Intern Insights: My Farewell

Alas, the summer is coming to an end and so is my stint at Murray & MacDonald. Though I may appear in the future as a guest blogger, this will be my final “Intern Insights” post, and it will be insightful. Now that my summer has come and gone, I’m forced to go back to school. As fun as it is, you can’t beat the beach.

This summer was a first for me when it came to blogging. I’ve never been a blogger. As I was scrolling through my Blogger queue and noticed that one of my posts hit 200 views, I was excited. Blogging had to appeal to me six months ago but now social media is a large facet of my job. The bulk of the work I’ve done has been in social media. For someone who’s an active Facebook and Twitter user each day, it only makes sense that social media is part of my job. As a Finance and Accounting major, I didn’t think I would ever be this heavily invested in marketing. It’s actually a running joke that Marketing majors have it easy at Bentley, so I’m surprised to find social media optimization as difficult as it is. It’s hard to get people to interact with an insurance agency, because said agency is part of a "boring" to others industry.

While my social media presence has been a great learning experience, forming relationships with those around me has been even more so. I don’t know what it is, maybe it’s my boyish charm or classic good looks, but it’s been very easy to make friends here. I never thought I would call a group of women that could be my grandmothers my friends, but their impact on me has been profound.

Today, I went to lunch with the group. Rita and I took my Mustang, top down and all, to lunch. She said in the car that my departure felt like she was seeing one of her grandkids off to school. I responded that I felt like I had three grandmothers now. She’s a real straight shooter, she tells it like it is and is not afraid to voice her opinion. I’ve eaten many a lunch with just her, talking about anything and everything under the sun. For me, it was a great compliment to hear someone consider me that close.

The other two, Julie and Sandi, are quite the talkers. Our conversations generally consist of them talking and me nodding. Sandi is light-hearted; she loves to laugh and sometimes she talks so fast it makes my head spin. Yet, she’s incredibly wise and can offer truly insightful guidance if called upon. She’s a true businesswoman. Julie and I are similar in three ways; we like numbers, country music, and absolutely love candy. Every once and a while, I forget that debits are on the left and credits are on the right, but Julie is there to help me out. The other day, we both fell asleep in the lawn chairs on our lunch break (whoops)!

Everyone has been great to me at the agency. I would mention everyone else, but I have to adhere to a strict 700-word limit (so I don’t put anyone to sleep). All of my colleagues have been truly helpful in every regard. They are quick to offer insights when I have a big project and are reliable for advice whenever I might need it. I’ve learned many life lessons just from listening to people talk. To me, the experience has been far more valuable than any work I could have done. At small business, I never expected to do the kind of work I do in class. I don’t think anyone is going to let me factor receivables or prepare a loan amortization schedule, at least until I have a degree. To have an opportunity to understand an office environment, the way people act and communicate will be my biggest take-away from this experience. 

 

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WreckCheck: Relieving Your Accident Headaches, Figuratively

Car accidents, whether minor or severe, can be a stressful time for all drivers. Often, drivers are unaware where to draw the line when it comes to exchanging personal information. Obviously, it is recommended you call the police regardless of the severity of the accident, but drivers can gather accident information from their perspective to share with their insurance company. To streamline the process of gathering information after an accident, the National Association of Insurance Commissioners developed the Apple and Android apps called WreckCheck. It tells users what information to gather and with whom to share it.

With your safety and car the first things on your mind, it’s easy to overshare information with the other drivers involved. In most instances, you should be okay, but there’s a chance giving away too much information could lead to a stolen identity. The most common information is given away, though not needed, is license number, address, and personal phone number.

In a recent survey, 38% of drivers felt it was necessary to share your license number in the event of an accident. Your license number is one of the most common ways to verify identities. If you’re shopping online, many stores will ask for your license information to confirm your credit card and license information match-up. Putting this information in the hands of someone else can put your credit at risk.

Of the same group of drivers, 25% and 29% felt you should share your home address or personal phone number. There is little need to share either. The police department and your respective insurance agencies will be able to communicate easily, without the need to exchange phone calls or home visits. Exchanging this type of information can present both safety and identity issues. Providing a home address gives a stranger access to your home, putting your personal safety in jeopardy. It also gives identity thieves access to mail that could contain personal and financial information, making it easier to steal your identity.

