|
T H U R S D A Y , O C T O B E R 1 2 , 2 0 0 6
Big “I” National News
On the Hill
Political Races Heat Up
Polling shows interesting trends in top contests.
With less than four weeks until the Congressional elections, Congress is out of session and in full campaign mode. In the closing days of the campaign season, a tremendous amount of polling data is becoming available on a number of hotly contested races in both the Senate and the House.
Insurance News & Views recently previewed a number of races in both chambers that were of interest to InsurPac, the Big “I” and independent insurance agents and brokers across America. Now, we will research the ever changing polling data to keep our members abreast of how the contests are developing in races of particular interest to agents and brokers.
In the Senate, there are four races that have been of considerable interest to InsurPac. In Washington state, former Safeco CEO Mike McGavick, the Republican candidate, is facing an uphill battle against incumbent first-term Democratic Sen. Maria Cantwell. The most recent available poll, taken by Mason-Dixon on Sept. 27, showed Cantwell with a 50-40 lead, which is in line with her average advantage over the last three available polls (51-41). McGavick took a hit after revealing that he once had been pulled over for a DUI, but seemed to rebound and got as close as six percentage points in a Sept. 20 Rasmussen poll. Since then, however, Cantwell has maintained a solid lead of 9 to 12 points. CQpolitics.com and Rasmussen Reports both rate this race “Leans Democratic.”
In Connecticut, incumbent Democratic Sen. Joe Lieberman, running as an independent after his primary loss to businessman Ned Lamont, holds an average lead of 49-38 over Lamont in the last four polls, with Republican Alan Schlesinger averaging only 4 percent. The most recent poll available, released by the Hartford Courant and the University of Connecticut on Oct. 11, shows Lieberman with a 48-40 lead over Lamont and Schlesinger lagging at 4 percent. CQpolitics.com and Rasmussen Reports both rate this race “Democrat Favored,” but since Lieberman and Lamont are both Democrats, this distinction is essentially meaningless in terms of which individual candidate is expected to win.
In Nebraska, incumbent Sen. Ben Nelson, a well-respected moderate Democrat, holds a consistent and substantial lead over Republican businessman Pete Ricketts. Nelson’s average lead over the last three polls has been 56-32, with the most recent available poll, taken by Rasmussen on Sept. 20, showing Nelson with a 55-32 advantage. CQpolitics.com rates this race “Leans Democratic,” and Rasmussen Reports rates it “Democratic.”
And in Montana, incumbent Republican Sen. Conrad Burns appears to be in serious danger, trailing Democratic State Sen. President Jon Tester by an average of 48-42 in the last three polls, though the most recent available poll, taken by Zogby on Oct. 2, shows a slightly smaller spread, 46-42. CQpolitics.com still rates the race as “No Clear Favorite,” possibly due to Burns’s track record of coming from behind in the late stages of his 2000 campaign; Rasmussen Reports rates it “Leans Democratic.”
There are fewer and less frequent polls being taken on the House side, but one of the most closely watched races in America is taking place in Indiana’s 9th District, historically a Democratic-leaning but culturally conservative district along the Ohio River. Former Democratic Rep. Baron Hill, a onetime Big “I” member, faces off with current Republican Rep. Mike Sodrel for the third straight election: Hill won in 2002 and Sodrel won in 2004, both by narrow margins. The most recent available poll, released by Survey USA on Oct. 9, showed Hill leading Sodrel 48-46, with the three most recent polls showing an average Hill lead of 49-42. CQpolitics.com rates this race as “No Clear Favorite.”
In Pennsylvania’s 8th District, the most recent available poll, taken by RT Strategies on Aug. 29, showed incumbent Republican Rep. Mike Fitzpatrick leading his race 53-45, and the average of the two most recent polls showed Fitzpatrick up 54-44. CQpolitics.com rates this race as “Leans Republican.”
