News Grid

Senate Action Follows House Passage by One Day; President Obama Expected to Sign the Bill

WASHINGTON – The National Association of Professional Insurance Agents (PIA) praised the U.S. Senate for passing bipartisan legislation [H.R. 26] that extends the Terrorism Risk Insurance Act (TRIA) for six years. Action by the Senate followed by one day passage in the House.

“The message is clear: America will remain insured against acts of terrorism,” said PIA National Executive Vice President and CEO Mike Becker. “PIA commends Congress for its strong leadership in taking this vital action to ensure that America’s businesses will remain protected from financial devastation in the event of terrorist attacks.”

“PIA is very pleased that the leadership of the new Congress made this its first priority upon convening,” Becker said. “The overwhelming votes in both the House and the Senate demonstrate that when it comes to protecting the citizens of the United States against terrorism, there is no partisanship on Capitol Hill. We are hopeful that this forging of bipartisan consensus will serve as a template for dealing with other insurance issues going forward.”

Approval by the Senate by a vote of 93-4 came just one day after the U.S. House of Representatives passed the bipartisan bill on a near-unanimous vote of 416-5. The bill also includes a provision that benefits Main Street insurance agents, the National Association of Registered Agents and Brokers (NARAB II). President Obama is expected to sign H.R. 26 into law shortly.

Despite widespread support, passage of the six-year reauthorization of TRIA hit a roadblock in December 2014 when one retiring senator who was opposed to the inclusion of NARAB II placed a hold on the legislation, preventing a vote.

“This is a victory for consumers, businesses, the American economy and our national security,” said PIA National Director of Federal Affairs Jon Gentile. “It is an example of legislation in which everybody truly wins.”

“Renewal of the terrorism risk insurance program was a top legislative priority of PIA, because the customers of Main Street insurance agents need the certainty that it provides,” Gentile said. “It is an example of what we all can achieve when we work together toward a common goal.”

Notable for PIA, the bill also includes the creation of NARAB II, an independent, non-government, non-profit membership organization based in Washington, D.C. designed to facilitate multi-state producer licensing. PIA supports NARAB II. “NARAB will provide agents with a streamlined multi-state licensing process, while protecting states’ rights and the independent agency system,” said Gentile.

PIA cautions that in accordance with how the legislation is written, the Federal Insurance Office (FIO) should have no role whatsoever in the implementation of NARAB II.

Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance, but specialize in coverage of automobiles, homes and businesses. PIA members are Local Agents Serving Main Street America^SM. PIA’s web address is www.pianet.com.

PIA National Immediate Past President Andrew C. Harris is the subject of a major cover article and profile in the September 2014 issue of the National Underwriter.

The profile of Harris looks at how he decided to get into the insurance business 38 years ago (after majoring in biology and chemistry in college), and why he has never regretted his decision. It traces his path from working commercial accounts for Liberty Mutual to his decision to start an independent insurance agency, and the resulting success he has achieved. Harris also shares his views on the challenges facing the agency distribution system. "Our challenge is to show our customers that the money they are paying is well spent, and that the value they're getting is worth it," he says.

The article details Harris' decades-long involvement in PIA, at both the national level and with PIA of New Jersey. He also talks about the need for young agents "to become truly independent and not just join a direct writer," observing that PIA is "uniquely positioned to help brand-new agents starting in the business."

"In my entire insurance history, I have never asked another agent for help on anything and been rejected or denied," Harris said. "As an industry, we are the most incredible, benevolent competitors you can imagine."

Read the full National Underwriter profile of Andy Harris here.

Andrew C. Harris – The Player (National Underwriter September 2014)

All of PIA honored PIA of New Jersey and PIA of New York on both associations’ 75th anniversaries. PIA National President John G. Lee presented PIA of New York with a special commemorative plaque, marking the occasion; while PIA National Immediate Past President Andrew C. Harris presented a plaque to PIA of New Jersey. Both presentations were made this week during a joint convention held in Atlantic City, New Jersey.