WreckCheck makes the information exchange process simple while providing insurance companies and authorities what they need to investigate and resolve an accident. WreckCheck allows you to enter your vehicle and insurance information beforehand so that you are always prepared for an accident. The information includes license plate, VIN and policy numbers, but not personal information. The app allows you to document the accident by first recording time and place. The app then directs you take photos and recordings of the accident.  It also allows you to enter a text description of what happened in the accident from your perspective. The “Vehicles, People, & Police” screen allows you to enter the proper vehicle information of those involved, with make, model, year, color, VIN, plate state, and number (but NOT license information). Once you've gathered the information, WreckCheck allows you to email the information to yourself and your insurance agent, simplifying the process and relieving your headaches.

If you have an iPhone or Android, check out the app. Let us know what you think.

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Intern Insights: The Value of Relationships

Like a majority of small businesses, the nature of our business is relationships. Developing strong client relationships leads to referrals upon referrals. The same is true for my father’s company. When my grandfather started, he established relationships with hundreds of clients in town. As time progressed, their children became clients of my father. Word of mouth from these clients brought in business from the remainder of the town and towns surrounding, establishing a client base that essentially began as relationships. Today, my father is heavily invested in the social aspect of business. He greets every customer like a close friend, knows their address, when their last delivery was, who their parents are, etc. It surprises me how much he knows about even his smallest clients. The same holds true for an insurance agency.

When it came time for me to buy car insurance, the first place I looked to was an agency that my family already had a relationship with. My parents had their car insurance with a local agency, so naturally I defaulted to that agency knowing that I would be recognized without having met the agent before. I see it on a weekly basis in our agency. Customers of the agency come in with their teen driver and sign them up for a policy. Little thought goes into exploring other options because they know that if an issue arises, it will be handled promptly and professional. Little thought goes into writing with a direct writer because they value the personal, friendly relationship that our agents offer clients, even if it means sacrificing a few dollars for the sake of service. It would be very easy for my father’s customers to buy oil elsewhere when only considering price. At times, financial position and market influences dictate charging a higher price that some competitors, but the assurance of knowing that if a problem arises, no matter the time or day, someone will answer the phone is a higher priority than price.

On Thursday, the agency’s own Sandi Abrams hosted a Ladies’ Luncheon for members of the Private Client Group, among other customers of the agency. Insurance talk was forbidden provided it was strictly a leisure event, with a representative of Stark Fabric & Carpet presenting design highlights for 2012 (a riveting presentation, I might add). Though I had little interest, the women found the presentation and event delightful, given the lighthearted, fun environment. Though it was not an event solely focused on referrals, the development of relationships became a central focus. With representatives from a variety of area businesses and industries, and an environment that promoted socialization, everyone seemed to mingle with people they might not have elsewhere. Many a phone number or business card was exchanged, and if anything, attendees walked away with new friends and leads. While the colors, fabrics, girl-talk were dizzying, I could tell that the event was far more than a lunch.

As the summer comes to a screeching halt, I find myself staring down the barrel of what is to be my hardest year of schooling yet. With courses like Cost Management Accounting, Advanced Managerial Finance, Advanced Financial Accounting and Reporting, and International Finance, it looks to be an insurmountable challenge. I don’t know about you guys, but I’m not ready for my summer to end!

You might not be as good a multitask-er as you think...

Distracted driving is a hot-button topic this summer, especially since Arbella brought their Distractology 101 trailer to our Bourne location in June. I looked down upon texting and driving, although I did so myself when I first began driving, I have become increasingly more aware of the dangers of multitasking on the road. I can tell when drivers around me are more focused on their iPhones than the road ahead, even when they think they are being sneaky. Sometimes I wish I could roll down my window and yell, “Get off the phone!”, but I don’t know how effective that would be.

I was perusing “Insurance Journal”, an insurance industry news site that I frequent, and I found an article about a multitasking study that 32 college students had recently undergone. During the study, researchers conducted a baseline visual test that involved matching numbered grids. Subjects were then asked to give an automated “college student” walking directions to a nearby location. Half of the subjects were instructed to use instant messaging and half were to use chat services. The researchers used eye-tracking technology to judge how frequently subjects’ eyes were moving to and from their tasks. Researchers found that when subjects were given two visual tasks, their grid matching performance suffered by 50%. When subjects were asked to perform an audio and a visual task, their performance only worsened by 30%. These results can be translated directly to driving!

Following the study, subjects were asked to rate their multitasking performance and those who performed two visual tasks were more confident than those who performed a visual and audio task. This may be why people think that they can safely text and drive, without harsh repercussions. Little do they know, their driving performance can be reduced by 50%, even if they take their eyes off the road for a second.

