Are You an Insurance Professional’

Does your firm sell insurance or is it a firm that provides professional insurance services? That is not a trick question, it is a mater of focus and approach.

Sure, we all say that we are professionals in what we do because we have the knowledge and experience. Yes, the clients get great advice when they buy insurance. Boiled down to the core, selling insurance is comprised of building relationships and closing the sale. However, an “insurance professional” can be so much more, before and after the sale.

First, helping a client while they buy insurance is just fine. There is a wide range of service that clients require. Many clients either generally know what they want or they do not feel they need an “insurance professional” for one reason or another. This type of business exchange satisfies the majority of those insured and is practiced by most agencies.

On the other hand, there are many clients that need, want or should have an “insurance professional.” These types of clients need and appreciate high quality professional advice and service. They also understand that they must pay a premium for this level of service.

Agencies that operate in this “insurance professional” realm are more productive, more profitable and have better retention than the average agency. These are certainly motivating factors to investigate this approach. However, there is a cost.

The agency must be diligent in developing, implementing and refining procedures and systems that meet the ever changing needs and expectations of the client. It is a lot of work to meet the criteria of an “insurance professional.” If you want to attract large, sophisticated accounts, you need to offer large, sophisticated service. It also takes a long time to develop the relationship and reputation that attracts such clients.

Defining the “Professional”
So what is an “insurance professional?” The concept is simple. It is an insurance broker that not only provides in-depth consulting before and after the sale, but also additional services throughout the relationship that help mitigate insurance cost or streamline insurance related problems. Clients (and prospects) see the organization as a resource for solving insurance related problems.

“Professional insurance” organizations practice continual product improvement by evaluating the future needs of clients (and prospects), then develop solutions to these future problems. They create new ways of exchanging pertinent information. The best firms are those that constantly improve themselves and track the ever changing business world.

Each of the organizations that can be considered to be operating like an “insurance professional” will have their own style and approach. There are some common elements. They might include: risk management consulting, financial services, employee benefits, human resource consulting, loss control and claims administration.

Prospect Development
One common element that these types of firms share is the overall approach to the development of prospects. These prospects are individuals and business executives who, while not yet clients, start building a solid relationship with the agency based upon first class information, knowledge of issues, and potential solutions to problems. The “professional insurance” organization demonstrates its superior service by example, rather than through brochures and talk.

This style of prospecting requires a higher level of commitment and consistent effort by all in the agency, not just the sales force. For a quality prospect, this commitment must be maintained throughout the life of the prospecting cycle, which can last for months or even years.

One might think that the cost of using this approach to develop prospects would make it unprofitable. The key is that the hit ratio with this approach is very high and the client retention rate is also well above average. The relationship is no longer based upon price. Instead, the client sees the agency as a long-term business partner that provides needed information and services. This style of relationship improves productivity and profitability.

Revenue for these types of firms does not need to be on a commission basis only. Fee based compensation can make a lot more sense. The extra service that the agency provides is also a source for additional fees. Keep in mind that if a client expects and appreciates the extra service, they should expect to pay for it as well.

There are a couple of steps that must be taken before the first prospect is called. Defining and developing the prospect list must be done in concert with an honest assessment of the firm’s strengths and weaknesses. There is no sense in going after a complicated account such as a large upscale resort if it is beyond the capability of the agency. An unsuccessful bid on an account that exceeds the firm’s limits will cause a loss of credibility, not to mention time and money.

Spheres of Resources
Develop a list of resources and skills within the agency. Understand what the staff does best. Now match these services that the firm can provide with the type of prospects that needs these types of skills and services. Train and educate the staff to fill in the cracks. As the firm grows, so will the capabilities and talent of the agency.

If the firm has some weaknesses, these can be shored up through the effective use of outside resources. A firm with established “spheres of resources” could have the same impact as regional and even national brokers. “Spheres of Resources” are services that can be offered to your clients (or prospects) by outside organizations. When properly developed they are packaged so that the source appears seamless with your organization.

For example, some carriers are a good source for information on specialty loss control, claims analysis and even ergonomic recommendations. The wholesale market arena can offer a wealth of information on specialized products and needs, such as D&O, marine, aviation and municipalities.

Be aggressive in the use of proven technology. The bottom line end product of any insurance agency is the collection and distribution of information. There is no question that technology has changed and continues to improve the way data is handled. The computer is the great equalizer in the 21st century. A small firm can now effectively compete with large firms in many areas of being an information resource for clients.

Throw out the old list of prospects and start all over. The agency needs to focus like a laser beam on the types of businesses and individuals that will benefit and appreciate what the firm offers. A good approach is to use telemarketers to screen prospects. Make sure that whoever has the first contact with a prospect pre-screens them to make sure they qualify as a potential client for the agency. Think win-win.

A prospect does have a finite life in that category. It is important to set goals and timeframes for each prospect to develop credibility based upon resources and issues. Progress must be measured. Otherwise, you run the risk of chasing a fantasy, or not focusing on attainable prospects.

Teamwork
Another unique distinction of “insurance professional” organizations is the use of teams and teamwork. Clients and prospects understand that the salesperson is backed by a group of specialized professionals. The key people in a client’s organization know who the right person is in the agency that can answer their questions or address their problems.

Be a team member on the client’s team. The concept behind long-term business partnerships rely on the employees with the responsibility and the knowledge to work together to solve problems. This is done without going through the chain of command.

Summary
Consumer expectations have and will continue to change and increase. The future of business is trending towards the “business partner” approach. Agencies that understand and adapt this concept will have a significant advantage, especially during the hard market.

Bill Schoeffler and Catherine Oak are partners in the international consulting firm Oak & Associates based in Northern California. For more information, call (707) 935-6565, e-mail catoak@sonic.net, or visit www.oakandassociates.com/catoak/.

Topics Agencies