Grant's Blog

My blogs tend to be about what I am working on or helping with durring the week. 
Insurance topics, Salesmanship Systems to help with your business are just a few topics. 

Christmas Eve From Joel Osteen

12/24/2008 12:27 PM

I hope I don't get in trouble for cutting and pasting this, but I wanted to share the email I received from Joel Osteen.  I start my day everyday before I get out of bed looking on my Blackberry email and read the message from Joel and Victoria Osteen with my wife.  Most mornings I cut and past the message and send it to my children via TXT messaging on their cell phones.   On his website you can sign up for a free email everyday. Just go to www.joelosteen.com to sign up. 

It is a wonderful way to start the day, and keep focused on the things that really matter.  It also reminds us of God's love for us, and has helped me stay very focused and develop a sense of "mission" as I help my clients.  I also recommend reading his books.  Or you can get them in a CD format to listen to in your car, or down load on Itunes.  We gave our entire staff his CD set which was very well recieved.   Merry Christmas, and God Bless you.

Today's Scripture

Today's Word from Joel and Victoria

A Prayer for Today

Insurance Broker Selection

11/19/2008 10:04 PM

In summary your broker should help you:

1.  Manage your risk
2. Buy your insurance.

 

Most insurance brokers are never really selected based on any tangible reason.   Most brokers are selected based on:

• The size of their firm,
• They happened to be at the right place at the right time,
• They raced to block insurance markets by putting together a fast sloppy submissions only designed to block other brokers from competing with them.  (They control the market).
• The “Good Ole Boy” mentality, you know “A friend of a friend”

 

Few clients actually buy their insurance based on logical facts, services or broker knowledge.   Many times even when presented with obvious gaps in coverage and uncompetitive services and pricing clients find it hard to make the right business decision because “they have been with ___, for 10, 20, or more years”  and once they ask ____, they are told that “they can do it to.” 

 

The problem with not taking the time to choose a broker on purpose is similar to anything else you do in your business by accident.  You end up with a broker that just got you the lowest quote.  Not the best quote mind you, just the one a bit lower than anyone else got.  When things aren’t done on purpose things are then left to chance. 

 

This is why 90% of businesses’ that sustain a major property loss are out of business within 3 years.  Their broker did not do your disaster recovery plan with you on purpose. 

 

By contrast in my nearly 30 years in the insurance business I find that the best quotes, and coverage’s are given to the clients of brokers that spend their time developing risk management programs that have proven effective in reducing the number and severity of losses over time. 

 

Question:  Are you aware that most insurance policies can be discount as much as 55%?  

Question:  Do you know why you did, or didn’t get all the available discounts? 

 

Answer:  Discounts are given as earned.  You might find it interesting to know that discounts are not subjective; if an insurance company offers a discount to one company for certain things they must offer it to all firms that adopt similar programs to reduce risk. 

 

Here are the key factors you should consider when choosing an insurance broker:

 

1.  Size does, and doesn’t matter.
   1. More important than the “Size” of the firm, is the capability of the individual handling your account. 
   2. You need a broker that has access to the majority of insurance companies that write your class of business.
   3. Many studies have shown that there is higher probabilities of quality work from a medium sized brokerage where the agency principle is the person you that handles your account.
2. You should choose a broker that starts with risk mitigation.  First and foremost you want a broker that offers state of the art risk management solutions. 
   1. Your broker should understand and assist you with, “The four corners of risk management” once risk has been identified:

                                                              i.      Can it be avoided?

                                                            ii.      Can it be transferred to someone else?

                                                          iii.      If not, then apply risk management treatments using the “no such thing as an accident” theory.

                                                          iv.      Finally buy insurance only for the losses you cannot afford to retain.

1. Marketing your account.  AKA: Helping you buy your insurance. 
   1. By presenting your account to insurance companies with complete and detailed risk mitigation plans, you will naturally get the best rates from an insurance company. 
   2. By promoting honest competition between companies you will get better rates, and terms. (Coverage options). 
   3. Your broker should give you a list of all companies they plan to approach on your behalf.  You never want more than one broker approaching the same insurance company, and you don’t want to approach every market every year or soon you will find that you won’t have companies competing for your account. 
2. Discounts.
   1. Your broker should review with you all the available discounts a company offers, and detail the ones your company was given and why. 
   2. More importantly why any discount was not offered.  (Many times the reason is wrong, or can be corrected by applying risk management techniques.)  

In conclusion:

 

Getting a quick low quote from an insurance company today is the easiest part of being an insurance broker.  Positioning your account to get better rates next year than you did this year, and better yet in 5 years and so on is the real work of a professional insurance broker. 

 

Although we cannot control the hardening, or softening of the insurance market place, or the rates that are offered.  A professional insurance broker can assure that your company pay as little as possible for the broadest coverage’s available now and in the future by providing your company with real solutions to lower the number, and severity of losses your company has.

 

When you are ready to interview the most valuable employee your company doesn’t have to pay a cent for please give me a call so I may apply for the position. 

 

Thank You

Grant W Davis

888-991-2929

CA Workers Comp Rate Increase 1-1-09 Good Math Bad Politics Part II

10/27/2008 10:57 AM

Below are copies of part of the email I received today.  I have seen this before!  In my 30 years as a broker in CA... I have seen political pressure keep rates down, when the math indicates they need to be raised.  I am all for keeping rates down and if I thought that by waving a magic wand and ignoring the math we could just keep rates down forever I would wave the wand to.... But what is about to happen is that the large insurance companies are about to squeeze out the competition again.    Here is how… The claims data says rates need to increase 16%, because despite all the plans of the past few years to reduce workers comp rates they never addressed the real issues… The political pressure is to keep rates down so they are going to only go up 5%.  Which sounds good to all us business owners?  But what this will actually do is put the smaller more aggressive workers compensation companies out of business as they under price their policies to keep their clients.  When that happens the bigger companies are again free to charge what they want to as they have eliminated their competitors!   

I have been a broker for 30 years now, and have seen this happen several times.  At the end of the day the 16% rate increase that was needed will seem like a deal when the large companies get rid of the competition your rates will more than double like they did just a few short years ago…

 

Here is what I got in my email today.

San Francisco, CA October 24, 2008 - On August 15, 2008, the WCIRB proposed to the California Insurance Commissioner an average 16% increase in advisory pure premium rates effective January 1, 2009. On September 12, 2008, the WCIRB amended its filing to include an evaluation of June 30, 2008 loss experience and a modification to the medical loss development methodology.

Earlier today, the Insurance Commissioner issued a decision regarding the January 1, 2009 filing. In the decision, the Insurance Commissioner approved a 5% average increase in pure premium rates effective January 1, 2009 applicable to new and renewal policies as of the first anniversary rating date of a risk on or after January 1, 2009. (The Insurance Commissioner has adopted the term "Workers' Compensation Claims Cost Benchmark" to describe the overall change in pure premium rates.)