Let’s do a little math to put this statistic in perspective. If you’re traveling down the highway at 70 mph, considering nobody goes the speed limit, it should take you approximately 315 feet to come to a complete stop. That is 69 feet in thinking distance, the time it takes you to register to stop, and 246 feet in actual braking distance. If you were texting at that time, it would take you 50% longer to avoid someone stopping short ahead of you. At that rate, you would come to a final stop at 473 feet. If the car ahead of you comes to a stop at 315 feet, and the absolute minimum distance you can stop in is 473 feet, collision is imminent. Fact and common sense say you shouldn't be texting and driving (or email, facebook, etc), no matter the circumstance.

Moral of the story: Keep your eyes on the road. Please, if not for your safety, do it for the safety of others (including me!). The last thing you want is to be a statistic. Another flipped car, another injury, and another death because you put a text message at a higher priority than your safety. The world isn’t going to end if you don’t answer that text or email. It can wait!

I’ve posted this before, and I’m posting it again: AT&T’s short documentary on texting and driving. The messages and stories are so powerful. If my blog post can’t deter you from texting and driving, maybe this will. 

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Intern Insights: Outside Influences on Businesses

When I took on this internship, I thought I was entering into an industry wholly separate from that which in which I grew up. My dad’s office smells faintly of oil, most of his employees sport beards or mustaches, and he answers phone calls at 3 A.M. from clients with no heat. How could there be any similarities between that and what I thought to be the most boring industry out there?

Insurance isn’t as boring as I previously thought. It is an ever-changing industry subject to outside factors, much like the oil industry. The most notable factor that draws similar comparisons to the oil industry is agency commission rate-change. When the agency writes a policy with an insurance company, the agency receives a percent of the premium paid by the insured. With agency commission the premier source of income, rate change can either inflate or deflate agency revenues. Commission rates are not something the agency can control. Agencies are at the mercy of insurance companies and state regulators when commissions and premiums are set.

The oil industry is subject to price change relative to oil supply and demand. I’m no master in future’s trading, but I’ll do my best to shed some light on oil price fluctuation. Foreign affairs can have a particularly adverse effect on the price of oil, driving it up when tensions grow high. With Iran continuing progress towards development of a nuclear weapon, President Obama issued sanctions in an executive order that levies huge fines and penalties for dealing with banks that aid Iran in selling oil. In an attempt to suppress oil related revenues, a fruitful endeavor for countries exporting hundreds of thousands of barrels of oil per day, President Obama also took millions of gallons of oil off the market. Basic rules of microeconomics would dictate that demand remaining constant, a sharp reduction in supply would spur an upward price shock. This past winter, above normal temperatures proved to be a nightmare for oil companies. Demand sharply reduced due to abnormal temperatures leading to higher per gallon prices. The nature of business is making money. Oil companies do so by selling oil at a markup to account for their expenses, called a profit margin. If my dad bought oil at a $2.75 a gallon and wanted to make a profit of $.30 per gallon, he would sell it as $3.05. The higher the price goes, the further the profit margin shrinks. The inverse is true for insurance companies. The lower the commission rate goes, the more profit rates shrink.

Every business faces systemic risks it cannot control and can have a negative effect on the business’ well-being. Whether you’re a chocolatier facing a cocoa embargo in South America (women would go crazy), or a financial institutions facing increased government regulations, there are factors you cannot prepare for. Weathering the storm that these outside influences bring is monumental in ensuring financial well-being. 

Are You Getting the Proper Homeowner Coverage?

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For most people, a home is their most valuable investment and possession. Standard homeowner policies are cost effective and provide solid coverage. Are you getting the coverage you really need? Standard coverage is beneficial, but it is not necessarily the proper coverage for all. Do you have a home based business? How about your grandma's heirloom diamond ring? Are your prized golf clubs covered? What about your daughter's computer? Your son recently took up photography, is his expensive camera equipment covered? An endorsement, also known as a “rider”, is an addition to your homeowner policy. It is written to extend coverage beyond the "standard homeowner policy". 

To protect your values posessions, you can add a personal property replacement cost endorsement to a homeowner insurance policy. If any of your personal property is damaged or stolen, a standard policy will cover the actual cash value (ACV) of the property, taking into consideration depreciation. Depreciation can severely decrease the value of your asset.
Ex: You purchased a couch in 2000 for $1000, how much is it worth today? Maybe $200?
The replacement cost endorsement will pay either: repair of the item or replacement of the item, whichever is less, not to exceed the personal property limit on your policy.
Ex: Using the above example, if you have replacement cost on your personal property you will be able to buy a couch of "like, kind and quality" as the couch you purchased in 2000, instead of receiving a check for $200 for the depreciated value of the couch.

