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E&O: How Do You Handle Rejections?

Posted By Administration, Tuesday, March 24, 2015
 
 Curtis M. Pearsall

by Curtis M. Pearsall, CPCU, AIAF, CPIA, President Pearsall Associates, Inc. & Special Consultant to the Utica National Agents E&O Program

 Every day, agencies provide prospects and customers with proposals on coverages addressing a multitude of exposures. Some proposals are provided at the anniversary of the customers insurance program, while others occur during the policy year, more of a mid-term situation. While it would be nice if the customer bought coverages that were proposed, unfortunately, that is not the norm. Quite possibly, the customer does not see the need for the coverage or the premium could be an issue. Since customers will probably reject certain elements of a proposal, the degree to which the agency has documentation of the rejection is a key element in the event of an uncovered claim.

Good, but not enough

Most agencies have an expectation for handling the issue of rejected coverages. Yet, this could mean that one producer at your agency handles it one way and another producer at your agency handles it differently. This potential lack of consistency can lead to problems. It is important that the agency staff recognizes that if there is an uncovered claim, it is possible that the customer will take a strong position that it was his or her understanding a specific coverage was requested, not rejected. It will now be up to the agency producer to provide some element of proof that the coverage was, in fact, rejected.

It might not be enough if your proof solely involves the documentation you have in your agency management system detailing the discussion between the agency producer and the client. While its better than nothing, the potential inadequacy of this approach is that the documentation in the file is your agencys recollection of the conversation. The customer may allege that he or she had an entirely different understanding of the conversation.

One often-applied approach is for the customer to sign the proposal acknowledging which coverages he or she desired and which coverages he or she rejected. If that is your agencys procedure, how confident are you it is being applied consistently? If there is not a notation next to a specific type of coverage (cyber insurance, for example), will the courts construe this lack of a signature as an indication that the coverage was requested, not rejected? Moreover, what about those situations where the proposal was not personally delivered and the rejection of coverage was provided verbally? What proof will you be able to provide? While the agency can ask the customer to send them an e-mail detailing the conversation, many agencies have become increasingly frustrated by customers delays in honoring these requests.

Written confirmation

The suggested approach for those situations where a customer does not purchase all of the proposed or suggested coverages is to provide that customer with some element of written confirmation of his or her decision. A variety of approaches can be undertaken. A vital element is that the written confirmation should be sent electronically or delivered without delay. Losses have occurred shortly after the binding of coverage and prior to actual policies being delivered, so it is not suggested to wait until policy delivery to review what coverages were bound and which were rejected.

The essence of this approach is for the agency to confirm its understanding of the customers final decision, essentially requiring the customer to advise if this information was not correct. This will help heighten the agencys desire for the customer to be accountable for his or her buying decision.

 A solid defense

Agents will often provide a copy of the proposal (manually or electronically) noting what was purchased and what was not. If the customer wants to think about it, the documentation on the proposal should note no coverage bound at this time. A common and effective approach is for the agency to send a thank-you letter to the customer that includes the necessary detail/decision on each coverage proposed. This serves two purposes: the agency is thanking the customer for the business and it memorializes the various details. Imagine if an uncovered loss occurred and the customer alleged that he or she thought coverage had been ordered. A detailed written document would provide solid defense for the agency.

While the previously mentioned scenarios involved a new business or renewal meeting, the same approach can be used when the customer makes a mid-term request for different limits or additional coverages. When the agency provides the proposal, the proposal should state that no coverage is bound at this time or include clear instructions detailing what is needed to put coverage into effect. If and when the customer rejects the proposed coverage, the agency should provide detailed documentation of the discussion, the decision and the date.

A duty

Since it is not possible to pinpoint exactly which agency file will be the next one to have a loss, it is paramount for the agency to have standards and expectations on how the declination/rejection of coverages will be handled. Ensuring that these standards and expectations are consistently applied is equally important. This is where the auditing of files can bear tremendous benefit. While producers have a responsibility to sell, they also have a duty to ensure that the agency has a solid defense if something happens that results in errors-and-omissions litigation.

Tags:  E&O  E&O: How Do You Handle Rejections?  Errors and Ommissions  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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Drought in the West: Dangerous Conditions Growing More Dangerous

Posted By Administration, Tuesday, March 24, 2015

 

In California water rationing is in effect. The state has been bone dry for four years. And its likely to grow worse and not better the rest of this year. Around the nations Western states things arent much better.

According to the National Oceanic and Atmospheric Administration (NOAA) this is especially true of the Golden State and its neighbors Oregon and Nevada.

