My accident cost what?

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 Many  people assume putting a claim on their auto policy will cause this insurance premium to increase. It's not always true.
Today, I'm going to share some "insider secrets". Actually, the general public is privy to the information, but the reality is, most people don't know how to find the information.
Here's a helpful link to the "Point System" in Massachusetts.
Back to the point of this blog post.
Were you in an car crash?
Was it your fault?
If you answered yes to either question, read on. If you weren't, read on, you may be able to help someone else!
If you were in a car crash it's either you at fault, the other driver at fault, or 50/50 (you're 50% at fault and the other drive is 50% at fault). If there are more vehicles involved, it gets tricky.
If you rear end someone (hit from behind), it's your fault.
If someone rear ends you, it's their fault.

1. If the insurance company paid out $500 or less, there will be no surcharge.
2. If the insurance company paid out $500.01-$2000 you will have a surcharge of 3 points.
3. If the insurance company paid out $2000.01+ you will have a surcharge of 4 points.

How will that affect your driving record? How will it affect your insurance?

It won't.
A surcharge of 3 points on your driving record, it will be on your license for 6 years. It will cost you approx $2000 over a period of 6 years on your car insurance policy.
A surcharge of 4 points on your driving record, it will be on your license for 6 years. It will cost you approx $3000 over a period of 6 years on your car insurance policy.

What should you do?
That depends.
If you have a $500 deductible on your car policy and you have $400 worth of damage to your car and $0 damage to another car, you pay out of pocket.
If  you have $900 worth of damage, you can submit a claim to the insurance company. They can subsidize your accident. Remember, you have a $500 deductible. You can pay $500 and the insurance company can pay $400.
If there is $1000-$2000 worth of damage the insurance company will pay out, is it worth having a surcharge on your license for 6 years? Can you pay out of pocket? If you can, you should.
If there is $2000+ worth of damage the insurance company will pay out, you will have a surcharge of 4 points on your license for 6 years. You can either pay out of pocket or let the insurance company handle it. Sometimes it's not worth the hassle to pay out of pocket.

Remember the limits:
$0-$500  no surcharge
$500.01-$2000  3 points
$2000.01+  4 point

Keep checking our blog. We're going to highlight a topic many people may be interested in: accident forgiveness!

Please call you insurance agent for more information or further questions. Remember, our blog is a resource, but it's best to speak to your agent who knows your situation and your policy. Our information is not the be-all end-all.
We are here to help.
And to inform.

Happy weekend!

Pocasset River Shark

On the first official day of Summer, this 14 foot Basking Shark was recorded swimming in the Pocasset River. In the video, it looks like the shark ran itself aground but was able to swim away. Fortunately, Basking sharks are completely harmless, unless you get whacked by its tail! This happened to be a small animal for this species, as these sharks can grow to be 20-26 feet on average and upwards of 35 feet for large animals. The Basking shark is a filter feeder, feeding on zoo-plankton, small fish, and invertebrates,  and is the largest fish in the ocean behind the Whale shark.

It might be harmless but it's scary nonetheless!

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A Simple Way to Save a Few Dollars, Pt. 2

Did you read our recent blog post about payment plans companies offer to their policy holders? Today’s post is specific to homeowner discounts. Everyone could stand to save a few dollars, right? That's why we want to ensure that you're aware of the money you could be saving. When your home is your most valuable asset, you can’t afford to skimp on the  bargain insurance plan if something were to go wrong. Fortunately, insurance companies offer customers a variety of substantial discounts, giving them a break while maintaining excellent coverage.

Arbella Mutual Insurance provides you with a variety of discounts simply for being a loyal customer. Arbella offers customers up to a 20% discount on their homeowner’s policy when customers also carry auto policies with Arbella. Many customers carry homeowner and auto policies with different companies and don’t realize that they are missing out on savings.

You can see serious rewards for brand loyalty. To add to the auto and home bundling discount, Arbella will discount your policy 3% for each year you renew your homeowner policy. Arbella will knock off an additional 2% if you carry your auto policy with them as well. For renters, Arbella will discount your policy 10% if you insure your car with Arbella. Not only is it an added convenience to carry both policies with the same company, but it is cheaper too!

