The meaning of life
The Hartford launches an ambitious cross-selling initiative
By Elisabeth Boone, CPCU
Customers want life insurance and investment products ... carriers offer them ... agents have a built-in base of prospects for them. Even the opportunity to boost revenue and retention, however, isn’t enough to lure many property/casualty producers into what they perceive as the complex arena of life insurance and related products.
Many insurers have tried, with varying degrees of success, to encourage their agents to offer these products to existing clients and prospects. Good intentions, however, don’t necessarily translate into positive results, as Greg Boyko of The Hartford Financial Services Group, Inc., readily acknowledges.
Boyko, whose 13-year Hartford career most recently took him to Tokyo to serve as president and chief executive officer of Hartford Life Insurance K.K. in Japan, returned to the home office last October to oversee the launch of a new initiative to help The Hartford’s 10,000 property and casualty agents become an effective distribution channel for the sale of pension products, group benefits, and individual life insurance to business owners.
In his new position, Boyko reports directly to Ramani Ayer, chairman and chief executive officer, who is equally familiar with the pitfalls of cross-selling.
“When I met with Ramani last summer to talk about the new initiative, I saw a beautiful marble box on his desk with The Hartford stag on it,” Boyko recalls. “I finally asked him what the box was for. He said, ‘That’s an urn for the ashes of the people who have tried cross-selling in the past.’ That,” Boyko says with a chuckle, “set me on a journey to find out what those poor souls did to wind up in Ramani’s urn.”
Accompanying Boyko on his journey is Jack Kennedy, who directs the cross-selling initiative. Kennedy has been with The Hartford for four years and had been serving as a securities attorney, focusing on NASD (now FINRA) broker-dealer distribution. He has been working on the cross-selling initiative for over a year.
Boyko brings both depth and breadth of experience to his new assignment. Before taking the helm at the Japan-based life company, he served as executive vice president and director of Hartford Life International, where he was responsible for the expansion of investment products, life insurance, and group benefits into Japan, Brazil, and the United Kingdom.
“In Japan, a big chunk of our business is in the retirement arena, and I learned a lot about distribution, and the needs of agents and what appeals to them,” Boyko says, “and I think that’s helping as I work with Jack to make this a successful cross-selling effort.”
Why do it?
Why is The Hartford launching this new initiative—and why now?
“As one of the largest multi-line companies in the country, we offer just about every financial services product,” Boyko responds. “Up to this point, our company has been more profit center oriented, with great results on both the life and P-C sides. As we look to the future, we need to find growth markets,” he says. “In Japan we experienced explosive growth, going from zero to some $35 billion in assets in seven years. But no tree grows to the sky, so we need to consider other avenues for growth. Ramani has been looking at cross-selling for many years, and we both think the concept has some real legs,” Boyko asserts.
Beyond growth, Boyko points to other benefits his company can achieve by launching a cross-selling initiative. “Growth in and of itself is terrific, but also the life insurance, investment, and benefits business is more persistent,” he comments. “As we know, the more products we can sell to a customer, the longer the business stays on the books.”
Another advantage, Boyko notes, is “more revenue for P-C agents, particularly in a soft market such as we’re experiencing now. We also believe that if we can help our agents cross-sell effectively, it will deepen the relationship they have with their customers.”
Finally, Boyko notes, “Cross-selling maximizes our leverage and our efficiency. It’s obviously cheaper to sell a second product to an existing customer than to go out and acquire a new customer.”
The Hartford’s size and product diversity favor its decision to launch a cross-selling initiative now, Boyko observes. “We have a very good position with small businesses in the U.S.,” he says. “We have a highly successful small commercial operation with between 750,000 and 800,000 customers, and we see some real opportunities to become a thought leader and a powerhouse in this market.”
Missing ingredient
Products, vision, and experience are all powerful factors in a cross-selling effort that takes hold and produces results. The Hartford clearly possessed these attributes, in spades. But was there a missing ingredient that could take the initiative from “we should” and “we can” to “we did it”?
“When Jack and I started looking at how we would approach cross-selling, we realized that, while we had made a number of attempts in this direction, we hadn’t made the structural changes necessary to make it happen, and we hadn’t found a way to make the life and P-C sides work together in their mutual interests,” Boyko says. “We’re very grateful to the people in our property and casualty, investment, group benefits, and life insurance units for letting Jack and me examine their operations and try to build collaborative relationships among them.”
Recognizing the motivational power of money, Boyko and Kennedy chose as a first step to make changes in the compensation system. “We have changed the compensation of our field and home office people to include a significant element of cross-selling,” Boyko says. Money talks, but, as Boyko observes, “Recognition goes a long way.” To put a spotlight on top performers, he and Kennedy have built a recognition program into their cross-selling initiative.
“We also have dedicated resources in each of our life businesses that are focused just on cross-selling through P-C agents,” Boyko says. “We have the support of Ramani and Tom Marra, our president and chief operating officer, as well as the rest of senior management, in a very visible and committed way,” he says. “Ramani doesn’t get 20 words into a speech these days without mentioning cross-selling, and he’s been actively participating with us in the initiative.”