It says El Nino has finally arrived but its too weak and too late to give the region the soaking it needs to recover from the drought. So at least through June were going to see very dry conditions in the three states and others in the west.

Heres what NOAA says the PIA Western Alliance states look like now:

Alaska The southern part of state is abnormally dry.

Arizona Most of state has moderate drought but some of the north and far east is in severe drought.

California Most of south and central part of the state is in exceptional drought. Some of the eastern portion of the state and the north are extreme drought. Parts  of the northwest and far southeast is experiencing severe drought.

Idaho The south portion of the state is experiencing severe drought. A few areas have extreme drought.

Montana Things are abnormally dry in a sliver of the southwest corner.

Nevada The state has exceptional drought in the west-central portion. Extreme drought conditions are in the north, central and southwest. The eastern half of the state ranges from severe to moderate drought.

New Mexico The southwest portion of the state is experiencing severe drought. The rest of the state ranges from moderate drought to abnormally dry to normal.

Oregon The southeastern portion of the state to the south central part of the state is in exceptional drought conditions. The eastern portion of Oregon from the central region to the northern region extended is experiencing severe drought conditions. The southwestern section of the state has moderate drought.

Washington The central portion of the state to the border with Oregon is experiencing moderate drought. Some of the north central to northeastern part of the state is abnormally dry.

 

Source link: insurancejournal.com

Tags:  Drought  Drought in the West: Dangerous Conditions Growing   Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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The Leadership Mind: Two Angles

Posted By Administration, Tuesday, March 24, 2015

 

The consulting firm Vantage Hill Partners recently did an interesting study of CEOs. The title What CEOs are Afraid Of says it all. And the number one fear of the 116 surveyed is being found incompetent.

Vantage Hills CEO Roger Jones put his conclusions in an article for Harvard Business Review. He calls that fear the imposter syndrome and says, This fear diminishes their confidence and undermines relationships with other executives.

 

Of those surveyed:

  7% are in investment and professional services

  73% are male

  33% hold the title CEO or president

  66% are business and division unit leaders or managers reporting to those leaders

 

To go into more depth, Jones interviewed 27 of the participants and found they fear of incompetency meant losing their reputations.

 

Here are the top-five:

  Incompetency

  Underachieving

  Appearing too vulnerable

  Being politically attacked by colleagues

  Appearing foolish

 

These insecurities Jones concludes cause CEOs to display dysfunctional behaviors like overcompensating and doing too much political game-playing, too little honest conversation at the executive level, among others.

In his article, Jones said these dysfunctional behaviors can result in 500 bad consequences consequences identified by the CEOs and managers interviewed. Among them is the tendency not to act unless a crisis comes upon the company and focusing on survival rather than growth.

Ego is another huge problem with CEOs and other leaders. Or so says Brian Ray who is a business and management consultant and author. He penned a book called Revelations Incorporated: The Disturbing Truth of the Business World & Workplace Culture.

Many in corporate and business leadership create illusions that only their ideas are best and their word on any subject is final period. The key word in the last sentence is illusion. Ray contends these leaders can have evidence to the contrary staring them in the face but they refuse to see. They do what they want, no matter what because their ego says they are the boss and that makes them automatically correct.

Ray said all of us have encountered that boss somewhere in our careers. Even worse, some of us have been or are now that person.

There are three reasons why these leaders choose to ignore everything, everyone and insist on being right. Here they are:


The quest for glory: We all want to shine. Some of us put blinders on in order to get there and were caught up only in what we contribute. Everyone elses ideas are shoved aside in our push to be the savior of a company or the reason for its growth. Eventually reality catches up to the me and only me attitude and shatters what Ray calls the illusion of perfection. In the meantime, living in denial of the truth causes everyone around this leader to suffer.

The quest for power: For some the proverbial possession of power goes to their head. Absolute power corrupts absolutely. But that only happens if its allowed to happen. The leader can change things and start to get that theyre not listening well. This leads to thinking team is better than thinking I.

Learning to swallow pride and being open broadens the horizons of a leader and of a company. Mastering this and keeping this perspective makes a leader a true leader and someone who is quite formidable. And that goes for life as well as business.

The Fear of Inadequacy: Many leaders dont have an open mind because theyre afraid. Fear makes them think not having all of the answers makes them appear weak or incompetent to their peers and to upper management. As we all know, just the opposite is true. This leader actually appears to be rigid, unyielding and unapproachable the proverbial tyrant. That causes others in the company equals and, even worse, underlings to avoid that person and minimize contact.

Not very productive at all.

