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How Law Firms Can Win Panel Positions

Managing partners at many insurance defense law firms across the country are on an elusive quest to get on more insurance panels.

Defense law firms traditionally build client relationships with insurance carriers, self-insured entities and municipalities over many years. In today’s rapidly changing legal climate, however, these relationships are increasingly being replaced with a formalized application process.

Being named as panel counsel is not easy. For starters, it is frequently difficult to determine who is in charge of the hiring process.

This article provides some insight into the panel counsel selection process.

How to Become Panel Counsel for an Insurance Company

At one level, every insurance company panel is different. Listed below are the most common ways that insurance companies are organized to manage the panel process:

  • National overseers may review all panel counsel applications
  • Regional managers may have responsibility for multiple states
  • State-level coordinators may be the point of entry
  • Panels for multi-subsidiary insurance companies may be consolidated in one division
  • Purchasing departments increasingly are screening interested vendors
  • Online applications are also becoming popular

In some insurance companies, there may be multiple points of entry that could be used to gain consideration for a panel. Many carriers, for example, maintain multiple panels. Examples might include a separate employment practices (EPLI) panel or a construction defect panel. There may be an independent panel manager for each of these claims areas who has some independent hiring capabilities. While a variety of panels adds opportunities to counsel selection, it also adds to the complexity of the business development effort.

There are also many similarities in the panel application process:

  • Personal referrals are the best way to gain panel consideration
  • Periodic panel reviews (every one to two years) may be used
  • Even if a law firm gets on a panel, it may take time to establish a consistent stream of new cases

Finding the Panel Manager

There are several ways to identify the best point of contact within an insurance company, including:

  • Ask around within your network
  • Attend industry conferences
  • Conduct Internet research
  • Review insurance company websites
  • Make telephone calls to the carrier

Insurance company websites typically do not specifically identify an individual as the actual panel manager, but they might point an interested party in the right direction.

Claims adjusters used to play a significant role in panel counsel selection, but this is becoming less common. A law firm in search of new insurance defense panel positions may, however, find it worthwhile to explore professional meetings of insurance adjusters in its geographic area, particularly if there is an active claims association. A recommendation from a local adjuster can certainly help to reinforce a panel application.

Starting the panel research process from a blank piece of paper can be an extremely time-consuming and frustrating process. Trying to balance this research with the demands of a very busy law practice is particularly challenging.

Background on the Insurance Market

There are 2,700 property and casualty (P&C) insurance companies in the U.S., according to the U.S. Federal Insurance Office and A.M. Best. Insurers are regulated at the state rather than the federal level, meaning that each state maintains a department of insurance with information on the insurance carriers admitted to do business in that state. Insurers with primary corporate headquarters located in a given state are called domestic insurers.

Law firms starting a search for panel positions may find data posted on the website of their state’s insurance commissioner to be useful. Annual market share reports are frequently available, which identify the top 25 carriers in the state by service line, such as auto, commercial general liability, medical liability, etc.

Additionally, the department of insurance within each state typically provides an online list of all carriers admitted to sell insurance in that state. While this may appear to be helpful at first glance, the researcher who downloads a list of admitted carriers is frequently faced with hundreds of different insurance company names to sift through. Upon closer inspection, it becomes clear that many of the carriers admitted within a state are actually subsidiaries of larger insurance companies.

Business Development Is a Numbers Game

As discussed earlier, a personal introduction to the panel manager is generally the most productive approach. In today’s world of carrier consolidation and litigation centralization, however, it can be difficult to stay abreast of panel managers.

The law firm is faced with the challenge of first identifying the panel manager and collecting accurate contact information. Next, the firm’s managing partner or lead rainmaker needs to reach out to the manager and make an introduction to the firm. An in-person meeting is ideal, but difficult to achieve initially. Generally, an introductory letter or email can be used to try and arrange a phone call to start the business development process.

