What services or lines of business are you focusing on forgrowth in 2013? 

Spencer M. Houldin: We have particular focus onpersonal insurance for the high-net-worth consumer. These clientsseek an insurance advisor with markets and product knowledge. Weoffer services, such as background checks for domestic employeesand personal property inventory services, which are sought in thisspace. Given the competition for the commodity-based consumer, weare committed to growing our advisory-based customer numbers. Anadditional 2013 goal is to grow our group personal excess liabilitybusiness with a particular focus on law firms.

Jeff Cavignac: We focus on our corecompetencies, which include the building industry (development,design and construction), real estate, manufacturing, non-profitsand other industries we feel qualified to work with. We believe itis important to specialize in order to help clients effectivelymanage risk. We also plan to further develop our fee-based riskcontrol services, specifically in the area of human resources.

Ted Devine: We will strengthen ourrelationships with our core carriers and identify additionalcarriers that might provide our customers with better security. Wealso will ensure that clients understand the unique valuepropositions of each of our carrier partners. Our clients want usto present their insurance options in a way that is relevant tothem. Differentiation on something other than price is a coreservice we provide our clients and our carrier partners.

What was your biggest challenge in 2012? How did youovercome it? 

Cavignac: Our biggest challenge was growing ourtop line at a time when many of our clients continued to experiencea tough business environment. This has actually been a factor forsome time. If we had renewed 100 percent of our clients since 2006and not written anything new, our revenues would have been cut inhalf. The only way we have been able to develop the modest growthwe have is the acquisition of new business. Our annual new businessgoal equals 15 percent of our year ending commissions. We alsostrive for a 95 percent retention and 5 percent productivity gainsmeasured as revenues per non-broker employee.

Devine: In 2012, we saw a large increase indemand for small business commercial policies. Keeping up with thevariety in businesses was one of our largest challenges. A fewyears ago, the market mainly consisted of computer consultants anda few other professional services classes. Now nearly every type ofsmall business is looking to mitigate business risks.

We also have spent a tremendous amount of time and energybuilding out our product offering with new carrier partners inorder to service as many industries as possible. It is a goodproblem to have.

Houldin: Our biggest challenge has beenimplementation of a segmented approach to our internal operations.We cannot afford to treat a $25,000 personal lines account the sameway we treat a $4,000 account. Both are valued and both will begiven an exceptional experience, but they have to be handleddifferently to preserve margins. This has led to additionaltraining needs, severing of some client/CSR relationships, and newteam building initiatives. The implementation was not withoutchallenges. Taking direct feedback from all involved and adjustingour approach will allow us to end the year much stronger than westarted.

Read on to hear panel opinions about mentoring youngagents and compiling disaster plans.

Where do you turn for young talent? How do you mentoryoung agents? 

Devine: We are fortunate to have a goodrelationship with college insurance programs here in the Midwest,and over time, these young insurance majors contribute to oursuccess. A key part of this success is the enthusiasm and energythese talented grads bring to the team. Insureon's culture is adynamic and more entrepreneurial environment compared with otherinsurers. We give young agents a lot of responsibility andopportunity from the get-go, and they seem to thrive on it.

Cavignac: Young talent is the toughest to find.Many recent college graduates are not certain what they want to dowith their careers. The young talent we have hired we already knew.Both our young brokers also played college sports. This wasreflected in their demonstrated competitive attitude, ability towork within teams and the willingness to work hard. In the futurewe will continue to evaluate young brokers on these threeattributes.

Houldin: I have enjoyed being involved withInVEST, a collaboration of agents and carriers charged witheducating our youth about the opportunities within the industry.Under the auspices of the Big I, InVEST has grown over the last 40years and is making a real difference in attracting youngtalent. 

At Ericson, our top priorities in new hires do not necessarilyinclude a strong insurance background. We look outside the industryfor individuals who are clearly motivated to succeed, have strongtechnological skills and are forward thinking. We have the capacityto provide the training for them to gain a strong insuranceaptitude. There are certain innate traits that you cannot trainthat we long for.

Does your agency have a disaster plan? When clients needagents most, how do you ensure that claims will behandled?