Ray advises all of us to be open to suggestions from our peers, team members and subordinates. No one knows it all no matter what their position.

Good viable options he says should be acted upon. And tell those individuals offering ideas that they have most excellent ideas and that theyre most excellent employees.

This attitude and not control is what helps an individual up the corporate ladder or to other types of success in business and life.

 

Source links: Two articles from Carrier Management number 1 and number 2

Tags:  Business  Insurance Content  Insurance Industry  Insurance News  The Leadership Mind: Two Angles  Weekly Industry News 

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Mergers & Acquisitions: Deal Values Up & Growing

Posted By Administration, Tuesday, March 24, 2015

Deloitte said the average merger or acquisition deal value rose 60% between 2013 and 2014. The rise is mostly in reinsurance deals but Deloitte thinks this is going to expand into primary insurers as we move farther into 2015. 

Slowing growth and shrinking returns will push the value of deals up going forward.

 

Deloitte said its analysis of SNL Financial data found:

  51 deals in 2014 compared to 52 in 2013

  There were 58 in 2012

 

Where things differ is in the details:

  Deals averaged $217.7 million in 2014

  Thats up from $134.5 million in 2013

  The 2012 average was $77.4 million

  High end deals were $1.7 billion on average in 2014

  Thats up from $1.1. billion in 2013 and $623 million in 2012

 

Deloitte said, While companies continue to look toward bolt-on transactions as a mechanism to drive growth, the price point is beginning to rise. In the [property/casualty] market, buyers have been seeking scale, diversification and/or market access.

The report also notes more consolidation in specialty lines like crop insurance. Where [property/casualty] insurers have found themselves dealing with increased competition for a limited number of acquisition targets, companies with more capital are becoming more aggressive, Deloitte said.

Another report from Assured Research agrees with Deloittes and concludes as the soft market descends on the industry well see more mergers and acquisitions among primary P&C insurers because the lack of growth in the industry has become more apparent and, in the absence of meaningful growth, returns will eventually decline.

 

Source link: insurancejournal.com

Tags:  Insurance Content  Insurance Industry  Insurance News  Mergers & Acquisitions: Deal Values Up & Growing  Weekly Industry News 

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ObamaCare: Republican Budget Cuts it after Administration says it is Much Improved

Posted By Administration, Tuesday, March 24, 2015
 
Caption Sen. Orrin Hatch 

Budgets submitted in the Senate and the House are calling for the repeal of the Affordable Care Act. The House has by itself repealed ObamaCare over 40-times since Republicans gained control of the House in the third year of the Obama presidency.

The Senates budget proposal also calls for a repeal of the 2.3% medical device tax. Senate Finance Committee Chairman and Utah Republican Orrin Hatch said it harms innovation in health care, keeps companies from hiring and doesnt help with the delivery of health care.

It is time to end this tax so that more resources can be devoted to health care innovation not to the coffers of Obamacare, he said.

Both budgets got the ire of Democrats. Oregon Republican Ron Wyden put Democrat attitude the best. Its time to get past the well-worn talking points and begin the effort to find bipartisan ways to improve the Affordable Care Act. That strikes me as the best use of our time.

Eliminating ObamaCare is just going to get a presidential veto and one that cant be overridden.

Republican push to repeal ObamaCare aside, Healthcare.gov CEO Kevin Counihan said the Affordable Care Act is working and needs to continue. He said 11.7 million people have enrolled or re-enrolled this year. Thats 8.8 million from the federal exchange and 2.9 million on the state exchanges.

 

Here are other positives:

  The increase in the number of qualified health plans available per U.S. county is 29%.

  The number of screens on average someone had to click through to enroll fell from 76 to 16.

  Enrollment averaged 30-minutes instead of hours or in some instances days.

  The number of insurers on the exchanges grew by 25%.

  Consumers have an average of 40% more plans to choose from.

 

Heres another interesting statistic. A huge number 35% went to HealthCare.gov on a smartphone or a tablet and of those 15% enrolled with that device.

  7.7 million or 87% qualify for an average tax credit of $263 per month.

  Over half 55% paid $100 or less for health insurance.

 

While more people are registering, there is still a lot of confusion five-years after the passage fact about ObamaCare. A Kaiser Family Foundation and CNBC poll finds 53% of those doing their taxes this year are unaware that they must check a box that says they purchased or were supplied with health insurance.

When polling just those that are uninsured that number rises to 57%. Another 20% thought the mandatory requirement goes into effect next year and 16% had no clue when it takes effect.

