MARK YOUR CALENDARS | AWARDS LUNCHEON
Wednesday, August 4, 2010 |
IIARI LEGISLATIVE WRAP UP
Agency Principals can expect a 2010 Legislative Wrap Up in their email this week. IIARI Government Affairs Committee Chairman Ernie Shaghalian has prepared a detailed overview of the outcomes from this years' legislative session on Smith Hill. While there were some victories, some unresolved matters and even some adverse legislation (increase in surplus lines tax to 4%), Ernie gives you a comprehensive look at bills that impact the independent community. Special kudos extended to all IIARI committee members and NAIFA-RI representatives who work with us collaboratively via the RI Insurance Agents Council.
Look for the Wrap Up email this week!
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U.S. HOUSE PASSES 5-YEAR NFIP EXTENSION
According to the National Underwriter Online News Service, the House passed H.R. 5114 "Flood Insurance Reform and Priorities Act of 2010" by a vote of 329-90. The bill reauthorizes the NFIP for five years. The insurance industry is objecting to an amendment from Rep. Gene Taylor, D-Miss, that will require Write Your Own (WYO) insurers to agree to eliminate "anti-concurrent causation" language to exclude coverage from wind damage simply because there is also flood damage to the property. It is unknown what the U.S. Senate will do on the matter at this point.
To read the NU Online News Service Article, click here.
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2010 CONVENTION: SURVIVE & REVIVE
The convention committee, under the leadership of Kim Raymond continues to finalize plans for the 110th Annual Convention to be held October 7-8, at the Crowne Plaza in Warwick.
Dave Sanborn, with extensive education instruction experience, is planning on presenting 12 hours of CE (subject to approval) over the two days of the convention. Thursday will provide an opportunity to golf at the Warwick Country Club. The golf reception will occur back at the Crowne Plaza where golf prizes and other prizes will be distributed during the Luau Reception under the tent. Agency Principals have an opportunity to hear from the Director of Insurance on Friday, as well as, two skilled attorneys whose practice is principally limited to agents defense work. You won’t want to miss this session.
Pricing for both days of CE will be less than the average cost of a two full days of education and includes lunch, evening receptions and entertainment. A special discount will be extended to agency personnel provided the principal purchases a full convention or a full individual day registration.
More details will be forthcoming in the coming weeks. Be sure to mark your calendar now!
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CASE STUDY: WHY INSURBANC SHOULD BE BANK OF CHOICE FOR INDEPENDENT AGENCIES
InsurBanc has prepared a case study of an individual who searched for solutions for financing a buyout and discovered InsurBanc was the best and optimal solution. InsurBanc was created by independent agents for independent agents.
Click here to read the Case Study.
Click here for more information about InsurBanc.
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Big "I" Virtual University
UNLOCK THE SECRETS OF AGENCY VALUE
Webinar explains why values differ based on the needs of buyers and sellers.
A distributer prices a bottle of water at $1. But what if the water is transported to the middle of a desert, where there are no other sources of water — is the bottle still worth only $1? If the water comes from a spring that is free and readily accessible to locals, will they pay $1 a bottle? Agencies are like water. The value of the water, just like the value of a business (including insurance agencies), depends on the condition and needs of the buyer — not just the needs of the seller.
If an insurance agency is a corporation and its owners take all available net funds each year in compensation and/or bonuses and contributions to pension plans (a common occurrence in agencies throughout the U.S.), the agency may not pay much in income tax because the tax responsibility belongs to the individuals receiving the compensation. It can be valued as a going concern based on the historical and current trends of revenues and expenses. In order to make up for the lost income if the owners were to die or become disabled, the agency should retain sufficient income or insurance to replace the “going concern value” of the agency in its normal operation.
However, if that same agency is considering selling to another agency, the basis of value suddenly becomes the net income (earnings after taxes) that the acquired agency can substantiate for the acquirer. If the acquirer can merge the purchased agency into its facilities using its pre-existing employees to service the purchased book of business, it may be able to generate as much as 60% to 70% of the purchased agency’s income as profit (taxable). The net earnings after tax considerations for the projected profits form the maximum that the acquirer can afford to pay the seller in any given year. The value is comprised of the total earnings potential over the number of years that the acquirer is willing to forego the additional earnings in order to pay the seller.
To access the rest of this article, excerpted from the VU Research Library, click here (login and password required). To learn more about agency valuation, register to attend our newest webinar, "De-Mystifying Agency Valuation," on August 5 from 1:30 to 3 p.m. ET. Al Diamond, the president of Agency Consulting Group, Inc., a Virtual University expert and well-known, hands-on consultant to the insurance industry, will present the session. For more information, e-mail BestPractices@iiaba.net.
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Big I Virtual University
LATEST VUpoint NEWSLETTER AVAILABLE
The July 16 issue of the Virtual University VUpoint Newsletter is now available for online review. Articles this month include:
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Big "I" Markets
CHECK OUT HOT MARKETS ON BIM
Valuable articles, real estate E&O and bond among most popular markets.
Big "I" Markets (BIM) is heating up right along with the summer temperatures. Read on for a rundown of some of the hottest markets based on the amount of business agents are submitting and binding.
