Victory over the Doff System

Over the weekend, my Star Trek Online main hit rank four in the final remaining duty officer commendation.  As such, he has completed all of the assignment chains and all of the ranks currently implemented in game. I can continue to gain commendation exp up to 150,000/100,000 in each category - this will supposedly grant a headstart against any future ranks that are added.  I am also free to continue to improve my crew via recruitment, and to earn various currencies.  Overall, though, there is very little within the system itself that is of use to my main.

(My Klingon alt is also making steady progress - she has rank 4 Marauding for all the teleports, and is slowly completing chains despite roster limits - I have not paid to increase her roster size, and do not intend to.) 

DOFF missions award dilithium ore, which is required for certain types of crafting and purchases and can be exchanged for Cryptic cash store points through a player exchange.  As of now, my earnings have added up to around 1400 CP (plus 800 CP that I actually purchased).  A portion of that balance went to unlocking the energy credit limit for my account (400 CP) and to increasing my main's duty roster to 200 (580 CP), leaving me with around 1200 CP in spending currency - $15 worth.  This is more than half of the cost of the high level premium ships in the cash shop, though my income rate is dropping due to a steadily increasing exchange rate and diminished time in game. 

That said, the scorecard I'm actually tracking right now is my energy credits.  Now that I no longer need more officers for my crew, I'm selling stuff on the exchange for hundreds of thousands of energy credits daily.  I don't really need energy credits for their own sake - I don't actually play any of the conventional game and therefore have little need for gear - but it would amuse me to pick up one of those unethical lottery box ships that people are wasting over $100 in real money on in exchange for in-game currency. 

Of course, if I did this, I would be indirectly financing Cryptic/Perfect World's gambling activities.  The person who paid money for keys to open lottery boxes only to put the ship on the exchange did so because the roughly 80 million energy credits were worth the real money to them.  The players who buy my surplus duty officers are in turn providing me with the credits to convince that other player to buy lottery box keys.  On one level, this is a good thing because it is a way for my presence in the game to contribute income even when I personally am not paying - good for the game economy.  However, it also means that it's effectively impossible for anyone to boycott the lottery system unless they give up the entire in-game economy. 

Not sure how I feel about this, and I guess I have a good while to find out - I am less than halfway to the energy credit balance I would need, and I don't even want the Ferengi ship that's currently on offer.  It's definitely an interesting quirk to the system though - no wonder so many players feel so powerless to stop them. 

The Backwards Approach to Funding MMO Development

Let's say that you wanted to go forth and start a new chain of ice cream shops.  You would not go to the State of Rhode Island for $75 million with which to develop new ice cream technology for a simultaneous worldwide launch.  Rather, you would get a loan and open one shop with as few employees as possible.  Then, if you are reasonably successful, you'd go back and ask for money to open more shops.  At this stage, you might be told that you're still too big a risk, but that the investors will buy you a cart from which to sell ice cream made at your existing location on the local beachfront. 

This feedback loop is critical because the requirement that you demonstrate success before taking on additional debt helps keep you from getting in over your head.  If, for whatever reason, someone gives you more loans than you can repay, one day your employees are all out of work, your company is gone, and the State of Rhode Island is suddenly the proud owner of $1.4 million in R.A. Salvatore Amalur fanfic and a game that could be a hit if only you had 300+ employees for at least a year to finish it. 

I get that the analogy is not that simple.  There is colossal investment required in back-end systems and technology that players will never see, much less pay money to finance, before your game's first rat can be coded and killed.  Unfortunately, it appears that the economics are precisely that simple.  Whomever puts up the $100+ million to finance the game is taking their chances with remarkably little evidence that you can succeed.  It's only after the game is launched that development can proceed (or not) rationally with resources allocated based on revenue - a successful game like Rift gets the continued investment to slowly add features, while an unsuccessful game sees layoffs, merges, and possible shutdown. 

MMO development needs to get away from the approach where games spend ages in development - with corresponding costs - and emerge to the consumer only fully fleshed out and AAA-quality (or, more likely, bust).  There needs to be a way for games to succeed - or, yes, to fail - earlier in the process.  The alternative is to continue to see success defined primarily by whose fundraisers are able to keep the doors open for long enough to finish the un-finishable - a prospect which is going to get harder as more games go $100+ million into the hole.

