A friend of mine, Dave Benedict, who is a long time Insurance Professional was talking to a group of new producers several years ago and I was in attendance. He shared an anecdote that has always stuck with me:
Life is like a Jewelers Wheel, it will wear you down or polish you up, depending on what you are made of!
Never has that lesson resonated more than now. We face challenges like we have never faced. Fortunately, our industry will feel the impact but our survivability is higher than many other businesses. We will have to adapt and we will have to look harder at our business model moving forward.
What are some of our industry’s challenges?
In order to adapt and create a better business model moving forward, we have to understand the challenges we are facing.
- A hard market – Especially in Property and Business Interruption. I am seeing markets begin to shut down until carriers get more comfortable with how state legislators and courts decide on how the industry will have to deal with the catastrophic level of loss. This was on top of a market that was already experiencing hardening.
- Return of Auto Premiums – Allstate lead the charge but everyone else seems to be following. Now the carriers seem to also be following a “no chargeback” on commissions, which is great but still has an impact on our agency operations long term. As these policies renew at a lower premium the commissions will reflect this. So if commissions from auto are a substantial share of the overall income of your agency you will have the same service load but lower income streams.
- Changing Exposures from your clients – Reduced sales, payroll, inventories, etc. are a reality. Clients parking their fleets and going to comp only. People needing lower limits for their contents. Again, as our clients scramble our service load stays the same and the income is not. I recently saw some discussion on some social groups about fully earned premiums in things like the excess market who will not reduce the deposits, angering our clients.
- Total disruption to our day to day routine – How long will we be doing remote workforce solutions? How will we adapt our workspace to solve the social distancing requirements that will not leave us for at least many months and potentially years? And will you have a staff that never wants to return to the bricks and mortar, and do you want them to.
I am sure there are more challenges like dealing with the financial fallout but I will stick with these.
If you cannot sell because your markets are closed or severely restricted or your workflow is too disrupted, what can you do?
Take a look at how the message from businesses has changed. Here’s an example:
You Should Buy Toyota
We are All In This Together…and you should Still Buy a Toyota.
Now is the time to really rethink your tomorrow. Because if you try to solve your problems with an agency of yesterday there will be no tomorrow.
What should you do 1st?
Again, with my Toyota example, businesses are focused on their message. Are you? I have two agencies that I have insurance with. Both are excellent shops. But one is doing great with their message while the other is silent.
Who do you think I have the most confidence in? Messaging is making them comfortable with what you are doing and what is going on that you know affects them. Also, are you contributing to the feel-good responsibility? Random acts of kindness are huge and should be screamed from the highest mountain.
Communication is not just a Facebook post. Not a hipster cryptic message on Twitter. It is constant and fluid.
Do you have the tools to stay in front? Digital tools like integrated email and social media messaging? Are you setting up targeted messages? A couple of examples would be an auto group to inform them of the price reductions or a business group to keep them up to date on the business interruption situation.
Now is the time to be the trusted adviser nearly every agent has claimed to be.
Stop Marketing and Selling…. When people stop buying
Are you huddling up and waiting to ride this thing out or looking for opportunities? People will continue to buy insurance, they are just going to buy differently.
While some agencies attempt to cut back and ride things out, others will be on the front line connecting and communicating with prospects. When people come to a position to buy who do you think they will buy from? The one who has actively communicated and connected with them, or the one who recently emerges after the fact?
Here is a recent Linkedin Post from Marcus Sheridan (The Sales Lion)
It’s very telling that in the midst of this people are still buying pools. But I think It’s more telling how they are going about it.
Cutting costs are going to be a reality for most, if not all agents. But when businesses cut out their marketing and sales budgets, they lose all their steam and momentum. And in some cases, without the continued revenue they could earn from new business at this time when the economy recovers, they may not be one of the businesses that reopen their doors.
Marketing and sales in its rawest form is communication. Communicate with your clients but make sure you are continually communicating with prospects too.
How Can I Sell If I Have Nothing to Sell?
Now is a very unique time in our business. You should focus on the real reason a client should retain you or a new prospect pick you. Face it, no matter how much we use superlative language touting our greatness we have largely been an industry that has depended on offering a great solution but majorly being less expensive than the other guy.
I have a question for you. If you don’t have an alternative to offer what do you have to get the attention of a prospect? And, If a competitor knocks on your client’s door, what do you offer that keeps them from leaving?
I sold my agency to a firm that focused on getting the client to choose the agency, not the policy. Everyone pretty much has the same companies and policies. So what can you do to stand out?
They had some really strong analytical tools. These are available to you. But you have to focus on new strategies that are not the old “LET ME QUOTE” model.
- Ask for a Project – See if they will let you do a project for them. Maybe a Work Comp Payroll review. Or a deep dive review of the Cyber coverage. Maybe a Disaster Recovery program (Think that would get any attention now?) Whatever you can think of, try and get the opportunity to prove your effectiveness, than ask for the BOR/AOR
- Provide Value Adds – Do you have risk management tools available? Do your clients have access to their policies, ID cards, COI’s, etc? Is your existence virtual and 24/7?
- Communicate, Communicate, Communicate – Now more than ever people have time and they are doing their research. Are you positioned to be seen? Are you active on Social Media with pertinent info? Does your blog answer their questions? Are you available to the local media?
We are in a time where digital agencies are a true threat to the traditional agency model. What do you have to add value other than a slightly different quote?
We thrived after hard times and so can you
We had our defining moment in 2008. We changed our agency to adapt to a market crash like I have never seen. We didn’t take the “Whoa is Me” approach. We adapted. And now we face challenges that make 2008 look like Disneyworld. But if you choose to stand your ground your survival will likely make you stronger and avail opportunities others will miss.
Things are different now than 2008 but I still think I had experiences that translate into today’s environment. I would love to hear from you. If I can help I would love to. And we are stronger together. We have experience in developing strategies and using integrated tools and ideas to make for a better shot at success.
Will you allow these challenges to wear you down or polish you up?