Strategies for Agents in a Recession

Despite soft market conditions and a downturn in the economy, it’s still a good time to be an agent, says Leonard Brevik, president and CEO of National Association of Professional Insurance Agents. “There are a lot of opportunities (for agents) but they have to have a different game plan and strategy to be able to move forward,” he said.

Brevik suggests four areas agents should focus on. First, agents should be enhancing their sales skills. “They should be brushing up on that at all times, but sometimes when the market is really good, they don’t necessarily have to have the sales skills as sharp as when the market is bad.”

They also need to leverage their technology. “And that’s everything from utilizing your agency management system more efficiently, to utilizing software that can allow you to do different marketing campaigns to be able to reach out and leverage your client base.” Brevik said too many agents just look at increasing their client base, but they need to focus on deepening their client base.

Third, Brevik suggests that agents put a focus on increasing cross-selling. “If CSRs can help cross-sell and see where there are gaps in coverage … that can dramatically increase an agent’s book.”

Lastly, Brevik said when the economy gets bad customers look more at money-saving strategies. While customers can’t save much on their property casualty coverages, especially mandated coverages, customers may economize in other ways such as higher deductibles, dropping optional coverages or looking at financing options.

Dave Evans, senior vice president for the Independent Insurance Agents and Brokers of America, says in a recession agents and brokers need to make sure they focus on being marketing-oriented. Agents need to “realize that in this economy, agents are in a service and marketing role and in a recession it may be tempting to kind of just focus on the service side of the equation,” he said. “But they definitely need to keep their marketing plans and they need to — even though it may be harder, because the pie may be stable or shrinking — but they have to increase their aggressiveness.”

John Lumelleau, president and CEO of Kansas City, Mo.-based Lockton Cos., says an economic recession may create new client opportunities because firms facing recessionary pressures review their operations. Lockton focuses on “attracting new clients impacted by an economic downturn,” he said. “We often help firms solve issues and difficulties.”

Gary Ivey, president and chief operating officer of J. Smith Lanier & Co. in West Point, Ga., says that in a recession, if agencies have a more secure stream of revenue like employee benefits, they will do better than their competitors. J. Smith Lanier operates an employee benefits division that makes up a quarter of the firm’s revenue, Ivey said. “That’s an area that hasn’t trended off; benefit rate increases are being delivered.”

Ivey also suggested that agencies take a look at their competitors for possible acquisitions. “If your competitor is over-leveraged you might make an acquisition of them.”

Additionally, banks may be looking to divest some of their insurance operations, according to Ivey. “You will find banks stepping back and there will be some opportunities.”

Evans also suggests that agents with strong relationships prosper better in a recession. “In a recession businesses and consumers get reflective and introspective because they need advice and have to make tough choices,” he said. They don’t want to make bad or incomplete choices. “So the ability to have someone to turn to as a partner that understands my business and my personal situation is more valuable. … But in a recession, that’s when you really need the help of an advisor to help you make the difficult decisions.” That’s where the agent can be valuable to their clients, he said.

“I think it’s a perfect time to pick up the phone and not sell anything, but say, ‘Hey, look, I understand the economy is not good. We’re scheduled for the next policy review, but I don’t think we should wait until then. So I’ll come over, let’s go to breakfast and talk about your situation. I want to hear about how you’re dealing with the recession.’ … Who is not going to appreciate that?” Evans said.

Topics Agencies