Insurance Myth Busters

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According to recent estimates by the Insurance Research Council (IRC), roughly one in seven drivers are uninsured.  A majority of drivers only carry the state minimum limits.

The Common Myth

If an uninsured or underinsured motorist hits you, many think, no worries, they have coverage, or my insurance will pay.

Myth Busted

Your coverage is limited to the amount of coverage you have on your policy.  Therefore, if you purchase minimum limits you would have little coverage if someone hit you carrying no insurance. Adding an endorsement to your personal umbrella policy will place higher limits of coverage over and above your auto policy uninsured motorist coverage.

Why Insurance Is More Than A Policy

The example above is an excellent example of why it is important to have an agent who knows and understands insurance, and one who can communicate complex issues in “English”. This allows our customers to make intelligent choices regarding their insurance.

Your insurance policy is only as good as the agent who placed it. Your agent should be asking you questions and learning about your individual risks and provide options as to how to treat your risks. When your needs change or your situation complicates, you don’t want an automated phone tree or cold cyber-agent. You want to talk to compassionate, honest insurance experts – that’s our team

The Downside of Poor Customer Service

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Over that past year or so, we have been suggesting ways to improve how insurance is delivered. We have stressed that price shopping can actually cost the buyer more money in the long run; and that developing relationships can lead to a better risk management program.  Now, we would like to examine the downside of poor customer service. Poor customer service can impact a business negatively in many ways. This is especially true for small businesses that rely on repeat business and positive word-of-mouth advertising for their success. Here is a staggering fact: in 2014, U.S. businesses lost $50 billion due to poor customer service. (source; newmeida.com)

According to the latest numbers, here is how customers will act after they have received poor service:

  • 59% of people will change agents
  • 30% will tell others not to use your firm
  • 25% will post a negative review on social media

There is nothing worse to an organization than having angry customers and dealing with lost business. Here are some of the outcomes of poor customer services:

  1. Low employee moral
  2. Employee turnover
  3. Reduced income
  4. Loss of potential customers
  5. Loss of reputation

If you do not want your business to be among those companies that have to deal with the above list, your goal must be to use every service problem as an opportunity to impress your customer. When mistakes happen, use proactive recovery as the means to create customer loyalty. Next month we will give you tools to help you recover from a customer service issue.

Win the day!

Keep Your Agency Healthy Through a Client Service Review

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Do you ever sit down with your team and complete a client service review? If you don’t, let me try to convince you of its value. A client service review is like an annual physical. It is necessary for the health of the agency, and it helps everyone better understand the client’s needs. Your review should include the producer, account manager, claims person, and any other team member that touches the client. The client service review should only take a short time, but the information can be invaluable in making sure that the team is on the same page to deliver outstanding service to the client.

Here are some of the topics that should be included during a client review:

  1. Review all open claims to make sure they are progressing correctly.
  2. Does the client have any service issues or concerns?
  3. What are any issues facing the client or the industry?
  4. Does the agency have any new services or solutions to offer?
  5. Have there been any personnel changes with the client?

Having this information can help build a true partnership with the client. If there are any issues or concerns, it is best to address these well before the renewal. By doing so, the client will feel they are being treated like a partner and will in turn treat you like a valued business partner, not just an insurance agent.

Cyber Laws Are Changing As Fast As The Internet

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Cyber Security Information Sharing Act

At the end of November, the Senate passed the Cybersecurity Information Sharing Act. This legislation gives private companies legal immunity for sharing data with the Federal Government. This was passed over the protests of many lawmakers and consumer advocates. “In theory, the information shared would be limited to ‘threat indicators’ — data such as technical information about the type of malware used or the ways that attackers covered their tracks while sneaking through systems.” Andrea Peterson — The Washington Post

One of the purposes of this legislation is to help U.S. companies react more quickly to cyberattacks on their computer systems. If a company gets hit with a specific type of hack, the federal government would receive an alert and immediately distribute warnings to other companies.