Safety Insurance offers the same discount for homeowners, 20% if they carry both their auto and homeowner policies. Homeowner insurance is not cheap, and most homeowner’s also own cars. If they’re insuring these assets with different companies, they could be over-paying by 20% or more than they would be with companies like Safety and Arbella.

Arbella also offers a new home discount to homeowners, knocking 20% off their premium. Homeowners will continue to earn discounts on their home until the home turns 10 years old. Arbella offers new home buyers a 10% discount for the first two years if they attend a Massachusetts Affordable Housing Alliance workshop (MAHA). The MAHA educates homebuyers on sustainable homeownership, teaching homeowners the ins and outs of purchasing a home. The workshops take 12 hours to complete, over the course of four days, and can save you a ton of money. 

Lastly, Arbella, Safety and other companies will offer discounts when your home is retrofitted with additional safety measures. Installing simple measures such as deadbolt locks and smoke detectors can warrant discounts. The installation of burglar alarms, fire alarms, and automatic sprinklers are added discounts. Even if companies don’t offer discounts, you should have basic security features such as dead-bolt locks and smoke detectors to protect you and your family. Simple things like proximity to a police station or fire-hydrant will also bring down your premium, but that might not be something you can control.

Going above and beyond to maintain and protect your home shows insurance companies you value your home and gives them confidence they need to offer you a lower price.


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Protecting Your Home During Hurricane Season with Flood Insurance

What better time to discuss Hurricane Season and Flood Insurance than as thunder storms roll in over Cape Cod? Hurricane Season is upon us and it looks to be an interesting one. NOAA is predicting anywhere from nine to fifteen named storms coming through the Atlantic Basin over a sixth month period, with 70% certainty. Of these nine to fifteen storms, four to eight will become hurricanes with winds of 74 miles per hour or greater. Another one to three of these storms will develop into a major hurricane with winds greater than 111 miles per hour. In addition to damaging winds, these storms bring heavy rains that can flood low-level homes with ease. Now is the time to purchase flood insurance.

Hurricane Irene per NOAA

In 1968, The National Flood Insurance Program (NFIP) was created to help homeowners obtain flood insurance because flood is not a coverage carried on a homeowner policy. NFIP is managed by the Federal Emergency ManagementAgency (FEMA) and provides flood insurance to high (at and below sea level - think New Orleans) and low risk (above sea level and in the mountains - think Mount Washington) flood zone areas.

Coverage, with respect to the building, in a flood policy is the building and its foundation, electrical and plumbing systems, central air conditioning, furnaces, water heaters, refrigerators,  appliances, built-in appliances like dishwashers, permanent carpeting, paneling, bookcases, cabinets, window blinds, detached garages, up to 10% of building property coverage, and debris removal.

With regard to personal contents and property, a flood policy covers personal belongings such as clothes, furniture, electronic equipment, curtains, portable air conditioners, microwaves, carpets not included in building coverage, washing machines and dryers, food freezers and their contents, and certain valuable items up to $2,500.

For moderate to low risk areas, flood insurance is incredibly affordable. While it might seem unnecessary for you to purchase a flood policy if you’re not in a high risk area, take a look at this statistic. Twenty percent of flood claims filed with the NFIP come from moderate to low risk areas and receive one third of the total disaster assistance doled out. For approximately $49 per year, you can buy a contents-only flood policy. If you live in a high-risk, low-lying or waterfront property, you really only have one choice, a standard-rated policy. While standard-rated policies are more expensive, the damage that can be done to your home can be catastrophic. As I’m writing this post, rain is coming down in buckets, so you never know what can happen with storms that roll through the Cape!

You risk thousands of dollars in damage if your belongings aren’t adequately protected. With an increased frequency in storms with greater intensity, it is better to be safe than sorry, so check out your options.

Intern Insights: Business Risk

Momentarily departing from my normal weekly blog, I'd like to discuss the risks that every business can encounter, regardless of size. On Thursday, I was forwarded a copy of Lloyd’s Risk Index for 2011, a forty page article detailing the most formidable risks that businesses face today. The Risk Index is further broken down by continent, prioritizing risks and categorizing them by level of preparedness. Priority and preparedness were measured on a scale of one to ten, with ten being the biggest priority or most prepared. As an aspiring business owner, CEO, multimillionaire, yachtsmen, etc… mitigating risk is a top priority and something that needs to be fully understood. Lloyd’s Index provides an economic and contextual basis as to why these risks occur and have or have not changed. Lloyd’s top five risks in 2011 were the loss of customers, talent and skill shortages, reputational risk, currency fluctuation, and changing legislation.

