Tag Archives: agency

What COVID and 43 Years Taught Me

When I closed my agency offices at the beginning of the coronavirus pandemic, right away my independent agency team (now working remotely) got an influx of calls, emails and texts from clients about their coverages and concerns related to the lockdown. The team also began to contact customers with group emails through our agency management system as well as one-on-one phone calls, emails and texts.

The first call I got was from the owner of a private day care center in Texas asking what coverage would pay for the center’s loss of income. After quickly reviewing the policy coverages and exclusions, I was able to explain how business interruption coverage would and would not apply in light of a pandemic. I was able to refer my client to the exclusions on the policy forms.

Sounds routine. But it would never have been possible without the education and experience I’ve had over the 43 years of my insurance career. I never sought education specifically to help my agency survive a pandemic, that’s for sure! But I’ve always wanted to educate myself as much as possible on product knowledge, sales, customer service and agency management to be prepared for whatever happens.

This crisis is proof positive of the value of professional education. Knowledge matters. It can only be acquired by experience and education — nothing else. And the lockdown shows, every day, how flexibility is so vital. The business “reflexes” that came out during coronavirus are only possible through “reps” during not-quite-so-hectic times. 

I feel like 43 years in the industry prepared me to thrive during the crisis — and also helped me better position my agency for the future. 

Learn From What Just Happened

This year has shown us that things can change in a hurry. We as insurance professionals are responsible for helping people adapt, respond and recover. 

Even though I had a lot of industry experience going into the pandemic, I soon realized I had to apply what I know in new ways — and keep learning. That’s my biggest takeaway for the future: How can I best blend my experience “B.C.” (before crisis) with what happened “D.C.” (during crisis) so my agency is better off “A.D.” (after disruption)? My safety and comfort depend on getting this right, as do my family, my agency team and my clients.

Help Is a Two-Way Street

My agency is centered in the small town of White House, Tenn., with about 18,000 population. You might expect it’s an ultra-local business with little interest in serving customers outside our geographic area. Not so. 

In fact, once the first rush of pandemic client communications was under our belt, my agency team started fielding queries from the customers of other agencies that weren’t answering their calls. We obliged, but it left me wondering why agency owners would let their customers and their business flounder.

See also: Step 1 to Your After-COVID Future

During the health crisis, some areas have fared poorly while others have had no shortages of supplies, masks and so on. People in one area look to those in another for help.

The same is true for insurance knowledge. Insurance professionals must step up no matter where help is needed. It’s not good enough to hunker down and hope the trouble passes over your agency’s neighborhood. A crisis is a growth opportunity, one where the most knowledgeable, responsive and flexible insurance professionals win the day.

Using Technology to Serve the Customer and Ourselves

Much is said about how technology has changed the industry. I’ve seen my share of changes, some of which were hard.

Technology by itself should not be the driver of change. Leaders’ attention to customer experience and customer value must be the driver. And these kinds of changes are just starting.

As an example, I believe that insurance professionals should be prepared to use whatever communication channel a client or prospect prefers. Our experience throughout the pandemic has confirmed that text messaging is only going to grow in importance for customers. Other communication channels may ebb and flow.

Technology also enables independent agencies to close or reduce office space in favor of remote work over the long term, not just through this crisis. Tools like video calls have been a key part of that transition, but I’m keenly interested of how the entrepreneurial spirit and ingenuity in the insurance industry and technology sector will give us even more impressive tools in one, five or 10 years.

Long-Term Rewards of Sales Training

The pandemic has highlighted the value of sales training for client retention at my firm. I’m gratified that my team’s education — from numerous industry groups, including carriers as well as AIMS Society, an educational organization led by agent volunteers — is carrying us through the pandemic.

Case in point: As the effects of the pandemic hit home with our clients, we realized again that empathy, listening and understanding aren’t just nice words. They’re valuable business skills. AIMS Society courses for the Certified Professional Insurance Agent (CPIA) designation include the topic, “how to deliver the bad news.” That comes to the forefront in response to our clients’ questions, when our team was able to provide deep product knowledge while also delivering bad news in sensitive and helpful ways. 

Think of it this way: If a doctor didn’t keep updating her knowledge, how would she know how to treat a new symptom? It should be the same for us as agency owners: Prepare for the future through education.

Sales education teaches us what type of salesperson we are. It also teaches us how to determine the individual personalities and work styles of our prospects and clients and the best ways to reach them. I can’t remain in my own comfort zone and work only with people like me (“huggy, huggy people,” I call us, “who love to be with people and talk”). My delivery of information should be tailored for the individual client.

