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After 5,460 days and a lot more memories, I say goodbye

Now I have some sense of how Cal Ripkin and Brett Farve felt after their consecutive games played streaks ended at 2,632 and 297 respectively. In a few days I will formally retire from Parker Smith and Feek after 5,460 days of service and the feeling is clearly bitter sweet. It’s been a period of solid growth and success for our company as our annual gross revenues now easily exceed $300 million. Just doing some quick math indicates that during my tenure at Parker, Smith & Feek we processed over $3 billion in gross premiums- an extraordinary number for a regional broker.
In my personal view, retirement has never been a destination, just a passage to another stage. Hopefully a stage where one has sufficient resources and health to make new choices and pursue interesting challenges and opportunities.
Passages can take many forms, and looking back briefly I recall three that were indelible to me on my personal journey. The first occurred at a very early age when my family left a war torn homeland and found their way through Soviet warships out of Tallinn’s harbor and across the Baltic Sea to islands off of Finland and then on to sanctuary in Sweden. Growing up there on a farm is an untold benefit to a young boy.
A few years later, and after the second World War had ended, our family was on the move again as we crossed the ‘pond’ from Bergen, Norway to America, New York State and a land of unbelievable opportunities. A new language, schools, friends, a welcoming community and a new home were all part of that next stage. The years flew by: high school, academics, sports, competing, losing, winning, college, graduate school, career choices, marriage, children, divorce, parenting and providing are all part of one’s personal growth.
Then some twenty years ago I found my way to the Pacific Northwest and the next passage. Parker, Smith and Feek provided a new challenge, and an extraordinary opportunity. A culture that valued individual initiative and team outcomes, a long tradition of high expectations and continued growth, and a community of talented colleagues that worked toward defined and common goals. Clearly it’s been a pleasure to have been part of a team that has perpetuated and improved on a business model that is closing in on its 75th year of business. The future is always hard to foresee, but the values that guide one are immutable. My best to you all, and that next stage beckons.
Jaan

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Happy Holidays To You All

As the year winds down, I am once again reminded how much our employees do for our community. I work with a lot of caring, generous people who spend the year focused on taking care of client’s needs and helping others on their team.
However, no matter how busy they get or how crazy work can be sometimes, they never fail to reach out and help those that are less fortunate than us. We have a tradition of reaching out to others in our community, but that spirit is not driven by Management. It is driven by our employees who feel that part of who we are is giving to others in need.
This spirit of giving and generosity is truly humbling. I am proud of all of our employees and thank you all for your loyal service this past year.
Happy Holidays to you all.

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Happy Holidays from Parker, Smith & Feek

Are Requests for Proposals Unhealthy?

A colleague in our Communications Department recently shared with me an article titled “Why Requests for Proposals Are Unhealthy.” Since responding to Requests for Proposals is a big part of my job, I read this with interest. The article’s author suggests that Requests for Proposals (RFP’s) are unhealthy for both buyer and seller because the RFP process commoditizes products and services and “… reduces differentiation, even if it pretends to ask for differentiation.” He further argues that once a product or service is reduced to a commodity the only differentiator between you and your competitors, is price.
It was not clear which industry this author represented, but based on some of his examples, he most likely represented a company that frequently responded to RFP’s where the low bidder was selected no matter what. AND, he didn’t like the antiseptically level playing field that price-driven RFP’s created; he wanted to give his pitch, in person, directly to the buyer. Anyone, in any industry, who has responded to an RFP and was not the low bidder and therefore not selected, will emotionally agree with this argument.
My industry has been commoditized almost since its inception. We all hear the daily ads extolling us to save money on insurance, from the mouths of a gecko, duck, caveman, etc. For the individual insurance buyer, price is everything. But for businesses, the stakes are different. Seasoned businesses know that price is important, but not everything. For this audience, an RFP may be the key to unlock the differentiators between competitors that are not price driven.
An RFP seeking the lowest bidder may mask the talent and creativity a broker can bring to a business’ insurance program. It may also ignore the broker’s ability to lower a business’ cost of risk. In selecting an insurance broker, the so-called “conceptual proposal” – no price quotations – can expose differences in experience, industry knowledge, similarities in serving like clients, background and expertise of the individual service teams, and the broker’s innovation in designing a comprehensive, cost effective insurance program. RFP responses act as the “resumes” that tee-up the finalists who are qualified to do the work and have demonstrated their experience in doing so for others. RFP’s are successful screening devices which generate interviews, and interviews are the forum where buyers can evaluate, face to face, the potential “fit” for long term relationships.
As one whose career has been in the insurance industry, and who has responded hundreds of RFP’s for our firm, I believe RFP’s have their place and are not toxic to buyer or seller. Well-crafted RFP’s give the buyer answers that can clearly differentiate a broker’s strengths and weaknesses. RFP’s give the broker a chance to showcase how they can provide service, innovation and value. We never shy away from presenting a competitive price for our work, we just look for opportunities to illustrate the differentiators that make our firm unique.

