Agency-Insurer Productivity

Six steps to true carrier partnerships

Agents need to better align themselves with carrier needs

By Walter Bateman, CPCU, ARM and Scott M. Primiano

“Unless you have prepared yourself to profit by your chance, the opportunity will only make you ridiculous. A great occasion is valuable to you just in proportion as you have educated yourself to make use of it.”

—Orison Marden

So it is true of our relationships with our carrier partners and underwriting teams. They all begin with talk of partnership, mutual commitment, long-term growth, and shared success. Yet, as soon as the nail is driven to hang the plaque, things begin to change. Appetites shift, submission standards tighten, pricing becomes non-negotiable, and countless expectations and intentions are unfulfilled and misunderstood. Communication breaks down, phone calls go unreturned and discussions once shaped in “we” terms become “they” and “you” focused.

Current era agency-company relationships are like a teed-up golf ball on a windy day and frequently deteriorating into an adversarial who’s-doing-what-to-whom finger-pointing exercise. Where’s the love gone? And what about our clients? Has the industry lost sight of the reason that we are all here? Are we so consumed by internal combustion that we end up neglecting the very people whom we are committed to serving and protecting?

Yes. And here are a couple of reasons why.

First, we have essentially de-personalized the business of doing business. We have become so systems focused, so technically driven, so algebraic in our thinking, so “model-conforming,” so consumed with moving files and paper, that we have forgotten that within each file we find The People—unique people with unique needs, expectations, purchasing power, and insurance savvy.

Second, our business models assume stability and permanency in a decidedly unpredictable world. Just read the financial press. It’s a topsy turvy no-guarantees business world, chock full of uncertainty spawned by cutthroat competition, fickle financial markets, nervous investors, dissident shareholders, anxious boards, disloyal customers, interceding regulators, and aggressive attorneys general. It is difficult to focus our attention externally on the individual needs of our clients when so much time and attention is being sucked away by stress.

All that being said, we can achieve quality client-agency-carrier relationships. Here are six steps that you can use to convert carrier appointments into true partnerships:

Step 1: Recognize and accept the dynamics of a carrier-agent relationship

Rewind back to the “world has changed” theme. It’s a fact. The underwriter-agent du jour mentality is transactional and not relationship based. We live in a time where agency-carrier relationships have become based on a “what have you done for me lately” expectation. Unfortunately, they’ve been established without deeply rooted respect and long-term commitment. It’s as if relationships, like our products, have become commoditized. Also, essential to understanding the relationship is the issue of capital. Understand that it’s the carrier whose capital is at risk and whose capital is frittered away if relationship expectations are not attained.

To understand this dynamic is to be able to work with it rather than against it. Channel your conversations away from the generalized and annualized and focus instead on the specific, month-to-month, mutually compatible activities and services that will drive the partnership and enable it to prosper. Talk of targeted business segments where they can be the “go-to” market rather than your overall book of business.

Step 2: Know what you want and need out of every partnership … and know the difference between the two

Take out a piece of paper and jot down an answer to these questions: Why do you want or need this carrier? Will you be able to meet the goals and expectations of the carrier? Will you be able to co-exist based on their criteria as well as yours, not simply yours? And, will you be able to generate a flow of business that kindles a long-term agency partnership? Having done this, it is time to face the facts. Either you have the ingredients for a partnership or you don’t. If you do, make your relationship as transparent as possible by disclosing the answers to these questions—both good and not so good. Full disclosure will lead to a better understanding of each other’s strengths and weaknesses and, done proactively, will enable you and your partner to manage the relationship accordingly.

Step 3: Book rolls are bad for business and for partnerships

Every carrier wants its fair share of the risk bearing landscape and some want more than their fair share, asking for agents to roll their books from other carriers. The theory is that if you are truly loyal, you will gleefully move business from subordinate carriers to your true partnerships. Your clients and Mr. Spitzer may beg to differ. The word “independent” that precedes the word “agent” means that you will have more than one option for all or most of your clients. If you find yourself being confronted with a request or an expectation for a book roll, revert back to our first step and re-focus the conversation on a collaborative plan to grow the business, not to just shift it around. Point out that all of your carrier partnerships are strategically aligned with specific segments of your book, those that they specialize in, and that no client is randomly and haphazardly submitted to any partner. Tell them that it is your practice not to pitch one against the other.

Step 4: Become a disciple of the company’s strategy and value-proposition

Do you and the appointing carrier have value propositions that align? For an agency, the easiest way to fulfill the carrier’s value proposition is to first understand and digest its strategy, and then delineate in your agency’s business plan what you need to do to feed the carrier’s value creation expectations. Also, in business planning meetings with the carrier, lay out your agency’s value proposition. See how it plays. This is important because an alignment of value propositions leads to an ongoing fulfillment of the carrier’s strategy and underwriting appetite.

Step 5: Do you really need another market?

Before taking on a new partner, make sure that you are ready to enter a committed relationship with the new company; ready to commit to its expectations, strategy, underwriting appetite, systems and business modes. To exponentially raise your chance of success, make a sensory check on your ability to commit. What you are looking for here is best described as cultural compatibility. If you cannot create and maintain equal levels of value, integrity, and trust—essential ingredients in every personal and professional relationship—then don’t take the appointment. Your best bet is to broaden and deepen the partnerships that you already have. New appointments should be handled strategically and deliberately. Take the time to conduct the proper cultural compatibility checks up front and without reservation. In this case, “’tis better to have never loved than to have loved and lost.”

Step 6: Beat the competition by beating the system—build a real partnership!

A relationship starting point is to establish a real-time respect and understanding for your desk underwriter. He or she is your lifeline and has a very difficult job. Go to the underwriter’s workplace, shake his or her hand and build a rapport. Make a point to be more than a voice on the phone. Gain an understanding of his or her values, background and career motivations. Work at the relationship just as you would with anyone whom you care about. And don’t forget special occasion days. The recognition—any recognition—will pay huge dividends.

Don’t forget also to build a personal bridge of understanding with the regional branch and underwriting managers, recognizing that different precepts apply. Think metrics here; what are his or her business goals and how can you play a role in helping to hoist an annual victory banner?

Conclusion

The best agents in carriers’ eyes are not those who exert the most pressure on desk underwriters, nor those who generate the most submissions, and certainly not the loudest voice at agents’ council meetings. Rather, the best agents are those who focus on the fundamentals of an agent-carrier relationship consistently by guaranteeing quality, mutually compatible underwriting opportunities on a day-to-day basis.

So, take a step back. Review your companies and decide which among them are best suited for a long-term, culturally compatible relationship. Actively court their participation based upon shared accountability and sound fundamentals. Be aware that there will always be business ebbs and flows, market fluctuations, and price-based competition and prepare to commit to riding out these distractions together rather than being separately overwhelmed. Be true to your partner, be true to yourself, and, most importantly, be true to your clients. Believe, as we do, that in constantly striving to do the right thing, in the right way, with the right people, for the right reasons, you will get the right result. That result, is success. *

The authors
Walt Bateman is the CEO of Polestar Performance Programs, Inc. (www.gopolestar.com), a consulting and performance development company for the insurance industry. He is the former CEO of Harleysville Insurance Company. Scott Primiano is the president and founder of Polestar.