Aon Specialty Products Network sends E&O instructor
to agents' offices; attendees qualify for CE credits
By Phil Zinkewicz
From left: Margaret Eger, ASPN Marketing Specialist; Mark Jones, who is with Media/Professional (an Aon unit); Bill Hildebrand, ASPN West Coast Regional Manager and Vice President; and Jerry Tegan, ASPN President.
Most independent insurance agents today are finding themselves enmeshed in a hard property and casualty insurance market, the likes of which they have never experienced before. The last really hard P-C market, not as difficult as this one by any means, was in the mid-1980s, almost 20 years ago. That means that today's producers who are under 40 years of age probably don't remember what it was like for agents in a tight market to scramble for premium dollars as carriers either exited certain lines or cut back writing some business considerably. For those who don't remember, today's market is a sort of culture shock. Even for those who do remember the mid-'80s, it's not always all that easy for tried-and-true veterans to dust off the cobwebs and return to the errors and omissions loss control practices that were perhaps not all that necessary during the prolonged soft market.
Everybody makes mistakes. But in a difficult market such as this one, where every sector of the business--primary carriers, reinsurers and retrocessionairres--is being pressured to perform under oppressing conditions, mistakes can multiply. For independent agents, those mistakes can be costly.
An application not submitted properly or on time, a coverage that is unintentionally omitted in an insurance contract, failure to inform the insured of coverage exclusions--all these potential missteps and more can result in errors and omissions lawsuits and, in some cases, literally bring an otherwise efficient agency to its knees. In a hard market, everyone from the insured to the insurer to the insurance regulator is constantly looking over the independent agent's shoulder.
"Getting it Right!"--The Agent's E&O Seminar training materials and informational brochure.
Aon Corp., through its Aon Specialty Products Network (ASPN), is addressing independent insurance agents' E&O problems in an unusual and, not to put it mildly, extremely inventive way. Headed up by Jerry Tegan, ASPN president, along with the savvy of ASPN West Coast Regional Manager and Vice President Bill Hildebrand and ASPN Marketing Specialist Margaret Eger, ASPN has developed a program to assist agents in learning how to mitigate incidents of errors and omissions lawsuits and, at the same time, in obtaining continuing education credits. Moreover, the mountain is coming to Mohammed. Agents can learn E&O risk management techniques and earn their CE credits without having to leave their home base.
"ASPN is the marketing arm for about 38 specialty insurance companies," says Tegan. "All of the network provider companies are subsidiaries of Aon. The wholesale brokerage, managing general underwriters and insurance service companies that are part of the ASPN network offer more than 450 products, programs and services. ASPN was designed to help put agents into contact with an underwriter or broker that can write their business in this difficult market. Simply stated, the purpose of ASPN is to make the independent insurance agent's job easier by eliminating unnecessary calling and by enabling the agent to respond to his or her clients in a quick and effective manner," says Tegan.
As an example of how ASPN endeavors to make an agent's job easier, ASPN has developed a "Unified Producers Agreement," designed to reduce unnecessary paperwork for agents. "Prior to this," says Tegan, "each Aon company required separate agency contracts with different types of information requested and with different contract wordings. With the uniform contract, agents can work with all our companies by just submitting their E&O portfolios and licensing information. Everything that ASPN is designed to do centers around making things easier for the independent agent. We want agents to talk to us and tell us what they need to expand and grow their business."
In line with that thinking, high-level Aon marketing experts, including Tegan, have gone out into the field to elicit agents' views on how to improve communication between agents and Aon companies. "We found that many agents were not aware of how many Aon companies they could access and, if they were aware, didn't know how to access them."
Agencies "wanted to know how to avoid E&O lawsuits, what potential claims they might face and how they could minimize the effects of those claims. We ... worked for 11 months to develop an E&O training program."
-- Jerry Tegan, President, Aon Specialty Products Network
One thing that Aon's marketing people discovered in their visits to agencies is that, in today's market, errors and omissions claims have become onerous. " 'E&O claims are killing us,' is what they actually said," says Tegan. "They wanted to know how to avoid E&O lawsuits, what potential claims they might face and how they could minimize the effects of those claims. We listened to their problems and then worked for 11 months to develop an E&O training program to instruct select ASPN priority agencies on how to recognize what causes E&O lawsuits and how to dot every 'i' and cross every 't'."
