Cavalcade of Risk #93

Welcome to Cavalcade of Risk #93. Perhaps because of the holiday weekend, we were light on submissions but those we did receive were interesting. As expected, the health care debate as part of risk management continues to swirl both pro and con, so we'll begin there.

Health Care

Dr. Jaan Sidorov takes a look-see at the Senate Health Reform Bill’s provision to surtax the rich. After reviewing the various arguments both for and against, this contrarian bloggist points out that insurance premiums are typically not progressive. There are implications he warns -- big implications.

Jason Shafrin explains how the House Health Reform bill will affect the number uninsured and the number with employer-provided insurance. The Healthcare Economist explains at his blog.

Louise from Colorado Health Insurance Insider brings us her opinion in her blog entry Public Opinion of a Mandate. "We can’t have it both ways," she says. "We can either continue with a “free market” health insurance system that allows carriers to use medical underwriting and also allows individuals to opt in or out of the health insurance system as they please, or we can move to a system that insures everyone, thus spreading the cost to care for the sick across the entire population. (It’s useful to keep in mind here that none of us really knows when we might be counted among the sick.) But to think that we can have a system that allows sick people to obtain care with reasonable premiums while not collecting any premiums at all from healthy people who opt out won’t be feasible."

Workers' Compensation

Tom Lynch from Workers' Comp Insider offers a plan for measuring a workers compensation program’s progress designed to get the attention of senior management. Read the comments, as well, since Frank Pennachio comments and when he does, I always listen to this work comp guru.

Finance

Wenchypoo is back this month and presents The New Money-for-Life Plan posted at Wisdom From Wenchypoo's Mental Wastebasket.

Risk Management

My blog entry this Cav centers on OSHA's new attitude. Is your organization ready?

Busted!

Finally, Bob Vineyard, CLU, presents Paging Dr. Facebook posted at InsureBlog. We just started worrying about the implications of genetic information, and now this!

Until we meet again in cyberspace, have a great week and stay safe! And don't forget, horseplay can hurt. Ask Buddy.

I'll be hosting the next Cavalcade of Risk

December 2 I will be hosting the next Cavalcade of Risk. In the meantime, you can read my most recent column at allbusiness.com.

How about that Elvis stamp?

One Christmas I was in a long line in the Garden Grove, California, post office. An elderly woman was in line in front of me and when she finally got to the counter, she ordered a book of stamps. After asking for the book, she qualified her statement by saying with a great deal of irritation, "And none of those darn Elvis stamps, either!" Everyone within earshot tried not to laugh out loud.

Should you use a live stamp or bulk mail for your next promotional piece? While bulk mail may save a few pennies, I always use a real stamp. In fact, I often get creative and use stamps with themes or beautiful pictures just to draw the letter opener’s eye to them.

One of my favorite marketing gurus, Mark Satterfield at his blog Gentle Rain Sales Letters, offers the same advice. “A live stamp makes the recipient pause and say to themselves, ‘I wonder if this is something important?’”

Mark’s blog offers great tips on writing sales copy and other tips for marketing. If we can help you write copy that will produce sales, contact us at 602.870.3230.

We are already helping agents throughout the US with their marketing efforts. Why not call for a free consultation? With over a quarter century in the insurance industry, we understand your business.

Insurance broker bonds: What agents need to know

Occasionally we ask a guest to address insurance agents on important topics. One important topic is insurance broker bonds. Our guest columnist, Kevin Kaiser, a principal with Suretybonds.com, has graciously offered to share his insights on agent bonding with us.

Like their counterparts in the mortgage business, insurance brokers can make a significant difference in the lives of their customers. But a handful of outliers can wreak havoc and upend businesses and lives. It’s because of that potential, however infrequently this occurs, that surety bonds have become mandatory for both mortgage and insurance brokers.

Surety bonds help protect municipal agencies, businesses and individuals in the unlikely event of unethical, misguided or even illegal practices at the hands of an insurance broker. Longtime brokers and agents are likely well-versed in their knowledge of surety bonds. But for new and aspiring brokers, bonding can at times prove a complex, even frustrating experience.

Here are a few things that fledgling brokers need to know about insurance broker bonds.

What bonds protect against

These surety bonds provide a layer of security for consumers if brokers take advantage of their position and expertise. Brokers or agents who engage in any of the following tactics may end up with a bond claim against them:

• Providing false quotes or inflating figures to boost profit.


• Encouraging customers to engage in misrepresentation on applications.


• Telling customers it is permissible to distort their financial standing on applications.


• Encouraging customers to buy insurance products that are inappropriate for their needs.
  