The risk of losing customers can be traced back to the most basic backbones of microeconomics, supply and demand. Producers will try to maximize profits by meeting the demands of consumers. When demand rises, so does producer output. When demand falls, producers have to scale back output but still post a profit. This is the dilemma that businesses are facing now. In the wake of a catastrophic economic implosion, where credit was scarce, businesses are now able to fund operations more easily. The impediment to businesses striking gold through production is that consumers are less willing and/or able to buy, for a variety of reasons. Lloyd’s asserts that this lack of demand stems from stationary or declining income levels, rising price indices, and job insecurity.

Second on Lloyd’s list of the top five risks businesses face is the shortage of skilled workers. Businesses responded that the shortage of talent was one of only two risks they were insufficiently prepared for, and rightfully so. How can you possibly prepare for a lack of skilled workers? The answer is to develop and maintain a strong and skilled infrastructure of workers. Retaining your current employees is much easier and safer than finding adequately skilled workers elsewhere. Lloyd’s also stated that firms, like themselves, were recruiting raw talent and training them to meet their needs.

At times, a business’ reputation can be the key to generating sales when it comes to referrals and word-of-mouth marketing. Hence, reputational risk was ranked third in Lloyd’s top five business risks. Lloyd’s cites a startling 2010 study, stating that 80% of the world’s one thousand largest companies lose nearly 20% of their value at least once in a five year period because of a major event that impacts their reputation. For Toyota, it was the automobile recalls and BP, the oil spill that threatened miles of coastline and thousands of marine mammals. Mitigating reputational risk can spark increased business value.

Lloyd’s fourth business risk regards business that import and export raw materials and/or 

finished goods, as wells as companies that dabble in foreign investment. Companies that import foreign raw materials and export finished goods are subject to the fluctuation of foreign exchanges rates. As foreign currencies depreciate against the dollar, firms are subject to paying higher prices for the materials necessary to produce a finished product. To mitigate this risk, companies need to make raw materials more readily available, whether through domestic suppliers or otherwise.

Lastly, Lloyd’s addresses the changes in legislation that have resulted from the financial collapse and the risks imposed on businesses. In 2010, the Financial Stability Oversight Council was created to watch over financial institutions that instigated the housing collapse through the securitization of sub-prime mortgages. In conjunction, businesses are now being held more accountable for their actions, and reporting standards are changing to ensure the accuracy of information made available to shareholders.

North America’s risk priorities tell a different tale, however. The risk most prioritized by North America was corporate liability, at a 6.7. Following corporate liability were reputational risk, cost and availability of credit, fraud and corruption, and cyber risk. Whatever risks your business may face, it is important to be prepared and mitigate these risks. There are my insights for the week!


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A Simple Way to Save a Few Dollars

In an age where technology dominates and people are always wired in to their smart-phones, tablets, and computers, it’s not surprising that insurance companies have risen to the occasion and offer discounts for electronic billing. In a shift from conventional paper and check billing, insurance companies are beginning to offer discounts and waive service charges when policy holders pay by Electronic Funds Transfer (EFT). In addition to EFT billing, companies will offer discounts when policy holders pay their premium up-front. Some customers choose to forgo this discount or do not know that EFT is an option. Many of the companies we represent offer these discounts including but not limited to Arbella Mutual, Tower, Safety, Plymouth Rock, NLC, and MPIUA.

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 Arbella Mutual Insurance’s personal lines payment plan is simple. If customers do not pay the full Personal Auto premium balance in one payment, they are required to pay 20% of the total premium as a down payment with 10 monthly installments to follow. Each installment payment requires a $6 service charge, if the customer is not on the Automated Payment Plan. If you choose to enroll in the Automated Payment Plan, Arbella will automatically withdraw the monthly installment from your bank account and waive the service fee. Homeowner and Umbrella policies follow suit but have a service charge of $4 that can be waived under the Automated Payment Plan.

