Has It Been That Long?!

By Ken Kukral

I have officially been in this business 27 years!  Over half my life!  I must actually enjoy what I do!  Insurance, more specifically excess and surplus lines insurance is a unique and diverse area of the insurance industry.  One of the things I like most about it is that I get do work on different types of accounts every day.  No chance to get bored, doing that.

One of the things I enjoy the most is dissecting an account and figuring out how to put it all together and write it.  Doing this is really a culmination of all the education and knowledge I have built up over years and putting it to use.  A few things I have learned over my 27 years in the business:

  • As much as I already know about the business, I still have a majority of it to learn.  I see myself as a “coverage guy”, but feel I still have so, so much more to learn.  Like I can never know it ALL.  I find that when I do continuing education I learn just how much I don’t know.
  • I see the world from an insurance perspective.  I can’t count the number of times I look at life situations from a perspective of how would I write that account or would that claim be covered?  I think this is a mental condition that sinks in around year 10 in the business.
  • Never stop learning.  I am amazed when agents do not take classes that would expand their knowledge of the business and would rather just get the continuing education hours done as “painlessly as possible” in order to comply with state CE requirements.  If you are going to have to spend time in educating yourselves, why not make it productive and mind expanding?  You wouldn’t knowingly go to a cardiac surgeon who is not up to date on the latest and greatest in heart surgery, would you?  Ever think your clients think the same way?
  • You can’t control everything.  No matter how good you do on an account you may still not write it or lose it.  This happened to me recently when an account I put together extremely well (actually in my top 5) and the insured went bankrupt.  All I can say is, on to the next one.
  • There is a ton of new business out there.  So many times I feel like I am just scratching the surface of what is out there and all you have to do is go out and find it.  I call it “turning over rocks”.  Much like when we went potato bug hunting or night crawler hunting, you just had to turn over more rocks and you would find them.  It can be as easy as asking for what is on their desk that we could help them place, or do you have any renewals that we might be able to help you get competitive numbers on?  One of my clients that sends me a ton of business was developed by just sending one extra e-mail on a Thursday night when I was cleaning out my e-mails, when I asked her, is there anything else on your desk that I could be helping you with.  She responded back 15 minutes later telling me to call her in the morning.  Six accounts later she was able to clean off her desk and get the accounts over to me to quote.
  • Communicate, communicate, communicate.  Going the extra mile to communicate where things stand or where you are at in trying to quote an account makes a world of difference.  Nothing agents hate more than when their client calls to follow up and  they don’t have a status to give them.  They have to fumble for an answer or say, they will check.  So I make a point to get back to them before they call me.
  • Let them know you want the business.  I am more likely to place an account with a carrier if I KNOW they want the account.  It doesn’t take much to express this and can mean the difference between writing an account and not getting an order.
  • Usually the first quote in gets the business.  I found this out early in my career.  Speed matters.  Insured’s that need to get coverage in force right away will usually jump on the first quote that comes in the door.
  • Details matter.  One of the things I learned early on, is that you must take care of the details.  Little things not taken care of can become big problems.  This helps to reduce E&O exposures and prevent problems down the road.  You have to remember, that we are “non-lawyers”, selling contracts.
  • There are great people in this business.  I find this over and over and the true quality regularly shows.  I strongly believe independent agents are true advocates for their clients and look every day to do the best job for their clients.
  • You need to “give back” in this business.  One of the things I have found is that people in this business are more than willing to answer questions and help you learn.  Giving back can also mean getting involved with your trade associations.  The better you can help make the insurance industry in your area, the more respect the general public will have for independent agents.

I doubt I will have another 27 years in this business, but you never know.  I do know that I will never lose my thirst for learning and if I do, it will be time to get out.  The best advice I can give is ALWAYS KEEP ASKING QUESTIONS!  There is no way you can ever know everything in this business and asking questions shows an interest in continual learning.  It is when people STOP asking questions that I worry they are content and have enough knowledge.  Oh ya, ENJOY IT!