Continuing Education, the Underused Resource

There’s a whole realm of valuable education available to the IA channel. But it’s underused. As agency owners, we strive to run better businesses. Everything from human resources to legal to managing people to systems is dynamic. So why aren’t we business owners taking optimum advantage of education? 

Here are the big mountains I need to climb as an agency owner. What are yours?

  • Never miss the chance to use change to create new sales opportunities. Education will be the biggest contributor to my future understanding.
  • Be able to identify threats. Leaders need to understand and evaluate coming threats and assess how others are adapting.
  • Minimize disruption and manage a crisis. There’s nothing that bothers me more than disruption or crisis on the HR side, including employee turnover, so I need better preparation.
  • Manage employees effectively. When my agency switched to remote work, team interactions changed in ways I didn’t expect. For example, I realized that face-to-face video meetings had to allow time for some of the casual conversations and catch-up that happened in the office. I’m curious, again, as to what new and emerging opportunities we’ll be able to find.

See also: COVID-19: The Long Slog Ahead

The Critical Question

Will we as independent agents use all our experience (no matter how difficult) going forward? Will we push ourselves to keep our education current and learn to adapt to our customers’ and prospects’ changing needs? If we do, we’ll find a payoff in future situations.

Or are we going to try to forget that this business crisis brought on by the pandemic happened? Hoping it doesn’t happen again isn’t a strategy. Use all you’ve learned, in the past and in the present.

Embrace Tech Before It Replaces You

The following is an excerpt from a white paper, available in full here

I’m a huge fan of Dan Sullivan’s strategic coach program. Many years ago, he said something that, initially, I didn’t fully appreciate or understand:

“What you currently get paid for, you may do for free, or be totally taken out of. What you currently do for free may be the only way you get paid!”

Although he was referring to the advent of the microchip, his message is just as applicable to the digital disruption occurring today.

Primarily, agencies get paid for the risk-transfer mechanism they provide (e.g., insurance). They transfer the risk from the individual or business to the insurance carrier. Once the insurance is purchased and placed, the service they provide is reactive. In essence, most agencies are pass-through middlemen that respond to the needs of the insured but that otherwise add no real value.

These days, digital technology is rapidly assuming many of the functions and responsibilities for which agents used to be compensated, namely the purchase and placement of coverages, along with reactive service. This makes it easier than ever for customers, especially personal lines and small commercial lines, to buy and service most of their needs via their desktop, laptop or other digital device, with little or no human contact. This trend continues to accelerate at lightning speed.

So what are agencies doing now “for free” that may be their primary source of compensation in the future? I believe the answer lies in so-called value-added services and tools. These mainly involve providing risk advice that outlines ways to control the client’s true cost of risk, improves the client’s risk profile with the marketplace and protects their assets.

The insurance carriers are spending hundreds of millions of dollars on digital platforms. Why? For one thing, today’s consumers are demanding it. Furthermore, it costs the carriers less to do business digitally than personally. There is a staggering cost difference between transactions handled on the phone vs. online.

The use of insurance carrier service centers is also altering the way agencies operate. Originally, I wasn’t a fan. However, the carriers have invested significantly in technology and training, and I now urge agencies to put 25% to 50% of their personal lines and small commercial lines into a service center.

See also: How Technology Drives a ‘New Normal’  

By the way, the bottom 50% of your customers probably generate less than 10% of your commission income. This frees up resources so that you can provide a great customer experience to your best customers. I’m referring to your A and B accounts, the top 20% that generate 80% of your revenue — not the bottom 50%.

I realize this isn’t for everybody, but if you don’t know your 80/20 numbers (discussed in depth in Chapter 4), you can’t even begin to make a valid decision about which accounts to place with a service center.

It’s also crucial to remember that once the account moves to the service center, it’s moved! It’s gone. It’s no longer in your agency. One of my research contacts said that if he were an agency owner he’d transfer as many transactions and expenses as possible to the carriers. And I agree with him. This frees the resources, agents and agencies needed to focus exclusively on risk assessment and transfers, asset protection and risk management planning.

In my discussions with insurance carriers over the years, I’ve found that 54% of incoming phone calls to the service centers are agency personnel calling on behalf of the client. Keep in mind, the client either has been given the service center’s toll-free number to call directly for assistance or the client’s call is automatically routed to the center. And yet many agencies continue to service the accounts they’ve moved to a service center. This makes no sense! Once the account is moved, it’s moved. You need to be focused on the clients you’ve kept in-house.

