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... ____ Other ____ Professional Liability ____ Errors & Omissions ____ Directors & Officers ____ Umbrella ____ Flood ____ Earthquake ____ Misc. Liability ____ Misc. Property ____ TOTAL ____ Life, Health Life ____ Health ____ Disability ____ Payroll Deduction ____ TOTAL ____   Indirect Income Contingent Commissions ____ Interest Savings ____ Premium Finance ____ Charges ____ TOTAL____   MONITORING SALES EXPENSES Over $10,000 Commercial Lines Projected Spent % of Total Sales Expenses Advertising/Marketing ____ ____ ____ Auto ____ ____ ____ Auto Depreciation ____ ____ ____ Sales Commissions ____ ____ ____ Brokerage Commissions ____ ____ ____ Sales Bonuses ____ ____ ____ Entertainment/Travel ____ ____ ____ Sales Salaries ____ ____ ____ Donations ____ ____ ____ Misc. Sales Expenses ____ ____ ____ TOTAL ____ ____ ____ Under $10,000 Commercial Lines Projected Spent % of Total Sales Expenses Advertising/Marketing ____ ____ ____ Auto ____ ____ ____ Auto Depreciation ____ ____ ____ Sales Commissions ____ ____ ____ Brokerage Commissions ____ ____ ____ Sales Bonuses ____ ____ ____ Entertainment/Travel ____ ____ ____ Sales Salaries ____ ____ ____ Donations ____ ____ ____ Misc. Sales Expenses ____ ____ ____ TOTAL ____ ____ ____   Personal Lines Projected ...

... &# 160 TOTAL ____ &# 160 &# 160 &# 160 Indirect Income &# 160 Contingent Commissions ____ &# 160 Interest Savings ____ &# 160 Premium Finance ____ &# 160 Charges ____ &# 160 TOTAL____ &# 160 &# 160 &# 160 MONITORING SALES EXPENSES &# 160 Over $10,000 Commercial Lines Projected Spent % of Total &# 160 Sales Expenses &# 160 Advertising/Marketing ____ ____ ____ &# 160 Auto ____ ____ ____ &# 160 Auto Depreciation ____ ____ ____ &# 160 Sales Commissions ____ ____ ____ &# 160 Brokerage Commissions ____ ____ ____ &# 160 Sales Bonuses ____ ____ ____ &# 160 Entertainment/Travel ____ ____ ____ &# 160 Sales Salaries ____ ____ ____ &# 160 Donations ____ ____ ____ &# 160 Misc. Sales Expenses ____ ____ ____ &# 160 TOTAL ____ ____ ____ &# 160 Under $10,000 Commercial Lines Projected Spent % of Total &# 160 Sales Expenses &# 160 Advertising/Marketing ____ ____ ____ &# 160 Auto ____ ____ ____ &# 160 Auto Depreciation ____ ____ ____ &# 160 Sales Commissions ____ ____ ____ &# 160 Brokerage Commissions ____ ____ ____ &# 160 Sales Bonuses ____ ____ ____ &# 160 Entertainment/Travel ____ ____ ___ ...

... unique exposures that taverns face can generate E&O claims all too easily. Although not every carrier wants this class of business, there are companies that will write it — and do so successfully. If you end up placing tavern business in the E&SL marketplace, be aware of its distinctive nature and allow extra time to quote and place each account. Understanding the Exposures Although alcohol sales create the major exposure, you'll need to recognize other potential problems when marketing the account. Carriers looking to write taverns usually have an application that identifies specific issues. One deals with food. This can range from the basics (pizza and sandwiches) to full, multiple-course meals. You'll need to know the type of cooking equipment and the degree of fire suppression protection involved. Another element deals with entertainment. You must identify the type of entertainment. Although many taverns have live music, the carrier will probably want to know the type of music to determine the type of crowd that it will draw. Non-musical entertainment consists of pool, darts, and the like. If the risk is in an older building, and the tavern owns the structure, valuation could be a challenge. Because you'll probably write the coverage on a co-insurance basis it's essential to determine the proper value.. The carrier will want to know the condition of the premises and the date of the most recent rewiring. Most insurers require financials to assess the degree of moral hazard. The bottom line: Provide the carrier with the information it needs and be truthful with it. The last thing an insurer wants to learn is ...