Here are some of the responses a law firm is likely to get from panel managers during this early outreach effort:

  • Request for more information about rates and services
  • Agreement to set up an in-person meeting (which is likely to involve travel)
  • Notification of the panel review cycle, with a promise of notification prior to the next cycle
  • Indication that the panel is full, with a promise to contact the firm in the event of a conflict
  • Silence (meaning no response)

While many law firms optimistically hope to be engaged by one out of every two or three carriers they contact, the more common reality is that business development can be a long and arduous process.

A law firm is best served by constantly screening dozens of insurance carriers, self-insureds and other prospective clients for business development opportunities. Firms that are expanding geographically or into new product lines may also be creating panel opportunities. Insurance companies that are consolidating because of mergers or the growth of in-house counsel should be avoided.

Never Stop Marketing

The best time to start looking for new clients is while the law firm is operating from a position of strength. Business development can have a long timeline, and it is impossible to predict when a prospect’s needs for legal services may develop. Delaying the start of a campaign until the law firm is desperate for new business is not advisable, because the firm may then be forced to accept a lower-quality client at less than ideal rates.

After making an initial introduction to a carrier, the challenge is to keep the conversation going. Reaching out to the panel manager in a substantive way every four to six months can be an effective way to build a positive impression for the law firm. Meaningful ways to stay in touch can include the following:

  • Send an article written by the law firm.
  • Keep carriers informed of favorable case outcomes
  • Offer to teach an in-house CLE
  • Submit an analysis of pending legislation or emerging market trends
  • Maintain an active social media profile, especially on LinkedIn

Dropping the ball on prospect communications, while understandable, can be deadly to a business development effort. Rejection is a common first response, but the successful rainmaker will be best served by considering a negative initial response from a panel manager to simply mean “not now.” An exception is the carrier that says something like, “We have used ABC law firm exclusively for the past 10 years and have no reason to change” or “Our case volume is so low that we handle most matters internally.”

The administrative assistant to the panel manager can also be your friend. Treat all members of the panel management team respectfully to build a positive impression of the law firm.

Industry conferences can be an ideal forum for meeting panel managers. Of course, many law firms are thinking the same thing, so it can be helpful to make advance appointments. The Claims & Litigation Management Alliance (CLM) and DRI are two leading organizations that bring claims executives together with insurance defense lawyers.

Specialized organizations targeting selected industries can also be helpful. Examples include the Trucking Industry Defense Association (TIDA) and the National Retail and Restaurant Association (NRRDA).

Maintain Attractive Marketing Materials

The business development cycle will generate the best results when backed by attractive and informative marketing materials.

The law firm’s website is an important foundation for any marketing effort, because the attorney bio pages are frequently the starting point in a prospect’s effort to become better acquainted with a candidate.

A “beauty contest” can be an apt descriptor for the competitive process of vying for coveted panel positions. While the primary goal is to have a law firm stand out from the competition in substantive ways, the techniques outlined below can significantly enhance an RFP or business presentation.

  • Graphic design. Extend the law firm’s brand by using the logo, color scheme and photo styles from the website.
  • Attorney photos. Four-color head shots start the get-acquainted process and help the prospect to envision a lawyer in a court representation.
  • Credential icons. Martindale, A.M. Best and the CLM logos all have high recognition value within the insurance industry.

When including a list of clients or references, client confidentiality guidelines suggest that the law firm first obtain written informed consent from each client.

In Summary

Marketing is a process and not an event. Managing partners of insurance defense law firms are advised to get started on a serious business development effort, perhaps backed to an active law firm marketing committee. Staying actively committed to an expansion effort, while challenging, will yield the best results in the long run.

The Revenue Threat to Defense Lawyers

Thousands of insurance defense law firms across the country have built a steady business over the years by defending the claims of insurance carriers and self-insured clients.

The traditional business model for defense lawyers is undergoing significant change, however, as the personal client relationships that served as the foundation for many law firms are giving way to highly sophisticated litigation management programs maintained by carriers.

This article will explore the risks faced by insurance defense law firms in today’s competitive market, as well as risk management actions that can be taken to protect the law firm’s revenue base.

