1:18 The Myth of 10 and 10- Developing a Win/Win for Insurance Companies & Contractors Win-Win-Win or No Deal By Les Cunningham CGC, CR*, CCR*, CGRa *A NARI Certification

2:18 Basis of my information: Business Networks 200+ companies a. Hands-on review of their numbers b. Participation in all the major associations c. One-on-One consulting d. Owned and operated my own business for 15 years e. Won 15 C.O.T.Y. awards in a 7 year period Business Networks 200+ companies a. Hands-on review of their numbers b. Participation in all the major associations c. One-on-One consulting d. Owned and operated my own business for 15 years e. Won 15 C.O.T.Y. awards in a 7 year period It will offer you a different perspective that may lead to significant results for you personally and corporately.

3:18 Financial Reality: With Financial Pressures on the Insurance Companies and the Restoration Contractor, it must be WIN-WIN-WIN or NO DEAL!

4:18 WIN-WIN-WIN or NO DEAL! (Insurer-Contractor-Policy Holder) Actually, for the Insurer and Contractor to succeed, it needs to be: Win (Insurer)… Win (Contractor) … Win (Policy Holder)

5:18 The Insurance Marketplace is a War in Progress.  Mergers & Acquisitions  Cost sensitivity over the past 8 years, resulting in reduced quality of service to the insured.  Direct Writers (Internet, Banks)  Competitive marketplace – everyone’s positioning themselves.

6:18 What do the Insurance Companies Need to “Win”?  Great Service from the Contractor (Absolutely!)  Happy Policy Holders (Yes!)  Rock-bottom prices from the Contractor (Really?)

7:18 What does it cost the Insurer to meet Policy Holder’s Expectations?  Knowledgeable Staff (training – lots of turnover)  Lack of Knowledge costs money (when a simple water damage turns into a major mold problem) – this in turn affects costs for the insurer and their ability to be competitive.  Professional Contractor Resources  24 / 7 Emergency Response (Internal call center or outsourced)

8:18 It Hurts the Insurer to Lose Policy Holders…  Loss of Policy Revenue  High Turnover of Policy Holders increases the marketing and administration expenses in order to obtain, set up and cancel the Insured.

9:18 What do Policy Holders Need for their “Win”?  Coverage as Per Policy  Immediate Response  A Competent Professional Contractor  Life Back to Normal, ASAP  Constant Communication (i.e. a sense of control)

10:18 Why Do Policy Holders Leave the Insured?  Price (Coverage costs too much.)  Poor Service on a Claim ( Not meeting customer expectations.)

11:18 What does the Contractor Need to “Win”?  A Reliable and Regular Source of Work.  Clear Communication from the Insurer.  Insurers who pay “Timely” & “Fair Prices.”

12:18 What Does It Cost the Contractor to Meet Customer Expectations?  24/7 Immediate Response Infrastructure to Manage this (Overhead).Infrastructure to Manage this (Overhead).  Training Costs – Ongoing Technical & Customer RelationsTechnical & Customer Relations  Risks of Not Training Being sued for not following published standards (ASCR & IICRC).Being sued for not following published standards (ASCR & IICRC). Fines for not following Ministry of Labour Occupational Health & Safety regulations.Fines for not following Ministry of Labour Occupational Health & Safety regulations. A knowledgeable contractor will save the insurance company money.

13:18 The “10 & 10” Myth The Restoration Contractor can prosper (survive) on 10% overhead and 10% net profit. Doesn’t Work. Let me show you…

14:18 See For Yourself: Mythical Company $5-Million, 10 & %10.0% Real Companies (35) with with avg. of $1.5 Million32.4%2.0% Real Companies (30) with with avg. of $4.8 Million25.5%7.8% Allstate, 2000 Revenue of $29.1 Billion22.3%10.5% State Farm, 2000 Revenue of $29.6 Billion18.0%7.0% OverheadNet Profit 14:18

15:18 10 & 10 Analysis (Source Data): Does Volume Make a Difference? 15:18

16:18 Conclusion: Win-Win-Win or No Deal  Quality services retain Policy Holders for the Insured.  Knowledge & Training saves money for everyone.  The contractor needs fair pricing in order to provide knowledgeable and quality services.  The contractor needs fair pricing in order to provide knowledgeable and quality services.

17:18 Questions? ? ? ? ? ? ? ?

18:18 Thank You! From the Business Networks Team for the opportunity to be of service to you and your company!!