Yesterday a family of five was involved in a tragic
car accident. The mother was killed and the father and three children are
in critical condition. Very likely they were out holiday shopping and they had
the misfortune to be in the wrong place at the wrong time. A driver in his
forties who was impaired by drugs crossed the road and hit them head on. This
accident occurred in the middle of the day.
I can’t think of anyone who would not be touched emotionally
in hearing about such a horrible event. I’m sure you join me in praying for the
family and hoping for their recovery. They have a long and painful road ahead
When I am able to step away from this event as a husband and
father I can’t help looking at it as a member of the insurance community. My
greatest fear is that this family was drawn to all the irresponsible
advertising encouraging them to purchase their insurance based on price. It’s
exactly because of horrific accidents like this that as independent agents we
encourage individuals and families to investigate and buy enough insurance to
make sure their families are well protected. No one expects to be involved in
accident like this – I’m sure this family didn’t.
Are you tired of fighting against price selling? Frustrated
by consumers who only care about paying as little for insurance as possible?
Thinking about throwing in the towel and jumping into the price competition?
If you are then I recommend you focus on this unfortunate
family and others like them who are seriously injured in car accidents every
day. Did you become an insurance agent to be a professional or a peddler? Do
you care about the people you protect and do you want them to have the best
protection possible? How would you feel if these were your clients and you had
sold them price instead of protection?
Superstorm Sandy kicked our butt this time last year. Here
we are a year later and a lot wiser. Wiser yes but what are we doing with all
that firsthand knowledge that was obtained at the expense of an awful lot of
families and businesses in the metro New York area?
Sadly, there are still way too many people not recovered
from the storm and back to living a normal life. No flood coverage, incompetent
FEMA adjusters and poorly administered federal aid have had a devastating impact
on the victims of Sandy. It’s unconscionable that a year after the storm only one
home has been purchased under the federally funded program administered by New
York City. I guess it’s safe to say that Sandy’s effect is still not over and
it may never be over for some families and businesses.
Are things changing? A lot has been written about the problems
and issues but what’s being done to mitigate or prevent problems related to future
storm damage? I don’t think nearly enough is being done to have a serious
What changes have you made to reduce the risk for your
Are you discussing the need for flood coverage with every
client and showing them the cost? Are you aggressively encouraging them to buy
coverage? Is your staff sufficiently trained to actually accomplish this goal?
FEMA statistics show a minor uptick in the flood policies written in NY but
nowhere near the number that should have occurred if more families and
businesses were protecting themselves.
Have you advised your business clients how to get the
services and equipment they will need to be up and running as soon after a
disaster as possible? Many businesses never reopened after Sandy or lost a
significant percentage of their business.
What about your agency? You are the first people everyone
turns to when they have a loss. What disaster planning or modification have you
done in your agency since Sandy? Have you contracted with a vendor to provide
the immediate access to services and equipment you would need to get back up
quickly and assist your clients? The resources are there, have you taken
advantage of them? How can you ask your clients to do this planning if you
All of these things are within our control as insurance
agents and brokers and should be discussed as part of the risk management of
every client. If you don’t do these things and we suffer another Sandy or even
a smaller storm how will you face your clients knowing you could have helped
but didn’t. Your obligation is to advise them of the need, show them the cost
and encourage them to purchase the coverage. If they choose not to after that
it’s ultimately their decision and you have met your professional and moral
duty as their agent.
As I sat down to write this week’s blog post I realized I
had been picking the subjects based on what I think is important. My blog and
the information it provides should be about you the member and what is on your
mind or creating you a problem.
So let’s talk. Please take a few minutes and tell me what’s
on your mind.
If you can’t think of anything right off the top of your
head here’s a brief list of some the items members have asked about recently:
valuation & perpetuation
or selling an agency
coverage for current clients
agency more sales oriented
time to sell
hiring & retaining good employees
value to combat price selling
the Trusted Choice® brand
markets – for agency or for a client
This is your chance to put me to work or just tell me what’s on your
mind. Take advantage of it. Your problems, interest and issues are what’s most important.