No recent polling is available in the hot race between Republican Rep. Deborah Pryce and Democratic County Commissioner Mary Jo Kilroy in Ohio’s 15th District, but CQpolitics.com rates the races as “Leans Republican.” Anecdotal evidence indicates that Pryce is in the fight of her political life. And in South Carolina, incumbent Democratic Rep. John Spratt is listed as favored by CQpolitics.com in the conservative 5th District.
Cliston Brown (cliston.brown@iiaba.net) is Big "I" director of public affairs/government relations.
Legal Advocacy
ING Settles with Spitzer on Disclosures in Retirement Products
On Oct. 10, 2006, New York Attorney General Eliot Spitzer announced a settlement with ING Life Insurance and Annuity Company resolving a year-long investigation of the company’s relationship with New York State’s largest teachers’ union.
The June 15 issue of IN&V reported that Eliot Spitzer settled an investigation regarding retirement products with New York State United Teachers (NYSUT). That settlement involved allegations that the NYSUT’s Member Benefits Trust accepted payments from ING and its predecessor Aetna Life Insurance and Annuity Company to exclusively endorse the ING/Aetna plan in return for payments not timely disclosed to members of NYSUT. To read the NYSUT settlement, click here. The Oct. 10 announcement settles the insurer side of those allegations.
Under the terms of the settlement agreement with ING, ING agreed to pay $30 million as disgorgement and/or restitution to NYSUT members who participated in the plans between Jan. 1, 2001 and June 30, 2006. Each plan participant who falls within this group is to receive at least $100. The rest of the $30 million is to be distributed pro rata to the plan participants based on the average end of month account balance they had between Jan. 1, 2001 and June 30, 2006.
In addition to the restitution amounts, the settlement agreement requires that within 180 days of the settlement, ING is to give a one-page disclosure to existing participants in ING retirement plans. The one-page disclosure covers the fees and expenses associated with the ING funds and includes a table showing the impact of the average fee on an investor’s account. The one-page disclosure also states that mutual funds pay ING for being included as investment options. ING must provide the one-page disclosure to investors for five years and deliver it to existing participants in ING retirement plans as a cover page to the participant’s periodic statements. The one-page disclosure is not required for fixed-only products (e.g. products for which no administrative fees or variable account fees are charged) where ING provides only third-party administrative services, or where a plan sponsor specifically directs ING not to send the disclosure despite ING’s request.
The settlement agreement also requires ING to cooperate with the New York Attorney General’s Office regarding other investigations it is conducting involving retirement products. To read the ING settlement, click here.
According to the press release issued by Spitzer’s office, “ING has agreed to set a new industry standard for retirement product disclosure by providing a simple cover-page summary of all the costs of each plan it offers.” The New York attorney general is hailing this settlement as a landmark agreement setting new standards of transparency. “This agreement raises the bar for the entire retirement products industry,” Spitzer says.
Along with the New York settlement, ING also settled similar allegations in New Hampshire involving the New Hampshire State Employees Deferred Compensation Plan. The New Hampshire settlement provides $2.75 million in restitution to plan participants and $225,000 to the state of New Hampshire for costs of the investigation. A copy of the New Hampshire settlement has not yet been made publicly available.
For more information, contact Kathleen Graber, IIABA associate general counsel, at 703-706-5432; kathleen.graber@iiaba.net.
L&H Trends
Do Your Clients Mistakenly Think They are Eligible for Disability Benefits?
Independent agents must identify risk exposures, review current insurance policies in place and identify any gaps in coverage. It’s not difficult to convince a customer that a risk with potential financial consequences exists. However, one of the biggest challenges an agent faces is educating clients that the government-provided “safety net” of disability and survivor benefits are solely not adequate to meet their needs. Not many people understand how government-provided disability benefits actually work.
A common misperception is that everyone is eligible for disability benefits. In reality, similar to the rules for retirement benefits eligibility, people have to qualify for disability benefits. Yet many young people and individuals who were out of the workforce for a particular period of time (for example, a mom who stayed home with her children for a number of years) may not be currently eligible.