What do you mean endorsements can get me into trouble?

By Ken Kukral

Sometimes one of the areas you least expect to be a problem can quickly lead to an E&O issue.  You wouldn’t think how and when you request an endorsement can get you into trouble but it can quickly become one.  The larger the loss, the higher a chance it can become an issue.

Some things to consider:

–        What do your carrier contracts say?  Most agency contracts spell out the procedures and contractual authority for how endorsements are to be handled.  Many times they give you a specific time period to submit requests for endorsements.

–        Is the endorsement you are requesting within your authority?  If not, you may need carrier approval and there may be a delay in getting that.  Make sure your client knows you are REQUESTING the endorsement and are waiting for approval.

–        Backdating issues.  How many times has you client contacted you because they need to add an additional insured and get a certificate of insurance in order to get one of their customers to release payment to them. (So you are finding out AFTER they have already completed the job!!!).  What effective date will the carrier use?

–        How do you handle situations where a carrier refuses to offer a particular endorsement required by your client? (Such as waiver of subrogation).  I am not sure this situation can be completely avoidable, but it does help to know your carriers and what endorsements are available “on their shelf”.  Be proactive and inquire about them during renewal negotiations with the carrier so you can let your client know what might be available (including costs).  They can hopefully then work these extra costs into their bids and cover their costs.  Many clients fail to notify their agents of contracts they sign and what they are required to comply with, until AFTER they have signed the contract.  Educating them beforehand gives you a “fighting chance” to help alleviate these issues later on.

–        How are you requesting endorsements?  Or how are you having your clients request them?   Many agencies have gone to online endorsement requests to help make the process more efficient.  I would recommend an “auto response” from your system, that the request has been received but not yet approved.  Let them know you will respond with a request for additional information or clarification or an approval from the carrier.  In terms of how you are requesting them, are you using an ACORD Policy Change Request form or some other standardized form?  This will bring a consistency to your process.

–        Are you setting up a task in your system to follow up if a response from the carrier has not been received?  Do you feel comfortable if a loss happened that involved the item in the endorsement request? I would rather sleep better and have certainty than have to worry about where things stand.

–        If you are in the process of exiting a contract with a carrier, have they spelled out how endorsement requests should be handled?  You have less leverage when parting company (no pun intended) so you want to make sure the procedures are spelled out precisely.

My intent here is to give you something to think about.  Many agencies do multiple endorsement requests each day and I think it can be an area where procedures and workflows can become lax and lead to future problems.  Please go back, review your procedures, tighten them up if needed and even conduct an internal audit so you can assure yourself that they are being done timely and consistently.  The days of doing endorsement requests via phone, on sticky notes or cocktail napkins or via voicemail are over.  Give your clients a form or specific instructions on how endorsement requests are to be handled when sending them their policies.  Let them know you want to do the best job you can for them and standardizing procedures is a key to making that happen.

Oh ya, don’t assume the carrier properly issued the endorsement.  Double check against your request and file notes before sending to the client.  If they are wrong, have the endorsement voided and have a new correct endorsement done.  I have been down the endorsement to the endorsement to the endorsement road before and if a seasoned insurance professional can get confused with this situation, imagine how a jury could become dazed and confused.

Library Love

By Cathy Thurber

Libraries – they are my favorite place.  When I walk into a library I immediately relax.  I just love the smell of books.  I like to be able to wander the stacks and find something which triggers my curiosity, so much so that I could spend hours walking the aisles and reading a bit of every book.  I always have at least two books out from the library at one time (not to mention the CD’s I borrow), whether they are for me or my kids.