Random examples
A few random ideas that have been tried with varying degrees of success:
  • The browser game Kingdom of Loathing launched in 2003 as basically a page where you would click to be told a joke and granted relatively arbitrary stat points.  This was okay because the humor - not necessarily the gameplay - was the product, and things like classes and content got added to the game over time.  
  • Fan-favorite Diablo-alternative Torchlight was originally a prototype for a future MMO, though it's unclear whether/when said MMO will ever materialize.
  • The folks behind the Pathfinder MMO made the somewhat controversial move (see: Epic Slant) of using Kickstarter to fund a technical demo.  On the plus side, this is how things should work - demonstrating fan interest while simultaneously moving the project forward.  On the downside, the ultimate goal is to secure the funding to go back to the old model, and fans may be left holding the bill (and some souvenirs) if the project never gets that big investor.
  • The Storybricks Kickstarter campaign (which I've covered previously and looks unlikely to succeed unless someone wanders up with over $220K at the last minute) sought the approach of crowdsourcing a product that is as much of a back-end technology for a future game as a game in and of itself.  Psychochild has made the point that projects which have been funded through previous Kickstarter campaigns have been effectively sequels or otherwise possessing built-in audiences.  Fate of the project aside, I don't know that this one case will definitely answer whether this project - currently an alpha world-building tool - is too abstract/early for end users to be willing to buy in. 
Is this type of approach really limited to indie games like KOL, or is there some way for that players would accept to buy into the development process earlier (preferably without being taken for their money in the process)?

Lowering The Price of EQ2

In EQ2, SOE has the dubious distinction of developing the only major MMO that I otherwise enjoy playing but routinely do not play due to their business model antics.  That said, a questionable business model attached to a product that is worth playing is one sale away from being a done deal.

This weekend is a 50% rebate sale on EQ2's Station Cash store, which includes expansion packs and non-recurring paid subscriptions.  This is not an especially great time to buy Station Cash - a double SC sale, which happens more frequently, lets you pay half as much for the SC you want, while a rebate sale requires you to pay the regular price and gives you SC back afterwards.  It is, however, a spectacular time to SPEND Station Cash.

A few weeks ago, I decided to spend $20 for 6000 SC at the last triple SC sale - enough to cover the 4000 SC expansion and a one month non-recurring subscription for 1500 SC so I wouldn't need to start paying for gear unlocks again until I hit the new level cap.  For some reason, though, I held back on spending the SC after paying for it.  My patience paid off.

That $20, tripled and then instant-rebated, bought me the $40 expansion, three months of subscription status (3897 SC) and still over 2000 SC left from the most recent purchase (4352 total counting a previous balance).  The tough call now is whether to extend my subscription out from August through November (leaving me with around 2000 SC left after the rebate) or hold onto the balance in anticipation of being charged 4000 SC for another expansion in December.

Anyway, PSA: If you already have SC and are looking to buy stuff in EQ2's store, this is a good weekend to do so.

Marginal Return on Content

Anjin asks whether the layoffs at Bioware are a sign of trouble or business as usual.  I'd suggest the answer is a bit of both - losing staff is business as usual for a game that lost about a quarter of its customers in the previous quarter.  This move comes at about the game's five month mark, which is a bit late for the traditional ship-then-sack treatment.  At a minimum, the game's subscription performance can't have helped their case to keep more people on board.  That said, the game is still the number two subscription MMO at the moment, which would seem to make it a bit early to be abandoning ship.

The more concerning possibility, then, is that EA does not like what they're seeing in terms of return on investment for new content.  We know from the beta that Bioware has great tools in place to map out how content is used.  These tools may now be telling them that daily quests aren't helping them retain players who are out of story content.  Meanwhile, my experience has been that the solo content on a planet runs for a couple of hours, which can't be a great return on the development investment needed to create that much content. 

Overall, it is going to be very interesting to see whether the game ever focuses on advancing the solo story content beyond its current set of endings, or whether they continue to focus on quality of life features and concede that players will simply leave as they finish the story.  

What Diablo III Is and Is Not

Reading over the blogs, I wonder if Blizzard's biggest mistake with Diablo III was keeping the name.  This is not to say that players have not cited valid reasons for their lack of enthusiasm, but it feels like a disproportionate amount of the commentary has focused on what the game is not. 