... here about building relationships with customers enabled by a new medium, not selling them services. Increasingly, it's about building relationships in the digital economy. Because there's a new medium in human communications to do this, it makes it easier for any company to do it. When you sell anything you bundle in some insurance. In ACORD: How do you think the role of insurance will be altered in people's business and personal lives? For example, it's projected that all this technology will make people more home-centered. Will most purchase decisions (including insurance) be made from the home? What about business insurance? Tapscott: Increasingly, many of the functions dispersed from the family by the industrial economy can come back into the home, such as work, learning, health care, and interactive entertainment. But increasingly there will be integrated financial services environments where a family or single mom can sit in front of a workstation and take a look at everything. Again, it's not to see how much money we have in our savings account, where our line of credit is, and how much our house insured for. Building relationships is not about seeing all of your statements on one screen. Relationships are about creating new value for customers. So what kinds of new integrated services can be provided? For example, I'm planning my retirement. There are many insurance pieces to that whole picture, not just life insurance. It has to do with managing the risk in my life. Who will I call? Right now I don't call my life insurance agent, because I view him ...

... income from Life and group business. The averages run from 7.9% to 12.5% . We recognize that an agency can't change its business mix overnight. But you should consider increasing your income from these sources in your long-range planning. They're generally much more profitable than writing P/C Lines. Another major difference is in the recommended executive payroll, which we've set at 5% versus 15.1% -25% . Most agencies in the average composite groups are privately held firms in which the owners take part of the profit as excess compensation. A pro-forma strips out any compensation that's not directly related to the principals' performance as agency employees. These excess amounts fall to the bottom line as an indication of true profit. Other actual expenses that might involve ownership perks, such as travel, entertainment, or advertising/promotion, have also been adjusted in the pro-forma percentages. After removing the ownership return, the profit margin for an average agency should be between 18% and 25% . Most of the categories in the composite are self-explanatory. They correspond to standard financial reports produced by the major computer systems. Some items might need to be clarified to make sure that you're comparing apples to apples. Brokers Commissions are only those commissions paid to outside people who are primarily associated with another organization. Note that we've removed this expense from the pro forma since we've found that traditional brokerage activities are expensive to maintain and often reduce contingent income and increase E&O exposure. Employee producers and independent contractors who work only through this agency are included in Sales Payroll. In the pro forma ...

... success, bonus programs should emphasize contingents and growth bonuses. Incentives should be weighted toward encouraging employees to do what needs to be done to obtain and service the type of business that the agency principals have identified to be the most profitable and consistent with the agency's business plan. To a certain extent, the program must also take into account the orientation and needs of the individual employees. Some people are willing to take more risk in return for a potentially greater reward. Others would prefer the security of a guaranteed paycheck even if it is less than they could make otherwise. Extra time off may be more valuable to working parents than an additional week's pay. Older employees may be more appreciative of ways to put money away for retirement. People who are living on tight budgets without room for entertainment might prefer a dinner out or a weekend trip over receiving a bonus that they feel compelled to use to pay off the washer. Before setting up a new incentive program or revising an old one, it pays to know your agency and your employees.Agency Bonus Programs We were truly amazed at the creativity shown in some of the bonus programs reported to us in the recent compensation survey. Some combined a number of factors such as growth, profitability, total revenues, and contingents in such complex formulas that we wonder how effectively they could be administered. Others were still so dependent upon the discretion of the owners or the existing salary level that they probably should not even be called incentive plans. If your existing program is working to improve morale and to increase productivity levels, leave it alone for ...