By way of background, it is important to understand that insurance defense law firms must typically be approved in advance by the litigation manager of an insurance carrier before they are assigned any cases. Getting on a “panel” of approved outside counsel can be a difficult process for two primary reasons. First, the market for panel positions is intensely competitive. Secondly, it is not easy for a law firm to determine who is in charge of a panel to get the initial introduction.

Panels of interest to a law firm will vary with the firm’s areas of expertise. Many law firms concentrate their practice in certain types of cases, like the defense of auto injury, inland marine, premises liability, product liability or professional liability. Other firms take more of a full-service approach by handling cases across a wide range of practice areas.

On the carrier side, multiple panels might be managed by a single gatekeeper or could each have a separate panel manager. The litigation management chain of command within an insurance carrier or self-insured varies from firm to firm, adding complexity to the law firm’s business development process.

While rates paid in the insurance defense market can be significantly less than a law firm’s “retail” rates, the attraction is in the high case volume that can result once a law firm gets named to an insurance panel as approved defense counsel.

Insurance defense law firms that have been approved as panel counsel for multiple insurance companies can inadvertently find that their revenue base is threatened by a shrinking number of insurance accounts over time. In the section that follows, we will address the primary revenue risks facing insurance defense law firms.

The Imperative of Client Diversification

Insurance is about risk management, specifically the process of identifying, assessing and quantifying risk. Attorneys practicing in the area of insurance defense may find it beneficial to apply some risk assessment principles to the business development efforts within their own law firms.

There are three primary practice management mistakes that managing partners make, as outlined below. The solution is to establish a business development process that seeks to reduce the risk associated with unexpected account loss.

Risk #1: Too Many Eggs in One Basket

A leading risk facing insurance defense law firms is that a small number of clients can represent a large portion of the firm’s revenue base. In fact, many law firms (large and small) rely on three to five primary insurance clients to generate the majority of their revenue stream. While reliance on a handful of clients is a common situation early in any law firm’s lifecycle, the lack of client diversity puts the long-term viability of a firm in great danger.

There is no hard and fast rule regarding the number of clients needed for the long-term success of a law firm. Rather, the managing partner should start to worry when the loss of any single client would put the firm at a serious financial disadvantage. For many firms, this might be when one client starts to approach 15% to 20% of total revenue.

While the loss of any client is not desirable, an account that represents only 5% of total revenue presumably can be offset relatively easily by the inflow of other small accounts.

A long-term negotiated agreement with one primary client can look appealing initially but suddenly turns into a major risk factor when the viability of the account comes into question.

Risk #2: Failure to Recognize Changing Dynamics Within the Insurance Market

The times they are a-changin, as Bob Dylan warned in his well-known ballad. Listed below are several real-world examples where insurance defense managing partners either lost or risked losing a major insurance account.

The Industry Consolidation Scenario

“We were the lead insurance defense law firm in our state for a respected insurance company,” a managing partner for a Midwest law firm recalls. “Suddenly, without any advance notice, our insurance client was acquired by a larger insurance company. Not only did we lose the work, but many of the claims managers at our insurance client lost their jobs in the post-merger consolidation.”

The “Out for Bid” Scenario

“After its founding, our law firm grew extremely rapidly in response to the needs of our primary client,” a founding member of a Southeastern law firm reports. “We opened new offices and added attorneys simply to keep up with the client’s case load. The quality and pricing for our legal services was widely acclaimed, but a new vice president of claims brought in by the insurance carrier after a reorganization decided that he wanted to put our work out for bid. We eventually retained our work, fortunately, but it was a hard-fought RFP process.”

The Attrition Scenario

“Our insurance defense practice has a 20-year history of success,” explains the managing partner of a six-attorney firm who spends his work day as one of the lead litigators. “Over the years, however, I did not have the time to develop new business while also serving the needs of current clients. We found ourselves overly reliant on one client, and without the benefit of an established business development process.”