“I can still remember all of the problems that were caused by Eliot Spitzer, and his attack on Main Street agents getting contingent commissions,” said Lee. “PIA of New York was at the forefront of our battle against Spitzer as PIA National filed a legal brief opposing Spitzer’s actions. PIA of New York and PIA National worked together—in the courts and also in the court of public opinion—to successfully defend all PIA members.”

Harris thanked his fellow New Jersey agents for the support they provided him as PIA National president. “I always had the unqualified backing and support of PIA of New Jersey,” he said. “PIA of New Jersey has been an organization of strident professionals for 75 years. We were there during 9/11. We were there during Hurricane Sandy. We were there fighting Eliot Spitzer.”

Recently, the CEO of one of the strategic partners who is helping a big online retailer market auto insurance was quoted saying, “Consumers don’t want a relationship with an agent or even a carrier,” and “The consumer is looking for a store or aisle in a store where the shelves are stuffed with every risk management product they need.”

PIA National President John G. Lee takes issue with this in his most recent President's Message. Lee says that contrary to the claims of those who try to market insurance as a commodity, consumers don’t see it that way. They know that insurance is a contract to protect people and their property, and a promise to be made whole in the event of a loss. It’s not something that can be found in a box next to the canned tomatoes at a discount store.

“They can stuff their shelves with whatever they want,” Lee stated. “If you look at the facts as opposed to the hype, consumers want a relationship. Statements to the contrary come from our competitors. What would we expect them to say?”

“Insurance is serious business,” Lee said. “It is not ‘stuff.’”

PIA of North Dakota just had a very successful annual convention last week. The event in Bismarck marked the 50^th anniversary of PIA of North Dakota. PIA National President Johnny Lee delivered the keynote address.

“Throughout the years, there has been no more stalwart PIA affiliate than PIA of North Dakota,” said Lee. “No matter what the issue, we can always count on PIA of North Dakota to ask: ‘Is there any more we can do?’”

“So, on behalf of our entire Association—and every PIA member in the country—I would like to present this plaque in honor of PIA of North Dakota’s 50^th Anniversary,” Lee said. A total of 23 of the 34 living Past Presidents of PIA of North Dakota attended and were acknowledged, along with four original PIA charter members still living.

PIA takes issue in a press release with an assertion made by Michael McRaith, the director of the Federal Insurance Office (FIO), in a recent speech.

In remarks to the Networks Financial Institute’s Insurance Public Policy Summit on March 12, reported by Best’s News Service, McRaith said this: “We need to get past the notion that the insurance sector in the United States should be treated separately than any other sector because of this historic debate going back to 1904.”

“Rather than needing to ‘get past’ opposition to treating the insurance sector separately, advocates of greater federal involvement need to get over the idea that insurance can be regulated the same way the banking and securities sectors are by the federal government,” said PIA National Executive Vice President & CEO Mike Becker.

PIA National Senior Vice President Patricia A. Borowski added, “When Mr. McRaith says the insurance sector should be treated the same as the banking and securities sectors, he is dead wrong, and in conflict with current federal laws, among them the McCarran-Ferguson Act and the Gramm-Leach-Bliley Act (GLBA). The fact that insurance is regulated by our state-based regulatory system is why our sector – and the policyholders it serves – emerged almost completely unscathed from the financial crisis of 2007-2009, in marked contrast to the federally-regulated sectors.”

Read PIA’s full press release here.

PIA Responds to FIO Director’s Speech Advocating Federal Involvement

WASHINGTON — The National Association of Professional Insurance Agents (PIA) takes issue with an assertion made by Michael McRaith, the director of the Federal Insurance Office (FIO), in a recent speech.

In remarks to the Networks Financial Institute’s Insurance Public Policy Summit on March 12, as reported by Best’s News Service, McRaith said this: “We need to get past the notion that the insurance sector in the United States should be treated separately than any other sector because of this historic debate going back to 1904.”