... of action as a lack of interest. In most cases, it isn't. 2. Contacting customers is easy, but connecting with them is increasingly difficult. With voice mail, direct mail, E-mail, faxes, and advertising, contacting customers has never been easier. The techniques and technology have broken down one barrier after another. But getting the sales message to the customers doesn't necessarily mean that you'll connect with them. Amid the rush to reach customers, one fact emerges: Unless they sense that a message is directed to them, messages lose their effectiveness. Broadcast faxes, E-mail messages, generalized mailings, advertising, and cold calling are increasingly inefficient. This may or may not be the age of the individual-but it's certainly the age of individualization. As Michael J. Wolf writes in The Entertainment Economy, If the 80s and 90s were about I want my stuff, ' the next decades will be about I want to feel better, sexier, more informed, better fed, and less stressed.' The gauntlet has been laid down: Customers will respond only to totally personalized messages that focus on their individual objectives. Someone suggested that all markets are niche markets. It may be that all markets are individual markets. Toyota, for example, recognizes this when it offers to build customers individualized vehicles in five days, and the entertainment business is moving quickly to deliver customized CDs. 3. Knowledge is more important than ever, but keeping it simple is essential. The Internet plays into the need to accomplish more in less time. Giving customers just how much information they want is ...

... demographic of your existing customers, although you should already have that handy, but the target demographic of your website prospect. Personal Lines make a good starting example: Age Target – Boomer, X, or Y? Gender Target, if any. Household Income target. Now, based on that target follow the example decision tree below and see if your website has a clear path to lead your prospect to the goal, which is to call you. If your website doesn't follow a similar decision tree for every product and service you offer, then you are letting the fish off the hook. Function over Form The landscape is peppered with examples of what works and what does not work. I am a firm believer in function over form (unless you are in the media, design or entertainment business) . Let us examine some very successful examples of this truism. Google.com – As far as websites go, it doesn't get simpler than Google, and it's the best example of function over form. Enter your search term, hit go, get results. Google delivers exactly what users are looking for – no bells, no whistles and no other distractions. This is true of Google's other products as well, such as Google Analytics, Google Insights, etc. All of them function as you would expect, and give you the information you expect to find – no flash animation, or some corny lady walking across the screen, or fancy images appearing and disappearing. Amazon.com – What a great example of keeping things simple, clean, and most importantly, achieving the company's goal ...

... to 15% more than the producer who works in an agency where there is full support. The no-support system is rapidly being replaced by the full-support system. For this reason, this article will describe a compensation system for the producer who is selling in an environment of full-agency support. In addition, a common-sense approach to making a profit on every producer will be scrutinized. About two years ago, I was asked by an agency owner to provide consultation for their existing producer-compensation system. The agency was paying a commission rate of 50% for new and renewal P/C business. Not surprisingly, this agency had the usual expenses, including salaries for CSRs and sales-support people. Not only was the agency over-compensating in commissions, it was also going overboard with auto allowances, travel, and entertainment. The first thing the agency owner wanted to know was how much the producers should earn and how to increase profits. This question, which is applicable to all agencies and brokerages, will be scrutinized, as will sales operations and the elements of compensation plans: salary-versus-draw, commissions, incentives, vesting in a book of business, and employee benefits. PRODUCER AFFORDABILITY Almost any publication concerning agency operating costs suggests that total operating expenses, including administration and service costs, run about 50% of gross revenue. This figure includes the basic portion of the owner's compensation. An agency should set a goal of 20% pre-tax profit, part of which should go to the owner or owners as a return on investment. The reminder should be used to help growth and development for such items as ...

... to get clients to change their behavior. People Buy on Emotion In one of Zig Ziglar's books is a wonderful diagram showing the concept of emotional buying. A man has a large heart on his jacket. Two lines measure distances in the diagram, one going 24 inches from the man's back pocket to the heart on his jacket and the other going 36 inches from the man's back pocket to his head. See the point? If you want to get to that wallet, going through the heart is a shorter trip. The trick to getting to a person's heart is to tell a good story. Remember, people like people who are like them. If you can tell a story that illustrates your point well, enhances rapport by highlighting things you have in common with your client, and entertains, you'll probably never hurt for business. So why don't more people use this technique? Mainly because most people don't just come up with funny, concise stories out of the blue. You'll probably have to really think about your experiences and develop good stories from them. Developing Good Stories Did you know Bob Hope has a staff of writers who write jokes and one-liners for him? Sure, Bob Hope is very funny, and he comes up with plenty of material on his own. But Bob Hope isn't entertaining solely because he has great material. He also spends a great deal of time practicing and refining his craft. How much time have you spent developing and practicing what you'll say to the Commercial account's Risk Manager? You know they'll be a bit reluctant to introduce you to the ...