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Parker, Smith & Feek Launches Dedicated Healthcare Reform Website

With the passing of the Healthcare Reform bill we have seen an inundation of information and misinformation provided by media outlets; to the confusion of many.

Our clients asked Parker, Smith & Feek to create one resource that they can use to follow only the most important announcements. With that in mind we have created www.healthcare-reform-explained.com. A resource dedicated to only the most important Healthcare Reform issues.

Visit it at: www.healthcare-reform-explained.com
 

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One of the best things about the holiday season..

I can’t believe how fast this year has gone. We are already eight days into December, and already I have attended four Holiday functions this month, with many more coming before the Holidays.
Our last wellness event for the year has just started, with our “Maintain through the Holidays” challenge where the goal is to maintain your current weight through this holiday season. One of the best tips I saw during this campaign was “Staying healthy at Parties”, so I thought I should share it with you.
One of the best things about the holiday season is spending time reconnecting with loved ones and catching up on all that has happened in the past year. Parties and potlucks abound and wouldn't be complete without the sharing of good food or drinks. By paying attention to what you consume at these events, you can make choices that will leave you feeling just as recharged as you are from the conversation. Click here to download the Choosing Your Party Food tip sheet
Fit Tip – "Maximize Your Efforts" – Different types of exercise burn different amounts of calories. What is getting burned in your 30 minute workout?

Jogging: 372 calories burned

Swimming: 300 calories burned

Walking: 261 calories burned

Weight Training: 261 calories burned

Ice Skating: 237 calories burned

Skiing: 228 calories burned

Calories based on a 160 lb. person. Provided by Worksite Wellness
Wishing you all a healthy and fun Holiday season.

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Winter has come early…

Winter had come early to the Methow Valley. When we arrived last Friday night at our weekend cabin near Mazama we were disappointed to see that there wasn’t a flake of snow in the valley, but by the time dinner was over and we let the dogs out to stretch their legs, it was coming down hard and the ground was covered. We awoke Saturday morning to a six inch blanket. Winter, and the Holidays, have arrived.

Later on Saturday the sky lifted and we could see the top of Goat Peak and the Forest Service fire lookout. It reminded us of a wonderful hike this past summer. Two and a half miles from the trailhead, with 1,400 feet of elevation gain, the lookout is a perfect half day trek. Besides the beautiful scenery, successful hikers get to visit with the Forest Service employee who has manned the lookout every summer for 16 years – Bill Austin, commonly known in the Valley as ‘Lightning Bill’, aptly named for all the times his lookout has been struck during lightning storms.

Bill is one of those people you meet and instantly realize is unforgettable. He genuinely enjoys visitors and you can’t make the hike there without touring his lookout. While I’m not sure I could spend even a week doing what Bill does, there is definitely a sense of peace and serenity that’s instantly appealing, sitting on top of this mountain at 7,000 feet, with a sweeping 360 degree view of the Methow Valley. As you chat with Bill you begin to think – maybe he’s the one who has figured life out and found his own equilibrium and sense of balance and harmony.