“When Mr. McRaith says the insurance sector should be treated the same as the banking and securities sectors, he is dead wrong, and in conflict with current federal laws, among them the McCarran-Ferguson Act and the Gramm-Leach-Bliley Act (GLBA),” said PIA Senior Vice President Patricia A. Borowski. “The fact that insurance is regulated by our state-based regulatory system is why our sector – and the policyholders it serves – emerged almost completely unscathed from the financial crisis of 2007-2009, in marked contrast to the federally-regulated sectors.”

PIA is disappointed that the FIO, in its recent report to Congress, did not take into account the report issued by the Government Accountability Office (GAO) on June 27, 2013, that found that multiple regulatory actions and other factors helped mitigate the negative effects of the financial crisis on the insurance industry and its policyholders and that state regulators were especially critical in maintaining general stability in the market during the crisis.

“Rather than needing to ‘get past’ opposition to treating the insurance sector separately, advocates of greater federal involvement need to get over the idea that insurance can be regulated the same way the banking and securities sectors are by the federal government,” said PIA National Executive Vice President & CEO Mike Becker. “Insurance is different. Congress recognized this by mandating that the FIO serve a narrowly defined role that does not include insurance regulation, a fact that Mr. McRaith has noted repeatedly in previous congressional testimony.”

“The Dodd-Frank law assigns to the FIO a series of responsibilities involving monitoring that are all advisory in nature,” Becker said. “We agree with Congress’ decision in this regard that our state-based insurance regulatory system is best suited to regulate the business of insurance.”

“Federal law has already defined its relationship with the state-based business of insurance,” Borowski said. “The disagreement is whether we will continue the productive federal-state relationship in insurance as it is currently defined or go the way suggested by Mr. McRaith of a federally-directed industry.”

“One should never forget that all insured risks will always be local,” Borowski added. “The United States has an effective and efficient state-based insurance regulatory system that protects policyholders and offers them a broad array of competitive choices from many insurance carriers. Needed modernization is accomplished through state-based organizations like the National Association of Insurance Commissioners (NAIC) and the National Conference of Insurance Legislators (NCOIL). Our system protects both the American economy and the global economy. To those who want a different system, we simply say they are woefully misguided.”

Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance, but specialize in coverage of automobiles, homes and businesses. PIA members are Local Agents Serving Main Street America^SM. PIA’s web address is

New risks and high-profile data breaches have opened up a new opportunity for agents and brokers to offer cyber liability coverage. PIA National Senior Vice President Patricia A. Borowski addressed the new opportunity in comments in an article in the March issue of National Underwriter.

“Even among large mid-market insureds, there is a huge uptick that has to happen in terms of their attention to the real scope and detail of this exposure. This is even more the case with smaller commercial accounts,” said Borowski, adding that she believes the tipping point in cyber purchasing will ultimately come not through broker outreach, but by the growing recognition of risk across the business community.

Into the Breach (National Underwriter March 2014)

Linda L. Hughes, CPCU, CPIA, CPIW, passed away last week. Linda was senior Resource Center representative, having joined the Professional Insurance Agents of Ohio (PIA), now PIAA, in 2000. Linda was a highly respected, well-connected woman with a positive, joyful energy. This year marked her 50th year in an industry that became her home, family and passion.

“Those of you who knew Linda’s spirituality and her values know that she felt blessed in her life and career,” said PIAA CEO George W. Haenszel. “When she left the carrier side of the business, Linda told me that she simply wanted to help people. Thankfully, she came to PIAA. She was committed to passing her good fortune on to others and was especially partial to counseling young people at the beginning of their careers. She helped many of us ‘gray-haired’ kids along the way too.”

View PIAA’s tribute page for Linda Hughes here.

PIA National President John G. Lee testified in Washington, D.C. on December 18 before the NAIC’s Market Regulation & Consumer Affairs (D) Committee. Lee commented on the experiences of agents and brokers with the enrollment process under the Affordable Care Act (ACA).

“Initially, my experience with signing up clients in the marketplace was frustrating and time consuming,” said Lee. “The system was constantly freezing up or it would be very slow. At times it would kick you out and tell you to log back in, in 30 minutes. This was very frustrating for the client as well as agent and they could spend hours try to complete an application and sign up for a plan.”