Diablo III is not (note: cited complaints are not the whole contents of the linked posts):
  • Available offline (see: Syp amongst many others after the rocky launch week)
  • Sufficiently different in scenery from DII.  (See: Wilhelm)
  • Sufficiently similar in character skill design from DII.  (See Pete, more on this in a minute)
  • A game, but more of an interactive movie (See: Gevlon)
  • Being evaluated fairly by reviewers, but rather being given a bonus based on its title (See Tobold)
  • Reasonable about unlocking difficulty - three complete playthroughs are required to unlock the highest difficulty (See: Spinks)
  • Arriving in 2002, when the incremental improvements from DII would be more consistent with four years versus the fourteen it actually took.  (See: Ferrel)
  • Torchlight 2 (Pete, Arbitrary, several others - I suppose a real credit to Runic that this was such a common observation.)
So far, I've only played through level 11, but from what I've seen so far DIII is a good quality, polished, and fun game.  In some ways, it reminds me of SWTOR - you are definitely experiencing someone else's story, between the heavy involvement of NPC's and the relatively non-customizeable player characters, but the story experience and production values have been excellent.  Two tidbits that I've especially enjoyed:

Voiceover Lore: Those lore tidbits normally found in books that I never read in game?  In DIII, they are saved to my journal and an NPC will read them to me as I continue on my path of destruction.  As a result, I've been exposed to far more lore than I would ordinarily be tracking this early in the game.  This system is a huge step forward from tweet-length boxes of quest text.  Every MMO that is not planning on Bioware-style branching dialog trees needs to look at this.

Skill system: I am solidly in Camp Spinks on this one.  DII had one of the worst implementations of a skill system that I can ever remember tolerating - with no respecs and no requirement to spend more than one point per low level skill, DII basically dictated that players not use any skill points until most of the way through the game's normal difficulty.  In its place, Blizzard has created a system that offers tactical versatility without the dead weight and false choices - many options and almost all of them bad.  With the new system, I'm re-building my character in some way almost every level, and it sounds like I'm not alone in that experience.

Do I expect to be playing DIII every day for months or years?  No.  But that's another thing that DIII is not and does not need to be - a MMO with a lengthy commitment. 

(P.S. My tag-thing for contacting me in game is pvdblog#1183.) 

SWTOR At One Month

My first month in SWTOR has just about wound up - minus some time due to real life scheduling conflicts but plus a few days due to the referral trial program.

My first character is sitting at level 34, having completed the class story on Balmorra and collected four of my five companions.  This means that I'm done with seven of the twelve planets I will visit as part of my class story (not counting Ilum, which is PVP only as far as I'm aware).

There is still solo content left on about half of the planets I have visited, but I have chosen to forge ahead as my level permits in the name of preserving challenge.  I'm continuing to tackle content that's 2-3 levels above my head in search of an appropriate difficulty level.  In principle, this all means that my next Republic character could have a significant amount of content that I have not seen previously (assuming that I don't go back and power through the old stuff to farm companion affection for legacy unlocks).

Based on this timeline and rate of advancement, I'm probably looking at about six weeks of real time per level 50 character, and about four playthroughs (two per faction, and, coincidentally enough, one for each mirrored class pairing) before I'm really scraping the bottom of the barrel for content I have yet to complete.  I have not yet started a single alt due to how the Legacy system rewards work, but to Bioware's credit the only hard part about my next character will be the choice of which of the six classes (excluding Bounty Hunter because it's the mirror of my Trooper) to play next.

Is it ideal for Bioware if I ultimately pay for six months' worth of game time before wandering off into the double-sunset?  Perhaps not, but it's hard to call that a real failure either.  I suppose I should also be worried about whether all the legacy perks will harm the difficulty level (though I may have gone extra easy on myself this first round by playing a tank-spec with a healing companion).  Overall, though, I'd call my first month in the Old Republic a success.

The Pros and Cons of Scheduled Content

Last week's episode of STOked discussed a controversy in the Star Trek Online surrounding scheduled content.  The game has recently added some much desired additional group content, but this content has only been available at specific times through the game's event calendar.

I understand where the complaints are coming from.  It is fully understandable for players to want to play the game on their own schedule, with their own groups.  Especially in a situation where almost all of the group content that the team is developing is going into the "time-gated" calendar, players who aren't playing on the official calendar's hours are out of luck. 

The community seems quick to point the finger at Perfect World and the game's new free-to-play model.  This may be true, but it is at best an indirect effect.  Nothing in these minievents that I am aware of requires purchases in the cash shop.  Rather, the time schedule may be a legitimate attempt to help players enjoy the game - where perhaps eventually someday they might spend money. 

If you let players pick and choose their own groups, the folks with guilds will do the content they want to do, and everyone else will be stuck waiting because there is no one piece of content that everyone can agree to run.  Where most MMO's focus the random group pool by offering rewards for agreeing to run random content in the interest of forming groups faster, the scheduled content approach focuses the pool by saying that the one event is what's available at this time. 

In some ways, the approach is a stick (no access to content if it's not the right time) rather than a carrot (reward for agreeing to run a random dungeon).  However, when you look at the effects of the random system, every piece of content in games that use it now has to be designed to be easily beaten by a PUG of potentially dubious composition.  Setting aside a specific subset of content and saying that this is the stuff that any five warm bodies can clear for rewards may have less overall effect on the state of the game. 