Since we are on Cape Cod, a watercraft endorsement may be a useful addition to a homeowner policy. While a watercraft rider does not cover damage to a boat, it covers personal liability resulting from the use of your boat (less than 26 feet long and 25hp or less for outboard motor). When it starts to get hot and the water warms up, it's fun to get out on the water. Make sure you, your family, and your friends are adequately covered!

On Cape Cod, wind deductibles are written into a standard homeowner policy. A typical wind deductible is 2% of your dwelling  coverage. For example, if your home is covered for $250,000, your wind deductible would be $5,000. What this means to you as the homeowner: if your home experiences damage caused by wind,  an insurance company won't pay out until the $5,000 deductible is reached. This means, it's not worth putting in a claim for less than $5,000. It also means, because you live on Cape Cod, you're better off increasing your standard deductible to at least $5,000, because the chances of you having damage to your home caused by wind.

Remember, check with your insurance agent for specific issues on your own policies. Feel free to contact us if you have any questions.


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Shark Attack!

With Discovery Channel’s famous “Shark Week” put off for a few weeks by the Summer Olympics, it’s only fitting that Massachusetts saw its first shark attack since a fatal attack in 1936. While officials have not definitively confirmed that it was a shark that bit a swimmer in Truro, MA (only an hour and a half from Falmouth), experts speculate that a Great White is responsible for sending the man to the hospital.

Eyewitness accounts of a fin and the presence of seals in the water leads the state Department of Fish and Game’s Division of Marine Fisheries to believe that the bite is the work of a Great White. Officials are unable to speculate as to the size of the shark or the reasons for the attack. Only upon examining the swimmers wound and direct testimony from the swimmer will experts be able to claim that a shark was responsible.

The swimmer was transported to Mass General Hospital in Boston where he underwent surgery to repair the wounds from the alleged bite. The last reported shark attack in Massachusetts was in 1936, when Joseph Troy, Jr. of Dorchester was bitten and dragged underwater by a Great White in Mattapoisett. Troy died that night on the operating table.

The attack occurred at Ballston Beach, part of a stretch of beach that ranges from Provincetown to Chatham. The stretch of beach is unsupervised by lifeguards but Truro is now considering putting guards in place for the remainder of the summer.

Miraculously, the alleged Great White attack has not deterred swimmers from getting in the water at Ballston Beach. Fourteen year-old Ellie Raycroft of Sherborn, MA, said the following day, “I mean there’s lots of stuff in the water” shortly after splashing around with her brother, Cameron.  Ellie has more guts than I do!

Article courtesy of the Cape Cod Times.

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Intern Insights: Operational Efficiency

…And it’s officially August. Wow, this summer has flown by. It seems like just yesterday I was packing up to head to Falmouth for the summer. Now, I have to think about moving into my dorm, buying books, and taking some of the harder courses Bentley has to offer (Yippee?). I don’t know about you, but I surely don’t want summer to end.

Becoming acclimated to the office environment and dynamic has been a major challenge for me. I love being outdoors whether it is on the boat, the beach, or just in the backyard on a sunny day. Watching sunny days pass by from my desk has been difficult and probably won’t get any easier from here on out.  I get my tan on the weekends, provided it’s nice out, and it gradually fades during the week. I’ve learned from my co-workers that it takes little things to keep your sanity in the summer. You’d be surprised how far an hour lunch break goes! It’s as simple as rolling up your sleeves, kicking your feet up, and closing your eyes. For a moment, it’s almost like you’re at the beach (keyword: ALMOST).

In school, I have always been tentative to ask for help. It may be because I don’t realize that I’m not understanding the material until I sit down to take an exam and have that, “Oh, God!” moment, but that’s a different story for a different time. Naturally, this transitioned to the workplace. When I’m given a project, I do it to the best of my abilities. If something goes wrong, I try to figure it out myself. Unfortunately, I realized that a good deal of material was going to go over my head. I know much more about insurance than when I started, but I still don’t know very much. Therefore, I have had to ask for help and have found that my coworkers are generally very approachable and are willing to offer their knowledge. In this regard, having an internship has been humbling. I may have thought so a month ago, but I don’t know everything.

