Behind the Scenes
Inside the business of insurance
By Tracy Barbour

n the realm of commercial insurance, brokers render invaluable support for their clients by ensuring proper coverage and protection for their employees and physical assets. Brokers are the conduit between the insurance carrier and the client, says Todd Wheeler, a principal and vice president at Parker, Smith & Feek. “We’re viewed as trusted advisors by our clients and in the same light as they view their CPA, banker, or counsel,” he says. “The premiums that we are able to save them are real dollars that are injected back into the Alaskan economy.”

In essence, insurance is a mechanism that helps companies manage risk, which is a critical function of their success and survival, says Chris Pobieglo, president of Business Insurance Associates. Insurance allows a company to take an unknown risk and transfer it into a known cost such as an insurance policy. Pobieglo explains: “Insurance takes an unknown and puts a known value on it. This helps companies with preparing budgets and not being caught by surprise by a catastrophic event that can put them out of business.”

In terms of economic impact, insurance contributes significantly to the state of Alaska, according to Pobieglo. “Taxes on insurance policies were the second-biggest revenue generator for Alaska,” he says.

However, the relevance of insurance is sometimes more subtle and latent, according to Pamela Whitfield, founding partner of Elite-VB. Whitfield, who sells voluntary or supplemental insurance from multiple carriers, emphasizes the potential effect of COVID-19 in the workplace and how employee-funded voluntary insurance may be applicable. She says, “As financial times get tougher and tougher on businesses, employers may drop their employer-paid programs and find that adjusting those benefits to be employee-paid can work to retain valuable benefits without having a strain on the company’s bottom line.”

Bridging the Gap
Insurance brokers help clients demystify the complex options offered by insurance carriers, and they use diverse approaches to bridge the chasm between the two entities.
“We’re viewed as trusted advisors by our clients and in the same light as they view their CPA, banker, or counsel. The premiums that we are able to save them are real dollars that are injected back into the Alaskan economy.”
Todd Wheeler, Principal and Vice President
Parker, Smith & Feek
Take Parker, Smith & Feek, for example. The regional insurance broker has six locations and more than 300 employees, with 30 of them working in Alaska across its Property & Casualty and Employee Benefits departments. These employees apply a variety of skills to effectively assist clients, including interpersonal communication, listening, problem-solving, time management, and relationship building. Possessing patience, the right attitude, and a willingness to learn are also critical attributes for the firm, which figuratively places clients at the top of its organizational chart. “Ultimately, we look for people who want to work hard, have fun doing it, and be part of a team that takes pride in helping our clients achieve success,” Wheeler says.
Parker, Smith & Feek, which was established in 1937 in Seattle and opened its Anchorage office in 1986, serves a unique role in Alaska. While it is not a large national/international firm, Parker, Smith & Feek has all the same resources as the big firms, Wheeler says. And it considers itself to be a “glocal” business—one that has a global reach and presence but is local. The depth of the firm’s resources includes housing its own claims, risk control, builders’ risk, and analytics teams, as well as internal practice groups that cover sixteen industries. “That sharing of industry-specific information, along with the technical expertise and a very deep bench of talented professionals, makes our practice groups a differentiator and brings value to our clients,” he says.
Todd Wheeler
Parker, Smith & Feek
The company also offers industry- and coverage-specific seminars through its PS&F University. This provides opportunities for its clients and prospects to learn and ask questions. As another important differentiator, all of Parker, Smith & Feek’s employees are salary-based. “Clients never have to worry that we’re selling unnecessary coverages just to earn extra commission,” Wheeler says. “And all of our services are included in the commission or fees we’re paid, which isn’t always the case with larger, multi-national brokers.”

Business Insurance Associates is among the contingent of local independent brokerages that assist Alaska’s employers. In this role, the small Anchorage-based firm represents its clients, not insurance carriers, stresses Pobieglo, who holds twenty-plus years in the insurance industry. “The local broker has the ability to provide a level of personal service, and that’s the cornerstone of what they offer,” Pobieglo says. “It allows a broker to have a vested interest in your success.”

In addition, Pobieglo says local insurance brokers are plugged into the community and may be able to offer ground-level business advice, business referrals, and other resources. “Some of the larger brokers retain a service center outside Alaska, and you call a 1-800 number,” he says. “At that point, you’re just a number. They don’t know your goals, your dreams, or your kids.”

