Insurance is a tough market. If you sell life, you’ve probably noticed the obvious shift towards low-commission term life vs. the better paying whole life. If you’re in the P&C crowd, you’ve noticed the fixation on the low price game (and when comparing two companies towards with one has no affiliation, price is a big initial selling point). Selling insurance is not as easy as it was in years past. People are strapped for cash, so their buying fewer and smaller policies these days, and a tendency to “jump ship” for a slightly reduced premium (even before contacting their current agent) has created a volatile market and — for many agents — volatile books of business. In this modern and touchy insurance market, there are a few key things you can do to both grow your business and increase your persistency rates.
Many agents have turned to calling “cold leads,” or even trying to generate “warm leads” to contact and eventually make a sale. While I’m not going to deny the initial usefulness of leads as a partial business solution, they cannot be the whole game. Most insurance leads are going to be the aforementioned price-shoppers, and if they’re willing to dump their present carrier for you to save a few hundred dollars a year, what do you think they’ll do when someone else comes along who offers them a better deal than you?
So, rather than become dependent upon leads, there are some steps you can take today to increase both the amount of business on your books and also the persistency of your book of business. In no particular order, here they are.
- Increase Your Accessibility To Your Clients. Call them. Talk to them. Build that relation. The #1 reason that people don’t switch to cheaper insurance is an established relation with their present agent. Growing up, my family had “our” agent, and our agent knew our whole family by sight! I’d never think to switch to anyone else when I knew that “Larry” would have my best interests in mind.
- Have Your Clients Best Interests In Mind. Guaranteed to work like a charm, if you follow step 1’s advice and call them, so much better to call them when you can save them some money. It seems counter intuitive to some agents to offer their clients a cheaper plan than what they have presently, but if you want to cement your clients into place for the long haul, nothing does that like calling them to save them money over what they’re already paying.
- Differentiate Your Agency From Your Competition. This can be the most rewarding step, and also the most challenging, because it might force you out of your comfort zone. Give back to your community (which increases visibility, which also helps you under step 1). Volunteer. Help out at local schools or community organizations. This seems like a no-brainer, but join your local chamber of commerce! These simple steps make you more visible, but also make you stand out in sharp relief to your competition!
- Expand Your Portfolio. Along the same lines as step three, offering plans that your competition does not offer is a great way to further cement your book in place. Studies have repeatedly shown that the more policies a customer has with a particular agent, the less likely they are to switch. The problem most agents are facing right now is what to add. The traditional insurance market is admittedly over-saturated, hence the price competition.
One insurance broker I know has likened the insurance market to fishing in an over-fished and under-stocked pond. But there are some markets which, though less traditional, are beginning to show themselves as viable markets. I’ll high-light just two of these under-fished, over-stocked ponds here.
The first is pet insurance. As the number of children per family has declined, the number of pets per family has increased, and more and more those pets are becoming a part of our families. Veterinary bills are pricey, so some clients are jumping at the opportunity to cover Rover’s risks for a reasonable price. Still a novelty by most standards, this is certainly a viable market with little penetration as of yet.
The second area of open ground is legal insurance or “pre-paid legal plans”. Broker world declared that, though once a novelty, the concept of pre-paid legal plans has come “from a novelty to an accepted insurance marketing opportunity.” (March 2003) While many people may have a knee-jerk reaction of “I’ve never needed an attorney” when initially broaching the topic, our increasingly litigious society is making the notion of legal coverage something beyond a practicality — in many cases the service is bordering on a necessity. Most plans will cover a variety of issues, including: Consultation about personal and business matters, phone calls and letters on behalf of the members, contract and document review, will preparation, motor vehicle coverage, trial coverage, audit coverage and more, including identity theft protection and 24 hour “emergency legal coverage”.
The benefits of expanding your portfolio are manifold: from the ability to contact your present book with something they can get nowhere else – which makes you more accessible (#1), differentiates you (#3), and shows that you’ve got your clients interests in mind (#3). Moreover, the ability to find new business where otherwise there would be none, including the ability to work insurance markets outside of your assigned territory (if you have one), can be very liberating — and lucrative! Many businesses won’t consider changing insurance policies very often, but they will entertain offering a highly sought after benefit which can demonstrably increase their bottom line and worker satisfaction. And getting oneo’s foot in these doors gets an agent one step closer to being able to speak to the benefit of considering switching other insurance products (Health, Life, Dental, etc).
Not only that, but with generally no claim forms and simplified applications, the ability for onsite group enrollments with payroll deduction, and generally very generous commission structures, offering a non-traditional insurance product can be a viable way to help new agents get their foot in many doors which would be otherwise closed off.
Relying solely or primarily on insurance leads to expand and grow one’s business while neglecting one’s extant one’s book of business is a mistake. Hundreds of thousands of dollars are potentially on the table for an agent with a book of just 500-1000 clients. These are services your clients are going to buy, shouldn’t it be you that they buy it from?