The “No One Told Me” Scenario

“I suddenly noticed that we were not receiving the same level of incoming cases,” reports a practice group chair with a long history of providing specialized legal services to one of the country’s leading banks. “In researching the problem, not even our internal contacts could tell us who was now responsible for panel appointment decisions. It took many days to identify the bank’s panel manager and realize that they had decided to favor regional law firms over single-location firms like ours. We ultimately got back on the panel, but it was a very nerve-wracking process.”

Insurance defense law firms also face more routine risks, including:

  • Departure of a partner who leaves with her book of business
  • Retirement of a founding member who served as the primary rainmaker
  • Insurance clients that decide to hire more in-house attorneys
  • Centralization of the insurer’s litigation management team

Risk #3: Lack of Time to Expand the Book of Business

Once approved as outside panel counsel, law firms frequently enjoy a steady stream of cases that arrive at their doorstep with little additional business development effort.

Of course, panel members must perform satisfactorily, maintain good relations, be available around-the-clock for the infrequent (one hopes) emergency and offer billing rates that are attractive to the insurance company.

The challenge is that existing clients, particularly large accounts, can easily consume all available capacity within a law firm, leaving little time for courting new clients.

It is indeed a juggling act to manage the day-to-day requirements of meeting court deadlines and responding to client requests, while also trying to devote time to business development.

Looking at the risks, however, it may be easier to make time for marketing after considering what would happen if you lost one of your largest clients. The loss of a major account could result in lay-offs, as well as possible difficulty making lease and other overhead payments. In an extreme case, a law firm may need to quickly affiliate with another firm, thereby losing its independent status.

Minimize Revenue Risk With a Law Firm Marketing Committee

Insurance defense law firms or practice groups that plan for long-term success may find it helpful to create a marketing committee responsible for establishing panel counsel relationships among a broader range of insurance companies and other entities.

Marketing committee members can address issues like:

  • Where to expand geographically. This can be a difficult question, because it may involve an acquisition or opening an office.
  • Development of new insurance defense skill sets. A firm that handles auto cases may want to expand into related forms of transportation, like trucking, railroads or aviation.
  • Exploration of adjacent market segments. Staying with auto for the moment, law firms could try to create business opportunities with fleet managers or delivery services.
  • Growth in the self-insured market. Many large retail, municipal or corporate accounts self-insure up to a certain level (known as “self-insured retentions”).

The time to start looking for more clients is now! Attracting a new account takes time, so it is advisable to work on business expansion while the firm has a satisfactory level of business already in place.

In Summary

The best defense is a good offense. Paying close attention to existing clients, while maintaining an active business development process, is an effective way to minimize revenue risk in the insurance defense sector.

Start early. Marketing for insurance defense success is a long-term process that benefits from a continuous focus on business development campaigns.

Six Things to Look for in a Workers’ Comp Counsel

When I started defending workers’ comp claims 25 years ago, I learned very quickly what carriers and employers wanted from me—because adjusters would tell me every day about what they DIDN’T like about other defense attorneys. Seeing an opportunity, I made sure I did the OPPOSITE of the complaints.

To paraphrase Rod Serling, I am submitting for your approval six things I learned during those formative years that I believe insurance carriers and self-insured employers are looking for in defense counsel.

Independent thought

Workers’ compensation defense attorneys often simply inform clients that the going rate for a standard-type of injury is this or that. While the client certainly needs to know the going rate, that cannot be where the analysis ends. When I represented TWA years ago, the claims manager told me: “Brad, I can hire trained monkeys to tell me to pay the going rate for standard types of injuries. I pay you to do better than that.”

I define independent thought to be analysis on not only whether a claim is compensable but also on strategies to resolve the claim more favorably than simply paying the going rate. This means laying out a game plan that includes all necessary steps. It doesn't always work, but I know clients appreciate this analysis on the front end of a claim.

Zealous advocacy

When the vast majority of claims are compensable, defense attorneys (like insurance adjusters) can easily develop the “process and pay” mentality. I define this as simply looking at what it will cost to pay the claim and taking the fastest steps necessary to close the file and move on.