Why would your clients, or better yet the general public,
visit your website, blog, Facebook, Twitter or other social media? It’s true
they may visit your website to find out to how to contact you or to research a particular
insurance issue (if you even have such information on your website). You might
be able to get them to visit and signup by offering a prize drawing, but once
that’s over how frequently do you think they’ll return?
You need to use your social media as a way to communicate
about you, your employees and your agency. You create a personality or persona
based on what you write about and post. If you’re involved in the community
post what you’re doing. Does your agency specialize in certain types of clients
or businesses? Post information of interest to those clients or businesses.
What are you and/or your employee’s areas of interest? Post information about
those things that would be of interest to other like-minded individuals or to
the public in general.
Social media is a great way to let your clients and
consumers know about the knowledge and expertise of you and your staff.
Participation in conferences, awards received and work anniversaries should be
shared with your visitors. If you or someone in your agency writes articles,
teaches or is involved in industry organizations or committees posting that
information exhibits your knowledge, professionalism and standing in the
insurance community. Publishing client testimonials is a great way to show how satisfied your clients are with the services you provide.
Most importantly remember social media needs to be light-hearted
and fun. Let’s face it insurance is boring and no one is attracted to social
media about it. Make sure your social media postings include articles, issues
and surveys that are timely and interesting. Don’t make them all about
insurance, matter of fact insurance related posts should be in the minority,
brief and contain easily understood and useful information.
Once you have achieved all the things I’ve already mentioned
you will need to drive traffic to your social media. It’s important that you regularly
are encouraging clients and consumers to visit your various social outlets. Be
sure links to all your social media are posted everywhere. Include links to
your social media in various communications you might send out, especially if
you can link a client or consumer to articles or information related to the
subject of the communication. Encourage clients and employees to share social
media they find interesting, helpful or fun with their friends. An occasional
contest or survey with a prize is a great way to drive traffic to your social
Remember social media is all about creating a relationship between the visitor and you and your agency. You wouldn't go out on a date and just talk about yourself or your business (boring and self-centered). It's always good to spend time finding out about your date, who they are and what they like and dislike (helps to decide if you are compatible). You also want to make your date laugh and have a good time (so make it fun and nothing inappropriate). These same challenges exist when you're creating a relationship with clients and consumers. Keep this analogy in mind as you move forward with your social media - act as though you are "courting" them.
This week's blog post is going to touch several different issues and items that I hope you find helpful.
The news is full of stories about recent flooding. There is concern that many consumers still don't realize their homeowners policy doesn't provide any flood coverage. It's important that everyone reaches out to their clients making them aware of this and also offering them information regarding the need for and the cost of flood coverage. One way to get clients aware is to put a sticker on their homeowners policy letting them know there is no flood coverage contained in the policy. These stickers can be ordered from FEMA.
I'm getting calls from members telling me they have been seeing the Trusted Choice brand on TV or hearing ads for it on radio. We anticipate this growing to include strategic placement of ads in various places on the internet. As consumers become more aware of the brand and the benefits of buying protection from an independent agent we look forward to their visiting the website to find an agent and eventually to get a quote via the Project CAP consumer portal. In order for consumers to see your agency in finding a local agent it is very important that you create/update your agency's profile. Here's the link to take care of your profile. If you have technical questions you can contact Project CAP at 855.372.0070. For IIABNY help email Julie MacConnell at firstname.lastname@example.org.
By the way, September 19th is Profile Publishing Day. Update your profile and be eligible for a swag bag
I'm ending my blog with a growing problem I am seeing. Commission cuts are increasingly becoming an underwriting tool. Carriers that want to alleviate themselves from business or shift it to a different pricing platform use commission cuts to "encourage" agents to make the desired change. This allows them to not have to deal with regulations meant to control this activity. It also forces agents to move clients, creating additional work and putting that business at risk. The insurance division of the DFS needs to look into this growing trend and put a stop to it.