While cyber laws provide some immunity to businesses, it only applies to information sharing with the Federal Government. Businesses still need Cyber Liability Insurance as part of their risk management program. What we do not know, is what will the Federal Government do with information? It will be impossible to know until the law is fully implemented later in 2016.

Cyber Prevention Tips

  • Provide Training to all employees. Helping your employees understand how cyber breaches occur, will go a long way in prevention.
  • Keep your operating system, browser, anti-virus, and other critical software up to date.
  • Activate your firewall. Firewalls are the first line of cyber defense; they block connections to unknown or bogus sites and will keep out some types of viruses and hackers.
  • Secure all passwords and do not share them with anyone.
  • Use only secure wireless networks.
  • Develop a secure way to allow laptops off the premises. Never keep client information on laptops if used off site.
  • When an employee leaves the company or is terminated, turn off the access to their computer. If there is personal information on their computer, have your IT person manage the process.
  • Be aware of pushing scams. This involves a hacker using an email or website to install malicious software onto your computer. These web entities are designed to look like a normal email or website, which is how hackers convince their victims to hand over personal information.
  • Never open an email from someone you don’t recognize, even if it identifies you by name.

Risk and Insurance Outlook

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Are you concerned about the future? Is your risk management program designed and prepared for changes in pricing, economic downturns, healthcare, changes in employment laws and the upcoming political elections? A broker or agent who cares about your business will be on the forefront of change. Part of providing outstanding customer service is helping clients understand how current and future trends may affect their risk program.

Every so often we think it is a good idea to talk about what may be happening regarding insurance and risk management. We review many different insurance publications, insurance company bulletins and other professional’s opinions, to analyze these trends. This allows customers to make educated and informed decisions about their individual programs.

What Is Going On That May Impact Your Risk Program

  1. Healthcare is still impacting individuals and businesses alike. Employers with less than 50 full-time employees are not subject to the mandate requiring a business to provide health insurance to employees or face penalties.  It was good news for the 5.8 million businesses in the United States with fewer than 50 employees.  Unfortunately for them, other rules imposed through Obamacare have a direct, negative financial impact on how insurance will be priced in the future.  And the future is now.

  2. Increased reliance on technology will lead to better run insurers and stable premiums. The development of advanced loss control analytic tools will revitalize insurers focus on claim reduction, and potentially lead to increased investments in loss control. Insurers are using business intelligence to leverage “big data” to help them estimate claims, assets, credit and market data, and gain deeper insights across networks of producers, policy holders, and operations.

  3. There are more insurers entering the marketplace. While this can be a good thing, some of these insurers are not financially strong, which might lead to issues at a later date. We always recommend using stable and financially strong insurers.

  4. Mobile applications are one of the fastest growing areas of insurance. Businesses are able to manage risk programs through technology.

  5. Cyber liability will continue to be a major area of concern for all businesses. The government will continue to legally require businesses to protect customer’s information. Those businesses that don’t will be subject to increased fines.

  6. Global terrorism will impact local business. With the U.S. pulling out of the peacekeeping leadership around the world, the impact will be felt through increased attacks on American soil. Terrorism insurance will become more expensive and harder to obtain.

Cyber Liability; The Risk That Evolves Daily

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How Cyber Liability threatens your business every day

Did you know that an average business has a greater chance of having a cyber breach than it does of having a fire? It is true, and your business insurance policy most likely will not cover cyber liability losses.

Technology has enabled the common criminal to get into the world of cyber crime. Small businesses are a prime target, as most small businesses have little to no protection. Criminals can actually purchase programs that can be set up to hack dozens of businesses at the same time. It is important that your business has the right business insurance, including cyber liability insurance. Here are a few of the evolving cyber threats.

Malware hacks

These are programs that can be attached to an email or web site. The malware then can target specific systems.

