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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....

Developing Broker Services Agreements
DEVELOPING BROKER SERVICES AGREEMENTS by Gary Griffin This document by Gary Griffin illustrates the detail with which you can draft a broker service agreement and paves the way for you and your insured to develop a meaningful and profitable service partnership. For many businesses, insurance represents a substantial percentage of their revenues. In most instances, one or more insurance brokers places insurance policies on behalf of the insured. The brokers’ income is usually derived from insurer-paid commissions, from a fee negotiated with the insured, or from some combination of the two. The insured pays — directly or indirectly — for the broker to perform certain services which might be limited to the marketing and placement of insurance; or they might include hands-on assistance with such things as risk identification and measurement, loss control, claims consulting, and actuarial studies. Although most businesses enter into some form of written contractual arrangement with many of their vendors, most don’t have such contracts with their insurance brokers. This can hold true for even very large organizations where brokers’ fees and commissions can range from several hundred thousand to millions of dollars each year. The benefit of a broker-services agreement is that it defines in writing the expectations of the insured and the responsibilities of the broker. This helps eliminate disputes that might arise. A written service agreement also provides benchmarks for measuring performance. Developing such an agreement nails down what the broker will do and requires the insured to focus on the services they actually need. If the insured simply needs placement of certain coverages, the broker’s compensation might exceed the value of the service provided; and the insured might wish to renegotiate the compensation. It’s unclear why more insureds don’t have formal agreements with their brokers. One reason might be that developing a contract requires a good deal of thought and effort by both parties. Insureds who have had many years of satisfactory service from their broker might feel that a service agreement is unnecessary, or they might not fully appreciate the benefits such an agreement can provide. Although most brokers will agree to a service agreement, they might resist sweeping hold-harmless or indemnity provisions, particularly those that involve risk identification. Even small accounts might warrant services in addition to the mere placement of insurance. Here are some functions you might want to incorporate into your own broker-services agreements: SUGGESTED BROKER RISK MANAGEMENT FUNCTIONS Risk Identification and Analysis. The broker should gather and analyze operational and contractual data for the insured or assist the risk manager in accomplishing these tasks as required. The broker also should help prepare a report identifying key loss exposures. Where the gathering of data requires a physical inspection of property or personnel interviews, the broker should identify and schedule these activities. Articulate Risk Management Objectives. The broker service agreement should articulate the insured’s risk management priorities, goals, and strategic plan with the purpose of designing a program to meet those goals. The agreement also should establish performance criteria to measure results in attaining the stated goals. Insurance Coverage Audit. The broker should determine the loss exposure responsiveness of each insurance policy’s terms and conditions and recommend appropriate coverage modifications. The coverage audit should review all insurance agreements to assure that they’re placed with reputable and financially responsive insurers. The broker should provide all findings and recommendations to the insured in a written report. Risk Control Evaluation. Traditionally, risk-control services have been insurer provided. However, a broker can review the insured’s risk-control programs and help develop risk-control objectives. Once they establish those objectives, the broker could develop a plan for future servicing through a specialized insurer, broker, outside service provider, or consultant. The broker should establish risk-control criteria to measure its effectiveness. Risk-control services such as these might be outside the normal scope of service and incur additional costs. Risk-Financing Alternatives. Where agreed on, the broker can provide loss projections and statistical risk analysis. This might include identifying appropriate risk-retention levels based on loss exposures and financial data. Where appropriate, the broker should evaluate historical and current risk financing plans to assess their adequacy and effectiveness. The broker should develop risk-financing alternatives and report the relative advantages or disadvantages to the insured. SUGGESTED BROKER ADMINISTRATIVE FUNCTIONS Service Plan and Risk Management Administration. Some brokers might provide little or no service beyond renewing an existing policy, issuing certificates, and collecting full commission. To better serve your clients, make sure your service agreement contains the broker’s promise to fulfill these administrative functions: The broker should acknowledge that they’ve read each policy, binder, endorsement, or other documents, and that those documents are accurate and provide the