Even on compensable claims, I have found that clients are always happy to also receive (and even expect) a game plan for asserting possible defenses. To promote its $1 Dollar Menu a few years ago, McDonald's had a billboard that said: “$1 Legal Advice — Plead Guilty.” When I hear of a defense attorney simply saying: “Claim is compensable, pay this amount,” I always think this is the workers’ comp equivalent of “Plead Guilty.” Even if the employer should pay, the client wants zealous advocacy from the defense attorney on how to best reach the goal.

Regular, substantive communication

This may be the most important piece. It can be broken down into two parts – – regular communication and substantive communication.

I've had a plethora of adjusters over the years tell me war stories about their prior counsel, who would never….ever…do anything on claims. One adjuster told me: “All I ever heard from that attorney was the sound of crickets.” The defense attorney who does this not only violates the ethical duty to keep his or her client properly informed, but is also an attorney who is dealing with a future ex-client.

Employers and carriers also want substantive updates that demonstrate how the attorney is best representing the employer. Communications, whether by letters or through now-common emails, should always encapsulate where the parties are on a claim and where the defense attorney intends to take it. Letters or emails from the defense attorney that say nothing more than “Look at all of the creative ways I have billed your file this month” is NOT what employers and carriers want.

Understanding what constitutes a win

One common complaint about workers’ comp defense is, “The employer almost always loses.” That raises the question: Just what is a win, and what is a loss?

I try to resist watching legal shows on television because, even when such shows are deliciously complex, the outcome of almost every legal proceeding is either guilty or innocent. If a civil court is involved, almost every verdict is for millions of dollars or nothing even though, in reality, almost everything is resolved within the nebulous middle ground. I guess that’s why it’s called fiction.

In workers’ compensation claims, the vast majority are going to be found compensable by the state division of workers' compensation. But, to borrow some analysis from Monopoly, we’re not faced with a choice between Baltic Avenue or Boardwalk with hotels. Rather, we are more often than not fighting over whether we can buy Pacific Avenue for the price of St. Charles Place.

Because the vast majority of claims are settled, I often wonder if the client views the settlement as a win or a loss. Over the years, I have seen carriers and employers examine the relative value of a settlement by looking through the lens of the following criteria:

  • Is the settlement fair in light of the evidence available and the applicable jurisdiction?  (e.g., Illinois claims settle for far more than Missouri claims even if the injuries are identical.)
  • Was the claim resolved within the established reserves?
  • Were the defenses that were raised truly sufficient to obtain a non-compensable award or were they only good enough to use for settlement negotiations?

Creative attempts at problem-solving

All carriers and employers know that most claims are compensable. Rarely have I had clients who expected an award of “not compensable” on every claim or even on most claims.

But most clients expect the defense attorney to at least examine all potential defenses to evaluate how the assertion of such defenses might affect the value of the claim. 

Despite the lofty views that most attorneys have of our profession, most of our jobs can often be distilled down to this concept: We help our clients avoid obstacles. While this is self-evident in criminal law (obstacle — the state wants to put client in prison), such analysis is rarely applied to workers’ comp. 

For example, if a claimant states, “My injury occurred on the job,” this may or may not actually be the case. My job as a defense attorney is to identify factual, medical and legal evidence that might persuade the judge that the “work-related” component of the employee’s injury is not as clear-cut as the employee may believe.

I had one case years ago where the employee claimed he was injured on the job. In his deposition, he admitted that he liked to ride the bull in rodeos. It occurred to me that there must be some association that keeps track of who rides in professional rodeos, and I contacted the Missouri Rodeo Association. I was “shocked” (insert mock assertion of surprise here) that the claimant’s medical care ALWAYS seemed to occur exactly one day after he competed in professional rodeos. After I provided this information to opposing counsel, the claim was quickly dismissed.

My point — the employee’s assertion that he was hurt on the job would normally be sufficient to prove compensability in the absence of other evidence, but my job was to find that other evidence. Carriers and employers want their counsel to explore all possible defenses, even if the probability of success is low, because occasionally (like in my rodeo case) the defenses actually work.