See also: Secret to Finding Top Technology Talent  

Embracing technology also means getting serious about using all of the capabilities of your agency’s automation system. My content partner in the Better Way Agency program is Angela Adams, CEO of Angela Adams Consulting. She’s unequivocally the best in the industry when it comes to the internal operations of agencies and maximizing their automation systems. I’m constantly questioning her about the use of technology and automation within agencies.

Recently, she shared with me that the average agency uses only about 20% of the capabilities of its internal and carrier-provided technology. That’s about the same percentage of agencies that are active in an automation vendors user’s group. I find that incredible! Learning from others is one of the best and easiest ways to maximize your system. How else — and when — are you going to do it?

If you’re behind the technological curve, your time to catch up is rapidly running out. With the proliferation of ever-evolving technology, more and more of the routine service items and transactions that keep everyone “so busy” are being handled digitally, outside of the agency. Therefore, to stay relevant and not become obsolete, agencies and their teams will need to pivot from handling transactions to providing risk advice and insurance solutions.

5 Abysmal Business Practices by Agencies

We’ve combed through the year’s data of all the reading and liking and sharing that has been done around our articles, and this year a definite theme emerged:

You recognize that the status quo isn’t working any more, and you need to make changes to your business model to remain relevant to your clients.

Part one is about positioning and communication, recognizing that what you say and how you say it matters – a LOT. And here in part two, we’re taking a look at how you’re running your operations.

Business Practices

The consensus is that it’s time for an overhaul because insurance agency business practices are terrible. Continuing with status quo will not keep you even any longer; holding onto status quo is actively moving you backward.

1.) 5 Fears You Must Face: The High Cost of Insurance Agency Fears

Prospecting, referrals, retention, producers and delivering results may not sound like items that should scare you, but clearly they do. And not addressing those business fears in a healthier manner could put you out of business.

Bottom line: We get how truly terrifying these fears are and how difficult it is to bring significant change to your agency. But you have no choice. If you don’t face the fears, if you don’t bring the change, you are on a dead-end path.

See also: 26 Most Important Words in Business  

2. Do Insurance Brokers Really Know Why Their Clients Hire Them?

The short answer is “Generally, no.”

It may seem like an odd question, but if you don’t know why your clients hired you, it’s probably because you don’t have a clear value proposition; therefore, you also likely don’t know what your clients found compelling about you and your company. And it’s pretty hard to deliver effective results against the unknown. “It just feels right” is not a business-building answer that you can replicate to regularly drive new business.

Bottom line: Leaving your fate to the buyer’s gut instinct is inexcusable. It has to be extremely clear as to why anyone should hire you. And the same, tired reasons our industry has been giving for decades won’t cut it.

3. For Insurance Agency Growth, It’s Time to Pick up the Pace

Insurance agencies have never put themselves in position to control their own pace. Your business growth is being slowed because you have attached your business to someone else’s business (the carriers). And, because you can’t stray too far from the source, you can’t move any faster than the pace they set for themselves.

Bottom line: It’s time to start running your business as the stand-alone business you have always needed it to be; it’s time to set your own pace and grow as much and as fast as you desire.

4. Insurance Producer Sales Goals Are a Joke

Traditional producer sales goal-setting is a joke and results in very little confidence – for the producer or the leadership – that it will actually happen because it isn’t based on anything meaningful. The “goal” is likely the same pretend goal from last year, or some percentage variation of it, which was probably originally selected based on a “round number,” such as $100,000.

Bottom line: Successful business years don’t just happen, at least not any more. Nobody is responsible for your success more than you. Set a goal you actually believe in, and it will drastically reduce (likely by half) the number of accounts you need to write.

5. Dude, Do You Know How Bad Your Numbers Suck?!

Do you have any idea of how upside down you are on a majority of your book of business? It’s probably true. Knowing that agencies vary significantly by number of producers, let’s do some analysis on a per-producer basis to find out just how profitable your producers are running their books. This is a great follow-up to the Sales Goals article listed above.

Bottom line: You can’t afford to continue leaving things to chance. Be honest with yourself and evaluate your marketing and sales efforts and then make the tough decisions to make the needed changes – regardless of how difficult it may feel. You HAVE to change the way you’re working.

+1 BONUS: 

Zenefits: Disrupting Lives, Not Just the Insurance Industry

The industry loves a good “stick it to Zenefits” article or two. Perhaps it’s because you feel they’re really off base with their model. Or you don’t like the disruption they’ve brought to your comfy business. Or maybe you just can’t turn away from the drama they have created. Whatever the individual reason, here is the article that topped our posts for the year.