Safety Insurance offers customers three payment plan options for their car insurance. Customers can pay the premium in full at the beginning of the policy. If a customer chooses to pay less than the full premium, they are required to pay in 9 installments and a service fee of 15% of the premium at each installment is assessed. The most cost-effective way is to enroll in the Safety Advantage program. The Safety Advantage program allows customers to choose the number of installments, a maximum of ten including the down payment, the dates installments are paid on, and automatically withdraws installments from the customer’s bank account, waiving the service fee.  

Plymouth Rock, an auto and home insurance company, offers a few payment options to customers. The options are: 100% down payment with no service fee, 25% down with three quarterly installments, 25% down and 7 monthly installments, 20% with 9 monthly installments, and a program called EZ Paid. Customers are offered a 4% discount if they choose to pay the entire premium balance in full at the start of the policy. You are charged a $6 service fee with all installment payment plans. EZ Paid requires a 20% down payment and 11 equal monthly installments. The installments are automatically withdrawn from your bank account (EFT) and no service fee is assessed. Plymouth Rock also offers a 5% discount to customers who agree to paperless billing. Customers who elect to receive their policy documents electronically will receive this discount.

Mass Property’s payment plan is straight-forward. Twenty-five percent of the insurance bill (premium) is due at the start of the policy and 15% is due in a series of 5 equal installments. The installments come at 50, 100, 150, 200, and 250 days after the policy’s effective date. With each of the five installments, a $2 service charge is assessed for installment premiums between $100-$299 and $4 for premiums $300 plus. If you choose to pay each installment through Mass Property’s website, you won't get a service charge on the installments. You'll save yourself $10 - enough for a Friday lunch!

There are plenty of ways to save money on your Car and Homeowner Insurance policies! Electronic Funds Transfer (EFT) is a simple way to save a few bucks. You don’t have to think about it, the company will withdraw the money for you. With some companies, you could save close to $70 dollars by using EFT. It might not seem like much each month, but it adds up!

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 Please check our post about Safety's Mobile App.

Accounting in Real Life is Different Than What You Learn in Business School

Three weeks into my first internship, it’s safe to say I’ve learned more about the inner workings of a business than I could have in an entire summer of bussing tables or lifeguarding elsewhere, and yet I still feel like a minnow in the Vineyard Sound. The behind-the-scenes effort that goes seemingly unnoticed in operating a business is mind-boggling, something I have come to realize in these short three weeks. From staying current in social media to attaching documents to our Agency Management System to generating sales reports, the body of work that has been thrown at me has been a welcomed challenge, one that I’m proud to say I have stood tall against.

As I've grown more comfortable at my desk, more accustomed to fielding emails and operating the agency’s database, work has been flowing across my desk. A true display of the meticulousness of a business’ operations is accounting, more specifically reconciling accounts. Reconciling an account entails adding up its endless debits and credits, cross-referencing these with invoice records, and ensuring the accuracy of the account balance. While the numbers we use in school are nice and round, and when accounts don’t reconcile it’s easy to find discrepancies, this isn’t the case in the real world. In the real world, balances could be off by cents on the dollar and you could have no clue where those cents come from. It takes repetition and a keen attention to detail to ensure the absolute accuracy of account statements.

Circling back to last week’s “Intern Insights” post about generating new business, I’ve learned that the effort required is astounding. It takes a certain determination to market to hundreds of clients or prospects and to generate a few policies. A major project I worked on this week, is the generation of personal and commercial leads. In generating commercial leads, I used a tool that allowed me to map the area I wanted to market. I chose to highlight essentially from the Cape Cod Canal to Provincetown which generated nearly 29,000 results. Grumbling ensued. It would take me days to put 29,000 businesses’ information into a spreadsheet. However, I was able to narrow my results down to 2,200 local businesses by manipulating the parameters of my search. I was able to carefully select the size of the business I wanted to market to, in employee and sales volume, as well as a number of other specifications. It’s interesting to see how this information, all publicly available and free, allowed me to target a specific market which will fill our Pipeline with qualified prospects.

Finally, I’ve learned that in business you need to enjoy the little things. For a sales associate, this could be the smile on a customer’s face or the “Thank you” they get when they solve a customer’s problem. For an executive, it could be the assurance of watching your employees operates seamlessly together. For me, it’s sitting in a comfy chair out in the sun on my lunch break, closing my eyes for a few minutes, and enjoying the turkey sandwich on double-protein bread I made myself for lunch. Tough life!

