First Trade Show Goes Forward After Tragedies, Calderon Keynotes

It was not an easy decision when, immediately following the Sept. 11 tragedies, members of the board of the American Agents Alliance were polled by Executive Director Lorelle Kitzmiller as to whether its Conference & Expo 2001 should proceed as planned.

In addition to the grief felt by Alliance members, there were also concerns about the effect the terrorist attacks would have on attendance. Twenty booth participants were headquartered in the East. There were also concerns over what might happen in the days leading up to the convention and whether or not the airlines were going to actually be up and running.

Among those who answered in the affirmative was Chairman of the Alliance’s Finance Committee David Nielson, co-president of Nielson-Byers Inc. in Sacramento, Calif. Nielson expressed the opinion that it was better to proceed with the conference, if for nothing else than to come together as a community to heal. “Sometimes that’s the best therapy—when you talk about it…and you just move forward,” he said.

And go forward they did. A total of 1,450 attendees, virtually as many as attended last year’s conference, came together at the Westin Mission Hills in Rancho Mirage, Calif., from Sept. 19-23.

The traumatic events of Sept. 11 were never absent from attendees’ thoughts. But along with the gravity, there was also a display of optimism, strength and generosity that stemmed not only from patriotism but was also a reflection of the true spirit of independent agents and brokers.

Generosity shines through
“Our conference went extremely well in view of the circumstances,” said Herb Jones, 2001-2002 president of the Alliance and owner of Community Financial Planning- Ins., Los Angeles. “The overall feeling that I got was that we’re not going to let this dictate how we live our lives or how we conduct our business. We’re still going to conduct our business in an upbeat fashion and be optimistic about how it’s going to go.”

On the first day of the conference, with the opening of the Progressive hospitality suite, the Alliance began taking a collection to benefit victims and their loved ones, with all proceeds to be donated directly to the American Red Cross. By the closing day on Sunday, the drive, which was also supported by Bristol West Insurance Group and Safeway Insurance Company, had well exceeded its goal of raising $10,000, bringing in a total of $10,831.25.

For those who were unable to attend the conference, the Alliance indicated it is continuing to accept donations. “There are agencies who are allowing their employees to have payroll deduction from their paychecks and give that to the Red Cross, which I think is admirable,” Nielson said. “It’s my personal feeling that insurance agents are really softhearted people, and when asked to help, they’ll help however they can.”

Kitzmiller noted the generosity of all the sponsors, and also singled out the dedication behind the special contribution made by Anita Burris of Aliso Hills Insurance in Lake Forest. Burris purchased red-white-and-blue ribbon and small American flags, and then stayed up two nights making special pins to give to all conference participants.

Back to the Basics
The theme of this year’s convention was “Back to Basics.” “We just wanted to get back to the nuts and bolts,” Kitzmiller said. “We have seen, as technology emerges, several producers have kind of lost interest in the practices that made agencies so successful in the past—such as personalized service. We believe it’s personalized service that’s going to make the independent producers prosper.”

The “Back to Basics” theme was evident in numerous, informative CE classes aimed at helping attendees to better run their agencies.

Also of particular note was a CE class, presented by attorney Robert Hogeboom, which focused on how to properly handle things in the event of an agency investigation by the Department of Insurance and what rights agents have under these kinds of circumstances.

Of course, some of the more typical conversations one would expect to take predominance at such a gathering, like the ongoing hardening of the California market, may have been a little less in evidence than they would have under normal circumstances.

“I think every agency owner—new, in the business for a long time, or in between—is concerned about the economic times that we certainly appear to be going into, and I think that a lot of people are fearful of conditions now,” Neilson said. “The market is hardening up substantially here in California. That’s one reason we chose the theme of ‘Back to the Basics.’ Do your basic block and tackle, don’t get too fancy, and we’ll all get through this sort of a thing.”

Kitzmiller noted a few changes in the marketplace. “The reinsurers, three, four years ago were beating down the doors here in California,” she said. “They wanted to invest money in the personal automobile marketplace. Now…we’re seeing reinsurers pulling out, and the market is hardening, premiums are going up. The last few years, we had carriers come in that were offering artificially low rates, and it took a while for the losses to be realized. Now they’re realizing the losses, and…a couple of carriers have pulled out, stopped writing new business. We go through these trends.”

When the Alliance, a California association which is now also in Arizona, was formed in 1966, it was comprised of a small group of nonstandard insurance agents and brokers. Over the years, however, its membership has grown to include both nonstandard and personal lines producers, as well as producers who write commercial lines.

Calderon speaks out
The keynote speaker at Saturday’s luncheon was Assemblyman Thomas Calderon, who recently announced his candidacy for the office of California Insurance Commissioner when that office comes up for election next year.

Overall, Calderon expressed his opinions in a forthright manner. Calderon told IJ that because he is currently in “campaign mode” and trying to distinguish himself from the rest of the field, there was one basic point he wanted to stress. “That is that whenever someone’s in campaign mode, they’re going to try to speak to the audience and tell them things they want to hear and try to be respectful of what they’re about,” he said. “So you’re not really going to get the real bottom line on someone simply from a speech.”

Calderon wants his record—that is, his insurance industry experience—to provide that bottom line. He has served on the California Assembly Insurance Committee for the past three years and is chair of that committee this year. He has also attended required classes for the agent license and worked as a marketing director for an HMO.

“The message I try to take everywhere is this is an industry that absolutely needs regulation, but does function well much of the time,” Calderon continued. “The department should know when to be a crusader, a fighter for the public, but also when to be a partner in doing what it needs to do for the industry to make sure they’re competitive…viable…solvent.”

One issue brought up by Calderon which elicited an especially strong reaction from the audience was that of broker fees. According to Calderon’s speech notes, the main points outlined for that issue were that: “As insurers cut agent commissions to lower their expenses, agents are being forced to act as brokers in order to stay in business. That means the additional broker fees must be charged to the customer to cover costs. The DOI has resisted efforts to increase broker’s fees, but offers no alternatives to help preserve the independent producers in this state. We do need to control exorbitant broker fees; however, we also need to insure that producers can economically survive in order to provide a source of insurance coverage to the public. This is especially true in urban areas where many individuals find it difficult to find agents that directly write for insurance companies.”

Moving forward
In the end, attendees of this year’s conference lived up to the challenge of being part of an industry that must always be prepared for virtually any eventuality.

“This is not the first time that Americans’ lives have been changed,” Neilsen continued. “November of 1963—America was never the same after that. We lost our innocence. We will look back at this with a similar feeling—that we lost a lot when this happened, but we can’t let it stop us. We’ve got to keep going. We owe it to our customers [and] to our employees…to move forward, do what needs to be done and make good business decisions that will allow our customers to be able to provide protection for their families.”

Topics California Agencies