Sticking to your guns

If you ask an adjuster about her greatest pet peeve when it comes to dealing with defense attorneys, one example is most often cited: “I hate it when my defense attorney tells me at the beginning of the case that the claim is only worth $500, and then, on the day of trial, he tries to convince me to pay $20,000 to settle it.”

Years ago, I had a client who pulled files from another attorney and sent them to me. As I reviewed them, I saw a theme. The attorney would often say: “This claim is a fraud, and I wouldn't pay anything more than $500 to settle.” But I didn’t see ANY evidence of fraud in many of the files. I was in the unenviable position of having to tell the client that I thought these claims were not fraudulent, and I provided exposure estimates that were far higher than $500.

I was concerned that the client would say: “Gee, Brad, I liked the advice from the prior guy a lot better.” However, this did not happen. Instead, I heard this: “I thought the prior attorney was simply telling me what I wanted to hear. That's why I pulled the files and sent them to you.”

The lesson I learned here: Clients want the attorney’s honest assessment of the claim, and they don't want the defense attorney to simply tell them what the attorney thinks the client wants to hear. If the client can't rely on my analysis, then I'm not doing my job correctly. If the case is worth $20,000, I must tell this to the client as soon as it becomes possible to arrive at such a valuation. If I wait until the day of trial to disclose the true value of the claim, the client will think that I am simply afraid to take the case to trial.

Conclusion              

One could easily distill all these comments into a single concept: There must be a good working relationship between the defense attorney and the carrier/employer, one that is based on shared values, frequent communication and deliberative communication (meaning the attorney and the client jointly develop the goal for a particular claim and then both take the steps necessary to reach that goal). If reality matches this ideal, the defense attorney and the carrier/employer will probably be working together for a long time.

A Brave New World: Move Away From the Commodity Trap

A controversial McKinsey Report, “Agents of the Future: the Evolution of Property and Casualty Insurance Distribution,” compares the impact of the Internet on travel agents to the proliferation of online insurance websites and considers whether the local agent will disappear if he continues to do business as usual. The report says: “Local agents are not in danger of extinction, but the role they play will continue to evolve. Those who can adapt to a new set of circumstances will thrive.”

The report talks about the dangers of online commoditization to our industry. From the thousands of agents and brokers I’ve coached, I know that the enemy is not technology; it is the dominance of the insurance bid … a commodity force that must be removed as the focus of the customer experience. It must be replaced by the risk-management process — a consultative and diagnostic approach founded on risk evaluation and mitigation … strategies to protect a family and business properly with the goal of reducing claim frequency and severity.

What does this mean for the insurance industry in 2014?

Insurance producers are tired and frustrated with competing in the “commodity trap” — the 90-day insurance bidding process. They are beginning to lose confidence in themselves because they are playing a game in which they have little impact on the outcome.

Commoditization is a battle that insurance agents, brokers and carriers confront each day. It occurs when the consumer perceives little or no distinguishable difference between products, services and resources — and when price has become the primary differentiator.

Picture commoditization as a disease that is eating away at insurance producers’ knowledge, wisdom and professionalism. It is so cruel and debilitating that it is stripping away the value proposition of even the most seasoned producer by reducing professional purpose to a number.

Time for a Q&A

To determine if your agency is affected by commoditization, ask yourself these questions:

  1. Are you losing your passion and purpose for the insurance business?
  2. Are you able to change the consumer’s perception of you?
  3. Are you angry and frustrated with the 90-day bidding process?
  4. When you introduce yourself as an insurance agent at a social event, do people treat you with dignity and respect? Are you perceived as a professional, trusted adviser, like a CPA, attorney or physician, or do consumers perceive you as an order taker?
  5. Is the insurance transaction, the 90-day bid, getting in the way of your ability to learn the customer’s business and its issues?