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Distracted Driving - One Week Later

One week removed from Arbella’s Distractology 101, I’ve found myself far more aware of the dangers of distracted driving. It’s easy to recognize when a fellow driver is more focused on the text they just received than the road ahead of them. From teen drivers sending text messages, businessmen replying to emails, and women putting on make-up, distracted driving is an ever-present danger on the road.  It takes one, split-second distraction for a tragedy to occur, a tragedy that is easily preventable with a little common sense and self-restraint.

According to a recent U.S. Center for Disease Control and Prevention (CDC) study, one in three teen drivers admits to texting or emailing while driving, a staggering statistic (you can find an article on the study here!). While the turnout of young drivers last week came as a beacon of hope that teens are more aware of the dangers of distracted driving, or at least making an attempt to be, this statistic proves otherwise. Upon completing the simulation, one driver told me that while the demonstration was powerful, it is unrealistic to think that teen drivers already in the habit of texting and driving will not stop unless something terrible happens. I tried to retort but found myself struggling to prove the young driver wrong. Fortunately, companies like Arbella and AT&T will not accept complacency and have launched campaigns to stop it. Arbella’s Distractology 101 aims to prevent teens from developing such a habit, introducing them to the dangers of distracted driving before they can develop an irreversible bad habit. AT&T approached the problem with a different perspective, launching an ad campaign displaying the violent consequences of texting and driving. The slogan of AT&T’s ad campaign is “It Can Wait”; such a simple phrase teen drivers have had a difficult time comprehending. In 2010, AT&T launched a deeply moving documentary, seen here, of teen drivers injured or killed as a result of texting and driving. If these very violent, very real stories of the dangers of texting and driving cannot deter teens from doing so, it’s difficult to see what will.  

Several Murray & MacDonald employees tested the Distractology driving simulator and more often than not had the same had the same results as most of the 50+ teen drivers who participated. If the employees, some who have been driving since before the teen drivers were born, can’t make it through the simulation unscathed, then it’s safe to say that no one should be texting and driving! 

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Intern Insights

The major topic of discussion last week was the development of new business and continued growth. The week began early Monday morning with a marketing discussion allowing sales associates and interns to offer insight on how  to achieve steady growth.  The “Pipeline” has been a central focus of our discussion. The insurance “Pipeline” is similar to the Alaskan oil “Pipeline”; it requires an availability of resources that will eventually become a profitable product. As the Alaskan Pipeline carries oil from its origin to refineries for it to be converted into gas and heating oil, qualified prospects may turn into insurance policy holders.


As simple as it seems, maintaining steady growth in the insurance industry is more complicated than the basic “Pipeline” analogy. In the marketing discussion, we realized that potential customers were slipping through our fingers unnoticed. With a large customer base, it is possible that some customers hold either car or homeowner’s policies with us, but not both. Simply asking clients if they want a second opinion on their policies held elsewhere is a simple, effective way to grow while providing the client a valuable service. Though it is not always easy or convenient to ask clients about policies held elsewhere, it allows for quality, organic growth. Conventional advertising and promotion are effective ways of acquiring new customers but can be very expensive in comparison to growth from within. Having never been part of a discussion like this, I was humbled to learn that my peers had far more to offer to me than I did to them. As an intern, my purpose is to offer tidbits of my knowledge to improve the brand. Whether it be improving the use of our social media outlets or preparing mailings to reach new customers, it is my job to help put the executives and sales associates’ ideas into practice.  


In an industry crowded with companies offering low prices, differentiation has become a focus of the agency. We discussed what factors differentiate our agency from our competitors. While insurance is a homogenized service to a certain degree, not all agencies offer the same quality service. At any given price, a myriad of companies offer insurance policies with the same or similar coverage. To be successful in an industry riddled with competitors offering the lowest prices, exceptional becomes a separating factor. In the discussion, we came to the conclusion that easily accessible, welcoming, and helpful agencies and associates become most successful. Exceptional service not only creates a strong reputation for an agency, but it generates growth in the form of referrals. Customers will change agencies, sometimes at a premium, to ensure that their problems are solved, questions are answered, and that they are treated with respect. It is our responsibility to ensure the tactics we  discussed would be put into practice to generate growth.