Giving compensation and recognition their due, Boyko comments, “We’re also working on education. We realize that when you go to a successful salesperson and you want them to do something new, their first concern is, ‘Will I mess up my relationship with my customer?’ and ‘Will I make a fool of myself?’ We’re working on ways to train agents in cross-selling and to demystify the process. Jack and I recently conducted a series of meets and greets around the country to get all of The Hartford’s salespeople together, to introduce everyone so they can start networking,” Boyko says. “That’s been very effective.”
Leveraging the model
“Most important,” Boyko continues, “we’re truly leveraging the Sales Assist model that Hartford Life has so effectively built over the years. Our PLANCO wholesale unit has been the backbone of our variable annuity and mutual fund distribution, and we have similar kinds of people in our 401(k) and life operations,” he explains. “We’re trying to connect those professionals so we can go to our P-C people and say, ‘These are people who’ve been distributing investment-linked products for 25 years, and they have the trust of virtually every bank and securities firm in the U.S. You can depend on them.’
“That kind of trust doesn’t happen overnight,” Boyko says, “but I think we have enjoyed a high degree of receptivity and some early success in fostering these relationships. We’ve had very good results with 401(k)s, and we’re seeing a lot of momentum in all the other life-related lines of business. That is not going to move the needle appreciably today in our sales numbers, but we see a lot of potential for growth.”
In cross-selling, as in any major initiative, Boyko points out, “There’s a short term and a long term. One of the things that put some of those poor souls into Ramani’s urn is that they went into cross-selling with lofty goals and a lot of money, and unfortunately many of their plans didn’t work. We’re starting from the ground up. We’re not spending a lot of money, and beyond the changes I mentioned, we’re not going through any major system alterations right now,” Boyko says. “We’re trying to keep it tactical, get points on the board, and really drive sales we know we can drive.”
To illustrate his point, Boyko goes back to the dark days surrounding the terrorist attacks of September 11, 2001. “It hit out of the blue and obviously was a terrible tragedy, but as I recall, by early that afternoon all the senior management of the life and P-C companies got together. We put our collective experience and talents together, and by the end of the day we had a pretty good handle on what the exposures were and what we needed to do to help our policyholders,” Boyko says. “I was never prouder of our company than on that day for cutting right through and getting to the heart of things. That has always colored my thinking: If we want to do it, we can do it, and we don’t have to wait for the Lone Ranger and a $100 million system fix.”
Right now, Boyko continues, “It’s an execution game, and we want to keep the momentum going. If there’s one key, I think it’s assisting our P-C people and getting them to trust the life side, and also to understand that they don’t have to be experts in the life business. Most small businesses have the same needs: they need P-C protection; they need 401(k)s; they need group disability and life, which we’re big players in. For a small, closely held business, there are buy/sell and life insurance needs. Our P-C people just have to identify those needs, and we’ve opened the door so they know whom to call,” Boyko says. “We’re actively promoting this synergy, and we’re feeling pretty good right now.”
The agency view
Offering a more micro perspective on The Hartford’s cross-selling initiative is Jack Kennedy, who directs the day-to-day operation.
“What we’re trying to do,” Kennedy says, “is help our P-C agents grow their revenues by solving more of their business owner-customer problems. We’re in a soft market now, so the receptivity of our agency plant to growing into these new lines is at its peak. We think that the time is right to bring this opportunity to our agents. We want to help our agents who have a strong track record with business owners on the property and casualty side,” he explains.
“We have a suite of life, group benefits, and investment products, plus our Assisted Sales service at the life company that’s geared specifically toward those customers,” Kennedy continues, “so we think we can help our agents meet more of their customers’ needs by offering some of our products and services on the life side. The obvious value to the agency is revenue, but also, as Greg said, improved retention and the opportunity to deepen the customer relationship are a huge part of the value we’re bringing to our agency plant.”
What steps is The Hartford taking to build agent buy-in to its cross-selling objectives?
“The first step, when we talk to our agents, is to show them the value of building their business by offering these other lines,” Kennedy says. “In addition to boosting revenue and retention, another advantage is the diversification of the agent’s income stream; that’s going to help the agency persist and thrive.”
The second step, Kennedy says, is training. “We train our agents in the products and in the Assisted Sales process. We also arm them with the tools they need to make the introductions to their customers about these life, group, and investment products. We also have broker/dealer services. Then our local specialists in each of these products sit down with the agent and put a specific plan in place for their agency. They’ll work with the agent to target the right customers, to educate the agent about the products, and then they follow up,” Kennedy says. “As Greg said, the key here is execution. The uniqueness of what we bring to our agents and their customers is that we combine product and service solutions under The Hartford brand and deliver them with strong home office and field support.”
Not so long ago, the idea of offering life, group benefits, and investment-linked products was anathema to many property and casualty agents. More recently, however, an attitudinal shift, accompanied by growing sophistication about both meeting customer needs and managing for results, has caused many P-C agents to appreciate the value of offering their customers a full suite of products.
“We’re seeing great success with the agents we’re working with,” Kennedy asserts. “We’re taking our first steps toward making this cross-sell effort work for the agent, and we see a bright future.” *
For more information:
The Hartford Financial Services Group, Inc.
Web site: www.thehartford.com