Basically, when it comes to disability benefits eligibility, individuals earn one credit for each $970 of wages or self-employment income. When they've earned $3,880, they've earned four credits for that year. Because younger people haven't been in workforce long, the eligibility rules take into account:
• Before age 24: A person may qualify if he has six credits earned in the three-year period ending when their disability starts.
• Age 24 to 31: A person may qualify if he has credit for working half the time between age 21 and the time he becomes disabled. For example, if he becomes disabled at age 27, he would need credit for three years of work (12 credits) out of the past six years (between ages 21 and 27).
• Age 31 or older: In general, unless he is blind, a person must have earned at least 20 of the credits in the 10 years immediately before he became disabled.
Today, it is not uncommon for young people to take some time to “find themselves.” This journey might include a prolonged stay at college and/or a part-time job and college classes. Also, some young people end up “working under the table” in a job for cash, meaning their employer does not reporting their employment to the government and does not pay payroll taxes on them, so the worker is not receiving credits toward Social Security eligibility. As a result, a coverage gap can exist for a young person who worked sporadically and went to school. The same is true for a young mother who was out of the workforce for a while.
Parents should talk with their adult children about whether their employer covers them for disability benefits (and remember: Social Security requires a very strict definition of disability to receive payments, which means total disability for at least one year). Many employers, particularly smaller ones, don’t provide disability benefits.
According to the American Council of Life Insurers, 30% of small employers (10 to 100 employees) have never even been contacted by an insurance agent about disability insurance. For independent insurance agents, this gap creates an opportunity to talk to employers about offering disability benefits to their employees. In fact, independent agents provide the majority of commercial insurance for small- and medium-sized employers.
Are some of your commercial clients among the 30% that have never been contacted by an insurance agent about disability insurance? Don't let that be the case. Help your customers safeguard their employees’ financial future and in turn boost the bottom line of the agency.
Dave Evans (dave.evans@iiaba.net) is a certified financial planner and IA l-h contributing editor.
Tech Update
Weaving a Web of Possibility
Web sites are becoming more crucial to insurance agents as customers rely on Internet for recommendations.
Before the dawn of the Internet, shopping for insurance used to consist of asking family and friends for recommendations or just walking into a local agent’s office. But times have changed and now, rather than rely solely on word-of-mouth recommendations, customers are looking to Web sites for their information, making a strong Web presence a necessity for independent agents.
“The most important thing agents can understand is that consumers use Web sites today to validate what they are told,” says Bill Rice, president of the Web Marketing Association. “One of the first things people do is check on a person or company’s credentials, so the Web site has to represent the agent in a positive light.”
Rice understands what makes a good Web site. For 10 years he has been critiquing companies’ Web sites as part of the WMA’s annual WebAwards. Earlier this month, WMA released the winners of its 2006 WebAwards. A total of 2,300 Web sites in 96 categories were scored this year, including several insurance Web sites. Blue Shield of California won the award for Best Insurance Website. The website for DRIVE Insurance by Progressive (www.driveinsurance.com) was among those recognized with WebAward’s Standard of Excellence award.
“We’re delighted to have received the award for driveinsurance.com,” says Bill Everett, product development manager and DRIVE online experience manager. “First, it reinforces to DRIVE that we are making the site an effective tool for consumers who want to purchase insurance from an independent agent or broker. And it helps motivate us to keep making the site even better.”
DRIVE, the largest writer of auto insurance through independent insurance agencies in the country, launched its Web site in Dec. 2004. Since then, it has received 2.3 million hits, a statistic Everett credits to the site’s breadth of information.
“Consumers can go to the sites to find a local agency that sells DRIVE, get a quote for an auto policy and even send that quote electronically to the agency of their choice – the agency receives the quote in the forma of a sales lead,” he says. “The site is also our online portal of DRIVE customers to service their policies. They can log in to their policy and make a secure payment, report and track a claim, view and print their policy documents and more.”
