dp

Your clients are calling me. I too, work for an insurance broker.  If you’re reading this you might also.  Recently, a new strategy has emerged for retaining business that seems to work well for the broker, but irks the buyer.  That strategy is locking out every available market five or six months prior to renewal.  Sure, this strategy works well for the people on the selling side to prevent competition from quoting an account, but how is it going to work out for you in 2011?  In the last 3 weeks, I’ve met with several of “your” clients to discuss their construction insurance and risk management programs.  If the meeting went well, we would discuss marketing the account when their renewal got closer.  However, several of these accounts had already been heavily marketed (6-7 markets by the incumbent broker) many months prior to said renewal.  Not sure if the brokers and agents responsible for this extremely are aware that this tactic does not sit well with their clients.  Just yesterday, I got a phone call from a prospect that I haven’t spoken with in over a year and he offered me every market except the incumbent.  Because these types of calls don’t happen very often, I inquired why he wanted to go this route, and he responded very matter of factly that “he is sick of his agent blocking every market so far in advance that no one else has an opportunity to improve his insurance situation”.  At this point, I could have been greedy and asked for every market we represent, but didn’t.  Being a specialty contractor, there are only so many markets that understand and offer a product for the type of work his company performs.  I have a feeling that a lot of agents send in half assed submissions to every carrier just so they can make their client feel that they went above and beyond, when in reality half of the carriers they supposedly sent submissions to flat out denied it just because of the type of work the insured does.  But that isn’t the message portrayed by the agent at proposal time.  They will try to spin their marketing efforts into a story about how much work went into marketing the account solely based on how many carriers they approached.  This approach works right now because contractors have too much to deal with just bidding work that they don’t have time to send rescinding BORs to carriers.

Here’s how we(my brokerage) differ.  We don’t market every account we have to every carrier we represent every year.  Instead, we spend our time making our clients safer and more profitable.  Instead of leaving the fate of our client’s insurance pricing in the hands of our carriers, we work PROACTIVELY to prevent and minimize claims and market the accounts strategically to carriers that have experience with and have designed special programs for contractors that address the risks specific to their industry or trade.  Two reasons why we do this:

1. If the underwriter is experienced in construction, he or she can price the account more accurately, preventing large price swings year to year.

2. If an underwriter sees the same account every year and never has a realistic chance of winning the business, they become less and less interested in spending time reviewing the account(assuming they don’t flat out deny quoting it because of all their time the agent has wasted in the past)

If you’re an agent using the market saturation technique, it has probably worked for a few years now and will work for most of your fall and winter renewals.  However, I’m not calling your clients begging to quote.  YOUR clients are calling me because they don’t like how you’re handling the marketing of their account.

If you want to learn more about our strategies for making contractors more profitable, check out our website at Construction Risk Advisors.com

A few months ago, before the iPad came out, I wrote a post about some potential applications that contractors could use it for.  It wasn’t a very strong post, but after actually handling one, it would be way too distracting for anyone to use at a jobsite, office, or anywhere else where productivity is needed.  I initially suggested we get the sales team at my company them to do our presentations with instead of using laptops, but realistically, if someone ( a prospective client) had never handled or used one, it would be very hard to pay any attention to a powerpoint when instead you would be playing with an iPad.  Down the line when people are much more accustomed to fancy, touchscreen technology, it might be a useful sales tool or a way to expedite some processes on construction job sites, but for now, in my humble opinion, it is a distraction.  Anyways…

I was just reading an article in Constructech Magazine about smartphone technology for contractors.  Nothing groundbreaking.  But good to see a few app developers working on an underutilized section of the marketplace.  However, not extremely excited about a magazine article that focuses on the ‘ruler’ app for smartphones.  It was featured in the initial TV ad for the iPhone almost 4 years ago, and in using it at home to hang pictures, isn’t all that impressive.  Basically, if I paid you to build a building for me, I’d hope you would use more advanced tools.  As smartphones and their applications become more advanced, I don’t doubt there will be an upswing in construction technology, but not holding my breath at the moment.  Sorry to be critical, if I could think of a better app idea for contractors, I’d be doing that instead of blogging/whining.

