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T H U R S D A Y , M A R C H 2 7 , 2 0 0 8
Industry News
InVEST
Participate in the 2008 InVEST Silent Auction
Don’t miss your chance to support the next generation of industry professionals! Participate in the InVEST Silent Auction and support the program’s annual scholarships awarded to graduates of InVEST who are pursuing higher education with an emphasis on insurance. To preview the upcoming auction items click here.
The InVEST Silent Auction will be open during the during the Big “I” Legislative Conference & Convention trade show from 6 to 8 p.m., April 3 and 9 a.m. to 12 p.m., April 4.
On Thursday night only InVEST is offering a “buy now” option that allows bidders to purchase a few select auction items at a “buy now” price. To purchase one of these items, bidders must let the InVEST staff know they would like to acquire one of the specially marked items, render payment and pick up the item by the conclusion of Thursday’s opening night party in the exhibit hall on April 3.
The InVEST Board of Directors is holding the InVEST live auction during the Large Agent/Broker CEO Dinner on Thursday evening. This is the second year InVEST will hold a live auction as part of the Big “I” Legislative Conference & Convention. This thrilling package, donated by Allstate and Encompass Insurance, includes two tickets to the Allstate® 400 at the Brickyard®, round trip airfare, hotel accommodations and Gasoline Alley Suite tickets, along with hospitality including food and drinks.
InVEST would like to thank all its supporters, both donors and “bidders,” that make these auctions fun and a valuable way to help young people further their insurance studies.
For more information about the auctions please contact Sandra Skipper, InVEST program manager, at 703-706-5437; sandra.skipper@iiaba.net.
DIVERSITY
IIA of Virginia to offer AIAO Program
The IIA of Virginia has announced that it will be offering the Associate in Insurance Agency Operations (AIAO) designation program beginning in April. Classes in strategic planning, budgets, getting others to see your vision and creating a sales and customer service culture are all part of the curriculum. IIAV has put together an excellent team of instructors. Experts in human resources, technology, sales and customer service will lead the discussions to make this an exciting series of classes.
This dynamic program is designed to provide insurance agency owners, producers and managers with the planning, sales and service expertise necessary to build successful independent agency operations.
Position your agency for continued growth and success. This comprehensive curriculum is designed for those who seek the tools and strategies that will allow their agencies to be attractive business partners for top national and regional agency carriers.
IIA of Virginia is graciously opening the registration for the AIAO program to any Big “I” member in the country. The eight-day program is offered in four, two-day sessions with the first session planned for April 24 and 25. For more information contact Diane Mattis at 800-288-4428; dmattis@iiav.com.
BIG “I” MARKETSSM
The Value of High Net Worth Customers
According to a new Luxury Customer Experience Index survey (LCEI) from the New York-based Luxury Institute, an independent research institution that voices the concerns of the high net worth consumer, Chubb scored second in a survey of 15 property-casualty firms. USAA earned the highest score. High net worth clients rated 15 of the largest national p-c insurance brands based on their individual experiences. Big “I” members have access to Chubb & Fireman’s Fund affluent homeowner package programs, both of which are aimed at high net worth consumers. Fireman’s Fund, however, was not included in the survey.
Affluent Households: The Forecast
Despite the sub-prime mortgage debacle and signs of a recession, the affluent market is growing. According to the U.S. Federal Reserve Board's Survey of Consumer Finances 2001 and 2004 surveys, high net worth households are among the fastest growing segments in America. Between 2001 and 2010, families with a net worth of more than $5 million are projected to grow by more than 27% ---a total of two million households. Today, the average net worth of these families is more than $14 million and their combined net worth make them a market worth nearly $25 trillion.
Affluent Households: The Definition
Income is only one part of the equation. Net worth is more telling. By most definitions, net worth, is the sum of one's assets --- home equity, investments, savings accounts, retirement funds, cars, furnishings and such valuables as jewelry, furs, wine collections etc, minus all outstanding liabilities such as mortgage balance, revolving and credit card debt, college loans and so on. Across all households, the national median net worth is $86,000. Half of the population has more than that, half has less.