 

Source links: Insurance Business America, Employee Benefit News, Employee Benefit Advisor

Tags:  Healthcare  HealthCare.gov  Insurance Content  Insurance Industry  Insurance News  ObamaCare  ObamaCare: Republican Budget Cuts it after Adminis  The Affordable Care Act  Weekly Industry News 

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Around the PIA Western Alliance States

Posted By Administration, Tuesday, March 24, 2015

Arizona Rideshare Compromise Bill

Prescott Republican Rep. Karen Fann worked hard to put together a compromise between the taxi industry and rideshare companies and got it passed in the Arizona House.

Its now in the Senate and was passed by the Senate Financial Institutions Committee but experts on the topic think before itll pass the whole Senate some changes will have to be made.

The bill supported by Arizona Governor Doug Ducey requires drug testing by rideshare firm drivers, a no-tolerance policy for those testing positive, registering drivers and vehicles and requiring proper insurance.

Fann agrees the bill will need tweaking and that it was rushed through the House before it was finished because of budget issues and that one of the major debates will be insurance.

Source link: AZCentral.com

 

California Diversity Task Force

California Insurance Commissioner Dave Jones has set up the 2015-2016 Insurance Diversity Task Force. It is charged with ways to increase diversity in procurement and governing boards in the insurance industry and to make recommendations on which way to go to the commissioner and the insurance division.

The Diversity Task Force will also make recommendations on laws that need changed or modified.

These are the Task force members are:

  California Insurance Commissioner Dave Jones

  Linda Akutagawa: President and CEO of leadership education for Asian Pacifics Inc. Akutagawa.

  Danielle Beavers: Economic equity program manager at The Greenlining Institute.

  Robin Billups: Director of business development at the Womens Business Enterprise National Council.

  Janice Brown: Owner and founder of Brown Law Group.

  Pat Fong Kushida: President and CEO of the Sacramento Asian-Pacific Chamber of Commerce and president and CEO of the California Asian Pacific Chamber of Commerce.

  Melinda Guzman: CEO of the Melinda Guzman Professional Corp.

  Craig Holden: Senior partner and chairman of the National Commercial Litigation Department for the law firm of Lewis, Brisbois, Bisgaard & Smith.

  Ramon Jones: Regional vice president of Nationwide Insurance.

  Michael Keeley: President and CEO of MGK Risk and Insurance Services.

  Mark Morales: Vice president of the U.S. Small Business Administration division of HomeStreet Bank and co-owner of Charles Jacobsen.

  Salvador Peinado, Jr.: Senior supplier and diversity and innovation advisor at CSAA Insurance Exchange.

  Cathy Schwamberger: Associate general counsel for State Farm.

  Melanie Shelby: Managing director at Gray, Greer, Shelby & Vaughn LLC.

  Randy Sinnott: Founding partner of Sinnott, Puebla, Campagne & Curet.

  Scott Syphax: President and CEO of The Nehemiah Cos.

 

California Lyft Lawsuit

Hundreds of drivers for Lyft the ridesharing firm have filed a lawsuit saying the company cheated them out of $1,000 bonuses. The total dollar amount the drivers claim they were cheated out of is $5 million.

The suit is for breach of contract.

The plaintiffs claim Lyft tried to recruit new drivers  by offering $1,000 bonuses to current drivers that referred new drivers and to new drivers applying to be drivers by February 25th.

Though the suit is filed in San Fransisco, the allegedly affected drivers are from Atlanta, Austin, Boston, Chicago, Dallas, Denver, Los Angeles, Miami, Nashville, Philadelphia, San Diego, San Francisco, San Jose, Seattle and Washington, D.C.

Source link: insurancejournal.com

 

Idaho Fraud Sentence

Robert MacNeilage of Idaho Falls has been sentenced to two to eight years for insurance fraud. He told Progressive Insurance that his 2013 BMW and 2002 Ford pickup were damaged in accidents.

It turned out not to be true.

As part of the sentence hell do a treatment and education program at a minimum security prison. When thats done the judge will determine whether or not he has to serve his entire sentence.

 

Montana Former Miss Montana Sentenced

Former Miss Montana USA Christin Didier was found guilty in March of 2013 of conspiracy to defraud her insurance company and of mail fraud.

Didier will pay $213,000 in restitution and will serve five-years on probation.

She claimed to live in a mansion-like five-bedroom home with a pool at a cost of $15,000 a month while repairs were being made to her historic mansion were being made. That turned out to be a lie. She lived in a small cabin while collecting close to $123,000 in living expenses.

