report will be applicable to all independent insurance agents. Each one will have to analyze their own context and drivers of change and attempt to use lessons learned from other industries and other independent insurance agent companies to determine their own path. MAJOR TRENDS OUTSIDE THE INSURANCE INDUSTRY Embrace of technology. Regardless of the industry, suppliers and distributors alike are embracing the Internet and other advances in technology to propel their businesses to new levels. Those who adopted the Internet early on seem to love the new playing field, while latecomers are scrambling to catch up. Channel shifting. Financial pressures and consumer expectations are driving suppliers to distribute their lower-margin products through the most economical channels, sometimes bypassing intermediaries or reducing their commissions in pursuit of profitability. But this is only one side of the story. New roles in sales and service. A growing number of suppliers is viewing the product sale as the acquisition cost for securing long-term customer relationships. Increasingly, their intention is to find ways to free their distributors from the low-profit transaction and allow them to concentrate on higher-profit, value-added service and support. Consumers paying for service. As the roles of the supplier and distributor change, so do the distributor's compensation models and sources of revenue. Value-conscious consumers are clearly willing to pay for services rendered, but the greatest challenge to distributors in moving to a fee-for-service model is establishing price. Successful sales strategies. Growth opportunities will always exist for boutique-sized businesses as they provide specialized services to compete with the largest-volume players. Whether through volume or specialization, success is reserved for those with vision, courage, and an instinctive orientation toward consumer needs. Integration of supplier-distributor efforts. Suppliers recognize that the distributor ultimately controls the relationship with the customer. To assure that distributors can and will sell their products, suppliers are increasing their efforts to integrate marketing and communications with their distributors to ensure that a consistent message reaches the consumer. New efforts in cross-selling. The Internet as a medium has made cross-selling more advantageous than ever before to suppliers and distributors. The synergy of products and services offered is providing a tremendous convenience for consumers in their quest for one-stop shopping. Changing relationships between suppliers and distributors. In just the last few years, relationships between suppliers and distributors have undergone dramatic changes, forcing a reevaluation of commitment and responsibility to one another. While no single course of action has emerged as the standard, the suppliers and distributors who value their existing partnerships are working more closely together and as a result creating stronger, more unified relationships with their customers. CHANGE WITHIN THE INSURANCE INDUSTRY Here are some important questions for the independent insurance agency system: Are we responding to consumers' changing needs and desires? Is what we're providing today materially better than what we provided five or 10 years ago? Have we embraced the available technology? Do we understand what business we're in (i.e., selling insurance to buyers or helping them manage risk)? Are we prepared for the new competitors on the horizon (if not in our face) who will embrace technology, operate efficiently, and respond to the needs of the consumer? Are we improving the quality and efficiency of our working relationships with our business partners? Are we asking for and expecting more from ourselves and our business partners? Are we actively and aggressively finding ways to eliminate inefficiencies, duplication, and waste? Do we know where we can best strategically position ourselves for the future? Unfortunately, for many within our industry, the honest answer to several of these questions is "no." For them, the future is bleak. Fortunately, many agencies and carriers are aware of the changes, see this as a time of tremendous opportunity, and are actively doing something about it. We hope that this study will educate, stimulate, and motivate our industry to action. For some, it's a wake-up call. For others, it'll provide direction and ideas on what to do. For still others, it'll confirm what they already know and provide some additional perspectives that may allow them to further develop and make positive future efforts. STEPS TO SUCCESS The following steps will help to ensure the future of the independent insurance agency system: Stay attuned to change. Assume an optimistic attitude and perspective. Focus on serving the customer better. Match customers, products and services, and distribution channels. Pursue strategic affiliations and alliances. Develop and implement a technology strategy. Elevate relationships between agencies and carriers. In most of life's endeavors, the attitudes and perspectives of the individuals involved will be the most crucial factors in determining the level of success achieved. This is as true in the world of business as it is in sports. When conventional ways of doing business are challenged and the level of performance must be improved or materially adapted, positive attitude and perspective become imperative. TEN REASONS TO BE OPTIMISTIC ABOUT THE FUTURE In the current economy, the one who controls the customer is king. Insurance agencies have direct contact and good relationships (or their potential) with their customers. Most insurance isn't a commodity product. Buyers of nearly all lines of business require technical and professional assistance to understand and to purchase the most suitable product. This complexity makes insurance difficult to sell on the Internet. Even insurance that could be considered a commodity product can be confusing, considering the volume of options and alternatives available and the significant implications of purchasing the right coverage and limits with a financially stable insurance company. As a result, advice and professional assistance are needed. Technology can empower small independent agents by giving them and their customers access to products, services, and