Cavignac: We are clients of Agility RecoverySolutions. If there is a disaster in San Diego and our building isinhabitable, Agility guarantees that we will be back andfunctioning within 48 hours. With Agility's help, we developed adisaster plan that is reviewed with staff annually.

Devine: At insureon, we are proud of ourinternal disaster recovery plan. We built in redundancy for ourtelephone and technology infrastructure, and we have offices andstaff in different parts of the country, which helps insolate usfrom the impacts of regional disasters. We are confident thatregardless of what disaster scenario occurs, we would be able tocontinue operations. I just hope we don't have find out.

Houldin: We have a comprehensive disasterrecovery plan that is triggered in a variety of situations. As partof this plan, emails and voice messages revert to the cloud to beretrieved from any location. We have reciprocal relationships withagents in other areas who could to take calls for us. In the caseof an impending event, we send a blast email to all clients,letting them know how to reach us post event. This usually involvesa customized email address for the event. We meet after each catevent to talk about how we could be better.

Continue reading for panel discussions of legislativeissues and social media use in the industry.

What legislative issues interestyou? 

Devine: We would like to see a single nationalproducer's license.

Cavignac: We would like to see California'sindemnity statutes revised. Current indemnities allow upstreamparties to force uninsurable indemnities on downstream parties. Wereview our clients' contracts from a risk management and insuranceperspective. Our job is to quantify risk for our clients so theycan make the right decisions for their companies. Unfortunately,sometimes our clients are in a “take it or leave it” position. Theyeither have to accept the lousy contract terms or walk away fromthe job. We are advocates for statutes that require each party tobe responsible for the consequences of their negligence.

Houldin: With the President's re-election,there will be renewed pressure to have the federal government playa stronger role in the financial services industry. With the statusquo in Washington, Dodd-Frank is here to stay. We are fortunate tohave a strong lobbying presence in Washington, primarily throughthe Independent Insurance Agents and Brokers of America (IIABA), toprotect our interest and fight for preservation of the stateregulatory system.

I would love to see NARAB II come to fruition, which wouldstreamline multi-state licensing for agents. The current method ofinteracting with each state is inefficient, unnecessary anddetrimental to consumers. NARAB II has broad support in theinsurance industry and has been endorsed by the National Assn. ofInsurance Commissioners. It has passed the House on two prioroccasions and I am hopeful that we see movement in both chambers ofCongress next year.

Taxes, the Affordable Care Act and the Terrorism Risk InsuranceProgram also warrant attention.

How do you use social media to attract and retainclients? 

Cavignac: I'm not sure social media attracts orretains clients. We use it so others can check us out. We areactive on Facebook, LinkedIn and Be-Influential. We also blog forseveral publications. What we probably do best is publish positionpapers on key issues. We recently received an opportunity on a$500,000 account because the client performed a Google search onforeign insurance and found one of the newsletters we had writtenon the topic.

Houldin: This is an area in which we could do abetter job and will have our full attention in 2013. We justcontracted with Project CAP to design and launch a digitalmarketing strategy, which will largely involve social media. We areparticularly interested in how social media can help us bettereducate our clients and respond to them in the time of widespreadcatastrophic loss.

One of our advisors launched and moderates a Linkedin groupdesigned for agents who work with high-net-worth clients. Themembers of the group collaborate to solve problems and sharemarketing ideas. It has grown to just under 400 members.

Devine: For us, it comes down to having along-term commitment to frequently posting content on Twitter,Google+ and other social media channels, while treating eachchannel differently. For example, we actively promote our newsarticles specifically to Twitter, while larger announcements arebetter for blogs and other channels.

How do you differentiate your agency and products fromdirect writers?  

Devine: To the small businesses we work with,choice is critical. They want to know what their options are. Whatwe hear from our clients—particularly the smaller accounts—is thatthey have difficulty finding agents interested in learning theirbusiness and capable of providing unbiased advice. A direct writercan be at a disadvantage when it comes to these critical areas.