“Since December 1st, however I have found it to be a little easier and less time consuming, but still, improvements are needed,” Lee said. “However, agents in other states continue to experience problems. We have noticed that, in states with their own exchanges, there seems to be fewer problems. Since insurance is state-based, it stands to reason that customers are better served by systems designed specifically for an individual state, as opposed to being “piggy-backed” onto a one-size-fits-all national website.”

PIA of North Dakota Executive Vice President Steve Becher testified on crop insurance and the Farm Bill during a meeting of the NAIC’s Crop Insurance Working Group on Sunday, December 15.

Although direct-channel growth in personal auto has come at the expense of the independent-agency channel, 12 of 18 personal-lines insurers that have outperformed their peers in both growth and profitability over the past decade use the independent-agency distribution channel either in whole or in part, according to a recent Conning report.

“The flexibility of the independent-agency channel is well suited to the rapid growth of these companies,” Conning says in its report, “Growth and Profit Leaders in Personal Lines Insurance.”

The Conning report contradicts a study by McKinsey and Co., which argued that the value provided by independent agents is diminishing. Leading PIA agents strongly disputed the McKinsey study (“A Flawed Premise Wrapped in a Faulty Analysis”) in a series of press statements and an article in the National Underwriter.

Conning notes that the most common channel for companies in its “growth and profit leader group” was the independent-agency channel, adding that the channel allows small- and mid-sized insurers “to accommodate growth without requiring the large fixed-cost base of a direct-response organization.”

Most Personal Lines Growth Leaders Use Independent Channel (PC360 12/4/13)

WASHINGTON — The National Association of Professional Insurance Agents (PIA) has announced a call for nominations for three prestigious awards in its 2014 Spring Awards Program. Nominations are being accepted now through January 24, 2014 for the association’s Professional Agent of the Year, Customer Service Representative (CSR) of the Year and Young Insurance Professional of the Year awards.

The PIA National Professional Agent of the Year Award, the association’s highest national award of distinction, is presented annually to one outstanding professional insurance agent who is a member of PIA. Nominations for this award are made by PIA state and regional affiliate associations.

“Every Professional Insurance Agent is outstanding, but once a year we bestow our highest honor on just one PIA member who exemplifies the best of our best,” said PIA Nation President John G. Lee.

The PIA National Customer Service Representative of the Year Award is given annually to an outstanding agency customer service representative who works for a PIA member insurance agency. Nominations for this award are made by PIA members. The CSR of the Year Award is sponsored for the seventh year in a row by The Hartford, a member carrier of The PIA Partnership as well as a Pinnacle Partner.

The PIA National Young Insurance Professional of the Year Award is given to an outstanding employee, owner or principal of a PIA member agency who is under the age of 40 or a member of a PIA-affiliated Young Insurance Professionals association. PIA members as well as PIA state and regional affiliates may make nominations for this award, which is sponsored for the ninth year in a row by Rough Notes magazine.

All three awards will be presented during a luncheon ceremony on Friday, March 28, 2014, in Arlington, Virginia, held in conjunction with the 2014 PIA Federal Legislative Summit and 2014 PIA National Spring Governance Meetings. Learn more and download nomination forms at www.pianet.com/awards.

PIA’s four other major national awards — the Company Award of Excellence, the Managing General Agency of the Year, the Company Representative of the Year and Excellence in Social Media — will be presented in San Antonio, Texas, on September 20, 2014, in conjunction with the association’s Fall Governance Meetings.

Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance but specialize in coverage of automobiles, homes and businesses. PIA members are Local Agents Serving Main Street America^SM. PIA’s web address is www.pianet.com.

PIA National issued a press release on Nov. 15 in which we agreed with President Obama when he said, “Buying health insurance is never going to be like buying a song on iTunes. You know, it’s just a much more complicated transaction.” The president made the remark during an hour-long press conference at the White House on November 14, during which he attempted to explain all of the problems related to the launch of the Affordable Care Act (ACA).

