Tag Archives: iiaba

Expanding Into Commercial Lines

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.

Immigration Reform On The Horizon: What It Means For Medical Tourism And Workers' Compensation

Five years ago, members of a risk management discussion group I belong to on Yahoo Groups raised the question of whether or not illegal immigrants (i.e., undocumented immigrants) were entitled to workers’ compensation benefits. The answer most of the respondents gave was yes, but with some restrictions depending upon the state. One respondent in particular even provided the group with documents from the Independent Insurance Agents & Brokers of America, Inc. (IIABA) that gave the pros and cons in the debate on whether undocumented immigrants were entitled to benefits or not.

The purpose of this article is not to rehash the debate points, but to explore what impact impending immigration reform, which has been promised by the Obama administration in the upcoming second term of the president, will have on workers’ compensation and the likelihood that injured newly legal immigrant workers, especially from Mexico and other Latin American countries, will avail themselves of the benefits of medical tourism to their home countries as an option if injured on the job.

According to the IIABA White Paper, which cited a Pew Hispanic Center report published in 2006, there are probably 11 to 12 million undocumented immigrants in the US, depending upon how many have “self-deported” recently due to the current US economic slowdown. Demographically, this represents 5.4 million men, 3.9 million women, and 1.8 million children. In addition, there are 3.1 million children who are US citizens, having been born here (64% of all children of the undocumented) from one or more parent.

President Obama’s Executive Order last year gave many of these children a reprieve from deportation while they are attending college here and until more comprehensive reform can be achieved for all undocumented immigrants. Undocumented immigrants account for almost one-third of all foreign-born residents of the US, and about 80% of these are from Mexico and other Latin American countries.

The report also states that out of the total number of 9.3 million undocumented adults, 7.2 million (77%) are employed and account for around 5% of the US workforce. They comprise a disproportionate percentage in some industries, such as 24% of farm workers, 17% of cleaning workers, 14% of construction workers, and 12% of food preparers.

These industries typically account for much of the claims filed under the US workers’ compensation system. Within a particular industry, undocumented workers comprise a higher percentage of more hazardous occupations. For example, 36% of insulation workers and 29% of all roofing employees are estimated to be undocumented.

In my blog post, The Stars Aligned, I briefly touched upon the issue of immigration reform’s impact on medical tourism for workers’ compensation in regard to Mexican workers in the US. But since President Obama and Florida Senator Marco Rubio have recently outlined different reform plans, which I will discuss here in this post, it is important to mention first how undocumented workers are treated under the various laws each state has established to govern their workers’ compensation systems.

A document I mentioned in that blog post was a chart of the laws governing workers’ compensation and undocumented workers that one of the respondents had forwarded to the discussion group.

Undocumented workers are entitled to workers’ compensation benefits in thirty-eight states; however, six states have statutes that allow or restrict benefits for various reasons such as:

  • if the employment was obtained under false pretenses (Florida);
  • if disability benefits were payable or they were unable to work because of the injury (Georgia);
  • if they were entitled to medical, but not disability benefits because of a commission of a crime under the Immigration Reform and Control Act (IRCA) of 1986 signed by Ronald Reagan (Michigan);
  • if vocational rehabilitation benefits were covered since the worker could get employment outside the US (Nevada);
  • if disability payments were recoverable at US wages rather than those of the home country or if the employer was aware or should have been aware of the undocumented status (New Hampshire); or,
  • if disability benefits were not payable if the worker was unable to work due to his status and not the injury (North Carolina).

Three states — California, Georgia and Nebraska — have statutes that indicate that undocumented workers are not entitled to benefits in certain situations. California case law establishes that undocumented workers could be refused vocational rehabilitation benefits. Georgia case law establishes that disability benefits are not payable if the worker is unable to work due to his status and not his injury. And, Nebraska case law established that a worker named Ortiz could be refused vocational rehabilitation benefits because he could not legally work in the US and did not plan to return to Mexico to work.

Only Wyoming has a statute that expressly includes only “legally employed … aliens.” And case law in 1999 confirmed that undocumented workers were not entitled to benefits. Eleven states — Alaska, Delaware, Indiana, Maine, Missouri, Rhode Island, South Dakota, Vermont, Washington, West Virginia and Wisconsin — were listed in the chart as unknown as to whether or not undocumented immigrants are entitled to benefits.

As we begin the second Obama Administration, immigration reform has risen to the top of the list, only to be preceded by the debt crisis and the fiscal cliff. As I mentioned above, both President Obama and Florida Senator Marco Rubio have outlined their own versions of what immigration reform would look like. Senator Rubio’s plan would rely more on skilled workers such as engineers and seasonal farm workers while tightening border enforcement and immigration law. Senator Rubio’s plan would not provide blanket amnesty to those already here.

On the other hand, President Obama’s plan, as outlined in a recent New York Times article, would seek to give undocumented workers a path to citizenship. Sen. Rubio’s plan would focus more on merit and skill as prerequisites for entry into the US, much like earlier immigration laws passed in the 1920s and other decades. The president’s plan would be broader and more immediate, and would probably have less of an impact on the economic stability of those industries that currently rely on undocumented workers.

Whatever form immigration reform will take, the opportunities to offer medical tourism as an option to injured undocumented workers, once they achieve some legal form of citizenship, will no doubt increase. The likelihood that something will be done this year has already been the topic of many news programs and even has been discussed by congressional leaders such as Harry Reid, the Senate Majority leader.

Once the currently undocumented can legally remain in the US and continue to work in the industries they occupy, it is more likely that they will opt to go to their home country for medical treatment should they get injured on the job. With the benefits of doing so, such as not having language barriers, cultural barriers, and being able to be visited by friends and family living there, they will be more open to receiving treatment at facilities they normally could never get into. And as many of these countries are fast becoming “rising stars” as medical tourism destinations, the more likely they will want to get treated at the best hospitals in their countries, which will have a huge impact on their recovery, their well-being and their standing with friends and family. And the financial burden of not having to look for a job back home and being able to return to the US will convince them to opt for medical tourism as injured workers.