Source link: InsuranceJournal.com

 

Washington The Legislature Bill Deadline Passes

This from PIA Washington Lobbyist Mel Sorensen.

Now more than half over, the 2015 Legislative Session passed a key deadline this week, and the result is that dozens of bills will receive no further consideration this year. Pursuant to the cut-off resolution approved by the House and Senate at the beginning of the 2015 Legislative Session, bills not passed in the house of origin by 5:00 p.m. on Wednesday, March 11 will receive no further consideration this year. Dozens of bills failed to meet Wednesdays deadline.

With the passing of the cross-over cutoff, legislative committees will begin hearings once again. House committees will begin to consider measures passed by the Senate and Senate committees will begin to consider measures passed by the House. Under the cut-off resolution, committees have until Wednesday, April 1 to approve measures. Budget bills, and measures necessary to implement the budget, are exempt from the cut-off timelines.

In addition to committee work, members of the House and Senate will be focused on budget issues this week, as the updated state revenue forecast was released on Wednesday, March 11. Indications suggest that Washingtons economy has been strongly adding new jobs. The forecast indicates that revenue collections were $16.7 million higher than the February forecast. The remainder of the 2015 Legislative Session will be focused on how budget writers reach a spending deal for the 2015-17 biennium. Revenue projections indicate that the state will have nearly $3 billion in additional revenue for the next biennium just based on the growth of the economyan 8.6% increase in revenue as compared with the current revenue for the current biennium. The question is whether this increase will be sufficient to meet the increases in education funding necessary due to last years decision by the State Supreme Court in the McCleary case. House Democrats have indicated that they will release a budget plan on Monday, March 23.

The House Business & Financial Services Committee voted in support of a Do Pass recommendation for ESB 5471, sending the measure to the House Rules Committee. Prior to passage, the committee adopted an amendment to restore some language that was inadvertently omitted by the Code Revisers Office when the amendment for the bill was being prepared for the Senate floor. The amendment was not controversial, and all stakeholders checked off on restoring the language. Approval of the bill came on Wednesday, March 18, just one day after the bill was considered at hearing on Tuesday, March 17. ESB 5471 has already been passed by the Senate on a sweeping vote of 48-1. The Senate was able to bring the measure to a vote on the Senate floor after PCI and other insurers finalized agreement on key amendments to the model e-commerce legislation with the Independent Insurance Agents and Brokers of America and the Office of the Insurance Commissioner.

The measure is closely modeled after the Federal Uniform Electronic Transaction Act, and would specifically authorize insurers to conduct business with policyholders over the internet, subject to the consent of each policyholder. The proposal also includes a section that would allow an insurer to post generic policy forms and endorsements on a publicly-available website in lieu of mailing paper documents to policyholders, subject to the consent of each policyholder.

A companion bill in the HouseHB 1329was approved by the House Business and Financial Services Committee, but the measure killed in the House Rules Committee after the Senate took action to approve ESB 5471. It is not uncommon for a companion bill to be held after the same measure has been passed by the other House. With time running short before Wednesdays crossover cutoff, House leaders simply decided to focus on the Senate-passed bill now that it has been referred to the House Business & Financial Services Committee. HB 1329 was left behind at Wednesdays cutoff, allowing limited House floor time to be devoted to other measures.

When the bills were considered at hearings earlier this session, PCI and the American Council of Life Insurers, together with Progressive Insurance testified in support of the bill. Also testifying in support of the bills were the Office of the Insurance Commissioner and the Independent Insurance Agents and Brokers of Washington.

Tags:  Around the PIA Western Alliance States  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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Useless but Interesting Information — Ranking Insurance Mascots

Posted By Administration, Tuesday, March 24, 2015

Q&A Research does full-service, qualitative and quantitative research for this company or that. Recently it took a look at insurance company mascots and judged them for effectiveness. The 2015 Insurance Spokesperson/Mascot Survey looked at current and retired mascots.

All mascots were judged based on recognition, influence in the decision to purchase, brand attribution, appeal, positive perception of the company and memorability.

GEICOs Gecko took top honors and was in the top-three in every one of those categories. The most influence on a purchase decision comes from Allstates Dennis Haysbert who is ranked second. He also gave the most positive perception of the company.

 

Heres the rest of the top-five in all around score:

3. MetLifes Snoopy the most appealing mascot.

4. The Aflac duck

5. Progressives Flo

 

In last place is GEICOs Mike McGlone and the 21st Century Guy.

 

Heres more detail:

  GEICOs Gecko has a 94% recognition rate.

  Progressives Flo is a close second with a 93% recognition rate.

