The Global Insurance Industry is on the RISE!

It looks like  the global insurance industry is setup to beef itself up!

The industry is looking to grow anywhere from 3 to 4.5 in 2017 -2018!

It looks like the premiums in insurance are likely to follow the rise in the global economy , and this means we should be seeing a 2.9%  growth in 2017 and a 3.1% growth in 2018.
This growth estimate is connected with improved economics in U.S. markets and other emerging markets.

Emerging Asian markets are looking to be the best potential for growth estimated to be equal to Western markets in just a few years. Read the full article here!

7 Questions to Ask All of Your Cyber Insurance Prospects

With the increasing demand for Cyber Insurance Coverage make sure you are asking these 7 questions every time!

  1. What type of information does the applicant collect?
    • PII – personally identifiable information
    • PHI – protected health information
    • PCI – payment card information
  2. What type of data does the applicant have and where is it located?
  3. Does the applicant limit access to data?
  4. How does the applicant know who they are letting in?
  5. How is access removed from those that don’t need it?
  6. How effective is the applicant at getting rid of data it doesn’t need?
  7. Has the applicant experienced prior breaches?

You can read the full article here!

 

 

Colorado Insurance Agent Training

As an insurance agent, you’re in the business of sales. Staying on top of an ever-fluctuating market requires top-notch training and guidance so you are always one step ahead of the competition. The Bureau of Labor Statistics sites that the median salary of an insurance agent is $47,860. The highest paid insurance agents made over $119,970, and the lowest paid made less than $25,710. Between the highs and the lows, there’s a lot of factors at play. More often than not, what separates a high income agent from a low-income agent is experience, commitment, and education. If you are an independent agent in Colorado looking for valuable training, ICA has got you covered, so you can get more clients covered with your policies.

Separating Success from the Rest

Insurance is always in demand, even during times of economic trouble. Pet rocks and fashion trends fade away fast, but insurance is here to stay because, no matter who you are, accidents happen. However, just because insurance seems invincible in a vulnerable market does not mean that it is easy to sell. Just like any other industry, the insurance business is rife with competition. There are multiple insurance companies, multiple agencies, and many more individual agents within those agencies. As one agent wins a client, another agent loses one. But how do you become a successful agent with high profitability? You do it with excellent training and education to push you forward.

Continuing Education for All Agents

Not only is continuing education beneficial to your growth as an independent insurance agent, it is a state requirement. In the state of Colorado, an agent must fulfill certain education requirements by taking 24 hours worth of classes every two years; three hours of ethics, 18 hours of major lines, and three hours miscellaneous. Through continuing education hours are required for every agent, they cannot be repeated within the two year period. So what’s an eager agent to do when he or she has the insatiable thirst for knowledge and moreover, a thirst for success?

Insurant Agent Training in Colorado

 ICA is committed to helping independent insurance agents succeed above and beyond what is possible as a captive agent of a large agency. Without the support of a large agency or network, however, it is difficult to lay claim in a saturated market. That’s why ICA provides one-on-one training for individuals who want to learn the ins and outs of the insurance business.

The training that ICA provides is invaluable. A proven step-by-step process that transforms a budding agency into a full-fledged business. As a member of ICA, you will have access to one-on-one mentoring so you can skip the struggle. Learn what it takes to survive and conquer as an independent agent, and apply those techniques in your own agency.

The Agency Foundation program can help you build your business from the very beginning, teaching the fundamentals of setting up an office, client development and consultation. There are many courses and training classes within SIAA/ICA that are specifically aimed at the start-up agent. Courses go over how and what to prepare for professional submission to any and all insurance carriers. With these courses, agents leave with a profitable solid short-term and long-term plan.

Marketing Guidance and More Clients

In addition to providing independent agents with in-depth knowledge of insurance policies and procedures, ICA has a myriad of resources that cover all facets of insurance business. For independent agents who wish to brush up on their sales skills, ICA offers mentoring programs that reveal the best sales techniques so you can increase your chances of getting new clients. Marketing training covers your advertising approach and website building, both necessary in the modern age to increase visibility.

