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How Independent Agents Can Conquer the Middle Market

By adopting the right tactics, independent insurance agents are uniquely positioned to win the battle for middle market clients.
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how independent agents can conquer the middle market

While saying no to writing the policy for a new, family-owned store to focus on larger businesses feels like it goes against the core values of the local, community-minded agent, time is money. Always has been and always will be.

But what if you could do both—all while growing your middle market book and creating new leads at the same time?

“One of the biggest issues agents have is that they don't stay in their lane," explains David R. Carothers (pictured), principal at Florida Risk Partners in Valrico, Florida. “They want to be all things to all people. They want to write the two-employee candle shop in a strip mall down the road, but they also want to go after the $400,000 premium manufacturer that they've been prospecting for years."

“The more times I touch small commercial businesses, the less profitable it becomes," Carothers says. “By making the small business portion of our business more efficient, it allows us to focus on our core competencies and most profitable business—the middle market."

To do that, Carothers has “removed distractions" from other types of business. However, he isn't turning away business, not by a long shot. Instead, he's taking advantage of technology to turn those distractions into passive income via low-touch online transactions in both personal lines and small commercial.

“We made the decision that we weren't going to write any business under a certain threshold," he says. “But that is why we have a whole portion of our business that is all quote and bind products." For the types of business that shoppers are searching online for, Florida Risk Partners created landing pages—promoted through paid search advertising—where businesses can buy liability, bonds or other small-premium coverages. The pages have unique URLs which ensure that commission is paid to the agency.

“I never have to touch it," Carothers says. “It is 100% mailbox money for the agency."

Carothers is doing the same in the personal lines market. After noticing a demand for wedding insurance, he promoted Florida Wedding Insurance, a division of Florida Risk Partners, via paid search and generated business in the same fashion as the small commercial.

In both lines of business, he is adding client information to the company customer relationship manager (CRM) and building drip marketing campaigns to drive yet more business. However, “this is where people lose focus," Carothers warns, emphasizing the importance of up-to-date and complete data.

“Driven by the date of the wedding, we're sending them emails about homeowners, auto, umbrella and life insurance—all the things that they're going to need as their lives change," Carothers says. “We do the same for businesses."

Instead of paying for leads, Carothers is getting paid for them. “I'm using existing clients to go out and market to them," he says. “There's no better efficiency than taking something that's a cost center and turning it into a profit center—and then we're just multiplying our revenue from there."

Taking Care of Business

Only 15% of middle market companies rely heavily on an insurance agent or broker to help them understand and manage risk, according to the Middle Market Indicator report compiled by Chubb and the National Center for the Middle Market (NCMM).

Since so few middle market companies rely on an agent, here are six ways to use your time efficiently when prospecting for their business:

1) Educational webinars. The day it was announced that the first round of Payment Protection Plan loans was about to become available, Carothers picked up the phone and called the CEO of a local community bank and said, “I need you to get your Small Business Administration guys on a webinar as quick as you can. I want to educate my clients and prospects about what's going to happen with these loans because this is going to be a big deal."

“Around 500 people attended the webinar, and I didn't say a word about insurance," Carothers recalls. “All I wanted to do was take the people who needed the money and the people who had the money and get them together. But by inviting clients and prospects in our CRM I won new business—because if you can solve a problem, you're going to sell more products than you ever thought you would sell."

2) Researching clients. Gathering background information to make that all-important pitch is crucial. After all, you only get to make a first impression once. Fortunately, the availability of client data online and through software programs can help agents zero in on the right client while taking out the leg work.

Most people focus on customer account data, such as the size of the company or address, but the most efficient and targeted approach stems from plan data, such as loss data, expiration date or violations, explains Jason Liu, CEO of Zywave.

“If you're in the workers compensation market, you could look for any company in a zip code that has had substantial Occupational Safety and Health Administration (OSHA) workers comp violations because we collect all that data from the state workers comp bureaus," he says. “Combining marketing automation with smart data is something that is going to be an industry standard in the future."

3) Video. When the pandemic struck, Derek Hayden, risk architect, Dansig Risk Advisors in Decatur, Illinois, was prepared. “I had been using video proposals for a few years already to differentiate myself in my marketplace," he says. “I started using video on social media, but then I stumbled upon a few platforms where I could do a video proposal and one-to-one marketing."

