SAFECO Life & Investments president draws on his P-C roots
to bring simple but innovative products to the marketplace
By John Maes
Drawing on his own experience as a P-C agent, SAFECO Life & Investments President Randy Talbot stresses that life/financial services products must be "easy to sell, easy to service."
As a young agent in Albuquerque, New Mexico, some 20 years ago, Randy Talbot learned that cross-selling life and health coverages with property/casualty lines could go a long way toward making an agency profitable.
The convergence of the insurance and financial services sectors was just getting underway. Talbot could see that it soon would become a business advantage for agents to have access to a wider array of products--including more life, health and investment products. "We were able to see that agents would have to branch out and do more things," Talbot recalls.
"We decided early on to enhance our revenues by making sure we spent as much time and effort on life/health and investment lines as we did on property/casualty,"
he continues.
Today, Talbot is putting those principles to work as president of SAFECO Life & Investments(L&I). He wants agents to know they'll have a painless experience dealing with the company. His time in the agency ranks has given Talbot a special appreciation for the agent's desire to work with products that are easy to sell and service. "As an agent I didn't want to mess around with products that couldn't be easily sold and serviced. So we've worked hard to develop a line of products that is manageable for agents to deal with. 'Easy to sell, easy to service' has been our mantra," Talbot says.
Expansion by agents into life/health and financial services may have been gaining momentum over the last two decades, but many P-C agents still don't take full advantage of the opportunities to offer life/health products to their prospects, Talbot believes. Some agents may feel they're not set up to service life/health business while others may feel they lack the needed expertise to answer questions. Or, says Talbot, they may fear that bringing another producer or insurer into to the picture might create a communications problem or a service breakdown that could jeopardize the P-C account.
But there's every reason for just about any P-C agent to consider expansion into the life/health side, especially given today's increased concerns about insurance and financial protection, he believes.
Since the horrific events of 9/11, agents should be more proactive about offering to look at a client's total insurance needs and should be quick to point out coverage gaps that, if not addressed, could lead to financial ruin. And, he adds, they'll probably find that their clients are equally as concerned and thus very willing to listen.
"When tragedies such as the loss of a loved one, or the loss of a job or disability strike families across America, there are no relief efforts behind them in the way there were for so many people during the 9/11 disaster," Talbot says. "If any agent ever had a fear of calling on a customer for life insurance, they need to understand that the customer has just seen in spades what needs to be done from the protection side and they're just waiting for the call. The events of 9/11 opened the door for agents; now they just have to walk through," Talbot declares.
Talbot points out that aging baby boomers are thinking more about life insurance, making the timing right for P-C agents to cross-sell life/financial services products.
Another good reason for life/health crossover? The continued aging of the post World War II baby-boom generation has that population cohort thinking more about life insurance and related issues in general, says Talbot. "That segment of the market looms larger and larger all the time," he points out, adding "You have demographics on your side--the market will grow."
Agent support system
To support agents, SAFECO L&I has increased its force of field representatives from 12 to 43 in the four years since Talbot took over. As an adjunct, an award-winning agent sales center has been launched providing a toll-free phone number where agents can connect with service reps "who can service business on the spot," Talbot explains. Also developed has been the "Easy App" for coverage, which Talbot believes agents will find to be a refreshing contrast to the tedious multi-page coverage application of the past.
The six-question application can be transmitted electronically to SAFECO's home office where medical underwriters take over, call the prospect direct with any questions, and issue the coverage back through the agent, explains Talbot.
SAFECO has also added a consumer Web site (www.safecofunds.com) that allows customers to get information on the performance of their mutual funds straight from the Internet, says Talbot. In addition, the account holder can purchase additional securities or exchange and redeem funds.
Talbot points to the online information module for financial advisors called "Just in Time Learning" as another resource for agent support. "It's available around the clock, and it can provide as much or as little information as needed, whether it's finding out everything there is to know about a variable annuity or a quick refresher on a particular tax law," he says.
In addition, a fast-track licensing process is available for agents who don't now sell SAFECO life products. "We're one phone call away. When agents call (800) 210-1106, we can have them appointed and up and running with SAFECO within minutes instead of weeks," explains Talbot. An online weekly commission payment process using electronic funds transfer ties in nicely with the corporate philosophy of making things easy on the agent, he points out.