The WMA judges scored Web sites for this year’s WebAwards on seven criteria including: design, content, ease of use, copywriting, use of technology, interactivity and innovation. The last of which is the most crucial, according to Rice.
“All of these things play an important role in taking a Web site to the next level, but innovation is the most difficult to achieve because it is so illusive, yet very powerful when you get it,” he says. “Once you have that, the rest of the industry is going to try and catch up.”
Earlier this year, WMA released its Internet Standards Assessment Report (ISAR), which ranked industries on criteria similar to those used for the awards. The insurance industry had a poor showing ranking in the bottom 15 in most of the categories. (See “Insurance Industry Lacks Dynamic Web Presence” in the April 6, 2006 issue of IN&V.) Rice believes agents and the industry would have better success on the Web if they avoid making one of the most common mistakes of Web development.
“People think, ‘Oh, I have a Web site’ and then forget about it. A lot of agents put their Web sites up and they have a pretty good look and feel, but four years later they haven’t done anything to improve them,” Rice says. “The fact that they don’t regularly re-visit it and ask their customers if it’s helpful isn’t going to do them any good.”
Michelle Payne (michelle.payne@iiaba.net) is a Big “I” writer/editor.
Agency Management
Dialing-Up Business
Ten tips to help you warm up your cold-calling techniques.
Picking up a phone and calling someone out of the blue is a task many agents do not look forward to. However, cold calling is an effective and sometimes necessary method of finding new business. While it can be tedious, it doesn’t have to be a dreaded activity, according to Susan Aldridge, president of Outspoken1, a company that provides an outbound lead generation service and cold call training program.
“The biggest advantage of cold calling is you ‘meet’ the prospect right from the beginning,” she says. “Whether you get the sale right away or not, a bond is made and business relationships are gold no matter how long it takes to make the sale. You just have to keep maintaining it---and that means patience. It could lead to big dollars if you’re willing to hang on.”
Aldridge views cold calling as something that can benefit any company and urges independent agents not to discredit its effectiveness.
“I helped build two start-up companies through cold calling in a time when no one knew who these companies were,” she says. “It was how we got the word out, and because both companies offered great services and produced great results, the businesses became more referral-based, which is what all businesses strive for.”
Several elements go into to effective cold calling, but there are 10 key points Aldridge stresses when it comes to picking up the phone and reaching out for new customers. These points include:
1. Don’t keep your personality in your pocket. People are so intent on getting their message across that they tend to read scripts, get nervous and forget about authenticity. Be yourself.
2. Don’t read from a script. Write features, benefits, positioning statement, all things regarding a service/product on several different post-its around your computer so instead of being tempted to read a script, you are more apt to listen to a prospect and be more available to them. Think of it as a cold-call conversation and refer to the post-its when needed.
3. Don’t be afraid to make a mistake. Just recover and carry on. Using humor helps because then people will remember you and you’re no longer seen as just another cold caller.
4. Do not fear the phone call.
5. Always respect the people in charge---they have power.
6. Leave interesting voicemails that compel the prospect to call you back. Refer to how you helped someone solve a huge problem, saved someone money or provided some benefit. Sometimes even funny voicemails do the trick.
7. Use a computerized tracking system to track calls, schedule new ones, list call-backs, appointments and manage notes and information so you can build and maintain the prospect relationship.
8. Think of a humorous personal story, joke or some visual that transports you immediately into a fun mood. Then start making calls. Use this trick when you’re having a particularly challenging day.
9. Place a mirror in front of your phone. And watch yourself through a cold call. Smile! You can monitor the success of the call through your facial expressions. And if need be, pull out a funny mask (see number eight) and use it through your call. See if it makes a difference in your attitude.
10. Don’t stop calling a prospect until you’re asked to. It may take 10 or more calls to reach someone, but remember, it is a numbers game.
Michelle Payne (michelle.payne@iiaba.net) is a Big “I” writer/editor.
|