To sympathize with the app developers, I wouldn’t want to be blamed for phones or iPads that get broken because of jobsite use, or for being a distraction that leads to a drop in quality or productivity on a construction site.  Fingers crossed that a laser level enabled iPhone is available on verizon soon.

This morning, some of the popular daily insurance industry emails were hyping a youtube video that the reinsurance lobbies had released regarding a proposed bill called HR 3424 that could potentially raise insurance rates exponentially(for commercial and homeowners!) by levying a huge increase in taxes on worldwide reinsurers.  The point of this post is not to give you a crash course about what reinsurance is or how reinsurance works, the video below can do that for you, but to show you that even though ‘big insurance’ is trying to get involved in social media, they are still faltering.  When I first saw the youtube video mentioned on Advizen (a daily aggregator of happenings in the insurance world) I assumed instead of just talking about how neat and awesome this youtube was, maybe they would have included the link so that someone who read about the youtube could watch the youtube without googling it.  Even after googling it, I got links to more industry trade journals talking about it, but none of them included the link.  ALERT: if someone posts something on youtube, it is ok to provide a link to it!  I know how the insurance industry is terrified of someone reusing their precious articles in an effort to not get them out to the people that could benefit from them, but come on.  You have the resources.  Hire somebody that understands how information spreads over the internet.  Links spread information, and if you don’t provide links, information doesn’t spread.  A lot of web users won’t go to the lengths I did this morning to find a specific piece of information.  And if someone can’t easily find your information, it is useless.  Rant off.  (for the record, I’m not looking for a job doing social media for other insurance carriers or agents).  So here’s the youtube and link in question:

Link: http://www.youtube.com/watch?v=9xGHj1yoVnY&feature=player_embedded

Well, that was easy!

Part two of why this whole situation frustrated me.  After watching the aforementioned youtube, I wanted to see what other people in the industry were saying about it since it was interesting and has considerable impact if it passes. Sure enough though, “adding comments has been disabled for this video”.  Of course… someone could make some smart ass comment about our video and it could hurt our feelings.  Or a lot of smart people could add  relevant commentary and connect with other people who watched the video and wanted to see what others were thinking about it.  I guess it could be chalked up to risk management, but honestly, how many smart asses are going to watch a 2 minute youtube on reinsurance?  Every youtube video will have a couple spammers and a few people with too much time on their hands (like the person who has enough time to write a 600 word dissertation on this issue).  However, if your content is interesting enough for people to make remarks about, it has just become remarkable.  And remarkable information is the kind that spreads.  For more information on being remarkable go to amazon and buy these books.

Final grievance about ‘big insurance’ and social media:  I’m ok with ‘liking’ your facebook page, but that doesn’t give you carte blanche to update me 7 times a day.  Your boss is probably requiring immediate ROI for you to be able to go on facebook during business hours, and you thought this was a great idea.  Wrong.  Overposting is the fastest way to lose fans, and the easiest way for people to stop listening to what you say.  I’m not going to name names, but please tone it down a little! Once a day is fine, create an RSS feed if people want to be updated more than that.  If you don’t know what an RSS feed is, learn about that before you post on facebook again.  Social media ROI is a marathon, not a sprint.

We know you were able to find time during your weekend to pass a weakly accepted health care bill, and that you didn’t spend very much time regulating oil rigs in the Gulf of Mexico, but we were all kind of hoping that you could find some time in your busy schedules to not let the NFIP lapse…AGAIN.  Hurricane season starts this week, and most weather experts agree that this year’s is shaping up to be a busy one.  Besides wind, I think I remember hurricanes to be known for bringing massive amounts of rain and flooding.  I could have that confused with something that my homeowners and business property insurance covers, but I don’t think I do.  Help the American Public out by renewing NFIP instead of vilifying the insurance industry for not paying claims after several coasts get hammered by hurricanes and floods this summer.