  The Aflac duck is a close third at 92%.

  Allstates Dennis Haysbert is fourth with 91%.

 

Least recognized are the 21st Century Guy at 19% and John Krasinskis Esurance at 8%.

Last. The GEICO gecko and the Aflac duck were the two mascots that the 354 participants most correctly associated with their brands.

Its also interesting to note that the GEICO caveman is the mascot that makes people the least likely to purchase that brand of insurance. 

 

Source link: Carrier Mangement

Tags:  Insurance Content  Insurance Industry  Insurance News  Just for fun  Useless but Interesting Information — Ranking Insu  Weekly Industry News 

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A hiring explosion coming but who will fill the jobs?

Posted By Administration, Tuesday, March 17, 2015

The result of the Jacobson Group and the Ward Groups Semi-Annual U.S. Insurance Labor Outlook Study is out. The twice a year study says property and casualty insurers are hiring at the fastest pace in years.

How good is the news? The Ward Groups Jeff Rieder said 66% of the P&C insurers polled said theyre going to increase staff in 2015. Its the highest percentage since the two groups started the survey in 2009.

The focus of the hiring will be specialty commercial lines underwriters and claims professionals.

The Jacobson Group CEO Greg Jacobson said, Were seeing the hottest P/C market since before the recession as companies are doing everything they can to add to staff in order to support their anticipated or actual growth.

A year ago Jacobson noted 62% said they planned to add staff. And in 2014 the companies that actually did hire doubled the number they planned to hire. Thats the good news. The bad news from a year ago is that companies that cut staff cut much more staff than they said they were going to cut.

My view on that is that its become clearer who the winners and the losers are in the drive for market share. Those companies that are not producing profitable growth are losing staff pretty quickly, Jacobson said.

Rieder agree and says revenue growth is fueling the employment increase. He said 88% of the companies surveyed say to expect to increase revenue in 2015. That revenue growth will come from expanded market share.

 

That Jacobson said is creating a bit of a staff dilemma for carriers.

 

  74% of property-casualty firms are going to increase staff in the next 12-months.

  Thats 17-points higher than personal lines companies.

  And its 10% higher than those writing both commercial and personal lines business.

 

Other than actuarial and executive-level positions, the Jacobson Group and Ward Group survey found all positions in insurance have become very hard to fill.

 

Here are other conclusions from the survey:

  Unemployment in insurance is at 2.3%.

  Voluntary turnover is 7% to 9%.

  Voluntary turnover used to be 4% to 7%.

  Temporary employees are now a large part of the insurance industry.

  Temporary employment is 2% of the U.S. economy.

 

Insurance Information Institute (I.I.I.) President Dr. Robert Hartwig said employment in the industry looks very good. In an article he recently posted on the I.I.I. website, Hartwig wrote, For the 12 months ending in January 2015, P/C carrier employment rose by 10,000, or 1.9%. For the 12 months ending in January 2015, P/C carrier employment rose by 10,000, or 1.9%.

In other words, things are looking pretty good. In January 2015, on a year-over-year basis, virtually every subsector of insurance industry employment was up, with many subsectors rising solidly. Even life carrier employment, which has generally trended downward, rose, Hartwig wrote.

Lastly, Hartwig looked at agent and broker employment. The agent/broker segment gained 32,900 jobs in January 2015 vs. January 2014 (up 4.7%) to 726,900. After losing jobs in the Great Recession (from 682,100 in the first month of the recession, December 2007, to 652,900 in the first month of recovery, July 2009, and on to a trough of 638,200 in September 2010) the segment has been fairly steadily gaining jobs and has now passed the pre-recession peak of 684,500 reached in July 2007, he added.

Hiring looks good. The jobs are there. But whos going to fill them? And who is going to fill the jobs of those who will soon be retiring?

Its a big and very important question being asked by McKinsey & Co. in a new report. While interpreting a Marshberry report, the company concluded the average age of todays insurance agent is 59. It then went on to predict because of the advanced average age of agents 25% of the nations insurance agents will retire by 2018.

Thats a huge loss.

To keep up McKinsey & Co. said independent insurance agencies need to hire three producers for every producer retiring. And that has to start immediately.

This data makes it clear that agencies cannot afford to continue to do business as usual when it comes to hiring new producers. The most relevant agencies of the next decade will not only hire aggressively in the short-term, they will work to improve their retention in the long-term to ensure success, the report said.

But as you already know, millennials and young college graduates have a less than favorable opinion of the insurance industry. Several months ago Weekly Industry News reported on a study from The Institutes and the Griffith Insurance Education Foundation. It said young people view insurance as boring.