Customizing a client's coverage with the right company and making sure if they have a claim it's paid quickly and fairly are the keys to doing business with an independent agent. When it's coupled with exceptional service you have a client for life.
Have you ever investigated what it's like to be a client of your agency? What level of service does your client routinely get? Is it exceptional or just OK? Once you write or renew their coverage do you forget about them? How do they feel they're treated when they call in for service or to ask a question? How often do you communicate with them? Do you regularly update their information and coverage? Do you keep them informed of issues that are important and may affect them?
If they visit your website (hopefully you have one) is it inviting, easy to use, written in easily understandable language allowing them acess to their account as well as information that they find helpful. Do you have a Facebook account intended to develop a relationship with clients and prospects?
Every agency thinks they provide excellent service and use it as a sales tool. But the real decisionmaker in the matter is the client. If your clients don't feel like they get extraordinary service then retention and referrals are at risk. Step back and look at your service from the customer's perspective and then decide if what you provide is unique and exceptional. Does your service WOW a customer or is it the same thing everyone offers?
If you plan on competing on price you will lose! Your competition is better equipped to win business on price!
To grow your business you’ll need to create value consumers recognize and are willing to pay to get. What’s the value of buying protection from your agency?
I’ve been taking an informal survey of people I know or meet on what they value in an insurance agency. Here are their answers:
· Convenience in doing business
· Appreciate their business – positive, friendly interaction when they call
· Regular communication in language they understand
· No hassles – don’t need or want problems
· Candid advice with their best interests at heart
· Keeping them aware of issues that could affect them and offering solutions
· Don’t take my business and then forget about me
· I need you most when and if I have a claim – please be there
What do your clients value? What about your future clients? Maybe you should ask them? Not being able to show value in your service over price sellers makes the purchase of insurance a commodity sale.
I just read a recent McKinsey report entitled “Agents of the
Future: The Evolution of Property & Casualty Insurance Distribution”. I have to tell you it wasn’t good news.
Independent agents are being overshadowed by insurance companies
dealing directly with consumers. Consumers have been programmed via
extraordinary amounts of advertising to see auto insurance as a commodity. They
no longer appreciate the value an independent agent brings to the purchase of
insurance, especially auto insurance.
The truth is as independent agents you have been out spent
and out hustled. For too long you have avoided advertising who you are and the
unique value you bring to buying insurance. As individual insurance agencies
you can’t match the finances of the insurance carriers who spend hundreds of
millions of dollars each year. So how do you get your message out to consumers
and get seen where those consumers go to buy insurance?
The answer is the Trusted Choice® brand and Project CAP. You
need to band together and promote the Trusted Choice® brand that communicates
the value of buying insurance from an independent agent. The brand wasn’t meant
to overshadow your agency and who you are, it was meant to identify you as part
of a nationwide group of independent insurance agents that offer a unique value
to their clients. That is the ability to offer your client insurance coverage
customized to meet their specific needs from a choice of insurance companies
backed up by personal service and professional assistance when a claim occurs.
You notice I didn’t mention price? That’s because price shouldn’t be the first
or only consideration in buying insurance protection. Instead consumers need to weigh the
competiveness of the price they are given against the value of the service
To help you promote the brand, Trusted Choice® is offering to
split the cost of your marketing efforts up to a $500 contribution on their
part. We encourage each and every member to take advantage of the Trusted
Choice® Marketing Reimbursement Program.
Project CAP is the digital marketing piece of the Trusted
Choice® brand. It will get independent agents recognized by consumers who go
online and allow them to explore the prices offered by independent agent
carriers and then pick an agency that meet certain criteria important to
consumers. If you haven’t updated your profile you want to do so right away. Here
on how to update your profile and a link to the
actual Project CAP site. Although New York won’t go live with online quoting
until the first quarter of 2014 consumers looking for New York agents are being
directed to the site right now. Make sure they see your enhanced profile and
have the opportunity to choose to contact your agency.