From National Underwriter

The National Flood Insurance Program will lapse June 1 because of congressional inaction, meaning insurance agents will not be able to provide new or renewed insurance policies under the Federal Emergency Management Agency’s Write Your Own Program.

Sen. Harry Reid, D-Nev., announced Thursday night that the Senate will recess until June 7 without acting on legislation that would extend the program.

The NFIP’s current authorization expires May 31.

“This is now the fourth time Congress will have let this program lapse, and it’s beginning to feel like ‘Groundhog’s Day,’” said Blain Rethmeier, a spokesman for the American Insurance Association.

“The country has seen record flooding this spring,” he said.

“Congress needs to pass a long-term extension because homeowners living in flood-prone regions of the country don’t have anywhere to turn should another major flood occur during this Congressional recess,” he added.

Bills recently introduced in both the House and Senate would have extended the current program: the House through Sept. 30 and the Senate until Dec. 31.

Separate legislation, The Flood Insurance Reform Priorities Act of 2010, H.R. 5114, would reauthorize the program for five years (http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h5114rh.txt.pdf).

It would also reform the existing program by increasing NFIP coverage limits, phasing in actuarial property rates, phasing out premium subsidies for second and vacation homes, and making business interruption and additional living expense coverages available at actuarial cost.

This bill was reported out of the House Financial Services Committee and is awaiting further action by the House.

It has no companion bill in the Senate.

Allowing the NFIP to lapse at the start of the 2010 hurricane season is “irresponsible,” according to the National Association of Mutual Insurance Companies.

“Once again, the NFIP has become a victim of politics that have nothing to do with the program itself,” said NAMIC’s federal affairs director, Kathy Mitchell. “Allowing the NFIP to lapse just as the 2010 storm season is beginning shows a troubling lack of judgment on the part of Congress.”

She added that “millions of homeowners and businesses will be left vulnerable to storm losses because of Congress’ failure to act at one of the worst possible times.”

The Write Your Own Program, according to FEMA, is a cooperative undertaking of the insurance industry and FEMA that allows participating property and casualty insurance companies to write and service the Standard Flood Insurance Policy in their own names.

As everybody knows, google has a map function called google maps(duh).  The announcement today was that google has added another facet to how businesses are listed called Google Places.  In addition to the information google previously let you list, it now has analytics!  Such as where people were located when they googled you.  While the advantages of these upgrades are more applicable for “brick and mortar” businesses, it would be foolish for any business to not list themselves or take advantage of the free coupons.  Now before you poo poo coupons, there are still plenty of people across the country that still use them religiously.  If you’re an independent restaurant or car repair service, using these Google Coupons is a smart play.  Before you start in with the whole “we’re in a recession, our business is in the red, the margins are razor thin…” excuse, think of what the upside would be to acquiring a customer for more than one visit.  If you offer them a BoGo option for a pizza or a free appetizer they are still pretty apt to spend more money on drinks, apps, and desserts and are not dining out solely for the reason of ruining your margins by using a coupon.  Use the coupon to get them through door for the first time.  That’s the easy part.  The challenge is for you and your staff to impress them so much on their first visit that it becomes a no brainer to patronize your establishment and rave to all their friends about it.  The coupons are free to everyone, the experience you give the people that redeem the coupons is what can set you apart.

Prior to seeing this show for the first time last week, it had been a while since I shed a tear because of a TV show.  I’m not old enough to have been effected by the final episode of MASH or when JR got killed on Dallas, but for one reason or another the pilot episode of Construction Intervention really tugged at my heart strings. If you’re not familiar with the show, it’s about a loud-mouthed contractor from New York City who over his 30 year career has been tasked with getting horribly off-track projects back on track and under budget.  The premise for the show(which I believe will all take place in and around NYC) has Charlie Frattini and his crew of master carpenters, electricians, painters, and their laborers take a town on their luck business that is suffering because of forces outside of their control and do a complete overhaul of their office/restaurant.  In a week.  Think Kitchen Nightmare, but with contractors.