In addition to the education portion of the program, ASPN has taken steps to make certain that participating agents benefit from continuing education credits. ASPN has approval from insurance departments in every state, except Louisiana and Nevada, to offer the E&O classes to agents. The course consists of two sessions, each 200 minutes. Agents can take either one or two sessions. If they take two, they can do it back to back with a one-hour lunch break, or they can take the two courses over two days. Agents get four CE credits for Session I and four more for Session II, with the exception of Massachusetts, which gives only three credits for each session.
There is a nominal cost for the program for the agent. A minimum of 10 agents is required to form a class. The agency would also have to pay any costs associated with having the class off site--such as renting hotel meeting room space.
"We do everything else," says Tegan. "We provide the manuals and the teachers. Our goal, right now, is to do between 25 and 30 classes by the end of this year."
Margaret Eger and Bill Hildebrand were instrumental in developing the Agent's E&O Seminar, which not only assists agents in learning how to mitigate E&O lawsuits, but also provides continuing education credits. In addition, the seminar is conducted by Aon staff in the agent's office.
Hildebrand was instrumental in rolling out the first of Aon's planned E&O sessions on the West Coast earlier this year. The test project was The Mahoney Group, based in Arizona. "We have a great partnership with The Mahoney Group," says Hildebrand. "We work with The Mahoney Group on many of the new products we offer, to get their input and we value their opinions. Mahoney's president, Leon Byrd, is well aware of the potential E&O exposures that agencies face. E&O premiums are going up in the marketplace and so are deductibles. Leon recognized that it is important for his producers to be on top of what's going on the in marketplace. Our instructor for these two sessions was Mark Jones from our own Media/Professional. Mark lives E&O day in and day out and he was not only able to provide the information that is needed in an E&O training course, but also present actual case histories with which the attendees could identify." E&O Professional, is an operating unit within Media/Professional, one of Aon's managing general underwriting organizations, headed up by president, Mark Rebein.
Eger manages the ongoing communication with independent agencies in the Northeast, along with a team of four other marketing specialists, each with regional responsibilities for the same. "Without exaggeration, ASPN receives about a thousand telephone calls per month from agents requesting information on markets that are available throughout the Aon network. We publish a reference guide for agents and a quarterly newsletter that goes out to 37,000 agents. We are sending out reminders right now to select ASPN priority agencies about the new E&O course and how they can benefit from the continuing education credits that apply. We also keep in communication with state insurance departments to make certain that our course is in compliance with their regulations. With the young people in the business, there is a whole new group that needs guidance in E&O and we believe that, with our course, we are bringing a value-added service to the table."
Those at The Mahoney Group are also excited about ASPN's E&O training course. "We actually approached ASPN about the course," says Sharon Johnson, who is best practices and compliance director at The Mahoney Group. "We saw an article in one of ASPN's publications on the course that said they had filed in Arizona for permission to offer the course with continuing education credits. We have nine offices throughout the state and we immediately arranged for ASPN to do two eight-hour sessions, one in our Phoenix office and the other in Casa Grande. We are planning to have two more courses in other offices for our support staff (customer service representatives), all of whom are licensed; this will then afford a 'make up' opportunity also for those agents who missed the first ones."
The Mahoney Group is also offering a financial incentive for its producers to attend the ASPN classes, according to Leon Byrd. Typically, insurance agencies insist that their producers take a share in the deductible that goes along with an E&O claim, as much as 50%. "Our agency has grown in the last two and a half years and, with today's market conditions, our E&O deductible has grown as well. Our board met and came back with a decision that if our producers attend the ASPN E&O course, their share of the deductible would be half of what they were previously responsible for. We have had discussions with Mark Jones about future classes. He is one of the most knowledgeable people I know in the area of E&O and his presentation is exciting.
"Other E&O classes," continues Byrd, "are fine in their presentation of how agents must handle documentation-filing of applications, writing follow-up letters, that sort of thing. But Mark brought real-life examples of E&O claims from all over the country. He's someone who has been in the trenches and can provide front-line experience. Also, he is easy to listen to. I think the ASPN course is well worth the time to help our producers deal with a volatile insurance climate and stay out of harm's way."
Tegan says ASPN plans to take its E&O training course through the marketing efforts of the ASPN regional vice presidents to select ASPN priority agencies all over the country. In states where agencies are too small to produce enough agents to fill a class, ASPN plans to offer the course to several agencies at once. Asked whether ASPN will eventually consider offering courses on other troublesome lines of insurance, Tegan said: "Absolutely." *
For more information:
Aon Specialty Products Network
Contact: Margaret Eger
Phone: (312) 381-2919
E-mail: margaret_eger@askaspn.com