Whitfield is also passionate about using her independent agency to take a personal approach to helping Alaska employers. Whitfield blends her twenty-five years as a voluntary benefit leader, manager, and agency owner with an Alaska-specific focus to help clients. For example, the company leverages local knowledge and technology to address some of the unique geographical challenges faced by Alaska companies. In some areas of the state where there is low to no bandwidth, webinars and other virtual tools need to be complemented by a call center and/or paper tools. “We also have a population that is keen on handheld devices, so tools such as texting applications, videos, and more can speak to Alaskans wherever they may be,” Whitfield says.
Chris Pobieglo
Business Insurance Associates
Client Process
Regardless of location or size, most insurance brokerage firms strive for a hands-on style when working with clients. Brokers use various strategies to help them understand their insurance options and purchase the right coverage for their needs.

At Parker, Smith & Feek, this process typically begins with engaging clients in an in-depth discussion about their exposures, what keeps them up at night, and anything else that concerns them. This involves asking a plethora of questions to get to know clients on a business and personal level. “We can’t know everything they need unless we understand their business and concerns, so you have to help them identify the risks, evaluate them, and decide how to effectively finance them,” Wheeler says.

“The local broker has the ability to provide a level of personal service, and that’s the cornerstone of what they offer. It allows a broker to have a vested interest in your success.”
Chris Pobieglo, President
Business Insurance Associates
And one size does not fit all when it comes to insurance coverage. If someone is worried about getting hacked and having their computer system compromised, the discussion would center around cyber coverage. Or if a client is concerned about a fuel tank leaking, pollution coverage would be appropriate. Wheeler says, “The value of having an engaged and trusted broker is that clients know that they are properly covered at the right price, not over-covered at an inflated price.”

Business Insurance Associates also takes an exploratory approach to helping businesses identify their specific insurance needs. Pobieglo gathers information about their business, their objectives, and their appetite for risk. He also often reviews leases and contracts and discusses compliance-related issues. “We make recommendations to them in the form of a proposal, which may have different options,” he says. “And a lot of the time, we’ll put a number [cost] to the options.”

During the year, Business Insurance Associates advises clients of changes that could affect their coverage. The company also completes an annual review and contacts clients ninety days before their renewal to ensure they have adequate protection.

Whitfield, who works with employers as well as individuals, says it’s common for people to be confused about voluntary benefits. These non-traditional benefits—which are normally employee-paid through payroll deduction by the employer—often include disability and life insurance as well as popular plans like accident, hospital, and critical illness. Whitfield concentrates on educating and preparing clients to take advantage of the most current benefits that are available. “There is a need to upgrade a ton of older voluntary benefit programs in place in Alaska that just aren’t keeping up with the exciting features available from carriers in the market today. Also, who knows if a COVID diagnosis in 2020 will lead to a ‘pre-existing condition’ in 2021, so now is the time to spruce up voluntary programs in place to ensure they rise to the risks that are real.”

Alaska’s insurance brokers are intentional about certifying that they are equipped to serve clients in a variety of industries. Business Insurance Associates, for instance, caters to clients in the construction, healthcare, and transportation fields. Representing niche industries lets the company’s staff focus their training and education, so they can hone their knowledge of the industry they’re involved in, Pobieglo says. Three of his employees, for example, have CRIS (Construction Risk and Insurance Specialist) certifications through the International Risk Management Institute. “The more you know about the industry, the more you can be in a position to help your client,” he says.

At Parker, Smith & Feek, clients can benefit from its industry-specific “practice groups,” which have been invaluable to the firm’s organic growth and success. Along with being salaried employees, and having owners that all work in the day-to-day operations of the business, the practice groups have been a real differentiator because they allow everyone to sit down once a month (at minimum) to group-share and learn, Wheeler says. “We don’t have silos at PS&F,” he says. “We work as a team, not lone rangers, and the groups only enhance that collaboration and allow us to tap into a tremendous amount of intellectual capital within our company.”

Maintaining ongoing client relationships is also essential to the success of Parker, Smith & Feek and other insurance brokerages. Wheeler’s approach of maintaining a positive, ongoing relationship with clients is meticulous and deliberate: be available, respond quickly, and let them know that he’s always in their corner and will negotiate and advocate on their behalf. Because insurance is a relationship-based rather than a transactional industry, Wheeler has become friends with most of his clients. “We talk regularly and eventually got to the point where, in an hour-long lunch, we talk about insurance for less than five minutes—if we even talk about it at all,” he says. “My clients know that I have their back and I won’t back down until we get a result that works for them.”