In the first episode, Charlie and his crew were tasked with gutting and completely overhauling a failing lower-Manhattan restaurant/bar called the Blarney Stone.  The bar was originally built in the late sixties at the same time as the World Trade Center was being erected by an Irish immigrant and then by he and his two sons when they were old enough.  Following 9/11, the Blarney Stone served as a refuge and cantina for the brave men and women who were involved in the rescue and recovery.  After the owner passed away in 2005, and business dropped off in the wake of 9/11, the Blarney Stone was on the brink of closing its doors forever until Charlie and his boys decided to save the day, like the Blarney Stone had for the workers at Ground Zero.  The first part of the show showed the level of disrepair that the Blarney Stone was in, and the later parts of the show focused around a complete renovation that would have taken between 4-5 months, but instead was completed in 5 days.  I deal with the clerical and contract  side of contractors all day long, but it’s very rare that I get a glimpse of the actual work they do, and it was amazing to see how fast they were able to coordinate and complete the task at hand.

“When 9/11 happened, the Blarney Stone opened its doors to the rescue workers, and they kept this place open for nothing,” said Frattini, who said he also worked at Ground Zero. “And that’s one of the reasons I just had to come down here, because it was time to give something back to them.”

Just three weeks after construction, the Blarney Stone’s business was up 10%, and the bar had one of its best nights ever this past St. Patrick’s Day.

“These guys kept us open,” said Joe Keane, raising a glass with Frattini in his shining new bar.

“I never, ever dreamed that it would look like what it looks like now.”

If you like off the beaten path shows, or just like watching contractors do what they do best, set the DVR and check it out. It comes on Tuesday at 10pm EST(After Deadliest Catch).  This week’s episode will deal with the renovation of a restaurant owned by a member of the New York City Fire Department.

Read more: http://www.nydailynews.com/ny_local/2010/04/11/2010-04-11_irish_bar_down_on_luck_gets_tv_fixup.html#ixzz0lZZHgZpe

From the Des Moines Citizen:

UNDATED (WSAU) Congratulations to U-W Stevens Point graduate Mary Chind. She won a Pulitzer Prize for breaking news photography yesterday.

The 42-year-old U-W-S-P grad is a staff photographer for the Des Moines Register newspaper.

Her winning photograph was taken during a flood of the Des Moines River on June 30th. It shows a man on a crane being lowered into the water to rescue a woman whose boat had capsized.

From the NY Times:

Breaking News Photography 2009: River rescue in downtown Des Moines: A woman is pulled from near the Center Street dam by construction worker Jason Oglesbee on Tuesday. A man who was with the unidentified woman died in the Des Moines River. A rescue team from the Des Moines Fire Department tried several times to rescue the woman but could not get close enough to her.

Jason Oglesbee, the construction worker who saved the drowning woman is as humble as he is brave.  This is the only quote he gave to reporters after the rescue:

“I happened to have the harness on, see. That’s all I want to say. They just harnessed me up and dipped me down in the water and I grabbed her and drug her — the crane drug her — to the boat and that’s it. What are you going to do if she’s like that? It’s no big deal. The whole crew did it. So that’s all I want to really talk about or have to say. You know, my supervisor…they all did a good job.”

Despite the fact that he risked his life and very expensive equipment to successfully rescue the drowning woman, what would his employers’ insurance carrier think about this?  OSHA?  Would he have gotten comp if he had been injured during the rescue? I’d love to hear some feedback on what other parties have to think about this.

Video of the rescue:

we always figured that this was common knowledge, but…

If your home has been damaged by this week’s flood, be careful about hiring someone for the repairs, says Gov. M. Jodi Rell’s office.

Unlicensed contractors have been walking door to door, offering reduced rates for work. Ask contractors to show you a copy of their Connecticut license or registration cards, insurance certificates and references.