Join ICA for Invaluable Insurance Agent Training in Colorado

ICA also gives agents access to solid customer leads all while providing useful tips on expanding your client base. With a great insurance agency network to support you, you will see the rewards of working as an independent insurance agent. You’re not just another agent working for a company, you’re a part of something bigger: a network of agents who want to see you succeed.

 

How to Start an Insurance Agency

So, you’re ready to roll up your sleeves and start your own insurance agency. The perks of working for yourself versus working for an employer are wonderful, but starting an insurance agency from the ground up requires a lot of  prep work in order to make it a success. Whether you’re a savvy captive agent with years of experience or a newcomer interested in the entrepreneurial world of insurance, there are certain things you must do to ensure your agency gets off on the right foot. But no matter where you are on your journey toward independence, these steps can help you keep your goals and burgeoning insurance agency in check:

Get Licensed (If You Haven’t Already)

If you’ve jumped into insurance with curiosity and a drive to succeed, you must first commit to taking and passing state-required licensing exams before you can call yourself an agent. Every state requires anywhere between 20 to 40 hours worth of insurance education courses before you can even put pen to paper and mark your answers with confidence on the exam. In fact, you’ll need to take an exam for every type of insurance you wish to sell. Though not necessarily a requirement, taking additional classes in finance or business as well as having relevant sales experience will help you all the more on your path to owning a profitable insurance agency.

Licensing Your Agency

Depending on whether you plan on establishing your agency as a sole proprietorship, a partnership, an LLC (limited liability corporation), a corporation, or an S corporation, you might have to acquire agency licensing in addition to individual agent licensing. If you establish your business as sole proprietorship, most states will not require agency licensing unless you’re hiring other agents. However, as a sole proprietor, you are held personally liable if the agency goes under. As an LLC, there is a solid distinction between business and personal assets, meaning you won’t have to worry about losing anything from your home or your personal bank account if, for whatever reason, the business doesn’t work out.  If you wish to bring other agents in, you’ll have to consider the application and fee process involved with licensing not only your individual agents, but the agency as a whole. If you’re simply looking to hire support staff for office duties or telemarketing, you’ll be fine with just your individual license.

Form a Business Plan

You might have a grand plan bumping around in your head, but putting that plan on paper helps you to visualize your goals and understand the steps you must take in order to achieve them. Not only does a good business plan set you on a straight path, it establishes your credibility with potential stakeholders and shows insurance carriers that you know know what you’re doing. A good business plan will:

  • Introduce your agency and summarize its overall mission statement/goal
  • Explain how you plan to acquire customers
  • Detail what services/products you will provide
  • Go over target market and possible competitors
  • How you plan to stand apart from those competitors
  • Assess risks
  • Establish initial budget and project income/expenses

If you plan to expand your agency and need  to secure financing or business loans, a solid business plan is necessary. Not only does it help you stay on track, it showcases your professionalism and dedication to starting a profitable insurance agency.

Naming Your Agency

If you plan to ride solo, you may want “do business as” yourself, meaning, you use your own name to represent your agency. Many independent agents go this route. It’s simple, it works, and you won’t have to think too hard about it because it’s already your name! On the other hand, people forget names all the time, and having a unique name for your agency will set it apart and make it hard to forget. If you choose to do business as anything other than yourself, pick a name that avoids cliches, is easy to remember, and is relevant to your industry. Take your time with this one. The name is the first impression of your agency.

Getting Insurance

Police officers are expected to follow the law just like all citizens. And just as all officers of the law are expected to comply with the rules, so must an insurance agent comply with his or her own. Thus, an insurance agent must have insurance for his or her practice. You will need a BOP (Business Owner Policy) and E&O (Errors and Omission) Insurance. BOP provides property insurance for buildings and company owned equipment. There are a variety of packages that provide more comprehensive coverage in the case that you need something specific. BOP also includes business interruption insurance. Business interruption insurance protects your business and its income in the case that is disrupted by some disaster, such as a fire.

E&O is your professional liability insurance. People aren’t perfect, and E&O will ensure that you don’t take full responsibility in the case of a negligence claim (the error side of E&O). Any mistake could cause a client financial harm, and if a client were to take the case to court, E&O protects agents from having to bare the full cost of damages in the case of a loss. The omissions side of E&O protects agents in the case that they forget  to inform a client of something that could potentially create financial distress, such as policy renewal.