Stand Alone Valuable Articles, the newest product on BIM, has been an instant hit, with dozens of submissions in just the first few weeks. Offered by QBE Specialty, this Fine Art and Valuable Articles Program offers tailored products and services for personal and commercial fine art and floater risks. Coverage is available on a personal and commercial basis for a diverse range of risks, including fine arts, jewelry, antiques, silverware, coins and stamps, memorabilia, gun collections, fine wine, musical instruments and other collectibles.
Through the first six months of 2010, BIM has bound more real estate E&O business than was written in all of 2009. Check out these examples of common claims that real estate agents need protection against.
The bond business is booming. Quote volume has increased more than 100% from last summer, as agents are benefitting from the expertise provided by Goldleaf. Remember, if you provide a lead, Goldleaf underwriters will sell the bond for you.
While there are 12 segments of business that come under non-standard homeowners banner (click here for descriptions), several classes are generating a lot of activity. Users continue to access the vacant dwellings and coastal classes, while the slow economy seems to be affecting high-net worth homeowners, as evidenced by a noticeable surge in affluent non-standard submissions. Strong submissions also continue for the suite of habitational segments and, although it’s available in only a handful of states, the vacation income product is growing quickly. For a closer look at the habitational markets, click here.
The various hospitality offerings generate a consistent volume of submissions, with bars and taverns leading the way. Flood and affluent homeowners remain in high demand. In particular, activity in excess flood is picking up, while the new ACE market is proving to be an attractive alternative in the affluent space.
Thanks to your continued support, it’s shaping up to be a great summer for business on BIM. And recent changes to workflow and operations will keep service levels high. To learn more or register for this free member benefit program, visit www.bigimarkets.com.
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Best Practices
JOINT PLANNING TOOL AUTOMATES AGENCY-CARRIER WORKFLOW
Act now to improve current carrier relationships and attract new ones.
As a successful agency owner, you want to create more productive partnerships by sharing information and planning responsibilities with the carriers you represent. By working together, you can maximize efforts and resources to generate greater efficiency profits. The Joint Planning Tool Quick Step was designed to help facilitate this critical planning. Developed jointly by agents and companies in partnership with the Big “I” Council for Best Practices, this easy-to-use Excel spreadsheet will help you establish and monitor collaborative planning relationships with carriers.
The Joint Planning Tool Quick Step can help agencies establish production goals, create greater underwriting profitability, increase retention rates, enhance productivity, facilitate mutual-problems-solving, improve client service and better allocate resources. The tool also helps establish internal goals, prepare for discussions with carriers and develop, implement, adjust and monitor a joint plan.
Not only will the Joint Planning Tool Quick Step help improve your current agency-carrier relationships, but you can also use the tool to attract and develop new partnerships. Previous surveys have shown that 100% of insurance companies interviewed would seriously consider any agency that had initiated the planning process on its own and prepared a submission for the company.
This is a must-have tool for any agency owner or manager who is responsible for the planning process and wants to enhance existing relationships or develop new company associations. For more information on all the Best Practices resources, click here. To obtain an order form, click here or e-mail BestPractices@iiaba.net.
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| NATIONAL NEWS | | | Want to Improve Your Bottom Line? Click HERE for video presentation. If your agency is struggling with the twin effects of a struggling economy and a soft market, the Big "I" has tools you can use right now to help improve your bottom line. Listen to Big "I" President and CEO Bob Rusbuldt talk about what the Big "I" is doing to help your agency thrive. | | | | Big "I" Markets Introduces Fine Arts and Valuables Product ALEXANDRIA, Va., July 28, 2010 - The Independent Insurance Agents & Brokers of America Big "I" Markets program today announced access to new stand-alone fine arts and valuable articles policies. The new program offers tailored products and services for personal and commercial fine art and floater risks. | | | | Big "I" Testifies Before Congress on Federal Crop Insurance Program WASHINGTON, D.C., July 22, 2010 - John F. Dalton, a Big "I" crop insurance agent from Iowa, testified today on behalf of the Big "I" before the U.S. House of Representatives Committee on Agriculture Subcommittee on General Farm Commodities and Risk Management in a hearing regarding the current state of the federal crop insurance program. | | | | Big "I" Comments on President Signing Financial Services Reform Bill into Law WASHINGTON, D.C., July 21, 2010 - The Big "I" today commented on President Barack Obama's signing of the "Dodd-Frank Wall Street Reform and Consumer Protection Act" into law. | | | | "De-Mystifying Agency Valuation" Webinar ALEXANDRIA, Va., July 20, 2010 - The Big "I" today announced that the Big "I" Virtual University will present a webinar on "De-Mystifying Agency Valuation" Aug. 5, 2010 from 1:30 p.m. to 3 p.m. EST. | | | | ALL IIABA NEWS AND PRESS RELEASES | | | | Subscribe to Insurance News & Views You can subscribe to Insurance News & Views, IIABA's weekly member email newsletter. This informative publication contains the latest industry and national association news and is delivered to your desktop every Thursday. You must be an owner or employee of an IIABA member agency to subscribe. | | |
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