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April 13, 2018

Expanding Into Commercial Lines

Summary:

Independent agents can no longer rely solely on personal lines. Here are three best practices that will help land commercial clients.

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In personal lines insurance, independent agents constantly face increased competition in an already congested market. Many of the competitors have the technology to provide the on-demand service that customers require. In addition to direct writers and others, massive companies like Google and Amazon continue to hint about re-entry into the insurance markets. The bottom line: For independent agents to remain competitive, they can no longer solely rely on selling personal lines.

Commercial lines offer agents another avenue for revenue, and it is a segment in which they can still dominate. According to the IIABA’s 21st Market Share Report, while independent agents wrote just over a third of personal line premiums, they wrote 83% of commercial lines premiums. Most business owners need a trusted adviser. When searching for an insurance agent, they want a knowledgeable resource who can work with them on the different aspects of their personal and business portfolios. If their current agents can’t handle multiple line needs, many will turn to agencies that can handle both lines of insurance.

But, for agencies looking to expand their book in commercial, the same techniques used to target personal lines clients will not work. Personal lines are fairly straightforward. If you build a good relationship with a prospect, have a reputable carrier to place him with and fall within a reasonable price, you have a good chance of winning him as a client–and having him refer you to family, friends and colleagues. For commercial, you have to know the product and the customer very well. You have to understand the specific business details and the risks it faces on a much deeper level. You also can’t rely on building referral to referral. Prospecting requires much more research and initial leg work before you can start cold calling and networking.

See also: Top 5 Themes in Commercial Lines  

For independent agents looking to expand from B2C to B2B, here are three best practices that will help you land commercial clients.

Master some, but don’t dabble in all

In commercial lines, each industry has its own specific risk categories, and the needs of different companies can vary greatly from each other. For example:

  • How many employees does it have?
  • Does it have business disruption issues such as supply chain or weather-related factors?
  • What is the employees’ safety risk and how will this affect workers compensation?

For many agencies, especially those just entering the market, focusing on one or two industries and selling a specific type of product such as BOP or workers’ compensation, can be an effective approach.

This allows you to become an expert in that particular area and build the right set of carriers that specialize in that focus, a key draw for prospects. It also allows you to narrow your focus and get ingrained in that community.

For example, if you wanted to specialize in restaurants, you could join the National Restaurant Association and subscribe to the top three restaurant trade publications. This would allow you to learn the pain points of restaurateurs on a macro and micro level. You could then create a compelling presentation for the prospect’s business owner or CFO on how your agency could benefit her in ways her current provider cannot. Closing that first lead will help you get referred to other restaurant owners, and soon you can build a client portfolio that will make you the go to restaurant insurance agent.

Promote your credibility — with the right technology

Technology is important in commercial lines – but since you’re dealing with clients one-on-one in a customized way, certain technologies are not as critical as they might be for selling personal lines.

But that doesn’t mean successful agents can rely on old-school tactics like pamphlets, mail and fax to attract clients. Companies are looking for agencies that exude expertise and credibility in their fields. Sending an email newsletter to commercial clients can keep them apprised of the latest developments and emerging risks in their industry as well as keep you top of mind. You should have an interactive, comprehensive website that is easy to navigate, details your expertise working in a specific industry and makes it easy for the commercial client to contact you. Other digital materials such as an agency blog and accounts on key social platforms like LinkedIn and Twitter dedicated to your business expertise will also demonstrate your knowledge in your focus area.

The right digital capabilities can also aid you in prospecting. If your website illustrates your expertise in insuring a specific business rather than just commercial insurance, in general, it will attract prospects searching for insurance in their specific industry. For example, a restaurant owner will most likely search for insurance for restaurants, not business insurance. Email marketing newsletters and risk management webinars can also further demonstrate your expertise in working with businesses and provide an opportunity to build relationships with prospects by providing them with insightful information that go beyond sales materials.

See also: Commercial Lines: Best Is Yet to Come  

Let clients dictate the terms and method of communication

All prospect relationships need to be nurtured to keep the lead engaged. You should be ready and able to communicate through whatever channels clients prefer. This may be traditional email or phone calls. But the prospect might need you to present your information to a group of leaders, and you have to be able and willing to travel to wherever that prospect may be. Or, the owner might want to quickly be able to text you a question, and you will have to have some plan in place for handling those requests. Companies might be using more modern video conferencing systems such as Skype or other video platforms. When pursuing a prospect, you should ensure you know the company’s preferred method of communication and make sure you have the capabilities to communicate with them on that platform.

As the insurance market continues to evolve, insurance agents who focus on a single line of business will struggle to keep up with the competition. Independent agents still dominate the commercial lines market, and branching out can provide new sources of revenue. Targeting companies is not the same as individuals – and agents will have to thoroughly understand their focus industry and products. But if they can demonstrate their expertise in a particular field, independent agents can grow highly successful commercial lines books of business.

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About the Author

As vice president of sales at Smart Harbor, Callan Harrington is focused on empowering independent insurance agents to grow their businesses using Smart Harbor’s insurance-specific digital and customer relationship management (CRM) solutions.

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