In that case, though, the solution is as simple as it is elusive - make more content so that this one mechanic is not getting all of the limited new stuff that is being added to the game. 

Founding a Legacy

My trooper was finally able to finish Chapter One of his class story, unlocking the Legacy system.  I'd been brainstorming for a while on a legacy name that A) looks enough like a name to pass muster on an RP server and B) somehow addresses my status as a MMO nomad.  I considered various combinations of "WorldSpanner", "RealmCrosser", etc in English, and then had the idea of branching out into French. 

The result was the name "Jeutrémie", which combines the words Jeu (game) and trémie (hopper).  Technically, it's the wrong kind of hopper - this is the giant funnel-like structure that you use to load up exceptionally heavy cargo (e.g. cement, ore) - but I suppose my the analogy to my MMO habit holds regardless.  In any case, it sounds vaguely namelike and it has a pun on the theme I wanted, so I'm happy with it.

I understand the desire to have the legacy unlock - it also came with a bind-to-legacy token for a free weapon for my next alt to hit the teens - come as a special reward.  However, there was a side effect to this plan - players cannot earn exp for their legacy until it is unlocked.  The final quest in Chapter One rates at level 31, but I ended up pushing the envelope and clearing through it at level 28/29 (dinged midway through the instance, and a good thing since the final bosses were 32 elite and time-consuming). 

I suppose the wait paid off in the end.  I had a lot of fun pushing the envelope to get through those last few missions "early" (delaying the Tatooine bonus series and most of the non-story content on Alderaan until I could earn legacy exp for them).  As a tank-spec trooper with a healing companion, I can get through a lot, and that level of challenge often isn't found in the solo game of an MMO anymore.  Looking ahead, I see some tough choices on what classes to play next based on juicy perks to unlock for my legacy.  From Bioware's perspective, that's a win/win, and I guess it is for me as well.

Return of the 400,000?

There is much chatter about how SWTOR has - as Azuriel cleverly put it - lost an Eve Online's worth of customers in the last quarter.  This is roughly the first half of what I predicted at the beginning of the year - high churn.  The second half of that prediction - recurring revenue as those players return to replay the game - remains to be seen. 

Bioware is looking like it now owns the fastest MMO ever to acquire a million former players (in fact, Bioware-Mythic would own the top two slots if only Warhammer had actually made it to a million in the first place).  Many of the studio's games are well known for replayability, and this appears to be no exception - two factions, and four class stories (albeit with generic content padding out the leveling curve that is shared within the faction).  If you are coming back to experience the story, having more story left to experience is a good thing. 

That said, the short term looming crisis is to stop the bleeding.  The game is still most likely the number two Western subscription MMO, but knowing that the subscriber base is dwindling that rapidly puts a lot of what we've seen in the last months - the aggressive free game time campaign, complaints of poorly populated servers and the corresponding priority to implementing character transfers and guild features - into context.  Some of the solo-replay market won't care if they come back to a largely dead server in a game that's being viewed as a sinking ship by the "core" MMO community, but Bioware definitely does not want this to continue.

Triumph of the Flying Jetski

My SWTOR Trooper hit level 25, and obtained his first real mount over the weekend.  It looks vaguely like a giant hovering Jet Ski, and it adds 90% to my out-of-combat travel speed.  The added effect of this boost can be overstated when you consider that all characters get a permanent 35% non-combat sprint boost at level 1 as of patch 1.2.  The mount only takes half a second to activate, but it disappears nigh-instantly upon combat, so it definitely isn't worth mounting up between packs of mobs.  Still, it's a marked increase in speed while crossing the outside world.

The big black things do not appear to be functioning cannons.
The main reason why I was able to pay the 43,000 credits for the training and the vehicle was courtesy of SWTOR's crew skill system.  Each character is allowed three professions, and it appears that the intent is to take one crafting profession, one gathering profession (which procures basic materials for the corresponding crafter), and one mission skill (which procures rare materials for the crafter, and other miscellany).  However, pretty much all mission skills appear to operate at somewhat of a net loss of credits, probably to balance out the fact that you can have two or more missions going at once while AFK. 

Instead, I've gone with Slicing - an odd gathering skill that does very little for crafting but does find literal safes full of credits scattered around the landscape.  There are also slicing missions and I've had extremely mixed luck with these, generally breaking even.  (I've heard these were more lucrative in previous patches.)  While I suppose it's hard to complain about breaking even while earning skill points, in general I'm sticking to the guaranteed returns of looting lock boxes. 