Electricians, plumbers and heating-and-air-conditioning contractors are all required to be licensed. Even stump removal is considered a home improvement, so contractors must be licensed. You can check credentials by visiting www.ct.gov/dcp and clicking on “verify a license” under the consumer heading.

From the Hartford Courant

And a little elaboration from the good people at WTNH

Hartford, Conn. (WTNH) – In the wake of the severe flooding that hit Connecticut, Gov. M. Jodi Rell and the state Department of Consumer Protection has issued a warning on home repair scams.

The warning urges all property owners who have been victimized by the storm to be cautious when hiring workers to clean up the mess.

“Sadly, almost as quickly as the waters rose, scam artists have begun to emerge,” Gov. Rell said. “It is despicable that unscrupulous people would take advantage of the misery of others.” “We are already hearing reports of contractors going door-to-door offering repair services, so I am urging homeowners to double-check the credentials of anyone they consider hiring before accepting any offers or paying out any money,” suggested Rell.

Homeowners are also urged to steer clear of high-pressure sales tactics, especially those with a high price tags attached.

If anyone has any doubts about a contractor, you can check their background with the Department of Consumer Protection to make sure they have the appropriate licence or registration from the state. Although workers from other states are coming to Connecticut for work, home improvement contractors working in Connecticut are required to be registered.

In addition, when you hire a contractor, they are required to show you a copy of their Connecticut licence or registration cards. “Homeowners who end up with property damage or unfinished work at the hands of a registered contractor may qualify for restitution from the state’s Home Improvement Guaranty Fund – but those who hire unlicensed or unregistered contractors don’t have this benefit,” said Department of Consumer Protection Commissioner Jerry Farrell.

As a whole, there is the perception that (most) contractors don’t utilize or see the value in using social media.  While, I mostly agree with this, the 30% of contractors that are currently unemployed could probably benefit from it.  I follow a few construction industry people on Twitter, and earlier this morning noticed that they are posting job openings!  Roadtechs GC has an entire account dedicated to only posting nationwide job listings.   Roadtechs isn’t the only construction industry member that advertises jobs on via social media, so poke around once in a while.  All these services are free, and you can lurk around without having to contribute.  If you’re out of work, spend 15 minutes cruising around facebook, twitter, and linkedin.  You might be pleasantly surprised how quickly your employment situation changes despite what your peers say about the mean with which you got it.

If your buddies will disown you if they find out you’re using the same sites as their kids do, here’s the link to Roadtechs regular website

dig around.  you’ll find something

As we’ve alluded to a few times here at FYR, our day job is helping contractors with risk management and insurance consulting among myriad other services aimed at protecting their company and reducing their Total Cost of Risk(everything that goes into risk management, not just the premiums and deductibles on the policies).  Anyways, our business model is different than your average insurance broker.  We don’t engage in pricing battles with other agents.  We walk away from prospects that don’t want to understand our business model.  We do a lot more than just insurance, but our fees are the same as you’re paying your agent right now.  Recently, I’ve noticed some strange irony between our business and the contracting business.

So, when we are meeting with a new prospect for the first time, we will spend the first part of the meeting discussing their business.  Lately, more and more of these meetings turn into complaining sessions about how there are too many people on bid lists, under-qualified contractors bidding work they don’t know how to do, people bidding ridiculously low numbers and on and on……

In the same breath that they berate their own industry, they turn around and buy their insurance based on all the things they hate about the bidding process.  Low price wins regardless of the expertise or capabilities of the agent.

Things not taken into consideration:

1.  Whether or not the agent or broker has any experience dealing with the nuances of contracting (unqualified contractors bidding on projects that they don’t really know how to complete)

2.  Whether the low priced coverage is comprehensive enough to protect every facet of your business (if the price is too low to cover materials/labor and any sort of profit, something is fishy)]

3.  Allowing every agent that calls you saying they can get you the lowest price to quote your insurance policies (long bid lists filled with unqualified contractors)

Shifting your mindset into a new way of doing things isn’t easy.  But neither is closing the doors to your business because your cheap insurance didn’t protect your company correctly.