My sister was nine years older than me and when she went to college I used to spend an extraordinary amount of time in her room, just to feel close to her.  It was there that my love of reading began.  I cut my teeth on Janet Dailey, Stephen King, and Terry Brooks between the ages of ten and thirteen.   So, I was an eclectic reader from the start, switching from romance to horror to fantasy.   By the time Chris came home from college I had added Danielle Steele, John Saul, and Dean Koontz to my repertoire.  All of this early – and heavy – reading ended up being a bonus for me as my reading level in early high school was equivalent to a senior in college.  That’s probably why I ended up getting a degree in English Literature.  Of course, I did find that I liked certain genres better and that as much as I did like to read, there were certain books (Moby Dick) and short stories (The Yellow Wallpaper) that I could barely get through.  After college, I settled into reading specific genres that I liked and I am still an avid reader today.

I believe it’s important that everyone have some type of book they like to read, whether it be romance, horror, fantasy….even a comic book!  You should always have a book that you are working on reading, and the same should be true for your kids.  It’s amazing what good reading skills do for children.  And the best place to start is your library.  Bring home some new book, or something you loved but haven’t read in a while.  I’m thinking of re-reading Fahrenheit 451, or even To Kill a Mockingbird (my two high school favorites). Go ahead, visit your library.  You never know what new treasure you’ll find.

Carrier Rating Downgrade Handling

By Ken Kukral

It seems that lately there have been a few rating downgrade by AM Best.  It is my own personal opinion that their reluctance to downgrade a carrier from an A- to the B’s (B++, B+, B or B-) has subsided and it has set off a wave of rating downgrades (not sure if three carriers I am familiar with constitutes a wave, but it is more than I have seen in quite some time).  Some of the inherent problems of these downgrades are as follows:

–        Any rating downgrade is something to take notice of and review their situation.  Both long and short term.

–        Does the carrier’s rating continue to meet the requirements you set for your office in terms of “minimum acceptable rating”?

–        Does the rating still meet the threshold of your E&O carriers insolvency exclusion giveback endorsement? (Most are at B+ V or better to not be subject to the exclusion, but many policies vary)

–        AM Best also gives an “outlook” adjunct to the rating which gives the future outlook opinion(with positive implications, stable or with negative implications).  This gives you a sense of direction of where the rating is “most likely” to go (not a guaranty , but an informed opinion)

–        There are “unwritten rules” that are in place that gives a minimum of a 3 year timeline to get the rating back up to an A rating.  Major capital infusions and many other improvements will not help speed up this process. (in my experience)

–        The rating could down AGAIN

So what should you do?  (If anything?)  Some of my thoughts….

  1. Learn more.  Read the press release that AM Best put out and look for any that the carrier put out in response to AM Best.  Do other internet searches.  Contact senior management at the carrier to find out more what they know (including the “untold story”) and what their plans are to address the situation.
  2. Look at what your “exposure” is.  How many policies do you currently have with the carrier and is it “longer tail” business that could take years for claims to be reports and necessitates a long term financial stable carrier.
  3. What is your agencies “crises response” strategy for dealing with carrier downgrades?  Do you have one?  Does your E&O carrier have resource material you could design one off of?  Keep in mind that you need to be consistent in how you handle these situations.  This leads to a ton of questions such as:
  • “Should I immediately move these accounts away from the downgraded carrier?”,
  • “Should I sent written notification to all of the accounts I have written with this carrier and give them an option to move the coverage elsewhere?” ,
  • “Should I give accounts coming up for renewal with this carrier an alternative quote in addition to the renewal quote?”,
  • “Should I spread the risk for this insured to other carriers by moving part of the program, such as leaving the primary with the downgraded carrier and moving the excess?”
  • “Does the primary carrier’s rating still meet the requirements for the excess carrier?”
  • “What constraints will I have in moving these accounts (such as how long it might take to get the return premium)”
  1. Keep in mind that many times a carrier who has been downgraded may set up an arrangement known as “fronting”.  What this means is that they will continue to do business, but another carrier’s “paper” will be used.  The “fronting” carrier usually gets a 5 to 10% charge for the use of their paper.  Their risk is that if the carrier that they are fronting for ends up going belly up, they are assuming their risk.  It is important to investigate the financial strength of the “fronting” carrier since they could quickly be taking on a load of additional risk.