If you do take on a team of office staff, you may also have to look into worker’s compensation insurance. The requirements for worker’s compensation vary depending on how many employees you have and what state you are operating in.

Last but certainly not least, you must secure a surety bond. A surety is a promise by a guarantor to pay one party in the event that the second party fails to make his or her payments or does not fulfill his or her contract. The bond protects the insurance companies and your clients in case an agent runs off with their premium.

Join an Insurance Agency Network Like ICA

If you truly want to make the most of your independent insurance agency, consider joining an insurance agency network like ICA/SIAA. An insurance agency network provides independent insurance agents with the tools they need to succeed. Ideally, you would want to sell insurances of all kinds from different companies. Unfortunately, most insurance agencies won’t allow you to sell their products until you have sold a certain minimum. With this conundrum, you’re stuck in a cage of limited growth and little flexibility, which is sort of the opposite of what being “independent” dictates. Instead of trying to get by as a starving agent, and as an alternative to lowering your head and heading back into the big agency game of being a “captive” agent, join an insurance agency network. With an agency network, you jump over the red tape that prevents independent agents from reaching the best policies and services. Insurance agency networks like ICA are a collective web of independent agents. By joining an agency network, you can reach policies of large insurance companies. Insurance agency networks are great for startup agencies in many aspects, providing independent agents with

higher commission rates, discounted insurance, educational resources, sales training, support, and a plethora of tools to help your business succeed. With ICA Agency Alliance, a Master Agency of SIAA, independent agents are given the keys to big insurance providers. ICA helps independent agents and budding agencies to achieve an income higher than what is possible as a captive agent. If you’re considering breaking away and becoming an independent agent, let ICA help you reach your goals.

There are Benefits to Participating in the Oldest and Largest Group!!

SIAA and ICA  Agency Alliance, Inc. offers not only great income potential, often higher than receiving 100% of the gross commission, but also an array of products, training, promotional and other benefits.  Since 1983 SIAA has been providing Independent Insurance Agents an alternative to the pressure of meeting high production requirements, changes in underwriting appetites and rate adjustments.  SIAA has a unique blend of market availability in conjunction with other available services such as marketing programs, educational learning, direct access to insurance company resources including underwriting, claims and marketing, your own agency identity with your agency name on the policies and many more services and resources.

Comparing various groups often boils down to one basic question.  Who provides the best income opportunity and what does it cost to participate in the Group?  SIAA has been offering its program services long before any other groups.  SIAA has perfected the model of providing great income opportunities and access to the best markets.  In fact, the SIAA/ICA’s model, along with modest member agency success, can provide income in excess of 100% of the standard insurance company commissions and the cost of membership with SIAA and ICA.  This brochure provides an Income-cost comparison of SIAA/ICA to three other groups offering access to independent agent markets, usually without other  benefits.  The three groups are real groups offering the highest income earning potential.  As you will be able to see the SIAA model offers the best solution once an agency has reached a very modest level of success.  Please contact ICA with any questions at 888-227-1910.

Compare Contracts Before You Sign

Carefully Examine Who Has Control of Your Book of Business

Comparing entire Agency Group contracts can be very revealing.  It is easy to promote how fast it is to join a group and start receiving Income potential.  It can be a whole different story when it comes time to sell your book of business or even just leave.  100% equity ownership can have a completely different meaning when you must either sell your agency back to the Group, or to another member of a Group,

without a market value established prior to signing the membership contract.  There can be limitations when leaving a Group such as agreeing not to get an agency appointment with any company the Group has placed your business when, in fact, it is the most competitive company for the customer.  There can be a non-compete for as long as 2 or more years on the business you had to leave behind when selling your book back to the Group.  There may be difficulty replacing business that was placed with a Group using the Group’s name as the agent on the policies requiring the agent to solicit a broker of record letter from ALL of his or her customers.  The whole process can an have an explosive effect on your ability to  receive the market value of your agency should you decide to leave the Group.

SIAA/ICA strives to get its member agents direct sub-producer contracts with at least 90% of its companies.  This allows easy portability of the business if the member leaves or sells the agency.  The SIAA/ICA contract, when reviewed by an attorney, is usually the contract recommended because of the clear description on how a member can exit.  SIAA/ICA’s contract allows the member to sell or transfer the agency’s business to any third party, at any value the agency is offered, without interference from SIAA/ICA once the contract is closed.

