PERSONAL LINES SELLING
Seize the opportunities
By Troy Korsgaden
How do we, the local storefront insurance agency, communicate the hardening of the insurance market to customers and still hope to retain their business?
We are in the midst of what could turn out to be one of the worst hard markets ever. Some insurance carriers are quitting the property/casualty market altogether, or are severely limiting their new business writing. Others are re-underwriting their entire books of business. The reality is that most property and casualty lines have been under-priced for some time. However, prices are going up and this will be passed on to the consumer. So the question agents are asking is: "How do we, the local storefront insurance agency, communicate this hardening of the insurance market to customers and still hope to retain their business?"
Focus on the fundamentals
Some would say that recent events have made it harder for agents to deal with the consumer. However, sophisticated and visionary agents see today's market as an opportunity to deepen their relationship with clients in the trusted advisor role. Those agencies that take the time to meet with their clients and explain the current market situation will ultimately prevail. It is our job to assist our clients in creating a road map to help them navigate through this hard market.
Most of us don't like surprises. If you were to discover that your favorite restaurant had increased its prices by 50%, you wouldn't be too happy. And it's probably not the increase that would make you angry, it would be the surprise. If you had been forewarned that the restaurant's prices were going up because of a huge rent increase, for example, you would at least understand. Our clients are no different. They aren't going to like receiving a huge increase in the bill for their next homeowners or auto renewal. But you can ensure that your clients are not in for the shock of their lives by taking a proactive stance. Call every customer and let him or her know that a rate hike is coming. Then explain the reasons by providing an overview of today's insurance market.
In an ever-changing world it is more important than ever to focus on the fundamentals when dealing with clients and managing relationships. The recipe for success is simple, but it must be followed to survive and thrive.
1) Consistency
Yes, consistency is one of the major keys to success. Your clients read the newspaper, they watch the news on television and, more important, through conversations with friends and family, they are up to date about the economy and the need to stay alert. Your clients want to know that you are solid and that they can count on you day in and day out to provide the answers they need. And that's especially important since the events of September 11. Clients need to be reassured that you will continue to provide the security that they have come to know and expect from your agency. Who better to provide this reassurance than you, the locally based insurance professional?
Your carrier's headquarters most likely are thousands of miles away, yet customers want to be reminded that peace of mind is being able to get in touch with someone who understands their needs and helps them make the best buying decision for their family and/or business.
2) Communication
Know your story. You may need to do some due diligence on how things have cycled in our industry over the years. For the last few years, most personal lines agents have been complaining about other carriers who were coming in and low-balling rates to gain market share. Now the problem is that most everyone in today's market is taking some type of rate action. This has created an opportunity for you to communicate that your agency is not in business for the short run. Anyone can make a mad dash or a sprint, but you want to position your agency for the long-distance run. Tell the short version of how the insurance industry came to be where it is today but, more important, share your position on how you can help your client move steadily into the future.
You may want to clip articles about industry trends from newspapers and trade magazines and use them to counsel your clients. The printed word can be a powerful tool that adds validity to the discussion and makes it easier for your customers to understand why the market has changed.
3) Use every opportunity
Leverage every call that comes into your agency and every call that goes out. Leverage every appointment, whether it is for new business or an annual review, to reinforce the quality of service your agency provides. We assume that our clients know that we are their local trusted advisor, but this needs to be reinforced. The agency distribution model has one value proposition--it's what we can do for the customer. If it were only about rates, none of us would be left in business today. The people we do business with now and in the future want "high-touch" customer service. We need to leverage our daily opportunities to remind our clients that we are not selling a commodity but rather delivering no-worry personal service.
4) Use technology
Transitioning from a paper environment to a technology environment has been painful for many agencies over the past five years. Now is the time to take advantage of the payoff from this investment in time and money. Today's technology can easily tell us who our most "at risk" customers are. These should be the first people we call and meet with. Technology can assist in quickly communicating our message by segmenting our customer base for those who are most affected by the recent changes. Are we saying to use your computer to send out a letter advising clients that a rate increase is coming? The answer is no. Your database should be used to segment your customer base so you can drill down and contact the customers in order of needed attention. But without a doubt it is vitally important to contact every customer with whom you do business. Why? Because trusted advisors do not allow surprises.
Seize the opportunity to use technology to reach out and contact those customers who may have left because of price. Additionally, contact those prospects who did not make the switch to your agency over the past few years--for whatever reason. Now some will say, "With prices going up this is crazy!" Yet with the market in transition, the timing couldn't be better! Most customers who are looking for the right price and nothing else, come to realize sooner or later that you get what you pay for. There never could be a better time to illustrate this point.
5) Staff enlightenment
Granted, you probably already know a great deal about the insurance industry and know a lot about managing customer relationships. But none of us can run our business by ourselves. Once you have perfected your concise view of the industry, be sure to share this information with your staff. This will empower every staff member to present a consistent, cohesive message to customers and position your agency for success in the marketplace. Staff education and conviction is that one ingredient that brings it all together. Educate your staff about the competition and the industry as a whole and how your carrier or carriers offer solutions to your clients at a time when they need it most.
It's been said a million times that every situation can be viewed positively or negatively. We can look at today's marketplace as one more obstacle to overcome or we can look at it as one more opportunity to deepen the relationship with our most valuable asset--our client base. For those who truly understand that ultimately it's not about price, it's about what we can do for our customers, today's market offers uneasiness. I predict that in the not so distant future we will look back at this time in our history and remember it as one of the greatest opportunities our industry has ever known. *
The author
Twice named "Agent of the Year" from among 14,000 Farmers Insurance agents and a frequently featured keynote speaker at industry events, Troy Korsgaden has trained nearly 30,000 insurance agents and staff across North America using his industry-specific manual and seminar program, "Achieving Success in Agency Management." His book, Power Position Your Agency; A Guide to Insurance Agency Success, explores, in-depth, strategies for growing and retaining insurance agency business. Also available from Troy Korsgaden Systems (TKS) is an audio tape set, Building a Successful Insurance Agency: The 4 Essential Steps! Troy is currently co-writing a new book about the agency distribution system to be published in early 2002. For more information, call TKS at
(800) 524-6390, fax the company at (559) 625-1603 or visit the TKS Web site (www.tksystems.org).