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Marketing Matters Marketing to markets How to market your organization and your programs By Nanci Evarts
Niche programs and facilities are a staple of the specialty arena and cover a wide range of possibilities, including traditional MGAs, wholesalers with an “underwriting division,” and retail broker operations with specializations and/or association or affinity ties. Over the years, program business has become both more complex and highly competitive, due mostly to loss of or tighter reins on available capacity, and fewer markets dedicated to—and interested in—specialty programs. Further, carriers have higher demands for solid projections for success and higher expectations for reaching positive volume and profit results. Program administrators needing to replace a carrier on a specific program, or launching a new program, must address these realities. Key to your success and the growth of your business is the preservation of positive relationships with key carrier contacts in the specialty arena, at both the executive and field level. It’s easy to remember to market to your customers—but it is equally important to market your organization to the markets themselves—keeping your firm top of mind and maintaining a positive, high profile. In thinking about “marketing to markets,” there are several steps to success. Identify contacts and targets The first step in any marketing campaign is to identify your primary targets and the contacts you want to influence. Since 2000, more than $8 billion in “program” capacity has left the industry. This isn’t just a dollar issue. It also means that key contacts and relationships you may have developed over the years have scattered across the industry. This may explain the unreturned phone calls, blind alleys, and closed doors you may have run into. New dollars, companies, and contacts have entered the industry since 2000; but compared to the program markets of the past, you’ll most likely find that these and other carriers and reinsurers are far more selective about what they take on and whom they do business with. So, Step 1 is obviously simply doing your homework—reading the trade press to see what kind of business carriers are doing (or not) and who they are doing business with (or not). How does that compare with what you are doing or want to do? Who are the contacts? What other resources can you contact to “take the temperature” of the marketplace? Nothing takes the place of tapping into your network of contacts for this—reinsurance companies and brokers, friendly competitors, MGAs or program administrators specializing in other business. It goes without saying that active participation in key trade associations—AAMGA, NAPSLO, Target Markets, Big “I” or PIA—can help put you in touch with the right contacts and resources as well. Ongoing industry-wide visibility Advertising and promotion to your customers is a no-brainer. Remember to keep the “markets” in mind in your “visibility” efforts as well. Visibility can be maintained through a variety of approaches. Print advertising—Insurance industry trade publications have a significant readership that includes insurance carrier executives, underwriting managers, and individual underwriters. While your specific message might be primarily directed at agents and brokers, make sure your advertisements also position your company as a whole, so that carrier readers get a sense of your overall expertise and capabilities. If you choose to be more proactive in wanting to reach carrier targets, consider developing a specific corporate ad about your company. A corporate advertisement that highlights your overall capabilities, expertise, your people, experience, and specializations helps differentiate you from the other players handling the same or similar products. You will reach carrier contacts with your corporate campaign with placements both in the broad insurance trade publications, as well as in the “vertical” magazines focused on your specific programs, or specializations (e.g., Aviation Week, U.S. Banker, Florida Home Builder, Progressive Farmer, etc.) Web site—Carriers interested in identifying and evaluating new MGA partners, or keeping current with existing ones, may go to your company Web site to do some research. If a carrier executive or underwriting manager were to come to your company Web site, what impression would that person get? Would they get a good feel for all that you do or could do? Would they get a sense of the history, size, scope, and focus of your organization? Does your Web site help make your company look and feel leading edge, successful, and capable of exploiting new opportunities? Many MGA and wholesale Web sites are so focused on product and the transaction that they often don’t list the very contacts that the carrier is looking for. Be sure to make it easy for people to contact you and members of your staff. Maybe you would even benefit from building an “Insurance Carriers: Enter Here” section of your site, devoted to customized messages for your market partners. Newsletters—As part of your ongoing marketing activities, you may be doing newsletters to your agents and brokers as well as your policyholders or prospects. No doubt these newsletters highlight your expertise and professionalism—interesting information about your