Most agency automation systems offer some type of marketing capabilities. During pre-consulting sessions, it became evident to us that the term "marketing" takes on dual meanings in an agency. Identifying the specific definition is important to the determination of a proper training and implementation strategy.
To some, the term "marketing" refers to the initial selling process, identifying target markets and processing mass mailings to potential customers. To others, "marketing" defines the application process where an account is sent to various carriers for the best quotation. Regardless of the definition, much can be learned from the data created by tracking each process in your agency automation system.
Marketing--Sales context
Once your agency has identified a business segment to pursue, there will be analysis, advertising, and mailing expenses, particularly if your campaign involves automated mass mailing. If you are pursuing a specific market for the first time, it can be helpful to review the process to assure end profitability. If the desired result is not to your liking, the same data can be used to analyze the deficiencies.
Case history: While developing a training and workflow plan for an agency, the sales manager mentioned that the agency had always wanted a way to determine how many of a particular type of property risk the agency turned down due to carrier market inaccessibility. The agency received most of its leads from mortgage closings. The type of risk being turned down regularly consisted of non-owner occupied dwellings.
While this market might not be one pursued on a handful of risks, the sales manager suspected that the agency was turning down hundreds of opportunities to write the better of these risks. Without any type of quantifiable data, however, the agency was not able to get the attention of its carriers.
The solution was simple. As part of the workflow of pursuing each lead, a record was inserted into the system and a status was assigned to the "successfuls" and "unsuccessfuls." The "unsuccessfuls" also were flagged with a reason, in this case a simple code, such as NON-OWN, for non-owner occupied. To solidify its cause to the carriers, the agency also indicated the minimum premium that could have been generated from the item had it been able to provide a market.
The resulting reports were extremely useful in proving to several carriers that the agency had enough potential market access to warrant opening a source for the agency. Another year provided a substantial increase in revenue to the agency, stronger contingency opportunities from the carrier and expanded services to existing customers. The only regrets were for the prior years of missed opportunity.
Marketing--Placing the risk
The term "marketing" is also frequently used to identify the placement process of a risk, either at the point of sale or as part of the renewal process. It can be useful to identify carrier trends during this process. The same techniques noted in the example above can be employed to analyze this type of information.
Much staff effort is engaged in marketing a risk to carriers. Knowing which carriers will or will not entertain a given risk, and which local competitors have access to the same markets, plus understanding loss history and risk exposure--all play into the placement process.
If your agency has written the account for some time, and you have processes in place to record past placement efforts, you should be able to extract information on the history of carrier activity for a particular account. If certain carriers were not interested in the past, it may not be practical to present the risk again.
In addition, you should be able to identify trends regarding carrier behavior by analyzing all of the submission activity to a given carrier. Tagging efforts with a success factor can generate report data that can be shared with the carriers. Ideally, this endeavor should work toward improving carrier relations, including weeding out less productive relationships. By keeping an eye on contingency commission efforts, your agency can monitor the activity flowing into various carriers and guide the marketing energies to the most productive resources.
Putting it all together
Although the processes noted above depict different stages of an insurance transaction, data can be accumulated from both pieces to identify strengths and weaknesses in the methods employed by your agency. Looking at all of the information sorted by carrier criteria can help you identify your key market resources. Analyzing the type of businesses pursued, from both a successful and unsuccessful viewpoint, can give the agency a better handle on its effectiveness in given markets. Marrying the two can provide a valuable resource in negotiating market needs with your carriers.
Analyze customer needs by looking at the "acceptance trends" of business pursued. Develop effective codes so that you can tell when the problem is in your markets, your processes, or your competition.
Avoid El Nino
As with any other automated process, you get out of it what you put into it. Avoid what I have come to affectionately call "Information El Nino," or "Nothing In Nothing Out." *
The author
Wanda Shumaker is a 20-year veteran of the insurance industry, beginning her career in an agency, then traveling as a trainer for a major software vendor. She has returned to the agency side of the business and is an assistant vice president and the automation manager for Conseco Risk Management, Inc., a large independent insurance agency located in Carmel, Indiana.