coverage intended. Insureds would be appalled to discover blatant errors or omissions, poor grammar, or frequent misspellings in their policies. Insurance policies are legal documents; make meticulous policy review mandatory. If the insured’s risk manager doesn’t perform these functions, the broker should issue, record, and track insurance certificates, binders, auto identification cards, etc. The broker should verify rates, premium amounts, and audit results. As an optional service, the broker might review and analyze contract risks. This task usually requires the broker to develop a strategy for reviewing all contracts to ensure compliance with insurance requirements, noting any uninsured exposures. In addition, the broker should keep the insured abreast of pertinent insurance industry developments — both current and anticipated — and develop effective strategies for aggressively managing those developments. Claims Management. For some insureds, claims management is time consuming and expensive. Some brokerages have entire departments devoted to claims service. An insured expects such service as part of a broker’s normal commitment. The service agreement should reflect these needs and elaborate the insured’s claims philosophy. At a minimum, the broker should review and establish the insured’s claims-management needs. This should include a review of the adequacy and timelines of all loss runs and reports, and making changes as needed. The broker should help resolve all outstanding claim disputes and process all future claims to achieve timely payment. Where claim service providers are employed, the broker might be able to monitor and audit the effectiveness of those services. Ownership and Confidentiality of Records. All information, records, and data provided to or accumulated by the broker should remain the property of the insured. The broker should also agree to keep confidential all such information and material. The broker should agree not to disclose such information or records to any party without a direct underwriting need to know. Service Measurement and Stewardship Reports. The service agreement should schedule periodic services-evaluation meetings to determine whether the broker is accomplishing its service commitments as measured by pre-defined criteria. Periodic meetings also allow both parties to identify existing or potential problem areas and to deal with them before they get out of hand. Such meetings help foster an efficient and cordial working relationship between the risk manager and the broker service team members. Before renewal, the broker should give the insured a stewardship report that chronicles the activities during the service period and projects or recommends activities for the coming year. The report should detail the hours spent and expenses incurred by each service team member. Provide a summary for each policy showing the earned premium, incurred losses, and loss ratios. This summary also should include a full accounting of premiums and fees paid by the insured including all commissions or other income earned by the broker. SUGGESTED BROKER MARKETING FUNCTIONS Program Design and Specifications. Develop a risk-financing plan that includes a description of the proposed program structure, the desired terms and cost, a description of the desired services, and who’ll provide them. Be sure to prepare and present all insurance underwriting submissions to the insured for approval before you submit them to the markets. Marketing and Negotiation. Although marketing and placement of insurance is often taken for granted, establishing a plan can increase the likelihood of achieving the insured’s objectives. Having your insurance program successfully marketed and placed under the best terms is usually directly attributable to one or a few individuals in a brokerage who can get the best deals. Although it’s important to let them do their jobs, insist on certain milestone dates so you can deliver proposals with ample time to make informed decisions. IMPLEMENTING THE AGREEMENT The purpose of the broker service agreement is to identify the needed services and to make a commitment to provide them. The agreement doesn’t have to be complicated, but it does require some thought and effort. On existing business, and where a long-term relationship exists, there might be little if any urgency to finalize an agreement. You should set a target date to ensure that a hurried and inadequate agreement isn’t implemented. Key renewal dates often are good times to finalize such contracts, as they’re periods when the insured should already be focusing on risk management and insurance issues. Too often, insureds don’t know what to expect from their broker other than the placement of an insurance policy. A formal agreement documents the insured’s expectations, states the broker’s promise of service, and establishes a sound basis to determine the value of the relationship. Although these elements won’t be appropriate for all circumstances, they illustrate the extent to which such agreements can pave the way from which you and your insured can develop a service partnership. Gary W. Griffin, ARM, is principal consultant of Warren, McVeigh & Griffin, Inc., an independent risk management consulting firm based in Newport Beach, CA. He can be reached at (949) 752-1058, fax (949) 955-1929, e-mail griffco[email protected]etcom.com, or visit www.griffincom.com. ...

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. ...