“Although many independent insurance agents and brokers would disagree with the kind of healthcare reform efforts seen so far, the president finally did make a few valid points about the nature of insurance,” said PIA National President John G. Lee. “I was somewhat taken aback when the president admitted that his administration is ‘discovering … that insurance is complicated to buy.’ PIA has been saying this all along because it is true. This eleventh-hour realization is a particularly disappointing admission on the part of the president, given how many highly qualified and successful former insurance regulators he appointed within the Department of Health and Human Services (HHS) to head this effort.”

The president also said during his press conference, “Part of what we’re realizing is that there are going to be a certain portion of people who are just going to need more help and more hand-holding in the application process.” Lee said, “That is precisely what independent insurance agents and brokers do every day as part of the regular service we provide to our customers.”

PIA Agrees That Buying Insurance Is Not Like Buying a Song on iTunes (PIA 11/15/13)

WASHINGTON – Mike Becker has been named Executive Vice President & CEO of the National Association of Professional Insurance Agents (PIA National), effective December 10, 2013. The announcement was made by PIA National Executive Vice President & CEO Ron Von Haden.

“PIA is pleased that Mike Becker will assume his new responsibilities on behalf of our national association,” said Von Haden, who will continue as Executive Vice President of PIA of Wisconsin when he relinquishes the additional duties he had assumed at PIA National over the past year. “We are proud that PIA is moving forward in such a dynamic manner.”

Becker heads PIA’s day-to-day lobbying efforts on Capitol Hill. He began his career at PIA in March of 2007, rising to Assistant Vice President of Federal Affairs, then being appointed to his current position of Vice President of Federal Affairs in February 2013. Prior to joining PIA, he worked on the congressional relations team for the Consumer Healthcare Products Association (CHPA), an organization representing pharmaceutical companies. He joined CHPA in 2004 after a stint as a legislative staffer on Capitol Hill.

“Mike Becker is a can-do person who is fully and firmly committed to the continuing success of PIA,” said PIA National President John G. Lee. “He is the right person at the right time for PIA. The leaders of PIA National are determined that our Association will continue to grow and prosper in the years to come.” Lee added that Mr. Becker’s strong background as a federal lobbyist does not mean that PIA’s emphasis will change. “PIA is firmly committed to maintaining and continuing to expand the full range of legislative and regulatory advocacy, carrier relations and services that we currently provide on behalf of our members.”

“My commitment to PIA is complete and unwavering,” said Becker. “We owe an immense debt of gratitude to our professional staff at PIA National’s Alexandria, Virginia, headquarters. Their talent, experience and dedication keeps PIA a major player on behalf of Professional Insurance Agents. We couldn’t do it without them and we will depend on all of them in the years ahead as we move forward.”

“Over the past few years, PIA successfully overcame many challenges and is now growing its membership and expanding its influence. My job is to enable that to continue,” said Becker. “I am dedicated to earning the respect of our PIA affiliates, leadership, members and staff in this team effort.”

Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance but specialize in coverage of automobiles, homes and businesses. PIA members are Local Agents Serving Main Street America^SM. PIA’s web address is www.pianet.com.

It happens every decade or so and now, in 2013, it is happening again.

There have been several consulting reports issued in recent months which, to varying degrees, predict the demise of the independent agent and the unraveling of the independent agent distribution system.

The National Association of Professional Insurance Agents (PIA) disagrees, vehemently.

The report that has garnered the most attention is one by McKinsey & Co.’s Financial Services Practice, a consulting firm. It contained the headline, “The End of an Era for the Local Insurance Agent.” McKinsey contends that “the economics of the traditional agent model are beginning to unravel.”

The McKinsey report, after it makes a case for agents being under increased pressure from competition by direct writers and commoditization, then goes on to observe – somewhat incongruously with the rest of its argument – that “Local agents are not in danger of extinction, but the role they play will continue to evolve.”