The biggest and broadest affluent segment consists of people with investable assets of $200,000 and $1 million to $2 million. This group is sometimes referred to as mass affluent. The next segment up from mass affluent is designated as high net worth individuals (or HNWIs). There are no universal criteria here. Generally, HNWIs have invested assets of at least $1 million, although some companies also target younger households with healthy six-figure incomes, knowing their net worth is likely to reach target levels in the near future. Right now there are more than seven million high net worth households in the U.S., with a forecasted growth rate of 16% per year and projected assets of $32 trillion.
Affluent Households: The Opportunity
Along with an increase in wealth comes a large increase in the complexity of managing such wealth. Most high net worth families remain actively engaged in accumulating wealth even as their net worth surpasses eight figures. In addition to their increased wealth, high net worth households have expensive lifestyles. They are the "working rich." According to a Prince & Associates, Inc. survey, nearly nine out of 10 high net worth households report they are "very concerned about losing their wealth" and consider addressing this concern as one of the most important in choosing financial advisors.
As wealth inheritance and retirement take center stage for aging baby boomers, financial advisors and insurance professionals are positioning their practices for this highly desirable market segment. Affluent seniors expect state-of-the-art products and services from their professional advisors. Financial services professionals, insurance agents, wealth managers, trustees, accountants and attorneys will be called upon by both baby boomers and their aging parents to help them navigate their way through the wealth distribution and transfer stage of their estate plans. Agents who understand the demographic of high net-worth individuals and can provide creative solutions, will have a significant advantage over their competition.
Affluent Households: What Agents Can Do
* Familiarize yourself with the Chubb Masterpiece & Firemen’s Fund Prestige Portfolio homeowner packages. Learn the coverage advantages inside & out so that you can sell against the lower priced but sometimes coverage deficient polices many affluent consumers have purchased from the main street market.
* Brush up on life insurance products and sales skills. Or, for those who don’t sell life, consider adding a life specialist to work your book. Life insurance is an integral part in managing any household’s financial strategy and a revenue share with a specialist could be lucrative for your agency.
* Consider hiring someone who has a series 66 and 67 license so your agency can offer interest earning investments such as variable life, annuities and mutual funds.
* If you don’t want to branch out into those areas of financial management services yourself, then partner with a firm that does and set up a referral network. Or let a financial planner work your book and arrange for you to be paid for any sales that are made. Conversely, see if you can work the planner’s client base for leads.
* At a minimum, you should offering E&O insurance to anyone you know who is a financial planner or tax advisor and you can do that accessing the Financial Advisor Professional Liability product on Big “I” Markets.
IIABA NEWS
ACSR Scholarships Available
IIABA, in close cooperation with the National Association of Insurance Women International (NAIW), continues to offer a scholarship program to further promote and assist insurance agents and brokers’ commitment to excellence.
During NAIW’s annual convention in June, the Big “I” and NAIW will award the following scholarships toward IIABA’s Accredited Customer Service Representative designation (ACSR): Two full scholarships to take all classes required to earn the ACSR personal, commercial or life-health designation; and one scholarship to take an ACSR personal, commercial or life-health class.
“We are thrilled to be partnering with NAIW to offer their members and our own association members the opportunity to continue their education and gain valuable technical and professional training,” says Madelyn Flannagan, Big “I” vice president of education and research. “The ACSR designation is an important one—it promotes and recognizes the professionalism of customer service personnel in the insurance industry.”
Scholarship recipients will gain critical professional development skills, improve their customer service tactics, retain accounts and reduce their agencies’ E&O exposure. In addition, they will be able to take advantage of earning their designation online via the Big “I” Virtual University.
Applicants must be current and active members of the NAIW and in good standing. They must also work full-time at a Big “I” member agency and have one year experience in the insurance industry. Scholarship recipients must complete and achieve the ACSR designation within three years or take the ACSR class within one year and expect to continue their career for the next three years in the insurance industry. To obtain an application, which must be postmarked by April 25, click here.
IA MAGAZINE
Spring Forward with the March Issue
Spring is here and so is the March IA! This month’s edition includes articles to gear readers for the new season including: “In the Mix,” an explanation of why the soft market may mean reassessing an agency’s business mix; “Lean, Green Producing Machine,” a look why new agencies are prospering in spite of a soft market; “The Time is Now,” a report on how increased carrier focus on agents plus a new tax environment is making life insurance profitable; and “Cracking the It List,” a tale of an agent who went high-end to compete in the personal lines market, plus much more! Visit www.iamagazine.com for the issues’ Online Extras.
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