Paid Compensation Comparison SIAA/ICA Group 1 Group 2 Group 3
Total Premium $1,000,000 $1,000,000 $1,000,000 $1,000,000
Base Commission  % 15.0% 15.0% 15.0% 15.0%
Gross Paid Commission $150,000 $150,000 $150,000 $150,000
Percentage of Commission

Paid To the Agent

100% 80% 90% 100%
Supplemental Commission – Nationall Parnter Companies 1.5% 0 0 0
Supplemental Paid Commission $15,000 0 0 0
Total Gross Paid Commission– Nationall Parnter Companies $160,000 $120,000 $135,000 $150,000
Management Service Fee—9%  ICA -$14,400 ?0 ?0 ?0
Annual Admission Fee (5 yrs only)  ICA -$1,200 ?0 ?0 ?0
Net Total Commission Income $145,500 $120,000 $135,000 $150,000
Gross ICA Earned Profit Sharing $15,000 ?/0 ?/0 ?/0
Profit Sharing % Paid to Agent 70% ?/0 ?/0 ?/0
Total Gross Paid Profit Sharing 2015 (Loss Ratio  59% or  Less) $10,500 ?/0 ?/0 ?/0
Total Compensation

Paid to Agent

$159,900 $120,000

+Charges      Fees

$135,000

+Charges     Fees

$150,000 +Charges
Fees

The computations are based upon the following criteria:  Total premium is equally distributed between Safeco, Travelers and Allied Insurance Companies with half of the premium as renewal business and half the business as new business to the companies.  Profit Sharing is based on 2013 results and paid to agents in 2014 by SIAA/ICA.  Variations in commissions by insurance companies for the type of risks written have been averaged out to 15%.

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Staying Competitive During Changing Times

Survival for an independent insurance agent becomes more difficult every day.  The modern consumer has a plethora of insurance options to choose from, and those options are available in many forms.  The independent insurance agent who offers policies from one or two companies often finds themselves left by the wayside as consumer insurance options mushroom.  And now compensation to the agent is under attack by many insurance companies.

So how does an honest, hard working insurance agent stay competitive during changing times?

Is it possible for an independent agent to have the ability to offer more than one or two insurance options?  Better yet, is it possible to have access to multiple insurance options while maintaining your agency’s personal touch and identity?

The answer to all those questions is Yes!

By joining the ICA network of independent insurance companies, you’ll have a chance to build a strong independent agency.  Here are a few of the services that the ICA network offers:

  • Access to premium insurance markets and products for both personal and commercial policies
  • One-on-one commercial insurance education courses, ranging from beginning to advanced. In addition to courses, ICA education offers mentoring programs for sales skills improvement
  • Knowledgeable guidance as you build and market your agency’s brand
  • Tips on how to expand your customer base
  • ICA will provide access to solid, proven, customer leads
  • All of these benefits and at the highest compensation levels

By joining forces with the ICA network, our group will help you move your agency into uncharted, new territories, and provide you with a guaranteed income.

In addition to the services offered by ICA, you’ll have access to the power of the National Insurance Agency Alliance (SIAA).

SIAA consists of more than 4250 independent insurance agencies across America, and continues to grow by over 400 new member agencies annually.  237 of these member agencies began as start-up agencies, who, with the assistance from SIAA Master Agencies, benefited from immediate access to top-rated, competitive insurance companies.

Not all of SIAA’s new members started from scratch.  147 agencies were local independent agencies.  With their membership in SIAA, these agencies now have access to competitive insurance companies.

Since 2008, the new written premium through SIAA has grown over $6 Billion.

There are more benefits of an SIAA membership, such as:

  • Appointments with competitive companies. With SIAA membership, you’ll have access to benefits comparable with those of a much larger company
  • Top commissions, additional supplemental compensation and profit sharing

With your membership in SIAA, your agency will benefit through stability of being part of a group comprised of over 4200 members, that writes billions of profitable premiums annually, and has access to many competitive companies.