It’s up to YOU now. If you choose not to support and promote
the brand then you have chosen to take on the giants of the insurance industry
all by yourself. If you choose not update your profile and be seen by consumers
online then I wish you all the luck in the world in reaching out to the 75% of
consumers who go online to research and explore buying insurance. The decision
is yours and I hope you make the right one because the future of your agency is
riding on it.
“Word on the Street” is back. It started as an audio podcast
several years ago to comment on issues and trends affecting members. It morphed
into a weekly audio talk show where we had a conversation about current issues.
It makes its return with the release of our new and greatly improved website as
a weekly written blog. Through its many changes the purpose hasn’t changed.
“Word on the Street” was, and will always be, a candid discussion of issues,
trends and events affecting independent agents and brokers.
Take last week’s announcement by Travelers of the elimination
of 450 jobs in a cost-cutting measure intended to improve their competitiveness
in personal auto insurance. In a July 23rd article entitled
“Travelers Cutting 450 Jobs, Instituting Cost-Saving Measures on Auto
Insurance” A.M. Best’s News Service reported the job cuts and how they came on
the heels of an 85% increase in second quarter earnings totaling $925 million
and a combined ratio of 94.3. I wonder, will this lead to reduced personal auto
rates? If not, where will these savings go?
I’m not picking on any company just reporting on what is
happening and the “Word on the Street”. Reach out to me and let me know what you’re
thinking, feeling and hearing. Let’s have a discussion about the issues, trends
and concerns you’re facing every day. email@example.com
The state Department of Financial Services responded to an investigation I initiated in April, questioning whether major commission rate cuts by Farmers Insurance Group were meant to force agents to move personal auto and homeowners business to other companies and thereby dramatically reduce their independent agent policyholders in the New York market. It would appear by Farmers response that the DFS concentrated only on the auto commission cut to 5 percent. While the statement from DFS indicated Farmers had not violated state Insurance Law, it drew the department’s attention to the carrier’s need to substantially reduce the commission portion of the expense load built into its filing to make up for a very poor loss ratio.
This issue was first brought to my attention by several member agents from various parts of the state. A major concern for them, besides an unexpected revenue loss, was their ability to properly service the needs of their Farmers insureds at such meager commission levels. Several who were from the Metro New York area were equally concerned because the limited homeowners market in their area would make it very difficult to place their clients with a different carrier.
Despite the department’s finding, I still believe the commission cuts by Farmers were meant to circumvent the state’s controls on how much business can be cancelled or non-renewed at one time by a carrier. And, think about this, if the agent doesn’t move the business, the carrier still receives a revenue boost without filing a rate request with state regulators. In this case, that revenue is necessary because the company’s poor risk selection has caused it to have a 125.56 percent combined auto ratio as of March 2013.
In all fairness, Farmers is not the only company that has recently initiated commission cuts to force agents to move or modify business without having to deal with state regulation and law. This trend is extremely unhealthy and not the actions of a carrier that wants a mutually profitable relationship with independent agents.
In the case of Farmers, it’s also no secret the company is aggressively working on appointing “exclusive” or captive agencies in New York to offer their product. It’s unfortunate that the DFS can’t see what is occurring here and stop these negative actions that will ultimately hurt consumers in New York. Farmers is a captive agent company in most of the nation, except in the Northeast where it offers its product through independent agents. In my opinion, independent agents don’t fit in to the Farmers family and are blamed for the poor results of the company. Farmers has decided to get out of the independent agent distribution system and replace it with an exclusive agency force in New York. The company intends to do so as quickly and easily as possible by making its product unprofitable for independent agents to write and service.
It’s unfortunate that I wasn’t able to get the DFS to see what is happening here. There are some folks who I’m sure believe it is a waste of time to bring these issues to light. I don’t agree. I think we make a huge mistake if we sit idly by and allow companies to take advantage of independent agents. When IIABNY answered the concerns of its members, we did draw the DFS’s attention to this carrier’s actions as well as the unhealthy trend of cutting commissions to fix carrier problems. Ultimately, the best advice I can give agents is choose the companies you do business with wisely. Make sure they not only talk about having strong agency relationships but also prove it by their actions.