The central focus of the week has been efficiency and how technology can either promote or impede it. At the agency, we have the most up-to-date software, dual monitors, cloud computing, scanners to enforce paperless, computers and other hardware that promote efficiency. My perspective is purely subjective, taking into account what I have grown up knowing and my personal preferences. It seems that every time you being to get used to software, the company releases a more up-to-date version. It seems counteractive to change software when you have finally reached maximum efficiency in one version. After watching my father as I’ve grown older, I tend to shy away from ditching efficient technology from new software. The software my father uses to track oil deliveries is as old as I am. In fact, it probably peaked before I was born. Yet, I don’t find this to be a bad thing. There have been times where he has thought about updating, but spending thousands of dollars on software that will be out of date by the time he is able to operate it at the same efficiency as before seems to be a frivolous endeavor. 

This week there was a security breach in the company that offers our cloud computing services. This brought work to a screeching halt, as our storage drives were shut down completely and employees lost access to their work in progress. At times, I wonder what the benefit of cloud computing is for a company with only two locations. Would we have encountered the same problems if we had privately held servers?  I’m in no position to answer that question, but it is an interesting one to contemplate. To me, efficiency means tasks are completed in a timely, cost effective manner. If cloud computing allows us to complete tasks faster, and at a lower opportunity cost, then servers being out of commission for a few hours is forgivable. 

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Relationship Building 101

Technology is ever changing, an omnipresent facet of society in which we all must adapt. Whether it be the iPhone in my pocket, Twitter and HootSuite open in my browser, or the blog I am writing, technology revolutionizes the way we interact and build relationships. This holds true for insurance agencies as well. As technology changes, and rapidly at that, so do the relationships agencies have with their customers. For the Baby Boomers, the “Old-Timers” compared to my generation, the idea of meeting face-to-face with an agent readily available to answer questions and resolve issues at a moment’s notice is appealing. Service becomes a degree of separation between agencies and direct-writers.

On Friday, a coworker forwarded an article to me written by RyanHanley, an insurance agent and marketing wiz that stresses the importance of relationship building advancing as technology does. I perused the article and found Ryan’s observations and assertions spot-on and very easily relatable. He refuses to see insurance as a commodity. Companies like Progressive and Geico have implemented ad campaigns that portray insurance as a tangible good, something the consumer can see, feel, or taste. While for them it has been effective, it is not effective for all. I am a 90’s kid; I have been enduring the ever accelerating advancement of technology for my whole life. In his article, Ryan compares the types of relationships my generation and the Baby Boomers prefer. He finds that Baby Boomers naturally default to the face-to-face, personal relationships with their insurance agents. On the contrary, my generation resolves to technology, using social media platforms to develop relationships with agents and companies before actually meeting with an agent.

While I’m not exactly the spokesperson for my generation, let's pretend for a moment. Ryan strikes down two misconceptions that insurance agencies have of us 90’s kids and the services we prefer. These misconceptions are that we do not value the service agents provide us and online quote services are essential to competing with direct writers. The first perception has some truth to it, but is not entirely correct. My generation defaults to the internet. When there is no other option, we turn to Google searches to guide us. This is where the direct writers come in. Because we default to Google as our encyclopedia of life, finding insurance with direct writers becomes easy and convenient. Ryan writes that insurance agencies ignore the internet and thus ignore my generation. The only company I have seen that directly advertises its Facebook page is E-surance, so I would not know where else to look! Insurance agencies need to get in touch with consumers, market through Twitter and Facebook, to develop relationships with them. I do value the services that insurance agents provide; it is easier for me to develop a relationship over the computer first.  We will build a relationship on our terms or we will write with direct writers until we have a problem. We are constantly wired in; our comfort zone is on our iPhones and Twitter pages.  Ryan knows it, I know it, but I don’t think insurance agents know it.

Marketing insurance is a difficult task. Everyone needs it, but it is never on their minds unless they have to use it. To add to that, no one likes to use their insurance policy if their car gets totaled or a tree falls on their house. This puts insurance companies in a pickle; everyone needs insurance but who wants to use it? Marketing insurance to teens is an even harder task.  I did not even think about insurance until I absolutely had to. Between sports, friends, family, and school; insurance was the last thing on my mind, even when I was buying my first car. I had no relationships with insurance agents other than the agents my parents used. If I had been on my own, I probably would have gone with a direct writer. Using outlets that my generation frequents, Twitter, Facebook, and our favorite TV channels could lead to the foundation of relationships with younger buyers. Ryan, being the young buck insurance agent that he is, knows this and utilizes it, building his book off business through the internet while providing clients of all age groups the relationships they desire. 

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