Last week, we had Arbella’s Distractology 101 trailer in our lot to enlighten teen drivers of the dangers of distracted driving. It took a lot of effort to orchestrate the an event, from generating awareness through mailings to booking appointments for drivers to complete the simulator. With the aid of media outlets such as TheEnterprise, WQRC, and the Cape Cod Times, we generated enough buzz to more than 50  young drivers. Drivers were put through several scenarios such as hidden stop signs, cars stopping short, and vehicles running stop signs with and without cell-phones. They were made aware of the dangers of driving distracted, and almost every driver  had an accident or two while using the simulator.  Many drivers crashed without even using their cell-phones, which was unsettling.   It was exciting to see many young drivers willing to participate in the driving simulator. The easiest way to raise awareness about the dangers of texting and driving is through hands on and demonstration; using the simulator proved effective. The drivers were asked to complete pre and post-assessment surveys, and most responded positively that they were  aware of the dangers of distracted driving. While the program took significant effort to put together, watching teens walk away with a sense of enlightenment was ultimately worth it. 


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Distractology 101: Textident Prevention

This week, Arbella Insurance brought their Distractology 101 trailer to our Bourne office to offer teen drivers an opportunity to test their distracted-driving simulator and learn of the dangers of taking your eyes off the road. The trailer features two simulators and runs drivers through a myriad of scenarios with and without cell-phones, testing drivers’ abilities to avoid obstacles the road can present. Distractology has drawn significant media attention, most notably from the Cape Cod Times, WQRC 99.9 FM Radio and The Enterprise. Cape Cod Times recently wrote an article about Distractology, which can be found here: Cape Cod Times Distractology Article.

                 Over the course of the week, nearly 50 young drivers came to take part in Distractology 101, a great turnout despite students still being in school. For these drivers, Distractology proved to be an eye-opening experience with fender-benders galore. The simulator tested drivers’ ability to recognize road signs, blind spots, and just how far your car can travel when you take your eyes off the road for a split second. Drivers were asked to perform simulations of stopping at stop signs that were seemingly hidden, navigating intersections where they did not have the right of way, and avoiding pedestrians in cross-walks that were hidden by cars in another lane. While crash simulations were mild and the tone was light-hearted with a good amount of laughter, young drivers walked away from the simulations more aware of the violent consequences of driving while distracted and the sporadic nature of other drivers on the road. At any given time, a driver could run a stop sign or stop short and it requires the driver’s undivided attention to avoid an accident. Adding a cell-phone into the equation, especially in an era of non-stop texting, Facebook, and Twitter activity is certainly a recipe for disaster. It’s difficult to break a bad habit, so teaching drivers of the dangers of distracted driving will hopefully prevent them from developing one. It takes a simple text-message to take a driver’s eyes of the road for only a few seconds, plenty of time for an obstacle to create havoc.

                Special thanks go out to Arbella insurance and all who participated in Distractology 101, especially parents and teen-drivers willing to take the time to learn about the violent consequences of texting and driving. Raising awareness about the dangers of distracted driving not only enlightens young drivers, but enhances the safety of other drivers on the road. 

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Here are a few pictures of drivers testing the simulator...

Isenberg to Insurance

Last Working Wednesday, we heard from one of our employees, Andy Roth. This week, we have a guest blogger, Jim Hyatt. He is the Vice President of Personal Lines for Arbella Insurance Group. Jim answered a few questions on what brought him to insurance and why it's an important industry.

Jim Hyatt, Arbella Insurance Group

Q: How did you come to be involved in the insurance industry?

A: As a finance major at the Isenberg School of Management at UMass Amherst, I was immediately drawn to the insurance job opportunities that were available at the time. In 1985, I accepted a personal lines underwriting trainee position at the ChubbGroup of Insurance Companies. That experience provided me with a solid foundation for a career in the insurance industry. In fact, Arbella Personal Lines has developed its own Underwriting Trainee Program, which is modeled after the trainee program I went through and other successful programs I have been associated with over the years. Through a combination of classroom study, mentoring, and on-the-job training, our trainees are gaining the knowledge and expertise that will guarantee their success in the industry. The program includes not only underwriting and business analysis experience, but also experiences in customer service, actuarial, and claims, that provide our trainees with a well-rounded understanding of this business. I’m very happy to provide these employees with the same learning opportunities that I was given at the start of my own insurance career.