Having put forth its view of how it thinks the market is evolving, McKinsey then paints a picture of the role it sees local agents playing in the future: highly specialized, greatly diminished and paid much less. Indeed, McKinsey laments the fact that the flawed argument it puts forth “Surprisingly [emphasis added] [this] has not yet led to a change in the local insurance agent landscape. There are signs now, however, that the economics of the traditional agent model are beginning to unravel.”

It’s Just Not True

“The McKinsey report is just somebody’s opinion. In reality, I just don’t think it’s true,” said PIA National President John G. Lee of Fredericksburg, Virginia. “Direct writers are tough competition but we can compete. Wacte have just as competitive rates as they do. There is a percentage of the market that’s going to go direct and overall, across all lines, it’s been stuck under 30% for many years, despite billions in advertising. I don’t see that market share increasing.”

“Far from being the ‘End of an Era,’ this is the dawning of a bright, new age for the independent insurance agent,” Lee said.

PIA National Senior Vice President Patricia A. Borowski has seen this all before. Every decade or so, consulting firms will predict the demise of the independent agency distribution system, for their own competitive priorities. Often, she says, this leads to massive losses by those who buy into the narrative.

“The report by McKinsey is not a research report, as no true unbiased research seems to have been conducted for it,” said Borowski, during a break at a conference held by the Society of Insurance Research (SIR) in San Antonio, where she was representing PIA. “There are charts and graph references, but they are used to support a predetermined outcome. It is nothing more than an opinion article by a couple of analysts that – at best – relies on the authors’ opinions, along with selective statements from like-minded others.”

Borowski said the McKinsey report was on the agenda of the Commercial Lines Insurance Agents Panel at the SIR conference. The consensus among the panelists and a number of the conference participants was that the report is little more than a dressed-up op-ed article.

“These ‘reports’ are efforts to convince everyone that they – these consultants – have a plan by which carriers and/or banks (for whom the consultants would no doubt like to consult) can eliminate independent agents and pocket that savings,” Borowski said. “What is never discussed are the conversion requirements, ongoing costs and potential consequences carriers may face by following such a strategy.”

WASHINGTON — The National Association of Professional Insurance Agents (PIA) has named Frankenmuth Insurance as the recipient of its prestigious 2013 Company Award of Excellence. The presentation was made on September 20, 2013, at a ceremony held in conjunction with PIA’s Fall Governance Meetings in Las Vegas, Nevada.

“Frankenmuth Insurance is a true partner for Professional Insurance Agents,” said PIA National President Andrew C. Harris, in presenting the award. “In addition to their outstanding product line, Frankenmuth Insurance does business through 530 local independent agencies in a total of 15 states. It is with pride that PIA National bestows the 2013 Company Award of Excellence to a stalwart business partner and staunch supporter of agents.”

The PIA National Company Award of Excellence honors a company for its commitment to PIA, to the American Agency System and to furthering the interests of professional insurance agents by creating a better business environment.

“Receiving this national industry recognition is particularly gratifying since it comes directly from the independent insurance agents with whom we partner,” said Frankenmuth Insurance Chairman, President and CEO John Benson. “We strive to continually exceed their expectations, and receiving the 2013 PIA National Company Award of Excellence is confirmation we are achieving that goal.”

“We are truly honored to be selected to receive this award from the PIA National,” said Frankenmuth Senior Vice President Fred Edmond. “Our commitment to supporting our independent agency partners aligns both our interests and contributes to our mutual success. On behalf of our dedicated employees, leadership and Board of Directors, we wish to thank the PIA National as well as the Michigan PIA for nominating our organization.”

“With the advancement of technology, automation and product pricing sophistication, we cannot forget this is still a people business,” Edmond said. “It’s not always about just finding the lowest price, but it's about working with those you know, trust and like. Our mutual success is based upon strong agency partnerships and meaningful relationships.”

Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance but specialize in coverage of automobiles, homes and businesses. PIA members are Local Agents Serving Main Street America ^SM. PIA’s Web address is www.pianet.com.