ICA and SIAA work together to help build quality agents through the many programs offered including our one of a kind education, training and marketing program.  We care more about the quality of our agencies than the quantity.  If you believe your agency is a quality agency, and would like to join the SIAA team, contact  ICA Agency Alliance.

 

August 2016 Newsletter

Did you know…

Broker of Record letters also known as BORs or AORs (Agent of Record) allows the policy holder to designate a new broker for their insurance policies without changing companies. This allows the new agent to manage the policyholder’s insurance. Once the Broker of record is accepted by the carrier the broker of record may receive copies of all communications to the policy holder and may receive all quotes, policies and notices on behalf of the policy holder. They may also obtain and evaluate insurance quotes and policies and recommend changes to existing policies. This can be a great way to add to your client base. Remember, in order to be compensated for the BOR, they must be sent into the carrier within 60 days of the expiration of the current policy but no later than the expiration date of the current policy.

However, obtaining the BOR/AOR is the first step in converting a client to your agency. The BOR must be sent to the carrier and they must notify the other agent of this change. The carrier must also accept this change. Newly completed accord applications (in full) and currently valued loss runs must also accompany the BOR request as a BOR/AOR is considered new business to the agency and the applications and loss runs are a requirement of the carrier, and they must have them on file. Also, by obtaining the completed and signed application it not only allows the agent to have a better understanding of what the risk consists of and what their losses are, but the agent also has the insureds acknowledgment that the information provided to the agent is correct. Without this on file, if a loss were ever to occur or a problem arose as a result of the information provided, it could create an Errors an Omissions claim on the part of the agent due to a lack of insured signature on file.

BOR/AORs may also be used during the quoting process of new business. Perhaps the client has gone to another agent before finding you and they have quoted the carriers you represent and blocked you from quoting these carriers. BOR/AORs are acceptable to use in a situation such as this and just like the renewal BOR/AOR new applications with the insureds signature are required.

Let us help you round out all of your accounts and become a million dollar agency!

WHAT WE’VE BOUND RECENTLY

Restaurant – Guard

Painting Contractor – First Comp

Lessors Risk – Travelers

Air Conditioning Sales/Service – Liberty

Restaurant – Allied

Boat Repair Shop – Amtrust

Concrete Contractor – Pinnacol

Lessors Risk – State Auto

Technical Consultant – Travelers

Painting Contractor – Liberty

Food Distributor – Amtrust

Gutter Repair – Liberty

Non-Profit Organization – The Hartford

Farm/Ranch – Travelers

Electrician – Pinnacol

Paving Contractor – Amtrust

Lessors Risk – Guard

Auto Body Shop – Guard

Landscaper/Tree Trimmer – RPS

Condo HOA – Travelers

Music Studio – The Hartford

Auto Body Shop – Guard

Commercial Highlight:

Performance Bond: A written guaranty from a third party guarantor (usually a bank or an insurance company) submitted to a principal (client or customer) by a contractor on winning the bid. A performance bond ensures payment of a sum (not exceeding a stated maximum) of money in case the contractor fails in the full performance of the contract.

Performance bonds usually cover 100 percent of the contract price and replace the bid bonds on award of the contract. Unlike a fidelity bond, a performance bond is not an insurance policy and (if cashed by the principal) the payment amount is recovered by the guarantor from the contractor. Personal Lines Highlight:

Pet Insurance: A policy purchased by the owner of a pet that will lessen the overall costs if expensive medical bills are incurred by that pet. This is similar to health insurance policies except that it relates specifically to pets and will cover, either fully or in part, the often expensive fees that are incurred during veterinary procedures. Pet insurance started in the U.S. in 1980, and was the first policy was sold in 1982 for television’s Lassie.

The cost and coverage changes with which policy you get and for what type of animal you’re insuring. For instance, it costs more for an outdoor cat than an indoor, and premiums are higher for the percentage of coverage you wish to buy.

Newsletter May 2016

Did you know…

SIAA MarketFinder is a resource created by Alliance Program Services, a member of the SIAA family of companies, exclusively for SIAA member agencies.

MarketFinder’s Specialty Insurance Programs offer SIAA Member Agencies a wide variety of specialized coverage for their personal and commercial clients. Our carrier partners are selected for their experience, expertise and financial strength.