Meanwhile, my other two slots are occupied with the Biochem crafting skill and Bioanalysis gathering skill.  Bioanalysis produces all the materials I need to make common medpacks (potions) and stims (longer stat buffs) with Biochem.  There are some NPC costs associated with training and materials, but in general this is a very low cost way to obtain all of my consumables.  So, I'm basically getting everything my character needs and operating at a net profit from crewskills alone, which makes all of my quest rewards and drops pure profit. 

I hear mixed things about the other crew skills, and I can't make use of any rare recipes I learn through reverse engineering (a process in which crafters are reimbursed for destroying the common items they make for skill points) for lack of the associated mission skill.  That said, I would not hesitate to recommend this particular combination to any other newbies looking to purchase their first speeder.  

Storybricks: Emergent Gameplay on Kickstarter

The Storybricks project has taken to Kickstarter, in a move that's as fascinating from the business model perspective as the tool itself.

A Twist on Kickstarter
The traditional Kickstarter model is to ask for funds because you need the funds to complete the proposed project.  For example, Ferrel needed about $4000 to publish the Raider's Companion because he wasn't able to risk fronting the cash needed for editing, art, and other costs.  Goal reached, book published.  As Tobold writes, relying on this model for funding to develop an MMO is problematic - even Storybricks' $250K ask is very low in an industry that spends more than 100 times that on a triple-A title.

Reading Psychochild's post about the campaign suggests that they're going in a slightly different direction - what I'd suggest we could call emergent gameplay in the world of Kickstarter.  They would like $250K in funding - as would any independent project - but what they're really after is $250K in revenue. The theory - I'd suggest this is the same model that led to the two recent multi-million dollar game campaigns on kickstarter - is that revenue demonstrates to investors (either third party or within the studio itself if it has the means) that they will potentially profit from putting up money now, at a comparatively early stage in the project.

The project
The Storybricks project itself is a similarly quirky approach to MMO development.  The hope is to develop an artificial intelligence system for modeling NPC reactions to other characters first and then hoping to eventually build a game - and a system for player-generated content around that.   I have little idea how that will play out in practice, but it would hopefully result in something that looks different from the rest of the MMO pack. 

The campaign runs through the beginning of June and has currently amassed over $9000 in pledges from more than 200 donors - a lot by most standards but only a small step towards $250K.  Like most Kickstarter projects, backing this effort is a kind of purchasing decision - you will not be charged if they fail to reach the goal they say they need to fund the project, and you should in principle receive the promised goods if the project is funded.  Of course, the value of some of the longer term subscriptions will likely be diminished if the team does not eventually secure additional funds, but I'm guessing that most backers know what they're getting into - a longshot that, if successful, would be genuinely innovative in a genre that hasn't shown much interested in that activity precisely because of the large amounts of money involved. 

Whatever the outcome, this is a campaign to watch - both because of the actual project and because of its implications for future attempts at Kickstarter-funding MMO's. 

Account-wide Minipets and WoW World Events

WoW's Children's Week holiday is live once again, and I finally picked up the last of the ten minipet rewards.  (I skipped the event a few years in a row back when each pet you owned took up a slot in your bank, so ironically the final pet I needed was from Vanilla.)   I went on Warcraft Pets to update my pet collection and noticed an interesting tidbit they picked up from WoW Insider. 

With the new account-wide pet feature in Pandaria, this feat will no longer need to take multiple years, as it did for me.  Rather, players with enough eligible alts will be able to collect one pet on each alt and potentially wrap up their collection in a single year.  The same change potentially affects a number of other holidays - along with the Darkmoon Faire.
  • If you previously collected minipets on more than one character, obviously your workload just went down dramatically.  
  • Likewise, some events have currency token limits that make it very challenging to collect all of the rewards in a single year.  With the change, you will be able to farm the pet on an alt while saving tokens from your main for stuff that is not shared (though I'm a bit fuzzy on what will and won't be shared by the time the expansion lands - mounts? achievements?).  
  • If, like myself, you only collect pets on one of your characters, this change gives you a choice of increasing the rate at which you gain pets at a cost of increased time investment.  
One thing to watch is whether the time investment for future rewards increases due to this change.  For example, the current Darkmoon Faire setup awards almost half of the tokens for a minipet for a single visit to the event each month.  Currently, it isn't a huge loophole if you can collect pets on an alt you're not even playing.  If, on the other hand, the change means that I can now clean out the Faire vendors in 2 months using a pack of alts, rather than taking 6-9 months on my main alone, that's potentially a big drop in the staying power of the event.  I don't expect them to change the prices on current items - though it won't hurt to watch the beta servers just in case - but there could definitely be a change to how this works in the future. 