information that historically has been only available to larger organizations. Although compensation for selling insurance may go down, compensation for servicing and providing professional advice is going up. Many insurance companies that historically have distributing their products through captive agency systems are beginning to utilize the independent distribution system. Attractive opportunities exist for agencies to create alliances with other firms and so gain better access to prospects, capital, technology, and other resources. Existing challenges and opportunities are great. The reality is that many agencies won't respond proactively, which presents tremendous opportunity for those that do choose to take action. Many of the factors that are critical to the long-term success of an insurance agency are within the agency's control. There's abundant room for improvement in almost every aspect of our business. ELEVATING RELATIONSHIPS BETWEEN AGENCIES AND CARRIERS The central focus of this study is the distribution system, particularly the relationship between suppliers and distributors. As we've seen in other industries, changes are occurring in the relationships between these parties, including the roles and responsibilities assumed by each, the nature and quality of the end product being delivered to the customer, and the overall success being achieved by each party. The recent threat of disintermediation has haunted distributors in many industries. Many have questioned whether insurance agents will soon find themselves cut out of the insurance delivery system. The research in this study suggests that widespread disintermediation won't occur. For every example of intermediaries being squeezed out of the picture, there are comparable examples of reintermediation. If an intermediary is adding value to the transaction, its position is secure. We see both good and bad in many agency-company relationships. On the positive side, carriers and agents/brokers have provided valuable services and quality products to a large segment of the economy. At the same time, significant opportunities exist to improve the quality of these products and services. Additionally, there's enormous room for improvement in the efficiency and quality of the relationships between insurers and agents/brokers. For insurance carriers, agents, and brokers to enhance their relationships, a number of things will have to occur: Each will need to focus on improving the quality of their own performance and partnering with those who hold themselves to similar standards. Decisions need to be made with the recognition that each is dependent on the other and that helping the other succeed will enhance individual success. The level, depth, and substance of communications need to be improved. Investments need to be made on both sides in proactive and visionary strategic planning. Mutual commitments must be honored. The hallmark of the performance-based relationship is accountability. Concerted efforts need to be made to eliminate existing duplication of effort, inefficiencies, and unacceptable error ratios. Automation and technology need to be mutually embraced by all parties to allow for quantum improvements in productivity and to increase the quality of service provided to customers. Agents need to recognize that they are sales and service providers, and insurers need to provide the necessary tools, resources, and support to enable agents to effectively distribute their products and services. Compensation needs to be performance based. As roles and responsibilities shift, compensation needs to appropriately reflect the additional responsibilities assumed by each party.   This study was written for the Independent Insurance Agents of America (IIAA) by Reagan Consultants, an Atlanta-based management consulting firm that serves insurance agents, brokers, and companies, as well as financial institutions. You can contact them at (800) 261-4422. ...

Claims Management: An Important Part Of A Successful Insurance Program
CLAIMS MANAGEMENT: AN IMPORTANT PART OF A SUCCESSFUL INSURANCE PROGRAM by Elizabeth Shaw, CPCU This writing is based on one simple premise: The integration of claims management into a commercial insurance product during the early stages will improve the results of the insurance program. Just as a marketing plan defines the distribution process and an underwriting plan defines the risk selection and rating processes, a claims management plan to define the response process is the logical third piece, and is just as important to the success of the insurance program. To begin the discussion, let's interpret the insurance product from the perspective of an insured or affinity group of insureds. The insurance product is: a coverage contract providing protection from the financial results of accidental loss service and advice from an agent/broker and the carrier, at times critical to the insured Next let's analyze what an insured or a group of insureds expects from an insurance program. They expect: the coverage they need as defined by the law and/or the group or organization's risk philosophy, at a price that they believe is fair and in line with the organization's financial goals the service they want for maintaining the coverage they need. This service might include having all their questions answered, getting proactive advice as business conditions or market opportunities change, and getting professional assistance leading to prompt resolution when claims occur Traditionally, all parties involved with providing insurance have recognized the significant impact of claims considerations only after losses have occurred. The importance of proper reserving for the rating process and timely, accurate reports on actual losses for strategic decision-making and loss-control activities is undeniable. More directly, the claims process delivers the promises called for in the insurance contract, and therefore plays an integral part in the program. But what about before the fact? To be most effective, claims management should be discussed before the losses have occurred and even before the coverage has been decided upon and bound. As the continuing soft market for commercial casualty business attests, the days of the insurance market alone determining the availability of coverages and the rates