The best advice I can give is, contemplate these issues NOW rather than in the midst of a “crisis” that arises.  This will allow you to make much more “level headed” decisions and fewer “knee jerk” reactions that you will regret in the future.  Start looking at your existing carriers whom have A- ratings and learn about them NOW, rather than when or if they get downgraded.   The A- to B rating is perceived in the business as a “cliff” and a significant drop off.  It is nothing to be taken lightly.  Many of the insolvencies in the past were progressive rating drops and it was not all in one swoop.  It truly depends on if the carrier can “stop the bleeding” and make moves that will shore them up financially and move them towards potential future rating upgrades.  Does the carrier have the plan AND the leadership necessary to make this happen?  Silence is NOT GOLDEN after a rating downgrade.

One parting word….  The Guaranty Fund is NOT your friend…..

Back to certificates again.

By Ken Kukral

Having to issue certificates of insurance is a normal activity in most agencies.  Especially of you are weighted towards commercial lines.  We don’t get paid to do them but it is part of what we have to do to “service” an account.  I wanted to convey a few thoughts on certificates:

–        They can be a huge source of E&O claims.  If you put coverages, or limits or terms on the certificate that do not match the policy, you could run into an issue when a claim comes in and the person requesting the certificate is relying on those limits or coverages.

–        Many certificate requests come in last minute and could delay your client from starting a job or occupying their premises.  Knowing this, how have you set up your agency to deal with this?  Do you have a specific person that handles these?  Does that person have a back-up person?

–        Procedures.  Make sure you have established procedures and you follow them.  When a certificate is involved in an E&O claim you are going to need to rely that your procedures works and was followed religiously.

–        Know what your state regulations are regarding certificates of insurance.  Nothing compounds a situation like a regulatory action on top of a E&O situation.

–        Stay informed as to changes going on in the industry.  There is a national model act that is being seriously considered and some states have already adopted it’s language.  It would make it illegal to use anything but a standardized form such as the ACORD Certificate of Insurance.  More to come.

–        As I have mentioned in the past, make sure you specify the particular additional insured you want your carrier/broker to use so there is no confusion.  90% of the additional insured requests do not specify a form.

–        Get your clients used to asking for them.  If they are subcontracting they should be getting them from their subcontractors.

–        Know that you must use the latest edition of the ACORD certificate of insurance.  The newest form does not have the spot for the number of days for cancellation.  The licensing agreement for the prior edition ran out and you run the risk of a legal action by ACORD if you still use it.

–        Know your authority.  Does your wholesale broker give you authority to issue and sign certificates?  Does your carrier?  Do you need to send them copies?

I know many of you have set procedures.  Make sure you take a look at them every so often to make sure they are up to date.  If you don’t have them, put them in to place now!

Stepping back off my soapbox….

But I have never written an account like that!

By Ken Kukral

Having over 27 years of insurance experience under my belt, I feel like I still have a lot to learn.  I try to learn everything I can about different kinds of risks and different coverage and never get tired of it.  I find out on a regular basis just how much I don’t know or still need to learn.

Over the years I have built a fearless attitude on taking new challenges in the insurance arena.  Just because I have never quoted or written a particular type of coverage is no reason to avoid it.  Don’t get me wrong, I do not profess to be an expert at every type of account or every type of coverage but I will let you know the extent of my knowledge.  A recent example is Product contamination coverage (formerly known as product recall coverage).  Working on a couple accounts I have become involved with coverage triggers, expanded perils and nuances of particular policy provisions.  I am much better able to “talk the talk” on this coverage than I was six months ago and now have a much higher comfort level discussing details.  I am more likely to target accounts in this area since there are very few brokers who know much about this area of coverage.  It is easier for me to stand out as an expert or at least comfortable with this type of risk.