"We stress Internet sales, too," Talbot says, "except that with SAFECO's Term on the Web, agents get the same commission as if they had submitted the policy manually, plus, we can issue the policy with greater speed." Talbot goes on to explain that SAFECO also builds Web sites for agents through its Sitebuilder Program and can assist with financing for agents who need computer system upgrades in order to be fully Web-enabled.
SAFECO's efforts to bolster life/health writings appear to be paying off. Applications for individual life coverages have jumped to some 24,000 a year from 11,000 annually in 1997, the year before Talbot started. He also heaps praise on his management team. "I inherited a very talented group of people, and we've had a very good team effort."
Product offerings
Following is a look at some of the products being offered by SAFECO Life & Investments:
Business Life, which provides for the financial needs of companies that have experienced the unexpected death of an owner, principal or key employee. The coverage will protect against the necessity of having to take on an unwanted partner or stockholder just to bolster the company's financial position. It also covers the costs of recruiting and training replacement employees.
Employee Group Life/Stop Loss is a highly specialized form of coverage designed primarily for self-funded health care plans. It covers liability for health claims that exceed either the individual or aggregate stop loss deductible.
Employer-sponsored Programs, including life and disability and life and health coverages.
Structured Settlements, which are used to pay personal injury claims by "structuring" the payment of claims over time to meet the injured party's ongoing financial needs.
Ultra Voluntary Individual Insurance Package, a compre-hensive worksite program, for small companies of five employees or more, through American States Life Insurance Co., a subsidiary of SAFECO Life. It provides universal life, term life and disability coverages through payroll deductions.
Large Worksite Program, a product package consisting of universal life and short-term disability through payroll deduction to companies of 250 or more employees. For this program, SAFECO Life has partnered with Employee Benefit Communicators, Inc., to provide comprehensive programs to inform employees about benefits, thus relieving employers of this task.
Select Benefits, a group life/health program available to employers with 51 or more full-time workers who may also want to extend coverage to part-time, temporary and seasonal employees. The program gives employers an edge in a tight labor market for offering benefits to workers not otherwise eligible for coverage.
Retirement Programs, including an "Ultra 401K" that offers participant-directed investments along with a SIMPLE IRA or 401(k) plan for smaller employers (fewer than 100) or regular employer-sponsored 401(k) plans. Other programs include Simplified Employee Pension (SEP) for self-employeds and small businesses along with the 403(b) plan for employees of educational and charitable organizations. *
The author
John Maes is a Chicago-area freelance writer.
SAFECO President and CEO Mike McGavick (left) and Randy Talbot met with some 2,500 agents during their recent 22-city "road show."
If executive city-hopping had been an Olympic-style event, a four-member management delegation from SAFECO would surely have brought home the gold for the USA during the games in Salt Lake City.
The group recently completed a 22-city "road show" in less than 40 days during January and February, meeting with more than 2,500 independent agents and numerous other groups of SAFECO employees.
The purpose? To solidify connections with agents, to let them know that SAFECO is in sound financial condition, and to inform them that there's money to be made in selling SAFECO products, explains Mike McGavick, SAFECO CEO. McGavick, who started as chief executive in January of 2001, was joined by Mike LaRocco, president of SAFECO Personal Insurance; Dale Lauer, president of SAFECO Business Insurance; and Randy Talbot, president of SAFECO Life & Investments.
According to McGavick: "We were telling the agents that on the P-C and life side we'll be bringing out more products this year. There will be more to sell, it will be easier to sell and there will be more money for them to make." He also told them that a full range of agency support services backs up the suite of products, thus helping agents maintain the quality and continuity of service.
A secondary, more somber, but nonetheless relevant message was that "the public is more aware of the need to pay more attention to physical and financial security," he said, referring to the aftermath of the events of 9/11. "And we, who are experts in this field, have to be out there to bring them information about the solutions that are available for the things that can happen. It's a special obligation we bear."
McGavick continues: "We wanted to tell agents they ought to kick the tires of our company. We present a high-quality opportunity, and they should feel comfortable about entrusting us to their customers."
For more information:
Web site: www.safeco.com