With all our technical innovations today, it seems a bit incongruous that we still spot forest fires the old fashioned way, by posting strategic lookouts. There isn’t anything particularly high tech about what Bill does – he just keeps watch and reports fires as they develop. One modern wrinkle for Bill, though – he’s adopted social media. He has a Facebook page where you can follow his work on almost a daily basis. He also photographs his visitors and posts the pictures. We were honored to have our photo on his page this past August.

The lookout has been abandoned for the season and we know, based on Bill’s Facebook postings, that he is spending the winter (Bill is a seasonal Forest Service employee) working at a Carleton laundry. No doubt waiting for summer and his return to his post.

When we were in the lookout we asked Bill to point out the area where our cabin is located. “Right there”, he said, pointing. “And I always keep a close eye on your neighborhood.”

Thanks, Bill, and Happy Thanksgiving. I’ll look forward to summer and your return to Goat Peak. I sleep better knowing you are there, watching.

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With L&I seriously undercapitalized – what do they do now?

In my post last month I wrote about the November 2 ballot initiative in Washington State – I-1082. I-1082 sought to end the Washington Department of Labor & Industries (L&I) monopoly on workers’ compensation insurance by allowing private insurers to compete with L&I. Washington is one of only four states in the country with a monopolistic systems.
The State Auditor had reported last year that L&I was seriously undercapitalized and risked insolvency if rates were not significantly increased. L&I has been increasing rates steadily for years, while the rest of the country has seen decreases in rates. Many of us believe Washington’s workers’ compensation woes have had a great deal to do with the mismanagement of claims and especially the disturbing trend of offering pensions to injured workers’ in far greater proportions than comparable states.
We thought this was a powerful message and there was great value to everyone in creating competition. However, I-1082 was solidly defeated by the voters. In retrospect, there were several reasons that conspired in the defeat of the initiative:

The average voter has little concept of workers’ compensation insurance. It was very difficult to explain the basic issue. It just wasn’t on most people’s radar.

We were out-messaged. The ‘No’ side had several effective advertisements, including one featuring AIG as the force behind the initiative. As King 5 News pointed out, AIG was not involved at all in the campaign, which was largely lead by local businesses that were concerned about rising costs.

The Washington Insurance Commissioner, Mike Kreidler featured in a frequently run advertisement on TV indicating that if passed, he would have no control over the insurance companies and that workers’ would suffer. According to the Commissioner, I-1082 would somehow be different than the other insurance products provided in Washington and would beyond his ability to regulate. This would not have been the case.

Finally, we were outspent by 3-1, making it difficult to counter all the negative and misguided messages on TV and radio.

In an effort not to damage the ‘no’ campaign L&I delayed the announcement of their 2011 rate change from September, when traditionally done, till after the election. The reason was obvious. They were rightly concerned about the negative press associated with asking for the big increase needed to shore up their dwindling reserves.
L&I just this week announced they are seeking a 12% overall rate increase for next year. This amounts to a substantial tax increase to businesses and to workers’, as most employees in Washington pay 25% of the premiums.
Unfortunately, the defeat of I-1082 will not change the basic issue. Claims are not being effectively managed and the State is in the precarious position of having to continue to increase premiums at a time when most businesses cannot afford to pay more. As feared, the central message became highly politicized and voters, either through a lack of understanding, or through fear spread by those who opposed I-1082, have guaranteed the status quo.
Washington will continue to be out of step with the vast majority of the country where open competition not only protects businesses, but does an excellent job of caring for injured workers in a safe and cost effective manner.

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Six Chubb subsidiaries suspended from writing new business

Today, we were notified that the Office of the Washington State Insurance Commissioner has suspended six Chubb subsidiaries from writing new business/clients in the State of Washington for nine months. Please click here to review the notice from the Insurance Commissioner's office. The order is effective November 18th, 2010.