McKinseys survey offers a solution. It says hiring needs to focus on how insurance is a career of problem solving and helping people. Messages need to avoid a focus on selling insurance, as this was the most common reason why millennials were not interested in working in the insurance industry. Also, the messaging needs to combat the image of a boring industry.  

In an interview with the online publication Insurance Business America, Working at Home Vintage Employees CEO Sharon Emek offers another idea. Tell the millennials and others considering an insurance career that they can also work from home or from remote locations. Being in the office is not that critical to insurance sales.

If they know theyre working for an agency that offers the opportunity to have a career with flexibility, you will definitely have more young hires. Its a good opportunity for young people to be mentored by aging workers with institutional knowledge, while having them stay engaged with the industry as long as possible, she said.

 

Source links: Carrier Management and Insurance Information Institute and Insurance Business America

Tags:  A hiring explosion coming but who will fill the jo  Employment  Insurance Content  Insurance Industry  Insurance Jobs: Climbing to record levels  Insurance News  Jobs  Weekly Industry News 

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The Future: Millennials & Insurance

Posted By Administration, Tuesday, March 17, 2015

Weekly Industry News will be focusing on millennials those born between 1980 and 1996 over the next few weeks. This series wont be weekly but we will be featuring information about the next generation and its impact on the insurance industry, on you and your families, on society and on millennials themselves.

Millennials also called Generation Y are now the largest generation in terms of population in the nation and have grown past the boomers. Estimates say there are 80-million of them.

As the nations newest consumer force, they are currently the focus of most marketers. Millennials are huge consumers. Theyre also in the sights of politicians and political campaigners.

And they are the workforce of the future. Most of you if youre an employer by now employ one or more of them. If youre an employee, youre not doubt working along side a millennial.

Applied Systems recently did a study of Gen Y. It concludes millennials whether they are employees, business partners or customers bring a unique set of values and expectations to the table. This is an important factor for insurance to note. To attract and keep millennials as either a customer or an employee, their expectations must be met or they will go elsewhere.

These young people are the first generation to be constantly connected to the world around them. This as you have seen involves mobile devices such as smartphones and tablets. You will rarely see a millennial without one nearby or tightly clutched in their hands like it will leap out if the grip loosens.

They walk streets and hallways with eyes glued to them and this is where the rest of the world must reach them. That world by the way and as well note later is quite limited.

Heres some information you need to know:

  Millennials are always connected.

  They send up to 100 or more texts a day.

  80% visit social media sites daily.

  Over half use mobile devices to do so.

  For 71% of millennials, when a problem or need is encountered, an online search is the solution.

  They are 2.5-times more likely to adopt new technology early in the game than their older counterparts.

 

The Applied Systems study said millennials are not shy about voicing their opinion positive or negative about a product or service. Heres how they communicate to other millennials or to anyone wholl read or listen about their experiences with a product or service:

  44% test message

  16% blog

  38% social media

  38% instant messaging

 

This presents a huge problem for the insurance industry. We are historically more conservative and a generation gap exists. Millennials think differently. They are coming of age at a point in history where there are major shifts happening in technology, in business, cultural norms and social media. The industry is catching up to the idea that it must be more technology savvy and more understanding of the forces that shape millennials to win them over but it is happening more slowly than some would like.

Those in the industry whove figured it out and who are offering multi-channelled communications for millennials are doing better than those that dont.

Heres the good news for the independent insurance agent. Millennials want all the technology bells and whistles offered to them. Quotes on line are important and information online for what theyre buying is important, too. However, they like their parents and grandparents value the one-on-one or over-the-phone communication when it comes time to buy.

They want to trust you and that trust is critical to keeping them as customers. More good news. They are insured.

  91% have some form of property/casualty insurance

  89% have auto insurance

  55% have homeowners

  42% have renters

 

By the way, if you employ a millennial, most want more, not less responsibility and they want it now. But are they ready or educated enough for that responsibility? Probably not according to a shocking but not surprising new study by Princetons Educational Testing Service.

ETS administered a test developed by the Organisation for Economic Co-operation and Development to adults 16 to 65 in 23 countries. The focus, however, is on those born after 1980.

The study looks at the three areas most critical to employers. The first is literacy or the ability to follow written directions. Second is numeracy or the basic ability to understand and crunch numbers and third, problem-solving in a technology rich environment.

Though our millennials are the most educated generation in history, it did an epic fail in literacy, numeracy and problem solving in technology-rich environments (PS-TRE).