A man who for the past decade has been one of the most outspoken supporters of federal insurance regulation in Congress, Rep. Ed Royce (R-Calif.), has fired the first salvo in what may be a renewed war on state regulation of insurance. Rep. Royce has launched a broadside against the National Association of Insurance Commissioners (NAIC). He said he intends to request a hearing to investigate the NAIC and its role in the insurance marketplace, which he said has gone far beyond what it has the legal authority to do.

A top Republican on the House Financial Services Committee, Royce said the NAIC has acted beyond its self-described role as a standard-setting organization and taken on a regulatory role, both in the United States and on the international stage. While the NAIC maintains it is a “trade association made up of regulators,” Royce contends the organization “imposes its will on companies and states through its accreditation standards while representing the U.S. on an international basis on rules it has no authority to enforce on a universal basis.” An NAIC spokesperson said the association had no comment at this time.

Royce was a prime proponent of creating the Federal Insurance Office (FIO) and tasking it with doing a study on the “benefits” — but not the disadvantages — of federal insurance regulation. Royce was also an author of the ill-fated so-called “optional” federal charter for insurers and producers. Prominent among Rep. Royce’s campaign contributors have been those at the forefront of the decades-long campaign to engineer a federal insurance takeover.

What It Means to Agents: The timing of this is not a coincidence. Very shortly, the much-delayed FIO study of insurance regulation, which PIA has maintained all along may be biased in favor of federal regulation, will be released. It may recommend some measure of federalization — unlike the recent Government Accountability Office (GAO) study, which praised our state-based insurance regulatory system for protecting markets, the insurance industry and policyholders during the financial crisis.

Attacking the NAIC and holding a congressional hearing could be part of a smear campaign timed to coincide with the release of a critical FIO report and recommendation. Royce said he sees the release of the FIO report “as a watershed moment for future regulation” of the insurance industry.

Make no mistake: This is very important to Main Street insurance agents. This is another attempt to shift to a federal model, to benefit a few big players. The “uniformity” that federal advocates tout could result in there being far fewer insurance companies, offering fewer choices to consumers, through fewer independent insurance agents. In addition, every state’s insurance premium tax could be at risk of being usurped by the federal government.

This battle has been fought many times before, and the state system has prevailed. It will prevail again. PIA remains steadfast in support of our state-based system of insurance regulation.

The PIA Partnership, the company relations council of the National Association of Professional Insurance Agents (PIA), has announced its annual project for 2014. Agency Touch Points – The Voice of the Customer: Commercial Lines will conduct a nationwide survey of commercial lines customers to determine their buying preferences.

Agency Touch Points – The Voice of the Customer: Commercial Lines will be the follow-up to the PIA Partnership’s groundbreaking 2012 study, Agency Touch Points – Voice of the Customer: Personal Lines.

“Recent studies backed by direct writers and captive carriers have contended that some buyers of coverages such as small and midsize business owners policies (BOP) have asserted that a majority want to purchase such coverages online,” said PIA National President Andrew C. Harris. “We believe that such studies lack credibility and that a more objective picture of buyer preferences is required.” Commercial Insurance Customers have been relying on the advice and council of their Professional Insurance Agent, just as they have with their CPA and Legal Counselor.

The 2012 survey on personal lines found that customers value what agents can do for them more than they value having a choice of products and policy coverages, and they are eager for producers to take a more active role in delivering those services. It found customers are looking for expert advice and counseling, personalized attention and interaction, the ability to offer comprehensive protection to meet individual needs and excellent relationship-based customer service. The survey also found that customers care about coverage and that price is not the primary determining factor.

Current PIA Partnership companies include: Encompass Insurance; Erie Insurance; Harleysville Insurance; Liberty Mutual Insurance; MetLife Auto & Home; Progressive Insurance; Selective Insurance Group; State Auto Group; The Central Insurance Companies; The Hanover Insurance Group; The Hartford; The Motorists Insurance Group; and Travelers.