company, its people, successful account stories, etc. Make certain that company executives and underwriters “get the message,” by including them on your mailing list, be it e-mail or hard copy. Maybe there’s even an opportunity to feature your market contacts in stories and articles, building even stronger ties between you and helping promote them as well. Updates and collateral—One of the reasons that markets partner with MGAs is their ability to “fast-track” program growth and profitability through the MGAs’ established relationships and aggressive marketing. Reinforce a favorable impression with your markets by sending regular updates of your marketing efforts and copies of the brochures, e-mail blasts, Web site copy, and promotions, etc. Professional program submissions The other area of contact with markets obviously comes when you approach them to consider taking over a program or becoming partners in a new program. Whether this is with your incumbent carrier or a new carrier, you will no doubt be asked at some point to create a program submission, either an update of an existing program or a full-blown proposal for something new. While the technical aspects of the program submission are somewhat obvious, the “sales” aspect may not be. You are asking the market carrier to part with capacity, invest significant resources—dollars and people—and even perhaps stake their reputation on the program’s success. Additionally, you may be competing with other programs. Why should the carrier choose you? These considerations are just some of the reasons why the program submission is ultimately a sales document. It should help to persuade the market partner to choose you and your company over the numerous proposals they could be considering. A wise insurance colleague once mentioned what he called the “50-50 due diligence rule.” In choosing an MGA as a program partner, 50% of the decision is based on the integrity of the MGA’s operations and 50% on the specifics of the program. So in creating your program submission, you should strike a balance between these two elements. As such, a good deal of time, effort, and positioning must go into your proposal. Chief among the elements of a winning program submission are: A comprehensive summary of the opportunity. This part requires homework, competitive research, and perhaps some formal market research. Your summary should explain what the insurance “need” is, which targets are proposed, and why they offer both volume and profit potential for both the MGA and the market. Highlight the advantages and challenges to entering the market and sustaining activity. Most important, identify what kind of competitive advantage this partnership—your MGA and this proposed market partner—will possess. What’s the “hook” that will make the program successful over other programs? The technical details behind the proposal. The key to a successful approach here lies in clarity, organization, and brevity so that the market has what it needs but is not overwhelmed with too much detail. This section covers such areas as the history of an existing program, or the plans for a new one, including such items as statistical data and projections, risk selection criteria and underwriting guidelines, management and personnel profiles and roles, outline of classes, coverages, exclusions, details on program administration and systems, etc. Be sure to include risk-sharing proposals to emphasize your skin in the game and reinsurance solutions that might be needed. A detailed marketing plan. Every program needs one! Seems obvious, but I’ve read a number of insurance program proposals where the technical details dominated, and the MGA did not sufficiently describe how they planned to take the program to market and promote it long term. The MGA assumed that the market would know how this would be done and why the MGA was good at it. It is my experience that 80% of the insurance programs that fail do so because of a lack of a focused and sustained marketing and sales effort. The marketing plan should include: • A description of the competitive environment and its effect on pricing, coverage, and marketing. • Details on your distribution strategy and proposed commissions. Will you work through agents/brokers or go direct to the insured? This should include which type of agents and brokers have access to this business, or what type and size insureds you’ll go after. Regional or national? Or will you seek association endorsement? • Examples of specific relation-ships that will enhance your success: niche associations, memberships, endorsements, etc. • An explanation of how custo-mers will be approached and developed. • A plan and budget for an 18-month promotional plan, outlining specific marketing and sales activities you may deploy—sales calls, Web sites, advertising, direct mail, etc. Suggest possible co-op investment from the carrier itself. Be relentless in editing, proofreading, and spell checking. It may pay to invest in some professional writing and editing to “spin” your story in the most professional and interesting way. It’s essential that you stay in touch personally with your market contacts. Convey good news often. Prepare them for possible hiccups. And show them you are ready, willing and able to take on new challenges. * The author |
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