Solutions to combat commoditization

You may ask, “How can I stop being caught in this vicious game?” First, I remind you that you sell an intangible product. The less tangible, the more powerfully and persistently the judgment about the product can be shaped by packaging. You must position the package in a way to enable the consumer to change his or her perception about it.

Second, I ask you to consider three questions:

  1. To what degree does the small- and middle-market consumer have the time and ability to identify exposures? (0, low, to 5, high)
  2. To what degree does the typical insurance agent or broker assist his or her client with exposure identification? (0, low, to 5, high)
  3. To what degree does the small- and middle-market consumer enjoy the traditional insurance bidding process? (0, low, to 5, high)

Unless you’ve scored a 15 overall, your score gives evidence that you must stand out in a crowded marketplace!

Third, you must have a means to differentiate yourself by applying a consultative process focused on the identification, measurement and mitigation of risk. My personal formula is I3 (i.e., issues, implications and interventions).

When agents or brokers apply the I3 system, they improve their professional image, income and work-life balance. They discover a renewed purpose and passion for the business.

Fourth, if you are commodity-driven and chasing the 90-day insurance bid, you are headed toward extinction. Every day, consumers come face-to-face with transactional websites or agents. The surviving insurance agents or brokers of the future will transform themselves into indispensable, remarkable, trusted risk strategists.

The industry’s evolution?

Another industry study, conducted by Forbes for Zurich in 2013, supports the importance of a consultative process. In the study, 414 U.S. executives were interviewed. The study found that the majority of executives admitted that they were worried that they lacked knowledge of how to best mitigate risk; understand the sources of risk; and develop a sufficient risk-management budget. These are the same responses I’ve heard from small- and middle-market clients for years. The only difference is that most Fortune 500 organizations have fulltime risk managers, and middle-market consumers do not.

You can fill this void and serve your clients in a new, more consultative and diagnostic way.

When you serve as a risk strategist for your clients, you offer solutions that they cannot obtain if they purchase coverage online. As a risk strategist, you advocate for your client with the goal of designing and developing enterprise risk-management strategies. In other words, you find out what keeps your clients awake at night and take these worries away.

Secrets to success

Below are seven secrets to you help you implement future success in your agency.

  1. Value proposition. Summarize the reasons why a potential customer should buy your particular product or service, how it exceeds that of the competition and why it is worthy of the price she pays. Your value proposition of the future should be concise and appeal to the client’s strongest decision-making drivers. It must be an irresistible offer, an invitation that is so compelling and attractive that a customer would be out of her mind to refuse.
  2. Confidence. Wherever you are in your career, display the knowledge, skill and attitude to serve as a risk strategist for your clients.
  3. Criteria filter. Screen out price shoppers. Determine quickly if your prospective client meets or falls below your standards. Rather than taking a random approach to prospect research and qualification, make your approach disciplined and strategic. You know what is at risk!
  4. Unique process based on I3 — issues, implications and interventions. Focus on deeply engaging the client. Develop emotional connections with your clients that transcend price and product.
  5. Relational capital. Build long-lasting relationships. Understand that relationships rarely are pursued and captured. Rather, relationships are rooted in rich soil, consisting of a blend of mutual trust, respect and shared values. These relationships produce bonds and connections that enhance both parties’ opportunity to succeed.
  6. Servant leadership. Connect with others and find ways to make them more successful. Make your approach about generosity, not greed. Always show credibility, integrity and authenticity. The degree by which you practice relational capital and servant leadership will be evidenced by higher hit ratios, retention, referrals and cross-sell opportunities.
  7. Purpose and passion. Rediscover your purpose and passion for our industry. Love what you do, and touch your clients’ hearts.

When you begin to serve clients as a trusted risk strategist, you will climb out of the commodity trap. Using the I3 process is your best, most powerful tool to escape commoditization and thrive.

This article first appeared in Professional Insurance Agents Magazine.