How to get bonded

Surety bonds are available from a host of sources, including surety companies dedicated to providing bonding services. Insurance broker bonds are considered license and permit bonds. Like many other license and permit bonds, each state Insurance Department serves as the obligee for an insurance broker bond. In other words, the bond protects the state against loss. The bond guarantees that an individual broker will follow all applicable state and local laws and regulations. Paperwork must be filed with a broker’s state upon obtaining a surety bond. A surety bond is typically required upon application for a license or a license renewal.

How to Qualify

Currently, the market for insurance broker bonds is relatively stable. These are generally seen as low-risk bonds, especially compared to other commercial bonds within and beyond the license and permit category. Surety companies will typically look at a few key indicators when examining a bond application. These include:

• Credit score.
• Financial strength and background.
• Management structure or leadership team.

For these relatively low-risk bonds, rates won’t vary considerably among surety companies. Sureties usually determine the bond premium after examining the business’s claim history and financials.

Bad credit

Even brokers with less than stellar credit can obtain the necessary bonding. Brokers with bad credit will typically utilize a surety company that specializes in working with agents with compromised credit. Given the increased risk and greater degree of underwriting complexity, these bonds will almost always cost more.

To learn more about how to obtain a surety bond, visit http://www.suretybonds.com/ or email the author, kevin@suretybonds.com

Agents must communicate their value

A recent survey of public sector risk managers showed two unsettling trends. 1) When risk managers were asked if they viewed their dealings with their carriers as “a significant, long-term relationship,” only 30 percent of the respondents answered that question in the highest category.

Almost half of the respondents anticipated changing carriers compared with only 36 percent in 2008, a difference of 12 percent. Seventeen percent of respondents reported a “strained” relationship with their insurance carrier and fully 22 percent were considering changing brokers. An additional six percent reported a “strained” relationship with their broker.

What does this survey reveal? Brokers and agents must work hard to keep today’s insurance consumer happy. Providing valuable client services and frequent, thoughtful communication helps insurance professionals retain their client base and build business. Contacting your clients only at renewal or when they make changes to their coverage will no longer suffice. Today’s knowledgeable consumer no longer settles solely for a commodity-based insurance provider relationship. They must able to clearly evaluate the value-added services your agency or brokerage provides. Are you reminding your clients of those services?

Insurance Writer helps agents communicate your message to your clients. Contact us at 602.870.3230 for more information.

Build your website quickly and easily

I write website copy for agents and insurance providers. One of the biggest problems my clients find is locating a website designer who 1) is affordable and 2) is easy to work with and dependable. Especially for agents with small marketing budgets, finding the appropriate website designer is almost always a challenge.

While I rarely endorse products because I cover so many in my various columns, one website design option I think will fit many agents’ budgets is AgentMethods. In just a few minutes, agents can achieve a professional website that will help them build their business. With three options available, AgentMethods’ cost is very reasonable to establish a web presence, a must in today’s tech-savvy society. I talked with founder and CEO Aaron Kassover recently and was impressed with his straightforward attitude.

While agents will still want to incorporate customized wording and landing pages for their sites, this template is a great vehicle to build a website for countless agents without extensive computer skills.

Contact Aaron via his website. Once you have your website up and running, I’d be happy to assist you with additional advertising copy that will help drive business to you.

That's the way the cookie crumbles?

AIG is rebranding again. The new name for AIG, or AIU, which was AIG’s temporary “new name,” new new name is “Chartis.” And at least one of the nation’s top brokers (brokers=the ones you pay to represent you the consumer) is scurrying about passing out cookies. Curiously, most were broken when delivered. Don’t you love life’s little ironies?

Cavalcade of Risk #83

It is my privilege to host this week's Cavalcade of Risk. It is over 113 degrees here in Phoenix by noon on any given day, so in keeping with the weather, I have picked only the hottest posts about risk, both personal and private, and a few important blogs about the upcoming health care transition this country may expect in the coming years.

One note: my blog platform is tricky and will take you out of this blog when you click a hyperlink, so be sure to hit the "back" button to return!

Personal Risk and One Slightly Gross Dog Topic

First, I want to post a powerful post about personal risk and persevering even after adversity blows in. Toni Graybill presents tonig.net: Welcome to My World of Wealth posted at Maximize Health and Wealth.

ID Theft blogger Robert Siciliano, writing at the Blogger News Network, warns about increased risk of identity theft when using an ATM, and offers some helpful tips to mitigate it.

Since I am currently "house poor," here's a post I liked. Rohit presents 5 personal finance lessons we all should re-learn from the present financial crisis posted at eMoneyLog.

As long as we are on personal risk, I am going to include a post about dog health. Who hasn't rushed their dog into the vet and been bitten by a several hundred dollar vet bill? This post gives some general guidelines. Now, I am going to give you a tip that can literally save you hundreds of dollars. This post mentions taking your dog to the vet if diarrhea lasts more than one day. Au contraire mon frere. I have saved literally thousands of dollars during my dog-owning decades with this simple trick: a can of pumpkin.