... 00 AM by Al Diamond , CompleteMarkets Editor This content has not been rated yet. Although the case cited in this article centers on a New Jersey ruling, it highlights the potential for exposure in all states. Our subsequent conversation revealed a simple method of avoiding this E&O issue. See our remarks at the end of this article about how to protect yourself In a malpractice suit against an insurance broker by its customer, the New Jersey Supreme Court decided that insurance brokers may not rely on a customer's failure to read his insurance policy as the basis of a defense of comparative negligence. Aden v. Fortish, 169 N.J. 64 (2001) Before this decision, there have been numerous decisional pronouncements that an insured had an obligation to read the policy provided to them. Indeed, ... Appellate Division had upheld the right of an insurance producer to raise the issue of comparative negligence, and had held that the issue was one for the jury to decide in the context of comparing the negligence of two parties and determining proximate cause. In Aden v. Fortish, a fire damaged a condominium owned by the plaintiff and the condominium association's policy failed to cover the damage to the interior of the premises. Because the plaintiff's policy only provided $1 ,000 of coverage, plaintiffs were required to pay about $20,000 in repair costs. Plaintiffs sued the broker for allegedly neglecting to procure adequate coverage for the risk of loss. The broker filed an Answer contending that the plaintiffs failed to read their policy to determine if what they received is what they ordered, and that this ...

Service: Fumbling The Ball
Part one of this series by Brenda French takes a look at how poor service is costing the industry. The next two articles will discuss the factors that contributed to the industry’s service crisis and offer recommendations for solving the problem. 'Everyone is in service. If you aren’t serving the customer, you’d better be serving someone who is.' Service America Because friends and neighbors know that I work in the insurance industry I periodically receive calls asking for information or referrals. That is, until this year. Since January, I’ve been overwhelmed with calls from frustrated and angry friends. This consumer angst crystallized for me when I attended a barbeque and the topic of insurance surfaced. Everyone was complaining about bad service and had a horror story to tell. I leaped to the industry’s defense gallantly, but as expected, these consumers had little interest in our problems. As customers, they expect fast, professional service with no hassles when they need help. To get the customer’s perspective across, I’ll share four of the stories from the barbeque. Since my friends were in a cooperative mood, I gathered these statistics: Number of customers 18 (nine couples) Average age 51 Total annual insurance premiums $189,000 (Auto, Home, Life, Disability, and Small Business) Average annual investments $200,000 (RRSPs, Stocks, GICs, etc Number of days to untangle service problems 48 (three per household) In the day-to-day busyness of our professional lives, it’s easy to lose sight of what drives the insurance business: creating long-term relationships with profitable customers. Maintaining empathy for customers, especially when they’re upset, can be even harder. As the industry has focused on improving financial results, many executives have ignored the impact on customers, confident that they’ll accept the latest price increases. Although this is probably true, when we combine hefty rate increases with poor service, we have to expect a backlash. Consider these four 'telling tales' that illustrate the growing discontent between consumers and the industry: SCENARIO A: MARY AND ANDY Mary and Andy, self-employed professionals with three children, have been insured with Traditional Brokerage for more than 20 years. All of their Personal insurance has been with ABC Insurance Co. for the past 15 years. They own a million-dollar home, a cottage, and three cars. They also have these investments with Emerging Brokerage: $400,000 in RRSPs, $50,000 in stocks, $2 million in Life insurance, as well as Professional Liability and Income protection. Andy’s father and brother co-own a successful contracting firm and also have their Personal and Commercial insurance with Traditional Brokerage. Mary and Andy had a water damage claim three years ago when the sewers in their neighborhood backed up, flooding their basement (this and one small Auto fender bender 20 years ago have been the only claims). They were very impressed with how professionally and speedily their claim was managed. Their adjuster was reassuring and knowledgeable. During the damage assessment process, Mary told the adjuster not to worry about such things as the furniture legs being refinished since they weren’t really noticeable. She felt that because the insurance company was being fair and professional she wanted to cooperate as much as she could. After their claim, Mary and Andy were very pleased that their business was with a professional firm like ABC Insurance Co. In addition they invested $10,000 in grading and weeping tiles so that their basement wouldn’t flood again. About a year ago, XYZ Insurance Company purchased ABC Insurance. Fast forward to March of this year. XZY Insurance sent a letter to Mary and