Bottom line: Regardless of how you feel about them, please note that they continue to add new clients. While they may not be popular in the insurance industry, they more than make up for it with a group of employers who are attracted to what they’re offering. Take notes, and make your own adjustments to your own business based on what employers want today, which is different from what they wanted three years ago. Zenefits started based on this idea, and they continue to make adjustment because of it. You should, as well.

Triple Bottom Line From Q41 2016 Posts

Agency owners need to control their business from value proposition and communicating effectively, both internally and externally; to managing the company in a head-on manner and making difficult decisions that allow them to create the culture and company they want and need to have; to managing the flow of assets throughout the organization from revenue coming in the door to allocation of resources internally.

See also: Why Start-Ups Win on Small Business  

Leaving anything up to “the way it’s always been done” or maintaining status quo is putting you and your employees on a dead-end path. Take control of your business and take control of your future.

Can’t get enough of these great insights? Be sure to check out Part I of Top Q4i posts from 2016!

A version of this article originally appeared on Q4i Agency Blog.

Differentiation – Real Advantage or a Lie?

In 1965, as college freshmen in the Deep South, we were oblivious to the cultural revolution that was starting to sweep campuses around the country. We were tradition-bound and institutionally managed by a dress code. Our hair could not touch our shirt collars (shirts with collars were mandatory) or cover our ears. Our shirts had to be tucked in, and a belt was required, as were socks.

We were free to dress anyway we wanted within those restrictions, and we did. Most chose blue shirts with blue socks or yellow shirts with yellow socks, and, for the bold members of our class, there were pink shirts with pink socks. We wore the same uniforms; only the colors differed.

Obviously, these clothes were so “1964 and high school.” So as we grew into sophisticated freshmen with a larger world view we advanced our wardrobe to include Madras (bleeding Madras) in shirts, shorts and some slacks. At last we were different – we were all different – just in the same way.

In less than another 18 months, the craziness that was the West Coast – the hippie movement – arrived on campus. Our dress code was gone as fast as our belts and socks. Our bleeding Madras was replaced by cut-offs and tie-dyed T-shirts. At last, we were free to be individuals – to do our own thing – and we did. All of us did our own thing – just the same thing.

Fast forward 40 years, and I’m in an agency board room listening to an agency’s management team discussing plans for a new website and a new proposal format to showcase the agency’s uniqueness – how it differs from competitors.

My question was simple: What makes you different? Give me five or six real, definable and measurable examples of offerings that you bring to the market that your competitors don’t or can’t.

The discussions were bold (like college freshmen) and the ideas as diverse as our then-new wardrobes, but to me the sameness was obvious. As they bragged – I gagged. What they saw as “bleeding” Madras, a revolutionary new look, I saw as yellow socks and yellow shirts – and I knew that the competitors were wearing the same wardrobe, because I had been in their closets, too.

After several hours and more “styling,” the team agreed on what made them different. I listened politely, then restated their list to be sure that what I heard was what they said. All agreed. Now the challenge was to bring this list to life in a website and presentation.

I could live their delusion no longer. I stated, “I know most of your competitors, and they make these same claims and provide the same offerings. In fact, some of them use the same resources to deliver these same offerings. Where’s the difference?”

I hit a nerve. One of the producers said, with significant frustration, “Yeah, but we really do it.” With equal frustration, I stated confidently, “I can call each of the principals of all of your competitors and ask them if they really do these things, and I promise you they will each say, Yes.”

To prove the point, I created a spreadsheet with the nine major competitors of their agency listed. I then studied the website of each and captured two or three of the most significant “brag points.” Finally, I hid the names and brought the spreadsheet with me to the next meeting. I said, “Tell me which is your agency – it should be easy because you are unique.” After many attempts, they acknowledged that they couldn’t because they weren’t.

Before you discount this article and this challenge as not applying to your shop, I have one suggestion. Try it. Can you find your uniqueness? Would your clients find it? Would they believe it?

How long have you had that nice Madras shirt?

See also: Dare to Be Different: It’s the Only Approach That Works

3 Ways to Boost Agency Productivity

In the not too distant past, consumers went to independent agents for all of their insurance needs – whether simple or complex – because insurance was often an elusive concept to the man on the street. At the same time, insurance coverage was considered something everyone must have, so when insurance-related questions came up, many consumers’ initial instinct was, “I have to talk to my agent.”