Purpose Statement

The church insurance business is a game, a contest between the church and the insurer. You'd like to think you're working together, but let's be serious. The insurer wants to collect as much premium as possible from you while paying the least amount in claims, and the church is trying to pay the least amount in premium while getting the big problems paid by the insurer. It's a competition.

In any fair game both sides know and understand all of the rules, but that's not true of the church insurance game. The insurers know the rules, but the churches only know what the insurer or their experience has told them about the rules. It's sort of like playing poker and only one guy knows that two pair beats two aces, so when you show your pairs of 2's and 3's, he tells you his pair of aces wins and if you don't know better, you give him all your chips.

This website is designed to help even the playing field a bit by giving churches more knowledge of the rules of the game so they can compete evenly with, or perhaps even gain an advantage over, the insurance companies. I won't be discussing specific coverage at this site - that's a discussion you should have with your agent.

The most important post on this site is "What Your Churches Insurance Agent Doesn't Want You to Know". I've detailed many of the rules of the game in that post and it's a must-read for any church preparing to negotiate their insurance deal. There is also an audio version of this information which you can listen to my clicking on the player in the right-hand sidebar. Your church insurance agent won't like it, but nobody likes to lose an advantageous negotiating position.

I'm also going to use this site for two other purposes. I'm going to tell you some stories from my church insurance days, some funny, some irritating, but all true. Some of the things happened to me, and some I heard from others. I won't give you the names of the companies I worked for, the name of the agency or the people I worked with, nor will I mention the names of the church clients and prospects I worked with. There's no sense in poking the bear more than I have to.

I'm also going to talk about people management, or more correctly, how not to manage people. During my years in the church insurance business I was witness to and victim of some of the poorest people management skills I've ever seen in a person who was not the homicidal dictator of some banana republic. Think Hugo Chavez with a Lexus. That's why I describe myself as a "recovering church insurance agent". Whether you work in insurance or any other field involving people, these stories will be instructive.

This post will stay at the top of the page. New posts will appear beneath it.

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What Your Church's Insurance Agent Doesn't Want You to Know

(NOTE: I wrote this piece in an effort to pass on some valuable knowledge I accumulated during nearly nine years in the church insurance field. I figure there are some church administrators and board members who could use this and might stumble across it while searching the net for information.)

NOTE 2: A 3o minute internet radio broadcast of this information is now available at by clicking on the player in the right-hand sidebar. It includes additional stories and examples not included in the printed version. You can listen to the broadcast at the link, or download it to your computer or iPod so it can be shared with your church staff or other pastors or leaders who could benefit from this information.

Do you really know your employees?

I’m your church insurance agent’s worst nightmare. Now, why would a guy who usually writes and talks about politics want to do a post about church insurance? Well, my friends, it’s difficult to admit this, but I am a recovering church insurance agent. Yes, I’m sure you admire the courage that it took for me to admit that, but for nearly 9 years I worked for one of the largest church insurers in the country.

During those years I handled everything from little bitty start up congregations with 20 people meeting in a school cafeteria, to a 7,000 member megachurch with tens of millions of dollars worth of buildings and property and every activity known to man. I had conservative Baptist churches, Pentecostal churches, stuffy Presbyterian churches, mysterious Asian religions, a couple of mosques, independents of all types, and a fair number of cults. If you were a 501(3)c church and you weren’t burning witches at the stake, weren’t witches yourself, or weren’t passing out snakes during your Sunday services, our company would probably insure you.

During my countless hours on the road I often thought that if churches knew what I knew about the various pricing tricks insurance companies use to mysteriously find savings when a competitor comes calling, my life as an agent would be a lot tougher and churches would be paying a lot less in premium. I decided that if I ever found myself in a position where I could counsel and advise churches on this subject, I’d give them that information their agent doesn’t want them to know and help them keep more of their money for ministry and help them spend less on necessary evils like insurance.

When I entered the business I was naïve enough to believe that two identical churches in the same town with similar activities and loss history would probably have two very similar premiums. Not so. In fact, there could be a dramatic difference between the premiums paid by both churches, and what I’m going to show you here is how to make sure you’re taking advantage of the pricing options the insurance companies have that they don’t want you to know about.

Let’s get one thing clear at the beginning: Church insurance is not a ministry. It can help support you as you perform your ministry, but the companies are not providing coverage as a charitable act. Insurance is a business and the company’s goal is to extract as many dollars from your ministry as possible while paying out as few as possible in claims.