Now, instead of calling someone on the phone, he sends them a video. In 2020, Hayden achieved a 91% close ratio by using Vidyard—a personalized video creation platform for businesses—for short, one-to-one video pitches and Forge 3—a website platform designed for insurance agencies—for longer video proposals. In the one-to-one pitches, “I keep them to around 45 seconds," he says. “I just introduce myself and say something like, 'I saw your mod score is a 1.52 and I wanted to see if you're happy paying 52% more than your average competitor.' I keep them really short and spend most of my time on prospect research."

Another benefit of video proposals is that they provide a digital trail, which “carriers love," Carothers says. “If a client comes back and says, 'You never told me about ordinance and law,' I can say, 'Go to the 2 minute and 37 seconds mark in the video and that's exactly where I told you about ordinance and law and why it was important.'"

4) Prioritizing leads. The sales game is a lot like dating, according to Ryan Keating, vice president of commercial, Keating Agency Insurance in West Hartford, Connecticut.

“You're trying to find the relationship that works for both you and the client," he explains. But to ensure he's not spending time trying to win a business relationship that will ultimately see his proposals end up unrequited, Keating grades his prospects from A to F.

“After contacting them and finding out who they're currently working with and how that relationship is going, I try to assess what the odds are of developing that relationship to earn their trust, go to BOR and win the account," Keating explains. “They might be a C prospect, which means they're worth keeping on the radar because there could be an opportunity down the road, but sometimes they're going to be an E or an F because it's not going to be worth the extra time to go after them."

Meanwhile, a CRM can also rank the likelihood of a client who is ready to say yes by taking buying behaviors—such as opening an email, clicking for more information and reviewing pricing—and notify an agent that a prospect is ready to buy.

“We are operating more efficiently because we only focus on the people that are in the right stage of the buying cycle," Carothers says. “When we call our people with high lead scores, they're almost sitting next to the phone waiting for us."

5) Leading with cyber. Cyber threats are the top concern for U.S. business leaders, according to the 2021 Travelers Risk Index. Further, half of businesses believe it is inevitable that they will be the victim of a data breach or cyberattack at some point, and only two-thirds are extremely or very confident in their company's cyber practices.

Carothers has partnered with a company that assesses businesses for their vulnerability to a cyberattack and is using the findings to solicit business. Leading with a price to fix the issues the assessment uncovers “is an effective lead-in" Carothers says. “We're also sending emails where we'll direct a prospect to a landing page with a short video on cyber, but if they want to opt in to a longer 13-minute video, we ask them to input their information. The beauty is that while they're watching it, we've sent their information to our partner to run a cybersecurity scan. When they've finished the video, they get an email with the results."

6) Forms automation. For new business and renewals alike, automating the submissions and applications process will make the quoting more efficient, saving your agency and your client time while also reducing errors & omissions exposure.

Working with middle market clients requires more attention because there's “more risk that you've got to touch and feel to make sure you're doing your job," Hayden says. “Digital forms have really organized the process. We're getting all the information at the same time, which allows us to utilize our sales process to put the proposals in place for the client."

Making Value Stick

As the coronavirus pandemic persists and uncertainty continues to roam the economy, middle market clients are increasingly turning to their insurance agent for non-traditional insurance advice, according to a recent Agency Forward study by Nationwide. As many as 59% of middle market business owners are interested in hearing more about employee benefits from their agent, while 39%, 41% and 52% are interested in hearing more about retirement advice, cybersecurity and banking, respectively.

“Commercial clients want more from their agent beyond the insurance transaction. They are looking for personalized advice and critical industry insights to help them manage risk," says Mike Hickman, assistant vice president, commercial lines underwriting services, Grange Insurance. “Agents should be thinking one step ahead for their clients and identify emerging risks" because “business owners are also seeking education on risk management and how to implement strategies into their operations."

However, just because you want to help business owners solve problems, it's easy to spread your agency's resources too thin between a multitude of businesses and problems to solve. “Find your niche," Hickman recommends. “Concentrating efforts on specific business classes can help build deep knowledge of an industry's risks."