Andy informing them that they wouldn’t be renewing their Homeowners insurance. When Mary called Traditional Brokerage, they were informed that their broker had retired but their new broker would look into it and get back to them. Three phone messages and three weeks later, they still hadn’t heard from the broker. In frustration, they eventually moved all of their personal insurance to Emerging Brokerage. Andy’s father and brother are watching events closely. Their Business insurance is coming up for renewal in two months. Mary and Andy: 'Angry people will be much more prone to gouge or cheat on any future insurance claims. If I had an insurance claim today, I’d insist on having the legs on our furniture fixed and would be looking for anything else that could be added to the claim. Any sense of loyalty customers might have had has been thrown back in our faces.' SCENARIO B: JUDY AND MARK Judy and Mark are self-employed professionals who both work from home. They have no children. They own an $800,000 house, a cottage, and two cars. They have $300,000 in RRSPs, $50,000 in GICs and $500,000 in Life insurance. They also have Income Protection and several Business policies. In fact, they recently realized that they had nine policies with four different brokers. They find the whole process very confusing and have no idea how things evolved like this. Like many consumers, they view insurance as an expensive necessity and manage it with benign neglect. They pay their bills yearly, never have claims, and assume that their brokers will keep them informed. Until recently. In June of this year, they received the renewal for the insurance on their cottage that had been due in March. The brokerage had changed carriers, increased the coverage and rates, and backdated the invoice — which was also stamped overdue. When Mark tried to call their broker, he discovered that he couldn’t reach anyone after 4:30. He left two voice- mail messages and eventually the broker came to visit them. The broker explained that they were overwhelmed with work, and that at times, staff was working until 6:00 pm. This didn’t impress these professionals, who work long hours regularly. This event prompted Judy and Mark to review all of their insurance and to start asking some questions. They quickly discovered that they spend twice as much on insurance and investment products each year as they do for their mortgage. They also realized that they probably shouldn’t have their insurance spread among so many brokers. They aren’t receiving all the discounts that are available to them, have some potential gaps in their coverage, and don’t have a single professional who can advise them on 'the big picture.' What’s more, neither could remember when any of their four brokers had actually spoken to them. Judy and Mark are in the process of moving all their business from the four brokers and consolidating it with New Strategy Brokerage that was referred to them. Judy and Mark: 'Bad service coupled with large rate increases sensitizes us to view everything that comes from the insurance companies negatively. A reservoir of bad will has developed that will take a long time to change.' SCENARIO C: HEATHER After Heather’s divorce, she decided to move all of her insurance — and potentially her investments — to another brokerage. A VP with a leading manufacturing firm, she plans to retire in 10 years. She owns a late model SUV, a condo in downtown Toronto that’s mortgage free, and $250,000 in Life insurance, plus $125,000 in RRSPs and $10,000 worth of GICs with her bank. When Heather called a brokerage near her office, the broker recommended a new company that was offering very competitive rates. She agreed and placed her Auto insurance with Best Rates Insurance Co. on a monthly pay plan. Six months later, she purchased a Condo package from the same broker and carrier, and paid for it in full. Three weeks later she received a registered letter informing her that the package was being cancelled for non-payment. Heather called her broker, who straightened things out. When her Auto policy renewed six months after that, the premium increased from $1,600 to $4,200 (with no accidents, violations, or tickets). She called her broker, who discovered that a coding mistake had been made and in fact her premium had decreased $100 from the previous year. Three months later she received a letter from the insurance company saying that the post-dated check she’d given them had been returned NSF. They were going to take two months payments from her account and if there were another NSF check, cancel her coverage. There was only one problem. Heather had never given them any post-dated checks. When she contacted her bank, she discovered that $650 had been withdrawn for these 'NSF' checks. It took three months to have the money refunded. Last month, her Auto insurance renewed again and went up $1,000. Again, Heather called her broker, only to find that he no longer worked there. The brokerage partnership had split and her broker had gone one way and her file another. Although no one at the brokerage knew who was handling her account, they promised that someone would get back to her within 48 hours. A week and a half later, she received a voice-mail message informing her that all insurance premiums were up substantially this year and if she wasn’t satisfied she could cancel her policy — which is exactly what she did. The company continued to make withdrawals for her non-renewed policy for the next three months to the tune of $947.85. She’s still trying to get her money back. Heather: 'These experiences radicalize consumers. They will scrutinize everything and squeeze back on price at every renewal.' SCENARIO D: ANDREA AND JOHN Andrea and John are professionals who have just married for the second time and have four children in their combined family. They own a $700,000 house and two cars, have $200,000 invested in RRSPs, $20,000 in GICs and $2.5 million in Life insurance. This year Andrea’s trying to coordinate their financial services, including insurance. Previously, John had his Homeowners insurance with an agent, his Auto insurance with a broker and his RRSPs with his bank. His Professional Liability and Income Protection are with his professional association. Andrea had her Auto and Homeowners insurance with a broker and her RRSPs with her bank. Her Income Protection and Group Benefits package are with another broker. Andrea had an at fault accident three years ago. John has no violations and is claims free. Andrea’s goal was to place all the insurance with the same company for one-stop shopping and to maximize discounts. Because service had been poor with all of her previous insurers, she decided to use a direct writer who advertised good service. The first policy up for renewal was John’s Auto insurance. When she called the direct writer, NewWay, Andrea emphasized that she’d had an accident and needed to be able to place the two Auto and Homeowners policies with the same company. She was told that would be no problem. When Andrea’s Auto policy came due two months later, she called NewWay, but was placed on hold for more than 20 minutes. This happened three times in one week. No matter when she called, Andrea wasn’t able to get through nor was she able to leave a message. The following week, she called while doing some administrative work, waited 45 minutes, and still didn’t get through. In the third week, she called right at 8:30 and was eventually put through after a 15-minute wait. When she spoke to the agent, she was told they couldn’t accommodate her because of her accident. Company policies had changed and there were no exceptions. To top it off, her current insurer no longer offered accident forgiveness, so her Auto premium increased $1,200 over the previous year. Andrea spent the next week calling around to see what she could do about coordinating their policies, but no one was interested in the business because of her accident. After three months of planning and organizing, Andrea and John are in the same position as when they began. Andrea and John: 'Any organization that comes up with a better game plan will attract customers. My brother also had a terrible service experience with his insurance agent. There’s a cauldron of discontent that has been created by shortsighted business practices and disregard for customers.' HOW DID THIS HAPPEN? Our industry’s financial difficulties are creating an inward focus that excludes long- simmering customer service issues. This happens for two reasons. First, we’ve done a less than adequate job on the distribution side in identifying which customers create profitability and delivering the quality service needed to retain those relationships. Second, insurance company decision makers are disengaged from customers and their needs. The closest they come is through sterile research that analyzes internal company data and actuarial models. Unfortunately, this information lacks nuance, doesn’t view the customer as a human being, and only provides data on past activities — ignoring what would happen if customers were treated differently. Because no carrier or distributor has enough information on its customers to cultivate profitable relationships with them, it’s all too easy to ignore their demands for quality service. This deadly two-step means that we’re missing profitable opportunities with existing customers and new prospects, using rate increases as a blunt instrument to correct poor financial results, and treating customers disrespectfully. We’ve inadvertently created a process that disappoints and alienates customers faster and more efficiently. This raises some key questions. How did service delivery spiral out of control so quickly? What will be the long-term implications of today’s poor quality? Most important, how can we get off this reactive treadmill to deliver the quality service needed to foster profitable lifetime relationships with our customers? OTHERS TIDBITS FROM THE BARBEQUE AMBUSH: 'Savvy consumers like us know and respect good service when we receive it. Since we have lots of choices, we’ll leave the minute we are treated badly.' 'All businesses are going through tough economic times. The best way to stay in the black is to treat your long-term customers very well so that they stay with you. Previously, if my agent had asked for referrals, I would have given them. Now, I won’t.' 'Some consumers will now view a claim as an opportunity to get even. They’ll see it as an entitlement issue because of bad service and unreasonable rate increases and find ways to pad the claim.' 'Nobody’s stupid. We recognize bad business practices when we experience them. The insurance industry is over-promising and under-delivering.' ...