So how can you approach new coverage or types of accounts?   A few helpful tips:

1. Find areas or coverage that would help round out your current book of business.  There is nothing worse than having your client be approached by a new agent who says ”has your agent ever discussed this coverage with you?”  If your client answers “no”, they might instantly think you are not looking out for their best interests.  The new hot coverage area where this comes up is “cyber liability”.  Discuss it with your client before another agent does

2. Read.  There is so much on the internet that you can find a wealth of material to get yourself up to speed in a particular area.  Using the example I previously mentioned (cyber liability) I did a quick search and found the top ten things to discuss with your clients regarding their cyber liability and privacy exposures.  Get a comfort level with the subject.

3. Did I say read?  Read a specimen policy.  By reading through a policy I was able to get a comfort level with each of the cyber liability and privacy coverage parts and can better explain them when called upon by one of our agents.  I also read the brochure offered by the carrier for this coverage since it tends to explain things in simpler terms that get rid of the “jargon” that you will run into.

4. Search out online Continuing Education on the area you are interested in learning.  Why not get your CE hours in learning about something that will expand your horizons rather than just fill out your requirement.  I just recently went to a CIC program where they spent 8 hours going over tech liability and cyber/privacy liability.  My comfort level shot up considerably by hearing about how to educate your clients on the coverage and get them to understand the value of it.

5. Talk to your carriers or brokers on the coverage.  Find out what type of accounts they want, what their coverage offering entails and how they underwrite and price the business.

The first time you ever got on a bike you did not instantly ride it.  You have to learn till you became proficient at it.  Now it is “old hat” and you can almost do it in your sleep.  There has to be a first time… you don’t have to be an expert from the start… but you have to be prepared.  Five years ago I only wrote a few energy accounts.  I learned from those few accounts and now my largest account is an energy account.  If I never tried to learn about and place these type of accounts I wouldn’t be where I am today.

Try it, you will like it…

Twitter- More Than Just Basic Social Media

By Jen Monroe

In 2009, when I originally signed up for Twitter, I did it for the sole reason that celebrities and influential people/ brands in the US were talking about it. Mostly, I wanted to see what of the hype was. I took a crash course on how to follow people, how to find “people I know”, what on earth a hashtag was, and how to teach OTHERS how to use it. Back then, I used it to see what Ashton Kutcher and John Mayer were up to, to have quick conversations with my lifelong friends, and to use hashtags improperly to make a point after a statement (ie “Ohio weather stinks #gottamove #hateit #notcool”).

Today, Twitter has taken on a completely different role in my life. It is my go-to for news. Honestly, if I hear a rumor about something, I instantly search on Twitter to find out what happened. During the Boston Marathon bombing, I am quite positive I saw one of the very first reports of it (real time about 5 minutes after it happened) and I follow VERY FEW people from the Boston area. It’s incredible how quickly (and most of the time accurately) news spreads via Twitter.

My strategy for who I follow has totally changed from my early “what are celebrities up to” days. More often I follow things closely related to my personal interests or strangers from the Cleveland area that have similar interests. It’s incredible the amount of interaction sharing 140 character thoughts can cause among people from the same city. My early days approach was very similar to that of Facebook; interact with people you know, and just share about your life. Today, I have met a ton of new people and have conversations about things I love everyday with people I barely know, all thanks to Twitter.

If you haven’t tried out twitter (even if just to be a spectator) I couldn’t recommend it more!

