Insurance education: A competitive advantage

Competing successfully, improving productivity, and avoiding costly E&O claims are goals all agencies must reach just to stay in business, let alone prosper. Regardless oi size, an agency has to use every tool available to survive and thrive in a business and regulatory environment that constantly shifts and presents new obstacles.

Hiring people who want to learn and then giving them appropriate learning opportunities, incentives, encouragement, and recognition gives some agencies a competitive advantage.

"J. Rolfe Davis doesn't hire people based on what they know now, but on their ability to learn," says Donald B. Boone, CPCU, CLU, senior vice president of the J. Rolfe Davis Insurance Agency, Inc., in Orlando, Florida. What's important, he believes, is "being able to assess the prospective employee's ability to grow into a position."

The Davis agency employs 72 people and generates approximately $8 million in annual revenues. About 25% of its business is life and health. It uses the Insurance Institute of America's (IIA) Accredited Adviser in Insurance (AAI) program for both CSRs and producers.

Boone has set an example for employees by teaching CLU, ChFC, CpCu, and AAI courses. "I started teaching AAI six years ago at the request of six CSRs in our agency," he explains. "Classes are scheduled Tuesdays from 7:30 to 9:30 a.m., so there's a sacrifice of both employee and agency time.
Sometimes it is necessary to meet on Saturday mornings for reviews prior to an exam. I also give employees the afternoon before the exam for review on their own.

"We have found that the knowledge CSRs gained in the classroom resulted in efficiencies gained in the office," he continues. "The CSRs are able to accept greater responsibility and authority when they understand not only the coverages but how they meet customer needs. When our insureds call and request changes, the CSRs are able to ask the insured not only for the information for the endorsement, but know how it might affect other coverages. This reduces the number of call-backs from underwriters and follow-up calls to our clients for additional information. One way to avoid E&O exposures is to do it right the first time."

The Davis agency encourages all new producers to earn the AAI designation. "The three-semester AAI program provides a considerable level of knowledge and the tools to understand the risk management process," Boone says. He places great importance on understanding the risk management process. "An agent can be a policy manager or he can be a risk manager. A policy manager has very little to offer the customer other than a low price. The qualified risk manager can give his account a certain level of comfort that his risk is being effectively managed."

The Tolman and Wiker Insurance Agency in Ventura, California, with about 50 employees, puts entry-level employees through hAs Program in General Insurance (INS) and then through the AAI program.
Paula Wilcox, CPCU, CPIW, commercial accounts representative, has taught all parts of INS. She is one of 17 agency employees now taking AAI through group study. "No one was prepared to teach the class," Wilcox says, "so we broke into teams, each of which takes turns teaching assignments. The study group has worked out very well. Everyone prepared for their assignment and wrote practice quizzes. Someone developed a crossword puzzle. We have had both mid-term and practice final exams. The class stimulated people to prepare and to do well," she says. "No one wanted to be poorly prepared or give a bad quiz."
The AAI class ran from 4 p.m. until 5:30 or 6 p.m. one day a week. The agency gave employees an hour of work time for class, and the employees gave an hour of their own time. They also came in on a Saturday for a review session headed by an outside instructor to help prepare them for the exam.

"We thought about submitting our class schedule to the California Department of Insurance," Wilcox explains, "to see if we could get our classes certified for CE hours. We decided not to, however. We wanted people to be motivated to sit down and take the exam and earn CE credit that way."
Having multiple employees taking classes pays off

Mike Merewether, CPCU, a partner with Tolman and Wiker, serves on the agency education committee.
"One of the major benefits of employees studying AAI in-house has been the common terminology they learn and the synergy that develops when everyone involved is talking about different exposures and case studies," he says.

In addition, having real expertise in dealing with policy coverages can have a big payoff, according to Merewether.

"Paula reviewed the umbrella policy of a new client and found coverage for a loss that the policyholder had been told (by another agent) wasn't there," he explains. "The clients were preparing to defend the claim on their own. When Paula found that they did have coverage, they were thrilled."

"Taking INS, AAI, and CPCU helps employees understand written coverage issues," Paula Wilcox says. "Most of us have gone back to our desks and looked over our files when we've learned something that applied to our work. Our class work has made us aware of potential holes in coverage and uncovered exposures," she says.

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