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... ANALYSIS CRISIS MANAGEMENT PLAN STRATEGY REFINEMENT \/ /\ CRISIS RECOVERY Subsequent Operations Restoration Tasks /\ The following is a summary overview of the significant activities anticipated during the four specific time periods: 7.5 Prior to Crisis Timing The most important time segment concerning Crisis Management Plan timing is the period identified as "prior to crisis" . This involves an on-going time period without any definable termination. Within this major time segment lie Crisis Management Plan formulation, implementation and on-going maintenance. At the time of a crisis, the ultimate success of the Crisis Management Plan is dependent upon the effectiveness of the strategic planning which has been completed during this time period. 7.6 During Crisis Timing This time segment is relatively brief and addresses only action necessary during the actual crisis occurrence. This involves immediate ... funded under the risk management program to a major unfunded or underfunded catastrophe that could threaten the ultimate financial survival of the organization. (Refer to subsection 4.4) The crisis exposure assessment should remain broad in scope and not become inhibited by the traditionally narrow considerations of only those perils addressed by standard commercial insurance policies. 7.3 Crisis Management Plan Components The crisis management plan normally involves structured formulation, implementation and operating strategy as well as on-going operating maintenance, thus typically involving the following five sequential phases: Phase I Crisis Criteria Development Phase II Assessment Analysis Phase III Crisis Management Plan formulation Phase IV Crisis Management Plan implementation Phase V Crisis Management Plan Maintenance The above five sequential steps are summarized in detail in the organized plan Exhibit 7.1. Frequently, a comprehensive Crisis Management Plan is formulated and implemented in a developing ...

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... , you are asking for trouble. For a number of years we have been urging agents to formalize and standardize job descriptions, performance evaluations, and salary administration. First of all, it's one of the best ways to improve overall agency productivity and profitability. But second, and perhaps more important today, this system provides the management discipline that will help you avoid legal action. Lawsuits for wrongful termination, discrimination, defamation, intentional infliction of emotional distress, and breach of contract often arise from the real or perceived unequal treatment of employees in the areas of compensation, promotion or discharge. If you have written rules in place, and follow those rules, you stand a much better chance of averting unpleasant situations. Employee handbooks are the best place to outline agency policies and procedures regarding employment ... off, there is no assurance that the judge or jury will view your innocence as you do!!! So it is very important to make a complete review of the agency's personnel policies and treatment of employee issues. What are you doing or not doing that could get you into a legal quagmire? Most employee lawsuits start with poorly planned and executed employee relations decisions. If you have been operating with a seat of the pants' management style, i.e., making snap decisions about an employee's performance and acting upon those impulses, you are asking for trouble. For a number of years we have been urging agents to formalize and standardize job descriptions, performance evaluations, and salary administration. First of all, it's one of the best ways to improve overall agency productivity and profitability. ...

... the customs under the American Agency System that the agency is the owner of records and expirations is of no avail to the agency. Hardin County Farm Bureau v. Farm Bureau Mutual Ins. Co. 341 S.W. 2d 62 (KY. 1960) A final case shows that agents in a contractual relationship who attempt to compete or interfere with the company and refuse to return records are entitled to no termination benefits: Where agency contract provided for payment of termination benefits provided that the agent returned records and files, and agreed in writing not to service policyholders, or compete or interfere with insurer's business, agent who admittedly did not live up to such commitments was not entitled to termination benefits. State Farm Mutual Auto Ins. Co. v. Anderson, 70 NJ Super 520 176 A. 2d 23 ... to capable individuals. You know who has the delegated responsibility, and whether the owner relies on their judgment in making a renewal decision. It's important to know the dynamics of authority within the insured's firm and how you should relate to lines of authority, when and if they change. Taking this one step further, who in the firm can provide the information you need to keep abreast of the operations of the company? Your rapport with the comptroller, fleet manager, human resources director, operations manager, marketing manager, and others is essential. We've all heard about the need to learn who's who from top to bottom in our insureds company structure. The only change we'd make is that we need to know who is who from bottom to top. After all, the top is pretty ...