Houldin: Independent agents offer the unmatchedability to provide choice in the marketplace, allowing us tocustomize the needs of the client in the most cost effectivemanner. The culture at Ericson is based on the premise that we arenot selling a product, but playing a vital role as a trustedadvisor. The product sale will come naturally.

Ericson focuses on the utilization of technology to enhance theclient experience, both in coverage analysis and policy service. Westrategically choose our carrier relationships to make sure allproduct needs are met, but also so we are a significant partnerwith the carrier.

Cavignac: Most insurance brokers “sellinsurance” and provide reactive service. Any of our brokers willtell you what they do is “manage risk and negotiate insurance.” Thewords are chosen purposefully. We use the Cavignac Risk ManagementProcess. This system enables us to work with our clients to lowertheir cost of risk and drive dollars to the bottomline. 

The panel concludes with advice for building trust withclients–even in times of disaster.

How do you build a trusting relationship withclients? 

Houldin: You have to walk the walk, not justtalk the talk. It takes time. A quick perusal of agency websiteswill show that everyone purports to provide great service. And manydo. Actions are stronger than words, though, and we realize we needto outperform every day to earn client trust. We are grateful tohave a very strong network of referral sources who sing ourpraises. Our biggest opportunity to gain trust is in the time of aloss when we show why their decision to favor us with theirbusiness was a good one.

Cavignac: We live our mission statement. Itfocuses on three areas: knowledge, service and professionalism.Knowledge means being the experts in our fields. We spend two tothree times more than our competitors on education. We feel weunderstand the core industries we work with better than others. Wealso know what we don't know but know where to get answers. We alsoutilize the Cavignac Risk Management Process. This four-step systemenables us to work with our clients in a systematic way to helpthem manage their risk and drive dollars to their bottom line.Service is also critical. Every brokerage claims to offer “greatservice.” I can't tell you what other brokers do, but I can tellyou that we are constantly seeking to be proactive in our customerdealings. We ask our clients how we are doing, and if there isanything we're not doing that they feel we should be doing. As theCEO, I make it clear to all clients that if we ever fail to live upto their expectations, I want to hear about it. The final area weaddress in our mission statement is professionalism, which wedefine as putting the client's interest in front of your own. Thisis easy in theory but difficult in practice. It means recommendinganother broker or alternative if it's in the client's bestinterest. It can take dollars out of your pocket; however, it's theright thing to do.

Devine: Our staff is the key to buildingquality relationships. Though the early stages of insureon'sapplication are online, each and every client speaks to arepresentative at some point. Our clients are typically focused onthe day-to-day intricacies of running their business, so when itcomes to insurance, it helps to have a partner they cantrust. Part of doing that is making our products relevantto the client. That means we have to truly understand the businessowners' operations and the associated risks. 

Additionally, at insureon, we are not transactionoriented. We understand that as the businesses we workwith grow, even the smallest relationships pay dividends. When yourclients trust you, they tell their friends.

How can agents be “trusted advisors” to both businessand personal customers in the event of a disaster?

Houldin: Your reputation can be made or ruinedbased on your ability to be there for the client when they need youmost—in the time of loss. They need solid counsel and empathy.

We have a full-time claims manager who has the resources at hisdisposal to provide immediate mitigation needs. We work hard tobuild these third-party relationships for the benefit of ourclients. From there, we need to fully understand the potentialloss, review the deductible and claims history and make an educateddecision on whether filing a claim is warranted. Once filed, weeducate the client as to the process and stand ready to be theiradvocate to the end. It is not unusual for a claims adjuster tointerpret a contract differently than our team, which requires athoughtful rebuttal to their rationale to afford coverage where itis deserved.

Devine: At insureon, we strive to understandthe customer. And though that may seem like corporate rhetoric, itis fairly straightforward in the insurance industry. Clients wanttheir agent to be an ally in any claim, they want frank advice andthey want to know their agent understands their business. That issomething we do well by training our team and creating specializeddesks that handle claims for each industry. So when a restaurantcalls in, they are dealing with an agent that does numerouspolicies a day—not a couple each month.

Disasters can be especially stressful because our customers knowthey are fighting for attention from carriers who are overwhelmedwith claims. We are proactive and help create realistictime frames and expectations.