Q: What has kept you so engaged in this business?

A: One important aspect of the insurance industry that has kept me interested is the fact that it isn’t beholden to the economy. Some of my friends who are in consulting and investment banking have seen their entire careers bend to the whims of an unruly market. The insurance industry, on the other hand, has the power to withstand all economic cycles—it’s rock solid.

 

Q: What makes insurance such an important industry?

A: Those of us who are in the insurance industry are in a unique position to help others. We’re not selling a product; we’re selling a promise. We are selling our insureds the peace of mind that if something should happen, we will be there to help rebuild what’s been lost and help put their lives back together. Arbella’s ability to create mutual trust and loyalty with our customers is what I think differentiates us from other carriers. One year ago, many of our insureds in Western Massachusetts had their lives turned upside down after the devastating tornadoes that struck without warning. When Arbella arrived to help our insureds, we could provide one comfort: the reassurance that they were more than just a number, and that their policies were a promise that we would make good on. That quality, I believe, is not only important; it’s the mark of an exceptional insurance carrier.

Thank you for being a guest on our Working Wednesday blog Jim. It is great to have input from someone who started in the insurance industry out of college. Thank you to Jim Hyatt, John Donohue and Arbella for allowing us to host their Distractology Driving Simulator at our agency this week. Join us next week for another Working Wednesday blog post.

Intern Insights: Week One

Murray & MacDonald Insurance hired an intern, Ben Whitney, from Bentley University for the summer.

Each Monday, we will post insights from Ben about working for a local insurance agency.

In the first installment of “Intern Insights”, I’d like to introduce myself and provide a brief description how I became Murray& MacDonald’s latest summer intern. I am a rising junior at Bentley University and a candidate for the B.S. in Corporate Finance and Accounting with a minor in Law. This is my first internship, and I am more than excited to be here to continue to develop my skills and put them to practice. Most of my summers I spent as a lifeguard, busser and self-proclaimed guacamole chef/legend, it is exciting to take on a position that is truly value-added. While lounging in the sun and making the best table-side guacamole on this side of the Mississippi have made for great summer jobs, I am happy to build my resume and practice skills that will be the foundation of my career in the road ahead.

My first week at the agency was certainly a culture-shock. Prior to arriving, the extent of my knowledge of insurance was that my car insurance costs way too much. I was promptly set up with a desk, computer (with two monitors), and a notepad to begin my learning experience. While bussing tables required little or no intellectual prowess, there was a learning curve to overcome as a Junior Operations and Financial Analyst (fancy, huh?). I made a few mistakes in my first days that cost me hours of work, but they were greeted with understanding and guidance by my higher-ups.

My first project was gathering data and computing retention rates for sales associates dating back to 2009-2010 fiscal year and working my way forward, using the first five months of 2012 as a baseline to compare my figures. Customer and policy retention is an invaluable statistic in the insurance industry, allowing the firm to gauge its performance at the associate and agency level. With the introduction of seemingly low-cost insurance companies into the insurance market, retention is a helpful way to determine how many customers the agency loses to competition. I was asked to gather premium and commission data for new business and renewals as well as the number of customers and policies an agent was responsible for.  Using premium and commission data proved to be somewhat misleading, because they can fluctuate based on the economy. The truly valuable data proved to be the change in number of customers and policies. Using these numbers produced more realistic retention rates and provided valuable insight as to the inner-workings of the insurance industry. For any given year, an associate could lose a number of customers, whether it be to competition, the sale of a client's asset, a client not renewing the policy, or the unfortunate, death of a client. However, the same associate could be carrying more policies than in the previous year, an indication of an upward trending economic climate and a promising sign for the Bottom Line. The increase in policies shows that as customers leave for cheaper rates or their policies expire, new home-buyers and car-owners are purchasing multiple policies to keep all insurance with one company. While more competition can tend to cloud out markets, the solid retention rate is evidence that the associates and the firm as a whole are doing well.