... through Friday. Each CSR then takes a 20% salary cut in return for a four-day work week. THIRD KEY: PRODUCER/ACCOUNT EXECUTIVE COMPENSATION Following excess staff costs as a major expenditure are the profits lost by overpaying producers. Agencies should use the following maximum commission-payment schedules for producers: Producers handling a book of business of less than $120,000 after three years' employment should be terminated as a drain on the agency's resources and morale. Likewise, a producer handling a total book of less than $175,000 after five years should be considered marginal and terminated. FOURTH KEY: COMMIT TO STAFF UPGRADES Agency management must commit to constantly upgrading the quality of the agency staff: 1. Always hire a higher quality (not necessarily more experienced) individual to replace a departing ... submissions to each carrier for success 16. when seeking a new appointment, agency offers a seasoned book of business SIXTH KEY: BUSINESS DEVELOPMENT PLANNING All business development and growth planning must be activity-based. Premium and commission goals are nothing more than hopes and dreams. SEVENTH KEY: FINANCIAL BUDGETING All agency managers need to remember a basic management tenet: There is no such thing as financial problems, only operating problems. Financial statements are nothing more than a measurement of operating performance. If profits are low and/or cash is short, the agency's financial trouble is the effect, not the cause. The cause or problem lies somewhere in operations. This is why annual and monthly revenue and expense budgets are critical to success and why the agency's financial performance should be compared closely to industry standards. ...

... solicitation thereof and shall so notify the Party who shall be the owner of the Account. Such Parties may then make any arrangements which may be mutually agreeable to them; provided, however, until the Party to which such Account is coded on the books of CIS shall notify CIS of the terms of such mutual agreement, the Account shall remain coded to the original Party owner thereof. 4.4 Upon termination as a Party to this Agreement, no Party, for a period of three years following such termination, shall hire or be associated in business with any person who was an employee on the date of such termination by a Party or who was an employee at any time within 90 days prior to such termination, nor shall any Party at anytime while it shall be a Party hereto or at ... the Parties' and, individually, as a Party. W I T N E S S E T H: WHEREAS, each of the Parties is engaged in business in the Commonwealth of Massachusetts as an insurance agent and broker, and WHEREAS, the Parties desire to associate together for the purpose of forming a joint venture to provide certain services and assistance exclusively to the Parties with respect to their future operations in the insurance business, and WHEREAS, the Parties desire to consolidate certain aspects of the business operations other than the solicitation and production of insurance business; NOW, THEREFORE, in consideration of the mutual covenants herein contained and in reliance upon the representations and warranties of the respective Parties herein set forth, the Parties do hereby undertake and agree as follows: 1. Definitions: 1.1 For purposes ...

... /30/2013 12:00:00 AM by CompleteMarkets Editor , Jack Fries This content has not been rated yet. Almost two years ago, after 10 years of consulting, I accepted a temporary assignment of managing an independent agency that generated 85% of its income from Property/Casualty Lines and 15% from Life, Health, and financial services products. The agency had just been terminated by its primary carrier, which accounted for 82% of its income and 7,000 clients. The agency had also just lost the services of its manager for the past 18 years, as well as every Commercial Lines producer. As if that weren't enough, the only people who were trained to use the agency's brand-new computer system left the agency on the system's first live day of operation ... before completing the data-conversion process. Needless to say, this was the greatest challenge of my business life. However, not only did the agency and I survive, but by the end of 1998, income had grown by 10%, while the agency's value increased by more than 20% . How did we accomplish this goal? Most important to our success were the remaining agency employees, whose dedication I rate higher than any group I've ever worked with. Equally important was the application of what I call the Agency Profitability Audit. The Agency Profitability Audit consists of five stages: Analyze the available data. Understand the agency's objectives. Determine the agency's assets and course of action. Inform all personnel and companies of the course of action. Transact the procedures and practices needed to attain the established ...