Clean Eating for Dirty Bodies

By Cathy Thurber

I follow a lot of serious fitness people on Instagram.  One thing I’ve noticed is that so many of them talk about “clean eating.”  Being as I need to really shed some pounds myself, I’ve decided to look into it.  The main idea behind clean eating is that you’re trying to get rid of any added sugars, hydrogenated fats, trans-fats, and basically anything that is unnatural.  From what I understand, not only will you lose weight, eating like this will give you much more energy.  I’m all about that!  If you’re thinking about trying to take all those unnecessary ingredients out of your diet, here are a few tips:

–     Eat more – but smaller – meals a day.  Six meals, to be exact: breakfast, lunch, dinner and three snacks.  You’re trying to eat every few hours so that your metabolism remains high and you are continually burning calories at an even pace.  Not only that, you probably will curb your hunger with the meals spaced out evenly.
–     Cut down on the amount of sugar you eat.  You wouldn’t believe the amount of added sugars that Americans consume (I read that it’s an extra 30 teaspoons a day!).  If you skip the processed foods that hide all the hidden added sugars you’ll be in good shape.  Not to mention all the sugar (and chemicals) in that pop you’re drinking.  Instead, reach for a piece of fruit which is loaded with natural sugar and just might help your sweet tooth.
–     All that junk food you love?  Sugar and calorie filled….not to mention just not nutritional at all.  Of course, we all knew that – we just have specific things we love (or have an addiction to) that we really don’t want to give up.  I never said this would be easy!  Try keeping as many fresh fruits and vegetables around as you can.  This way you can add one serving in to every meal.
–     Watch your salt intake!  I know I need to watch this, since heart disease runs in my family.  Restaurant , prepared, and processed foods tend to be very high in sodium.  So, what’s the solution?  Cook at home and use fresh ingredients! Try not to use extra salt, but add your flavor through herbs and spices.  For me, this means I have to develop a meal plan ahead of time and work it around my crazy schedule. This way, I know what I’m going to make instead of coming home at 8:30pm and standing in front of the refrigerator for 10 minutes before I run back out to buy a pizza.
–     Choose whole grains – and remember, just because it’s wheat bread doesn’t mean it’s whole grain!  You’ll want to look for breads, rice and pasta that aren’t just brown but are made with 100% whole grains.  Also, whole grain pastas taste much better these days – so if you only remember the horrible taste from a few years ago, give the pastas another try.
Only healthy, unsaturated fats, please!  This means cut down on the fat that’s in your butter, milk, cheese & meats.  Try to get your fat from olive oil, avocados and nuts.  Look for lean meats, chicken and fish to add into your diet.
–     Drink Water!  This is the hardest one for me…I NEVER get enough water.  In fact, I need people to remind me to drink!  Drinking those 8 glasses a day will really help your body.  Think about it – your body is basically 60% water and it’s necessary for our organs to function.  It can only make you feel better.  If you’re like me and you can only drink so much water in a day….add a squirt of lemon or lime to your glass so that you get a different taste.

Good luck on putting those whole, natural & fresh foods into your diet.   Just remember  –  stay calm and eat clean!

Living "Screen Free" for a week

By Jen Monroe

I read recently, that some elementary schools have their students make a pledge to stay “Screen Free” for one week, meaning no TV, Computers, Video Games or games on cell phones for one whole week.  It then prompted me to think about what I would do with all of my free time if I too, lived screen free for a week (which is obviously not possible, since my job is on a computer… but hypothetically speaking).

My ideal week if I were “Screen Free”

– Spend as much quality time with my dog as she’d allow. Since she’s a pug, her walks are fairly short, so I’d take her on TONS of short walks
– I’d pencil in time to get out on my bicycle, play some tennis and a few rounds of golf for sure
– I’d spend a day hitting up an outlet mall—who doesn’t love shopping and the outdoors combined!?
– I’d spend some time sketching or painting—with my busy schedule these days, I rarely find time for it.
– CLEANING, CLEANING, CLEANING! Not that it’s the most exciting to do when you have free time, but if you were completely unplugged, I’d imagine you’d be able to accomplish a lot of deep cleaning and organizing
– Spend some quality unplugged time with my family  & friends—dinner, drinks, walks—whatever suits us

So that’s what I’d try and pencil in if I spent a week completely unplugged… what would you do? What are you going to do to try and make some of these things on this list a reality?