Top 5 scores in literacy:

1. Japan

2. Finland

3. Netherlands

4. Australia

5. Sweden

 

The United States is 17th out of the 23 countries in literacy. Only millennials in Spain and Italy had lower scores.

Top 5 scores in numeracy:

1. Japan

2. Finland

3. Flanders (Belgium)

4. Netherlands

5. Sweden

 

The United States is ranked 21st of the 23 countries. In numeracy, U.S. millennials ranked last, along with Italy and Spain.

Top 5 scores in PS-TRE (Problem Solving in a Technology Rich Environment):

1. Japan

2. Finland

3. Australia

4. Sweden

5. Norway

 

The United States placed 18th out of the 20 countries participating in that part of the study. In PS-TRE, U.S. millennials ranked last along with the Slovak Republic, Ireland, and Poland.

This is the most shocking of all of the results. American millennials are considered the most technology savvy people on the planet.

EST researcher Madeline Goodman said millennials not only rank lower in skills than their peers around the world, but they rank lower than all other age groups in the U.S.

We really thought [U.S.] Millennials would do better than the general adult population, either compared to older coworkers in the U.S. or to the same age group in other countries. But they didnt. In fact, their scores were abysmal, she said.

The studys conclusion is even more to the point.

A decade ago, the skill level of American adults was judged mediocre. Now it is below even that. Millennials, who will form the backbone of this nation's future, are not poised to lift us out of this predicament; in fact, the lack of adequate skills in this population has become a challenge for us to confront.

The impact the study notes puts the U.S. economy in dire straights.

The skills of our Millennials our youngest cohort, who will be the workers, the decision-makers, and the parents of the next 40 years will also have cascading effects on every level of society. A very real danger lies in perpetuating a cycle where low skill levels, less income, and less access to quality education will beget a further entrenchment of deep inequality, with some segments of society more at risk than others, it concludes.

Is more higher education the answer? Probably not. Millennials the report notes have been passed through high school and college without acquiring adequate skills. Policy makers and other stakeholders will need to shift the conversation from one of educational attainment to one that acknowledges the growing importance of skills and examines these more critically, the report said.

 

Source links: CBS MoneyWatch, 6ABC.com, Fortune, Applied Systems

Tags:  Insurance Content  Insurance Industry  Insurance News  Millennials: Looking at the Future of Your Busines  The Future: Millennials & Insurance  Weekly Industry News 

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It turns out — work really is killing you

Posted By Administration, Tuesday, March 17, 2015

 When you tell others work is killing you, a new study says you may be right. New research from Stanford University professors Stefanos Zenios and Jeffrey Pfeffer and Harvard Business School researcher Joel Goh claims workplace stress causes 120,000 deaths a year in the U.S.

They say long hours, job insecurity and an inability to balance work and life issues lead the causes. Those stresses along with the deaths cost employers, employees and insurers $190 billion a year in health care costs.

Zenios said, The deaths are comparable to the fourth-and fifth-largest causes of death in the country: heart disease and accidents. Its more than deaths from diabetes, Alzheimers or influenza.

These are the 10 common workplace stressors:

  Job insecurity

  Long work hours

  Low social support at work

  Low job control

  Secondhand smoke exposure

  Unemployment

  Exposure to shift work

  High job demands

  Low organizational justice

  No health insurance

 

They also did a breakdown:

  Job insecurity increases the odds of poor physical health by 50%.

  Job insecurity increases the odds of poor mental health by 40%.

  A significant stressor is the work-family conflict and it increases physical illness by 85%.

  Another major stressor is the lack of health insurance and it increases the odds of a physician-diagnosed health condition by more than 100%.

  Organization justice and high job demands are associated with a 50% increase in doctor-diagnosed illness.

  Loss of job control increase mortality rates by 45%.

  Long hours increase mortality by close to 20%.

  Another big driver is economic insecurity unemployment, layoffs and low job control.

 

The researchers say taken together these increase health care costs in the U.S by 5% to 8%. Critics say the study isnt accurate and Zenios agrees there are flaws. It is association it doesnt mean that theres causation. There may be other factors going on.

Pferrer agrees and says other causes could come into play but stress at work and not liking your job is a major contributor to health. Lots of research shows that your tendency to overeat, overdrink and take drugs is affected by your workplace. When people like their lives, and that includes work life, they will do a better job of taking care of themselves. When they dont like their lives, they dont.

 

Source link: Carrier Management

Tags:  Employment  Insurance Content  Insurance Industry  Insurance News  It turns out — work really is killing you  Weekly Industry News 

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