Outgoing PIA National President Andrew C. Harris, CIC, CPCU, CRM, ARM, AIS, gave a report on the state of the Association during the September 22, 2013 Board of Directors meeting held in Las Vegas, Nevada. Harris’ term concludes on October 1, 2013 as he begins a one-year stint on the Executive Committee as Immediate Past President.

Harris outlined the many changes made and highlighted many of the resulting accomplishments over the past year.

“Going into this year, we realized we needed to align the mission that PIA National has with our affiliates,” said Harris. “We did that by putting together a plan and a vision. It was simple, because there was only one way to go, and that was up.”

“One of the first things that we had to do was build consensus,” Harris said. “How? You meet with people, talk with people and you have forums. We started that under [previous president] Tom Adderhold. We had forums at every meeting, where we promised you that there were no secrets; everything was on the table. That transparency and candor has to work in both directions for it to succeed. We set the example, and we need to have frank and honest feedback to the PIA leadership. The dialogue itself is the important thing. We don’t ever always agree on everything, but it’s important to know where your partners are coming from. We have to respect our partners.”

Harris said that one of his first priorities was conducting a comprehensive search for a new executive vice president. He said the lengthy, exhaustive process resulted in the hiring of Ron Von Haden as Executive Vice President of PIA National. He said that was “probably the best decision” made during the entire year.

Harris then gave a partial list accomplishments, including visiting 25 affiliates during the year; reestablishing our relationship with the PIA Trust; creating the Membership Committee; securing PIA Trust funding for the Membership Marketing Campaign and creating it; getting on track to achieve 10 percent growth in new members, with a positive net, nationwide; adding two new E&O carriers, Liberty Mutual and Markel, to compliment the offerings of PIAPRO; transforming the President’s Advisory Board into a breeding ground for new ideas; and expanding PIA’s commitment to the PIA Partnership, to “not only produce tools for agents to use, but to also talk about how together, PIA and carriers can work to change the dynamic and improve the market for us and them at the same time.”

“We have made some very positive changes during the last year. It’s really the first step along a very long process,” Harris said. “We have 19 years before we celebrate our 100th Anniversary. Let’s hope we can keep our changes focused in the same positive direction over the next 19 years.”

“The last challenge I have to this organization is to reclaim our birthright,” he concluded. “We were once a superpower. Somehow, we got off track. We recognized that, we accepted that and we said ‘We want to go forward together.’ If we try, I would love – assuming I’m still around – to celebrate the 100th Anniversary of PIA as the #1 agents association in the country. I believe we can do that if we all pull together, and if we all try. So, that’s my challenge to you.”

“It has been an honor and a privilege to serve you,” said Harris.

Audio excerpt of Andy Harris’ remarks (9/22/13)

Most customers who are lured away from independent agents by direct insurers promising lower prices will ultimately return to an independent agent. According to a recent study commissioned by The Hanover Insurance Group, nearly 60 percent of consumers who had purchased insurance through a direct channel ten or more years ago reported switching back to an independent agent because they wanted more value.

This study was conducted for The Hanover, an independent agency company and member of the PIA Partnership, by the research firm InsightExpress, which surveyed 1,000 consumers who purchased insurance through direct channels 10 or more years ago. Most consumers who switched back to independent agents cited expertise and convenience for their decision. According to the survey, the motivators for consumers who switched to work with independent agents also included the benefits of having one point of contact to handle insurance needs and questions and having the guidance of an experienced personal insurance professional.

“This research demonstrates that consumers really value the advice provided by independent agents and the personal relationships they build with their customers,” said Mark R. Desrochers, president, personal lines insurance at The Hanover. “The majority of respondents said their number one reason for switching from a direct insurance provider was to have someone to guide them through their insurance buying decisions. Clearly trust and expertise are important to consumers.”

“The study shows that consumers realize the value that independent agents bring. That’s why we deliver our products exclusively through agents who are ‘the value creating channel,’” said Dick Lavey, president of field operations and chief marketing officer at The Hanover.

Study Shows Consumers Who Go Direct Return to Independent Agents (Hanover 8/12/13)