THURSDAY, JULY 15, 2010 

                                                Big “I” National News


Big “I” Fall Leadership Conference
Hotel Rooms Going Fast—Have You Registered Yet?
Head to San Francisco Sept. 21-26 for the Big “I” Fall Leadership Conference.

Hotel rooms are moving quickly for the Big “I” Fall Leadership Conference. Register now to reserve your spot! Enhance your leadership skills and network with your peers at this flagship event at the Fairmont San Francisco Sept. 21-26. The program also includes the Virtual University User Group meeting on Sept. 21, executive committee meeting on Sept. 22-23, InVEST board meeting on Sept. 22-23, Education Convocation on Sept. 22-23, Young Agents Leadership Institute on Sept. 24-25 and the board of directors meeting on Sept. 25-26. Visit www.independentagent.com/events to register and check out the schedule of events. You don’t want to miss it!


Young Agents
Get a Sneak Peak at Leadership Institute Marketing Gurus
Young agents set to present on social media and marketing.

Social media is top of mind for many independent agents, and the Big “I” Young Agents have scooped up two leading social media marketers for the Sept. 24-25 Big “I” Young Agents Leadership Institute in San Francisco. Chris Jordan with Atlanta Insurance Live and Ryan Hanley with Guilderland Agency in Albany, N.Y., are experts in social media and marketing. Recently, the dynamic duo presented a webinar for the Agents Council for Technology (ACT) to rave reviews. With an emphasis on techniques and a review of the available tools, the presenters will help attendees stay on course navigating social spaces. Check out a recording of a recent webinar here. Also, if you have specific social media or marketing questions you want the presentation to answer, contact Susie Bonner ( susan.bonner@iiaba.net). This year’s Big “I” Young Agents Leadership Institute has a knock-out line-up, so check it out. If you haven’t already done so, please register now! 


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.


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.


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.


Big “I” Government Affairs
Big “I” Agent to Testify Before Congress on Federal Crop Insurance Program
Hearing to be webcast live from Washington.

Big “I” Crop Insurance Task Force member John F. Dalton, has been invited to testify before the U.S. House of Representatives Committee on Agriculture Subcommittee on General Farm Commodities and Risk Management in a hearing “to review the state of the crop insurance industry.” Dalton is president of Midwest Insurance Associates LLC and the Agri-Land Insurance Agency in Council Bluffs, Iowa.

WHEN:  Thursday, July 22, 2010
TIME:  10a.m. ET
WHERE:  1300 Longworth House Office Building Washington, D.C.
WEB:  The hearing will be webcast live. Click here for more information.

Recently, the Obama administration released the Risk Management Agency’s (RMA) final version of the Standard Reinsurance Agreement (SRA) which determines the terms and conditions for the Administrative and Operating (A&O) reimbursements and underwriting gains for crop insurance companies.

The Big “I” was deeply disappointed with the final version of the SRA where the RMA unfairly restricted agents’ earning ability through arbitrary commission caps in an agreement in which the agents have no voice or ability to represent themselves. The association believes the agent commission cap provision in the SRA is misguided and dangerous to the farm safety net. Additionally, the Big “I” points to research that shows that the average commission rate has declined from 2008 to 2009 proving the fact that allowing the marketplace to determine commission rates works. The agent cap does not impact the crop insurance budget, doesn’t save the federal taxpayer any money, and has no policy merit.


Big “I” Advantage^®
Act Now on the $15 PUP Promotion 
Receive additional commission on all personal umbrellas bound through Aug. 31.

Have you heard? Through Aug. 31, Big “I” members will receive an additional $15 in commission for every personal umbrella bound on Big “I” Markets. The $15 will be added to your monthly commission statement. The promotion applies to both umbrella markets, including the preferred market offered though RLI, which includes a broader appetite within PUP Special. Log on to www.bigimarkets.com to quote and bind business.