Example–A small retail shop owner opened an email with a malware attached. The hack program then found 1,500 credit card numbers of the shop’s customers. The shop did not know about the hack until customers called about the fraudulent charges. The shop owner incurred over $75,000 in notification and payment expenses.

Social Hackers

This scam involves someone posing as a trusted bank or other advisor. The criminal then relies on the business owner or manager believing the call is legitimate and divulging privileged information.

Example–A CFO received a call from a hacker (acting as a bank official) requesting verification of account information. Through the process, the hacker obtained privileged information. They then used this information together with other data to make withdrawals from company accounts.

Key Business Insurance Coverage Offers Real Solutions

  • Cyber liability
  • Data restoration coverage
  • Business income or loss income
  • Legal notification coverage and expense

 

Why Hand The Baton To An Agent?

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baton 3432drtLife can be like a race. We all are in our lanes going as fast as we can to get to the next place. Buying insurance can also be like a race.  Except with insurance, you have the option of passing the baton to an independent agent, and when the baton is passed correctly, you and your agent truly become a team that can accomplish great things.

What are some of the benefits of passing the baton to an independent agent?

  1. An independent agent is someone who knows how to run in the insurance fast lane. With an independent agent, you will be able to communicate more effectively with insurance companies, than you can on your own. This gives you an advantage of having an advocate on your team.  We know which markets are interested in your unique insurance requirements.  For example, some markets like contractors while others prefer retail businesses.  And still other markets like to insure motorcycles.
  2. When you pass the baton to an agent, you now have the experience and clout of a well trained professional to finish the race for you. The finish line includes having the insurance relationship and program design that meets your individual needs.
  3. When an agent takes the baton, you get his or her entire team as well. This includes qualified staff to help answer your questions and provide accurate information to you when you need it.
  4. Every race may have a point where claims do happen. If your agent has the baton they will be there to help you get back on your feet and get you back in the race. An agent will take the lead in working with the insurance company during the claims process.
  5. As your team member, we communicate with you. Our goal is to connect with you regularly throughout the year on hot topics that will affect you.

Together we will run the race with professionalism, excitement, experience, and customer service in mind, to deliver the best possible combination of coverage, service, and price.

What Does Outstanding Customer Service Look Like?

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Have you left a business and thought, “How are they even in business”? Or have you gotten off the phone and said, “They don’t understand or care about my needs or even respect me”?  We have had those experiences, and we don’t ever want any of our customers to feel that way about our firm.

Outstanding customer service can mean something different to each person. However, we believe there is a basic underlying attitude of a firm that provides outstanding customer service. We would like to share our thoughts on what our firm believes contributes to outstanding customer service. Outstanding customer service is a mindset that we want every employee to have.

We practice three basic principles when relating to clients: empathy, appreciation and helpfulness.

  • Empathy – We will consider and understand your opinion and needs. We will educate you on the details of insurance so that you can make an informed decision.
  • Appreciation – You are important to us and you should be told so. We will value our relationship with you and treat you with respect and trust.
  • Helpfulness- When you call our agency you will talk to a licensed professional who lives and works in the community. We will listen to your requests and provide thoughtful responses. We will always say thank you. We know you have choices when it comes to selecting your insurance agent, and we appreciate that you have chosen us.

Here are other guiding principles that every agency should live by

  • Do what you say you are going to do. If you say the certificate will be delivered by 10:00 am Tuesday; deliver it before or on time.
  • Own your mistakes. No agency is perfect, so when a mistake is made, take responsibility and identify corrective measures to prevent it from happening again.
  • Care about the customer. Genuinely care about your customers and their experiences. When a loss occurs we will get involved as if the loss happened to us.

Insurance is not a product. It is a promise and a trusted relationship. Here at Reichley Insurance Agency, we are not going to sell you something you don’t need. We want to talk to you, determine your needs, and get you covered at the right price.