Now, before I go any further, let me just say that I’m not trying to imply here that the church insurance business is more unsavory than any other insurance business. You’ll find these same things going on with any insurance company. However, churches tend to put more trust than they should in church insurance companies just because they work primarily with churches. That trust will cost you a lot of money.

If an agent walks into your office carrying a Bible, throw him out! It’s an act designed to disarm you, and just because he carries an 18 pound gold embossed King James Bible with the original Greek and Hebrew manuscripts, doesn’t mean he still isn’t out to get your money. He may be a good guy, and may even be a dedicated Christian, but as your agent, the two of you are in a business relationship and you have to remember that

The larger church clients of mine often had full time staff members who served as administrators. These people were sometimes pastors with administrative backgrounds, or lay administrators with business management backgrounds. I enjoyed working with professional administrators since they had a great deal of knowledge about the subject and understood the importance of proper coverage. They could also be challenging, thanks to their business savvy and concern for the bottom line.

Smaller churches often had volunteer lay leaders, perhaps the pastor himself, or even the church secretary handling the insurance program. There were several occasions when I had to make a pitch to the part-time secretary who was then supposed to pass all my information on to the church board. That was usually a waste of time, and I’ll give you a suggestion regarding the proper contact person later on.

With all that having been said, here are a few rules you should take to heart when working with your insurance program:

-Don’t fall in love with your agent. You certainly want to have a good relationship with your agent since he’ll be more likely to respond favorably when you need something, but as they say, love is blind. I’ve seen churches willingly pay thousands of dollars more than they had to, and sometimes for less coverage, because they were so blindly in love with their agent. When you start to value your agent more than you value the ministry dollars you have to work with, you set yourself up for needless costs.

Your agent works for you – make him earn his money. If he brings you a box of candy at Christmas, thank him, eat the candy, but don’t forget insurance is still a business and if he isn’t competitive, you’ll spit him out like one of those chocolates with the coconut in them.

-Control your claims. You can’t help it if the little old lady falls down and hurts herself in your parking lot, but you can make sure your grounds and buildings are as free of hazards as possible. Be observant for things that can generate claims, because claims are your worst enemy when it comes to keeping your insurance costs down. Insurers assess loss ratios based on the dollar amount of claims paid versus the dollar amount in premium collected. Some also take into consideration the number of claims submitted, even if they were for small dollar amounts because there’s still an adjusting and underwriting cost associated with small claims. For the average insurance company, an account is considered profitable at anything below a 65% loss ratio. If you’re under that, the company is making money and they’re more likely to be willing to negotiate better rates for you.

For property claims, use your deductible as a guideline. If a claim situation arises that’s going to cost less than three times your deductible, pay it yourself and don’t file a claim. It will save you money in the long run. And speaking of deductibles, choose the highest deductible you can afford to pay on your own. Underwriters are more likely to grant credits on policies with high deductibles (more about credits later).

-Get competitive quotes every year. If you don’t do anything when your insurance renewal time comes up, I can almost guarantee you that your costs will go up, even if you haven’t had any claims. Sometimes that will be due to rate changes that may occur in your area, but often it’s due to company policies that dictate that they want a certain premium increase on existing accounts during that year. There were dozens of occasions when I got renewal worksheets from the company that showed a 5% increase in premium just because that’s what the company wanted. The customer hadn’t had any claims, and there weren’t rate changes in that territory. Because the church didn’t show any signs of shopping for other insurers, the increases sailed right on through. Your agent is probably paid based on a percentage of the premium you pay, so if he thinks you won’t mind an increase, he certainly won’t mind sending one your way.

So, how do they increase your rates even though there hasn't been a rate change? Easy. There's a little tool called "Special Risk Rating Credits" that can be applied to many policies that have the effect of adjusting the rates up or down according to the whims of the agent and the underwriter. There's an "official" list of reasons and allowable adjustments, such as Care and Condition of the Premises, or Management Cooperation, and each has an allowable percentage credit or debit. If any such credits or debits are applied, the agent has to complete a form to justify those changes. In theory, the agent should take that form, go down the various rating factors, and apply the appropriate credit or debit to each item to come up with the final percentage.

In reality, the agent and underwriter agree on the percentage of credit or debit they want to assess to the policy, and then work the form to justify the amount. For instance, if the agent thinks he needs 25% credit to be competitive and the underwriter agrees, he fills out the form accordingly. If the agent doesn't want to "leave money on the table", or perhaps the church is a start-up with no building and falls below the minimum desired premium, he can likewise apply a debit to the policy using the same process. If the company wants a 5% increase in premium, they just knock 5% off the credits at renewal time. There's more fiction writing done on Special Risk Rating forms than in the entire Harry Potter series. That's why it's so important to get a quote every year and keep the agent and the company on its toes.