3 Reasons Why Millennials Should Embrace a Career in Insurance – And Why Insurance Needs Them

The insurance industry faces an urgent need to attract a new generation with new talent. According to the U.S. Bureau of Labor Statistics and AARP, within 15 years as much as 50 percent of the current insurance workforce will retire. In addition, the industry is changing so fast that it can no longer rely on traditions and standard practices; insurance requires new ideas and new skills.

While all industries eventually face a time when there is a passing of the baton from one generation to the next, insurance is taking a hit now because we have an older than average workforce. So, we must engage with so-called Millennials to show that insurance is, in fact, an innovative and rewarding industry to work in.

In the early 1990s, when the California dairy industry faced a similar dilemma, it came up with the “Got Milk?” campaign. The campaign resonated with an important demographic, kids aged 12-18, who were being drawn away from milk by massive brand campaigns from providers of other beverages. The campaign was wildly successful, reinvigorating milk sales after three decades of declines.

The insurance industry needs the equivalent of a “Got Milk?” branding campaign. It needs to contain three key messages:

1. Insurance is an increasingly savvy industry.

Insurance carriers have had to adapt and evolve for centuries. Today, insurers are incorporating cutting-edge technology, including big data and predictive analytics. Tech is becoming a mainstay in the industry.

Companies such as Vodafone and Burberry have shown how data can transform marketing, and insurers will follow their example. As a whole, the industry will become much more innovative.

So, the industry should be enticing not just to young talent who are inherently tech-savvy and creative but also to those students who have a history in STEM (science, technology, engineering and mathematics).

2. Insurance is a sustainable industry.

In an unstable and uncertain economy, insurance has longevity on its side. As long as people continue to drive cars, buy homes and, simply, work, there will always be a need for auto and homeowners insurance and workers’ compensation. Insurance offers job security for Millennials who may be nervous about the fluctuating job market.

The insurance industry also provides a unique opportunity for young people to establish a solid foundation for a career with room to grow. Whether someone wishes to be an underwriter, an agent, or an actuary, there is a little something for everyone. Millennials tend toward “job hopping,” and insurance can provide young people with enough internal mobility to maintain their interest while keeping them within the industry.

3. Insurance is a service industry.

The insurance industry serves an important common good by allowing all of us to share risk for a small fee (premium) so that an accident or a storm does not ruin people financially. Without insurance, most people wouldn’t be in the financial position to start a business, own a home or even have a car. The core purpose of insurance meshes well with the interests of Millennials, 63% of whom volunteered for a nonprofit in 2011, according to the Millennial Impact Report. People who have a passion for helping others might welcome being a customer service representative and being the first point of contact at an insurer or might enjoy being an underwriter and ensuring that insurance policies are accurately written to provide a customer with the best protection.

Moreover, as young people’s talents and passions are brought into the industry, insurance carriers can expect to become better at what they do. In other words, the expertise stemming from new generations will allow for more accurate and, most importantly, more responsible insurance practices when handling scenarios such as relief from natural disasters.

The insurance industry truly makes a difference in people’s lives, often during difficult times. Young people can transfer their compassion into a career that delivers tangible results not only for themselves but for other people, too.

How will we attract and lead the new generation?

Where do we go from here? How do insurance companies draw talent when the competition is so fierce?

The first step is to use the tools we have – each other. The insurance industry can unite to overcome this talent crisis and collectively focus on appealing to the Millennial generation. An example of collaboration is Tomorrow’s Talent Challenge – an initiative involving industry leaders to motivate college students to explore the career potential in insurance analytics and technology.

We must also recognize that Millennials are looking for leadership they can relate to. Insurers need to hire people with titles such as chief decision scientist and chief data officer to head new departments of digitally savvy experts, if insurers are to draw young, tech-savvy talent. Creating and filling these roles will not be easy. According to McKinsey, by 2018, global demand for technical and managerial talent will exceed supply by 50 to 60 percent. We need to start working on the problem now.

If we as an industry can attract the right senior-level talent, can effectively communicate the professional and personal benefits we can offer to young people, and can articulate the creative contributions they offer us, then we will be on the right track for everyone to be asking the important question:

Got Insurance?