charged for those coverages are gone, probably never to return. A commercial insured today insists on having more control over its own financial destiny. Accidental losses leading to claims are obviously an important part of that financial destiny. The commercial insured today is more sophisticated and has many more options for exercising control than ever before. Some of the control is achieved by implementing loss-control measures. Other options relate to risk financing, each of which may create important claims ramifications. The risk-financing options now available include: new and/or larger retentions through deductibles, self-insurance, and captive reinsurance increased bargaining power through association sponsorship of insurance programs, purchasing groups and risk retention groups, and specialty niche programs customized for particular affinity groups Most critical for this discussion is another important benefit that insureds are also coming to expect in their insurance programs: understanding how their claims will be handled and having some input into the process so as to address their insurance requirements and support their financial and business goals better. Doesn't it then seem logical to integrate a program or account-specific claims management understanding into the overall insurance program at the outset, rather than assuming that the claims will simply take care of themselves as long as there are adjusters handling them? Line claims people, including those in management positions, do operate under a claims management plan. Every insurance carrier with any kind of claims staff has documented general procedures and standards for its claims department that it uses for dealing with common, and even not so common, claims issues. These procedures and standards are applied across the board for all policies and all insureds, and they are needed for fairness, consistent contract compliance, and ease of internal management. Authority levels for loss reserves and settlements, geographical and organizational work distributions and adjuster caseloads, and philosophies for establishing reserves and providing a defense are among the issues usually addressed by these standards. Unfortunately, because of the carriers' size and organizational concerns and the carrier's own financial interests, these standards are generic and often fairly inflexible, especially when specific claims concerns are not considered during the account or program planning process. Individual account or program issues are not particularly weighed when the procedures are established, and often account and program issues are not considered when the procedures are practiced. Claims veterans are even heard to say that 'a claim is a claim is a claim is a claim.' Insureds, as they become more knowledgeable and more assertive in their efforts to control their financial destiny, are not likely to concur with this characterization, especially when the claim in question is theirs. Furthermore, when claims standards and philosophies are not discussed with insureds until losses have occurred, they are likely to come to light as apparent conflicts. Through market opportunities becoming available to them, insureds are able to participate to some degree in planning the coverage to be provided and the rates to be charged, and the way the coverage will be coordinated with the methods and levels they have chosen for retention and risk financing. Why should they not expect to have some initial understanding of who will handle their claims, how and by whom and within what legal and ethical parameters their claims will be defended, or some input into when and for how much their claims are settled? This is not to advocate that insurance carriers should abandon the claims discipline to their insureds, any more than they similarly abandon the underwriting discipline. However, as proper underwriting criteria for risk selection and rating differ under the circumstances of different programs or accounts, different market conditions, and different carrier appetites, the procedures and standards that dictate claims practices can also differ and still be proper legally and actuarially. For instance, good claims practice dictates that subrogation from a viable third party, once identified, should always be pursued because the policy provides the carrier that right. But what if the viable third party happens to be an important client of the insured and an attempt to recoup a claim expenditure could interfere with the insured's continuing relationship with that client in the long run? Especially when the insured participates in the ultimate financial exposure for the loss, whether to subrogate becomes not only a claim decision but also a business decision. As another example, cost-effective claims philosophy dictates that small claims even if somewhat questionable, usually be settled early at a nominal cost (commonly called nuisance value) to prevent the need for incurring further investigative and defense expenses. But what if the insured believes that such a settlement in a particular case will encourage more claims of the same type and feels that a stronger defense posture in that case, though not individually cost effective, could prevent a proliferation of similar claims? There is no definitive answer to these situations. But an early claims management discussion, inviting input from the insured, can provide additional guidance to the claims adjuster and acceptance from the insured before they act as general procedures dictate. But claims practices that are within the legal and actuarial requirements of the carrier AND that best meet the an individual account's expectations are unlikely to occur by chance. Moreover, the time after the loss or period of losses is clearly not the best time to discover general procedures conflicting with the insured's or group's expectations or needs. Unfortunately, that is when the discovery is most likely to take place. The best time is upfront, while the program is being designed and the deal negotiated. That is when the communication lines are uncluttered by losses that have already occurred and by the potential frustration of unmet expectations. In direct contrast to abandonment of the claims discipline, I recommend taking the time to explain and agree to a claims strategy