What’s the process? Here’s what you should do about two months before your property/liability package comes up for renewal:

Contact your existing agent and request hard copy loss runs. That will do three things for you: -It will give you loss information that you can use when negotiating rates with other carriers (assuming the loss run looks good);

-It will put your existing carrier on notice that you’re shopping, and will make them more likely to sharpen their pencils a bit when calculating your renewal;

-It will make your existing agent nervous, and a nervous agent is your best friend.

You probably have a desk full of cards and mailers from other church insurers. Call them all. Two months lead time is plenty for most insurers to gather information and prepare a quote. If you have a very large church with individual buildings that would be valued at $5 million or more, you may want to start this process 3 months early since there could be some reinsurance issues that will take more time to quote.

Don't pay your bill until you absolutely have to. Your insurance won't get canceled if you don't pay your renewal bill a month early. Even if your payment is a day or two late there are regulations which prevent the insurance company from cancelling your policy on the renewal date.

I'm not advising you to pay late, just don't pay too early. The companies bill you early for a variety of reasons, but none of those are because they benefit you the customer. here's what happens when you send your money before you have to:

-You give the insurance company free money to use which they can invest and make money on, none of which will benefit you. It's better for you to keep the money in your account until you have to pay it.

-Secondly, an early payment tells the agent that the deal is done and he'll keep the business. Therefore, he doesn't need to spend any extra time and effort to try and retain your business. His work is finished.

-Thirdly, you make it more difficult in the event another agent wants to submit a bid late in the process. Usually the first thing they'll ask you is if you've paid your bill, and if you have, they may still give you a bid but they probably won't put that much effort into it since the assumption will be that the buying decision has already been made. If you haven't paid yet the agent will have more incentive to give you his best deal (especially if you follow the advice below and released all the information to him).

Keep your money in your pocket as long as you can. There's nothing like an unpaid premium bill a few days before renewal to motivate your agent to get creative in order to keep your business.

Full disclosure. This item will probably tick off the insurance industry more than anything. When a competing agent comes to your church, pull out your insurance policy, premiums and all, and let him look at whatever he wants. If he wants copies of the coverages and pricing, give it to him.

Why? If an agent knows what he’s competing with, especially in terms of pricing, he’s more likely to come back with a quote that’s superior to what you currently have. Some administrators believe it’s unfair to reveal pricing and coverages to a competitor. I could buy the unfairness argument if information is being revealed to only one side, but full disclosure means everybody gets to see everything. The competitor coming in gets to see the existing policy, and the current agent gets to see the competitive quotes. When the dust finally stops flying, you’re going to end up with the best deal.

Have the decision makers there when the agents present their proposals. There’s nothing worse for the agent or the church than having the agent give his best presentation to somebody who’s not empowered to make the decision. If the decision makers are not present, somebody will have to translate that presentation for them and much will be lost in the translation. You want to make sure the right people are hearing directly from the agent and have the opportunity to ask questions.

Don’t be afraid to set up a dog-and-pony show some evening. You can get the board members together and give each agent a specified amount of time to make his pitch. That way everybody hears the same things and it will be easier to come to a group decision (for those churches that make these kinds of decisions by committee).

And now, a caveat to this whole thing. Many of the large mainstream denominations have group programs that are outstanding. The programs often have huge property and liability limits and are priced very competitively. The downside is usually service. One of my pet peeves as an agent was the occasions when the boss would insist that we solicit business from churches that had these group programs. My company couldn’t touch them and we knew it, but the guy with the rose-colored glasses would always insist that we could win these accounts away with our charm and good looks. After looking at these massive group programs I felt I was doing a disservice to the client by trying to convince them to abandon a clearly superior program just so they could see my smiling face from time to time.

Look folks, service is a wonderful thing and you want great service from your agent, but if he can’t match the multi-million dollar blanket coverages that you find on these big group programs, don’t switch. He may come back with something that saves you a few bucks and he’ll promise to return your phone calls and name his firstborn after you, but when you compare costs relative to coverage, you’ll be making a bad decision if you leave the group program.

A little knowledge, planning, and effort on your part can save your ministry a lot of money, and since I haven’t seen the church yet that has too much money, I’m sure you can find better uses for it than paying insurance premiums. Meanwhile, I’m going to head off to the Insurance Agent Witness Protection Program so I can remain safe from all the insurance companies and agents who are now out to get me.

NOTE 3: Rick is available to speak on this subject. Leave your contact information in an email.

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