Understanding Benefits
Perhaps the most consequential role of being an insurance broker is to help clients understand the benefits that are most relevant to their business.

Many insurance policies will be similar for businesses across industries, such as workers’ compensation, commercial property, commercial auto, and commercial general liability. But there will be coverages one company will purchase that others choose to forgo. That’s because there are so many policies that are applicable to one type of business but not to another. Take business interruption (BI), for example. “A restaurant will purchase business interruption coverage because, if they have a fire on a Friday, they can’t just go across the street and open for business Monday morning,” Wheeler explains. “They’re going to be shut down until they can remodel or rebuild, which could take six months or longer, and they’ll take a big financial hit that the BI policy can address. On the other hand, if a contractor’s primary office has a fire, their business may not be substantially impacted because their primary work is usually offsite, and they potentially can rent a separate space quickly and resume operations. So, they may decline a business interruption policy.”

Ultimately, Wheeler says, it’s incumbent upon brokers to work closely with clients to identify and assess their risk and then secure cost-effective policies when their clients transfer the risk to an insurance carrier.

Whitfield also advocates taking a contemplative stance when choosing insurance for different industries. This is reflected in her enrollment process, which includes a video showing how each industry is distinct. She feels that every enrollment “campaign” should reflect the company’s objectives, complement its workforce, and make the human resources department shine. She encourages employers to evaluate their medical and core benefits annually to make sure they are offering the most suitable coverage for their industry. She says, “My suggestion is that they use a voluntary broker who has a pulse on the latest and greatest ‘COVID-friendly’ benefits on the market and evaluate [their benefits] every five years at minimum.”
Pamela Whitfield
Elite-VB LLC
Whitfield is adamant about helping employers better understand voluntary insurance and how they can use it to their benefit, particularly when it comes to COVID-19. That’s why she offers a one-hour continuing education session on voluntary benefits and enrollment best practices in a COVID-19 world. “Nothing speaks more to compassion than helping your employees to help themselves with programs that could prevent them from filing a bankruptcy or wondering how to pay their bills should someone be stricken with the virus,” Whitfield says. “Leverage your voluntary benefit plan so that it speaks to the compassion that you, as a concerned employer, have and with zero cost to your company. It just might be the best ‘free’ benefit you can offer in 2020 and beyond.”

Employers should also be aware of benefits or situations that may be particularly pertinent for residents of Alaska. Earthquake insurance, for instance, would not be purchased in states like Florida or Rhode Island, but it could prove critical in Alaska. In addition, Alaska has a lot of higher-risk industries, such as commercial fishing, mining, aviation, and trucking, which can impact insurance coverage. The insurance needs of riskier industries are not necessarily different in Alaska than elsewhere, but employers’ medical costs in Alaska tend to be much higher for workers’ comp claims.

“There is a need to upgrade a ton of older voluntary benefit programs in place in Alaska that just aren’t keeping up with the exciting features available from carriers in the market today. Also, who knows if a COVID diagnosis in 2020 will lead to a ‘pre-existing condition’ in 2021, so now is the time to spruce up voluntary programs in place to ensure they rise to the risks that are real.”
Pamela Whitfield, Founding Partner, Elite-VB
Cashing in on Benefits
The way benefits are paid to clients differs depending on the type of insurance and policy stipulations involved. In general, the client will file a claim and notify the insurance carrier, which will assign an in-house or external adjustor. “Once you have a claim rep, that rep will gather all the necessary documentation, take that back, and determine whether there is coverage there,” Pobieglo explains. “Then they typically try to get the client paid out.”

He adds: “With workers’ comp claims, those are a little more straightforward. But with a liability claim, it can take years to unfold in the court of law and can be more complex.”

Insurance brokers don’t pay claims directly to the client, instead acting as the middleman between the two parties. The broker is essentially an “employee” or extension of the client just as bankers, accountants, and attorney are, Wheeler says. “We work diligently on behalf of our clients to ensure that carriers honor the terms of the contract, which includes paying claims and making clients whole again,” he says.

The process for claiming and receiving benefits plays out differently with voluntary insurance. Cash benefits are paid to the employee to cover out-of-pocket costs such as hospitalization, urgent care, rehab, or outpatient surgery. And some voluntary insurance options offer broader coverage. “New plans now include pet boarding, coverage for mental illness, coverage for a COVID diagnosis and more—all paid to the employee to lessen their financial risk for pennies a day,” Whitfield says.

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