Keating has clearly defined his verticals. One of those is restaurants—a class of business that persistently suffers from employment practices liability claims. Recognizing that “insurance has shifted away from the 'Hey, your policy's renewing, let me quote it,' approach," Keating is leading his pitch with alerting prospects to EPLI exposures surrounding discrimination, wage and hour disputes and department of labor complaints, emphasizing that an EPLI includes duty to defend provisions that can save their business.

Additionally, in the post-pandemic environment, Keating notes that auditing has been a “big wedge element," he says. “With restaurants being closed and in flux, audits are a good leading point if they've laid off workers, reduced payroll and need to adjust their workers comp." Similarly, audits have given Keating the edge for businesses that have staffed up in recent years, such as HVAC contractors.

Value, however, is not simply defined by insurance coverages—or even risk mitigation strategies and advice. “Customer expectations have heightened concerning speed, simplicity and access to information in all of their business interactions," says Michael Keane, senior vice president at The Hanover. “Agents can exceed these expectations by enabling customers to access the information they need at their fingertips—whether this means via their websites or by partnering with carriers who can serve up information they need via portals or other digitized content libraries."

“A big part of the future of digital selling is sharing something of value to the client through third-party content," Liu explains. “Recently, sharing information with employers about COVID-19 vaccination requirements and other regulatory requirements are ways that agents can service their customers better, which increases the stickiness of clients."

And if you thought of self-service tools to amend an insured or update record qualifies as using technology to streamline processes and meeting digital expectations, you should be aware that that is now “table stakes," Liu says. Instead, agents like Hayden are meeting the expectations and increasing the retention of middle market clients by partnering with companies like Zywave to drive more efficiency to clients through education platforms.

“We share that learning management platform with our clients, who send the link to their employees to complete the training online," Hayden says, who utilized the sexual harassment training resources after the state of Illinois made it compulsory for employees to administer annual trainings to all employees. “It's documented, which we can share with the carrier, and it helps the employer streamline the administration of that training."

“Middle market clients are looking to streamline these engagements," Hayden adds. “These tools can add value by improving the onboarding process and employee training—or on the employee benefits side, the open enrollment process and the administration of their benefits."

“It's all about being intuitive and intelligent when creating an online customer experience," says Jeremiah Johnson, regional vice president of sales at Grange Insurance. “After a policy is bound, agents play an important role in building life-long customer relationships through digital engagement, which help extend the life of an agent's value proposition."

“By investing time into clients and their needs, as opposed to data entry work, agents become a valued resource other than just someone who provides basic insurance policy information," he adds. “Providing value allows agents to build relationships with their clients that will keep them coming back for years to come."

Will Jones is IA editor-in-chief.

The Protégé 

On David Carothers' first day on the job at an insurance agency, he was told that he needed to go out and bring in accounts that were between $250,000 and $500,000 in premium. “So where do I go to learn how to do that?" a bright-eyed Carothers asked. “You're the sales guy, figure it out," he was told. “We've got all the insurance expertise you need, just bring in the clients."

After leaving his agency in 2016, Carothers decided that he was going to do things differently next time. Now, as principal at Florida Risk Partners in Valrico, Florida, he only hires business-to-business salespeople from outside the industry. However, to do that, he had to create foolproof training and sales processes, the type of processes he wished someone would have given him when he started out.

After sharing a few secrets about what he was creating at a conference in San Diego, Carothers was approached to consult at various businesses, “but my answer was unequivocally, no," he recalls. “My agency was growing like crazy, and I wanted to focus on that."

But on the plane back to Tampa, Carothers had an epiphany and set about creating the framework for Killing Commercial, which would “provide producers the tools and resources to be successful in the middle market," he says. “Within the first 48 hours of launching, 25 agencies got on board and now we have 275 users nationwide."

Fast forward to 2020 and Carothers—who is also the host of “The Power Producers Podcast"—launched “The Protégé," an insurance agent-themed Apprentice-style game show where 11 contestants complete weekly challenges in a bid to become The Protégé and win access to Killing Commercial's coveted resources. Season 1 recently finished and applications for Season 2 just closed.

To watch the show, including application videos and more, go to Killing Commercial online.


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Thursday, January 6, 2022
Commercial Lines