... mutually appreciative. Avoiding disagreements about commission or account ownership, commission splits, and other aspects of the book of business is important. LIFE CARRIERS The other claimants to your book of Life business could be the companies you and your Life associates selected to write the business. Some companies have written their producer contracts in ways that give them free access to the agency's insureds in the event of the agent's termination. Each producer's contract should be carefully studied for termination clauses and the consequences of termination. Many P/C agencies have Life business written through outside agents. Sometimes such agents are contracted with a general agent (GA), not with a Life company, and termination of the outside GA (or of the agent) could wrest the client from your agency. In any case, if ... that things will go wrong. And just as owning an insurance policy is worthwhile even if things never go wrong, so is a contract worthwhile even if it's never put to a test. At the very least, get a letter of agreement between the P/C and Life/benefits parties, with a definite date set to formalize the agreement with a contract. If your Life/benefits operation is a separate corporation, then that corporation should have such contracts with its Life producer(s ) . Contracts are necessary regardless of how close, trusting, or loving a relationship exists between the P/C and Life principals. That includes close family members. Consider, for example, that when a party dies, the executor and/or lawyer for the deceased is obliged to pursue ...

... and agency automation system. List of stockholders or partners by name and percent of all types of ownership. History of changes in ownership for which outstanding notes or agreements still exist. Review of buy/sell agreement or other internal perpetuation documents. Review of deferred compensation, non-compete, or other vesting agreements. Current ownership of expirations, brokerage arrangements, etc., including details of settlement upon possible termination of employment/agreement or sale of agency. Review of employment agreements. Who has them and what do they say? Average number of employees and revenues per employee and compensation per employee. Compare to industry averages. Biographies and impressions of key people (not necessarily limited to owners and/or producers) . List of commissions handled by each producer and CSR (include "house accounts, ... rarely solve the problems — it will just make them bigger. Although there are exceptions to every rule, a financially weak agency should not be in an acquisition mode. Even the best agency purchase will generally cost more money than it will make over the short term. Unless there's a cushion to fall back on, the demands of the acquisition on total agency cash flow can literally drag the whole operation under. To be a healthy buyer, your agency should have a current ratio of at least 1:1 , a trust ratio of more than 100%, a receivable/payable ratio of less than 75%, and a tangible net worth that's in the black. If you've recently made several acquisitions or are in the process of buying out a major owner, the existing demands of ...

... to comply with instructions on how or when to work. Can't be trained or supervised by anyone in the agency. The agency can't set annual production goals or take any action if the contractor doesn't follow agency procedures. Must be in a position to realize a profit or suffer a loss as a result of the services provided. Can't be discharged as long as the contractual obligation is fulfilled. Can't terminate the relationship with the agency at will. Your agency has about a 10% chance of facing an IRS audit. If you're one of the unlucky few to get audited, you'll probably be dealing with the implications of the Federal Insurance Contributions Act, the Federal Unemployment Tax Act, income tax withholding, tax penalties, and Workers Compensation. EMPLOYMENT CONTRACTS and NON-PIRACY PROTECTION A departing producer or customer ... x No Thanks Loading.. Defensive Agency Management 4/30/2013 by CompleteMarkets Editor , Carol Hammes This content has not been rated yet. DEFENSIVE AGENCY MANAGEMENT by Carol Hammes Even in the best of times, managing an insurance agency isn't easy. The past decade has brought about rapid changes in technology, created more sales opportunities, and presented new operational challenges. In this article, we'll look at how new trends are affecting management, relationships, distinctions between exempt and nonexempt employees, agency trust requirements, and procedures. Opportunities to join mergers or networks pop up almost weekly, further confusing already murky business plans. As if direct writing companies, banks, the Internet and mega-brokers aren't enough, accountants are getting commissions for Life insurance sales and they may begin selling other lines. The ...