I own German or Czech shepherds. I am a big promoter of the German shepherd dog and believe in buying imports or dogs bred here from recent European lines. Because breeding standards in Germany and the Czech Republic are much stronger than they are in the US, the health and temperament of imports is generally excellent.

From time to time, my dog Romy will open the refrigerator door and have a feast or I will succumb to human sympathies and feed the pups people food, which doesn't always agree with their digestion. When my dogs get diarrhea, I simply open a can of plain pumpkin and take them off solid food, feeding them pumpkin for a day. The second day I mix in pumpkin and a little kibble or rice, and voila, in almost every case, symptoms solved. Most dogs love the taste, so don't worry about that. If the symptom doesn't resolve in two days, I would consider trotting them off (excuse the pun) to the vet, but I can't recall a time I have had to do so in the past decade and a half since I've been using this trick. For a laugh, visit the "unindicted co-conspirators" at my website.

I believe the high costs of vet care in the US precludes families from adopting dogs, so anything I can do to keep a dog out of the vet I hope keeps more dogs out of shelters.

Risk Management

If you have been following the swirl surrounding the "United Breaks Guitars" video, my post this week reminds us of what can happen when a mega corporation forgets about the power of today's media. If you haven't seen the video, I highly recommend you watch it. It is available at the link offered above.

The folks at Workers Comp Insider looks at cost and compensability issues related to sports injuries at college and at the gym.

Finally, Tim Norris of National RE Insurance Group offers some advice on workers' compensation exposure for the real estate investor at this link.

Health Care

Okay, now that I have probably grossed you out but saved you lots of money, let's move on to health care issues. I ponder why every industrialized nation in the world has some type of universal health care and we have been unable to do so. I know we are moving forward, but I cannot help but worry that what we Americans will end up with will resemble sausage more than filet.

Of concern to many Americans is the need for long-term health care coverage and this post by Jeff Rose at Good Financial Cents offers some tips on when and what type of coverage you should buy.

John Leppard offers Congress Can't Run the Risk of Ignoring Risk posted at Healthcare Manumission.

Wenchypoo is always interesting and doesn't fail this week. We present Wenchypoo's Health Care Proposal posted at Wisdom From Wenchypoo's Mental Wastebasket.

Jason Shafrin presents Public Plan enrollment freeze posted at Healthcare Economist.

Tyler King presents You can't solve a problem that you haven't defined posted at Clarifying Health. Tyler, I couldn't have said it better myself.

Next, Henry Stern, LUTCF, CBC presents Throwing Grandma Under the Train posted at InsureBlog.

Finally, the immodest Jaan Sidorov of the Disease Management Care Blog disagrees with Paul Krugman on the viability of markets for health insurance. He provides theory and evidence that suggest that the market can work and urges Dr. Krugman to get out of the way.

Our roundup of risk is complete. Have a safe and quality week.

Your RFP response is a critical factor in winning that account

More and more, large organizations seeking professional services like adjusting services, prescription benefits programs or agent / broker services turn to Requests for Proposal (RFP) to choose the best provider. For many service providers, responding to RFPs the first few times can be intimidating. A professional writer can help.

Case Study

A life and health agent in a small town of about 30,000 wanted to compete for a local organization's group health benefits coverage. The organization had gone out with an RFP for broker services the previous year and the brokerage, although submitting a proposal, failed to win the business. The hospital went out for services again last month and the brokerage turned to Insurance Writer for help in preparing the RFP.

As a former risk manager who both wrote and, as a consultant, responded to RFPs, I am in a unique position to help service providers craft excellent responses. I know what purchasing officers look for reviewing RFP responses. Today’s purchasing officer reviews, normally with a team of experienced personnel, many RFPs when attempting to procure services. Your response must stand out from the crowd.

The process we used allowed the agent to answer as many questions as he could in writing in the format of the RFP response. Then in a short series of interviews we determined his hidden strengths and where these assets could flesh out the RFP response. With our help, this agent stands a much better chance to win this bid. As an additional benefit, he can use this same RFP response and its format for future responses since so many RFPs ask for the same information again and again.

Here is the best part. The agent paid less than one percent of his potential commission in this matter to give him the edge he needs to win this important bid. Are you willing to invest a little to win? You will be surprised at how affordable our services are. Call us at 602.870.3230 if we can help.<.>

This week's Cavalcade of Risk is now posted

For a great overview of the healthcare system reforms and other risk-related matters, visit the Cav.

Safety training need not break the bank

Visit my latest column outlining inexpensive training resources for business and government. A little humor may help make important reading easier.

Cavalcade of Risk

The new Cavalcade of Risk is posted here. My article on the ADA and injured worker accommodation appears, but the entire issue this month is particularly interesting. Check it out!