Over the past few years, this paradigm has shifted toward consumers being much more willing and able to build an understanding of their needs. This trend is broadly seen across nearly every industry and is accelerating in insurance. While the trusted relationship with an agent is often still crucial, insurance consumers today are researching, purchasing and interacting with the insurance industry in new ways, and increasingly on their own terms. In working with agencies and end consumers around the industry, we think the shifting behavior of consumers can be summarized in two key ways:

  • The Knowledgeable Consumer
    This consumer actively researches insurance online and consults his peer network prior to purchasing policies – either online or in person. How can you quickly and effectively service these consumers before they research other options or take their business elsewhere?
  • The Always-On Consumer
    This consumer wants information anytime, anywhere via any device, be it smartphone, tablet or desktop computer. These consumers don’t want to stop by your office for an auto ID card or certificate of insurance. How can you give them access to their insurance information when and where they want it?

One thing these two types of consumers have in common is the expectation for instant access to information. From an agent’s perspective, providing a mechanism for online service allows for an improved experience by allowing consumers the flexibility to interact with your agency when and how they want. And while there may still be a window of opportunity for this to be considered as a differentiator for the agency, the day is approaching where nearly every consumer will expect and demand it of the agency. Consumers who don’t get this immediate accessibility and flexibility will take their business elsewhere. Further, by pushing common transactions online, agencies can free resources to focus on higher-value service interactions with consumers.

As seen across nearly every industry, advanced technology should be a key element of the agency strategy to meet these business objectives and the evolving expectations of insurance consumers. Agencies and brokerages are able to become more productive with relative ease thanks to enhanced data, mobility, better communication and increased adoption of third-party apps and other tools.

As an agency considers its business strategy, I’ll suggest there are three key considerations when it comes to the role technology solutions can play:

  1. Standardize and Dissect Your Data
  • Standardized Workflows
    To the extent it makes sense for your business, workflow consistency can yield real productivity gains and help capture comprehensive and better customer risk and demographic information your agency can use to better market, account round and engage customers. By leveraging standardized workflows, agency owners are ensuring data entry is consistent across an agency – regardless of location. Additionally, standardized workflows reduce the number of workarounds conducted by staff – increasing productivity at the outset and reducing any potential time spent rectifying workarounds at the back-end. The result will be improved quality and completeness of the underlying data.
  • Business Intelligence
    Over time, agencies and brokerages generate an immense amount of data – yet it can be difficult to access, analyze and understand that data in meaningful ways. Business intelligence (BI) solutions are one way to help turn all of that data into information. For example, principals can identify which producers are using their time most efficiently and driving the most revenue for the business. Principals can also evaluate how effectively their business is cross-selling and quickly identify new market opportunities. While traditional reporting can take hours if not days, BI solutions present your information in immediate and visual ways that drive new insights, enabling you to make more effective decisions to improve productivity and business growth.
  1. Think Easy Access
  • Mobile Technology
    New mobile technology affords producers all of the benefits associated with management system access within an office, without having producers tethered to a desk. This allows them to be more productive and to respond to clients and prospects more quickly and in the manner that current and prospective customers want and expect. For smaller agencies, where employees wear multiple hats within the organization, giving your employees access to tools when they’re away from the office is critical.
  • Online Access
    Consider how your business can leverage the cloud to drive productivity gains. The ability for service staff to work from home via the cloud, when needed, supports work-life balance and allows business to go on regardless of unexpected events. 
  1. Time Is Money
  • Paper No More
    Evaluate ways to become an all-digital agency and eliminate paper. Agencies and brokerages should leverage electronic signature and delivery of client documents, which reduces the time and expense of mailing paper copies.
  • Carrier Information Exchange
    Productivity gains have increased over the years as carriers improved their interface and as agencies better understood how and where to enter data in carrier systems. The vast majority of agencies use personal lines policy detail download to reduce rekeying of data, saving, on average, 81 minutes a day per employee. In addition to download, using real-time for service and rating saves agency employees as much as an hour per day. Policy download yields daily time-savings of nearly an hour and a half per department employee for personal lines and nearly an hour for commercial lines. Take the time to automate communications with your carrier on the front end to save more time over the long term.
  • Online Client Self-Service
    As mentioned, today’s insurance consumer increasingly expects information anytime, anywhere. Agencies need to provide clients the ability to access policy and billing information on their terms, which helps strengthen relationships, ensures high retention rates and drives revenue gains. Self-service capability can increase staff productivity and decrease costs in commercial lines, as well as personal.

Technology will allow you to work faster and, in turn, will redefine the products and services you offer to your clients. While working faster is one thing, using technology to provide mobile access, enhanced communication and streamlined procedures to more quickly serve clients will also drive new business and customer retention.

For additional insights on how to use technology to bolster agency productivity, check out our eBook, “Working Smarter: Finding Agency Productivity Gains.”