The suspension is based upon a Washington State Department of Insurance audit that found Chubb had not properly followed their Washington State Insurance filings when it came to documenting why they (Chubb) provided credits to certain policy holders. As an admitted insurance carrier in the State of Washington, Chubb is required to file specific rating plans that then need to have full documentation associated with the use of these discretionary credits.

This suspension does not effect any current insurance program you have with Chubb. Chubb has the ability to appeal the decision. We do not know at this time whether Chubb will pursue an appeal or not.

If you have any questions, please contact your Account Executive.

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The day the charge exceeded $50.00. I had to find out why?

The other day when I was refilling my car with gas I noticed that the charge exceeded $50.00. I have had the same car for quite some time and it had been a few years since it cost $50 to fill up, so my curiosity was tweaked.

I checked the business gauges and noticed that the price for a barrel of crude has reached $82.55. Not quite were it was in late 2008 when oil topped out at close to $150 a barrel, but considerably up from the February 2009 price of $31.04 a barrel. Supply, demand and the relative value of the dollar are all contributing factors in the crude oil price equation.

The recent global recession and decline in demand, curtailed oil production by its’ largest percentage since 1982. BP estimates that global oil reserves at year end 2009 were 1,333bn barrels. What is remarkable is that reserves are 23% higher than a decade earlier, despite 300bn barrels of consumption during the period.

Hubbert’s Peak, when oil reserves begin to fall, and prices begin to rise relentlessly, however has not been reached. M. King Hubbert, a geologist, predicted US oil production would peak in 1970, and it did. What Hubbert did not predict or account for however, was the growth of global trade or the improvements in oil industry technology and geological knowledge. Iraq recently disclosed that it has 25% more proved oil reserves than the last time it looked. Brazil says that one of its recent discoveries could be 8bn barrels, twice what was originally estimated. Hubbert’s Peak will no doubt be reached some day, but it remains a moving target, continuously delayed by new discoveries and data.

Oil industry concerns today are different: the rising cost of extraction, the impact of the recent BP Gulf of Mexico accident and resource nationalism. Seven of the top 10 source countries have shut out western oil companies (Canada, Iraq, Kazakhstan are the exceptions). The demand for oil shows no sign of peaking according to the International Energy Agency which forecasts that daily demand will increase by 20m barrels a day by 2030. Fundamentally though, the rising price of oil can be attributed to rising Chinese consumption and to the rising investment demand of extraction. More peak oil scares are most likely on the horizon.

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The Wall Street Journal Compares L&I in WA & OR

The Wall Street Journal published an article on Sunday comparing L&I in Washington and Oregon.
Key highlights from the article.

Average time loss claims in Washington is 270 days which is twice the national average and compares to 70 days in Oregon which has private insurance.

In 2007 and 2008 Washington granted lifetime pensions to 3,600 workers compared to 24 in Oregon.

Last year there was a 7.6% increase in L&I premiums. Oregon hasn’t raised premiums in 2 decades and this year returned $100 million to employers. 

In West Virginia which transitioned to a competitive market 5 years ago approximately 200 insurers moved in the market and premiums dropped 30%.

We ask that you consider voting yes on I-1082
Read the full article here
 

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IRS Releases Draft W-2 Form for 2011; Announces Relief for Employers

The IRS released a 2011 Draft W-2 form yesterday, October 12, 2010, which can be used by employers to report wages and employee tax withholding. They also announced the deferment of the new requirement for employers to report the cost of coverage under an employer-sponsored group health plan. The reporting by employers will be optional in 2011.

The IRS continues to stress that this reporting is for informational purposes only. The amounts reportable are not taxable. They are to be used to provide employees with greater transparency into overall health care costs.

For a copy of Notice 2010-69, please go to: http://www.irs.gov/pub/irs-drop/n-2010-69.pdf

A more detailed update can be found at: http://www.irs.gov/newsroom/article/0,,id=228881,00.html

Please contact your PS&F Benefits Team if you would like additional information.

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