that takes into account the insured's goals and the carrier's responsibilities. The specific advantages of having a program-focused claims management strategy include: Establishing communication lines to discuss routine and non-routine matters and to encourage a meaningful exchange to anticipate and provide for claims concerns Defining a role in the claims process for the insured or group that adds value to the claims-management process Determining useful measurement tools for the insurance program in relation to claims. Communication is the exchange of ideas and information. Effective communication is essential to a successful relationship and is the first step toward meeting the goals of all parties. Establishing and practicing meaningful, consistent communication procedures should occur from the outset of the relationship to prevent confusion or surprises later on. Exchanges regarding claims during the planning stages can encourage meaningful communication later on about claims matters. The successful use of such lines of communication for nonadversarial problem-solving and general reassurances could be as critical to an insured as premium cost. Part of the communication process is providing information, but the other part is receiving and understanding the information provided, including the attitudes and philosophies it reflects. Claims discussions should take into account the level of satisfaction of the insured's organization, with claim methods and results from the past and the reasons behind those opinions. Claims situations intrinsic to the particular type of business and to certain functions within the organizations should be considered. All concerns relating directly to claims handling should be identified and analyzed. But these claims issues cannot be meaningfully considered if they are not even mentioned during the planning process. If they are simply presumed to be addressed by generic claims practices designed to be consistent and meet the carrier's organizational management system, disappointment or conflict is likely to arise. The key is to establish the relationship in the earliest stages of the insurance program as a means for routine communication, not exchanges that take place only when a problem has developed or has escalated to potentially serious proportions. Meaningful communication requires an ongoing relationship between the parties, which is difficult to establish under the duress of frustration on both sides. Communication leads to smoother claims handling and a more satisfied insured. The second advantage of a claims management understanding is that it can specifically provide a means for the insured's input. The role of the insured or the group in the claims management process should be designed around the goal of advancing the appropriate and effective management of the losses under the program. Some of the obvious activities in that role are delineated in the Conditions sections of a standard insurance policy, such as reporting losses promptly to allow the investigation process to begin within the earliest possible time frame. Although especially important in Workers Compensation claims because of statutory time frames imposed on those responsible for paying benefits to injured employees, prompt reporting is important in every line of coverage. Another activity is to cooperate fully with the investigation efforts, including relaying all the facts as they are known, allowing access to knowledgeable personnel, and encouraging an open interchange of information as claim facts develop. An insured attempting to control the scope of the investigation by withholding pertinent information, regardless of the motivation, could limit the ability of the claims person to structure a competent defense. Claims people make their living investigating, evaluating, and resolving losses and complying with statutory requirements and court procedures. The insured person or group is rightfully concerned with the challenges, opportunities, and limitations for furthering the business purpose of their organization and the impact of claims on that business. Claims people welcome input and cooperation within areas of the insured's expertise. This vital contribution, based upon the insured's area of greatest knowledge and experience, adds value to the process and imparts an insight into the organization or business, the products or services, and the political and philosophical workings within the organization or profession. A subtle balance must be maintained between desirable input and inadvertent interference in the claims-management process. An agreement about the insured's involvement in the claims process, balanced with the available professional claims expertise, best promotes the basic purposes behind the insurance program of real savings in loss costs with long-term strategies (not short-term tactics). The third advantage of a focused claims-management strategy is to establish a set of claims ground rules and expectations against which actual results can be measured. As business and market conditions evolve, measurement tools are essential to enable the insured as well as the insurance professionals to evaluate the current insurance program and make necessary modifications over time. Taking the time during the planning stages to establish claims-measurement tools that are consistent with the goals of the insured and the insurer is well worth the effort. In conclusion, the basic premise of this piece was that integration of claims management in the commercial insurance product will contribute to improved results from the program. The insurance broker or agent achieves program success through binding the insurance program and expanding it over time. The insured or group achieves program success by promoting its own favorable financial results and having its insurance program meet its expectations. The insurer achieves program success through profitable underwriting results and retention of a profitable account. Encouraging discussions to anticipate and provide for claims concerns and establishing communication lines for nonadversarial problem-solving, defining a meaningful role for the insured or group in the claims-management process, and determining effective claims measurement tools, enhance the chances for success in all these areas....