 

 

 

 

 

Five Things to Do Before You Start Your New Business

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The latest news from the Small Business Administration is that only 60% of new businesses survive at least 2 years. Of that 60%, only 44% survive another two years. It is a fact that more small businesses fail then succeed. The two main reasons for failure are lack of planning and funding. While we can’t help with the funding part, we can offer some ideas about new business planning.

We found at least five things entrepreneurs should consider as part of their development process. We understand there are more, but this is a good start.

  1. Understand the risks and legal issues – It is important to any new start up to understand all the legal and regulatory statutes and laws surrounding their business. Hire a good attorney to help you; it will be worth the expense. Hire a professional insurance agent to help you understand what your risks are, how to manage the risks, and how to protect yourself from the risks.
  1. Start with a good name – Your name needs to tell the story of what your firm does. For example, if you are starting a bakery, the name “Smith Brothers” fails to tell the public what you do. Also, depending on your market, it is probably not a good idea to use a foreign language as part of your name. Keep your name simple but innovative.
  1. Develop a marketing plan
    1. Who is your target market?
    2. What is the current competition?
    3. How can you fill a need?
    4. What strategies do you need to undertake to tell your story?
    5. What are the costs of doing business?
  1. Develop a Web strategy– It doesn’t matter what business you are in, you must develop a web presence. This would include a web page, social media (Facebook & LinkedIn) and a blog. For some industries, Twitter and Pinterest are important as well.
  1. Seek out mentors and advisors– Whether your mentor provides pointers on business strategy, helps you bolster your networking efforts, or acts as a confidant, it is good to have someone on your team. Hire a competent attorney, insurance agent, accountant and payroll HR/firm

Insurance is not a product. It is a promise and a trusted relationship. Here at Reichley Insurance Agency, we are not going to sell you something you don’t need. We want to talk to you, determine your needs, and get you covered at the right price.

Good luck and call us with any questions so we can help you achieve your goals!

Insurance & Risk Best Practices

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What Large Companies Do To Lower Costs That Any Company Can Do

As we continue on our journey to a better understanding of insurance, we thought it would be informative to identify some risk management “best practices” of larger companies. We believe that many of these “best practices” can, and should, be discussed with businesses of all sizes.

The good news is that these generally don’t create additional costs to the company; in fact, they usually reduce costs!

Insurance & Risk Best Practices

  1. Big Companies View Their Broker/Agent As A Trusted Advisor. The best way to accomplish this is to not bid insurance, but rather select an agent based on qualifications and the best fit with the goals of the business.
  2. Consider Modifying The Insurance Program With The Swings In The “Market”. For example, during a soft market you are able to lower deductibles and broaden coverage. As the market cycles up, you are able the increase deductibles to offset premium increases.
  3. Develop Cyber Breach Procedures. Small to medium sized businesses have a greater chance of having a cyber-breach than they do of having a fire. Here is an excellent resource from Experian
  4. Wellness Has Become A Norm. According to an article in the Louis Business Journal, “employee absenteeism is reduced when wellness programs are implemented”. In a study by Prudential Insurance, disability days were 20 percent lower and disability-per-capita costs were 32 percent lower, after implementing a wellness program. In addition, annual medical costs fell by 46 percent.
  5. Human Resources Is Part Of The Management Team.As the workforce gets older, finding ways to attract younger employees will be important. Developing new nontraditional compensation formulas and work hour flexibility will help attract and retain top performers. Develop an employee handbook and keep it updated. Educate and train all employees.
  6. Separation of Accounting Duties. A recent report issued by The Association of Certified Fraud Examiners, places the cost of employee fraud at 7% of annual revenues. Companies with less than 50 employees saw a median loss of $50,000. Separate check writing and depositing responsibilities, and have an annual audit by a qualified firm.

At Reichley Insurance, our employees are committed to developing ongoing communication with our clients and striving to exceed your expectations. You are not buying a product; you are managing your risk. Remember, insurance is not a product; it’s a promise and a trusted relationship.