Point/Counterpoint: Relying on Commercial Lines Referrals

Should an agency rely primarily on referrals in commercial lines?


I started my agency 11 years ago, when “big box insurance” began cancelling home insurance policies by the thousands in Florida. The first thing I did was join the local chamber of commerce. Since then, I have built my business primarily through referrals.

The key to thriving as a referral-based agency is networking. You have to build relationships with the people who already do business with the clients you want to meet, then ask the right people for the right introductions.

At the chamber, we refer to this group as our “natural partners.” For commercial clients, some of my natural partners include business bankers, commercial realtors, remodeling contractors, merchant services providers and the chamber itself, since it’s comprised of business owners and market reps.

I’ve also joined several networking groups. When I want to meet a specific person or sell to a specific category of business, I ask my referral partners for an introduction. It’s much easier to convert a prospect to a client when they’ve been introduced through a mutual friend.

That’s also true for retention—people are less likely to price-shop my competition when they actually have a relationship with me.

In turn, I refer my commercial clients to business bankers, remodeling contractors, alarm companies, pest control companies and financial services providers. Since I concentrate on small commercial clients, I often refer more complicated risks to another independent agent who writes larger risks, and she refers smaller risks to me.

It’s important to support my referral partners, so I often sponsor their workshops and events. Volunteering is another excellent way to meet community leaders and business owners. It’s all about building relationships. 

—Robyn Killary-Greene, agent, Blue Sky Insurance Agency


While referrals are an integral part of new business growth at any insurance agency, very few principals will have the luxury of relying solely upon this particular income stream when it comes to the expansion of a commercial book of business.

Those that do follow this philosophy may want to take a step back and evaluate the revenue they could potentially capture by including additional marketing efforts and setting a goal to establish a clear growth strategy.

Focusing on online advertising, community involvement, producer networking or a thoughtful combination of all of the above can bring a wealth of new opportunities through the door. Ignoring these resources means the agency is likely leaving a lot of money on the table.

Developing and implementing a solid marketing plan is a strategic way to prevent stagnation and revenue shrinkage due to both natural attrition and inevitable market fluctuations. Many agencies make the mistake of valuing retention over new business, or sometimes the opposite. Maintaining a careful balance of the two will serve to promote stability and growth.

Retention of existing business will always remain a critical priority as the foundation upon which agencies build as they win new accounts. And it has additional value as an important reputational measure—high retentions generally mean clients feel satisfied and well-served.

Pointing to high retention rates in discussions with prospects can work as an invaluable sales tool. But although strong retention levels usually lead to additional referral activity, agencies are doing themselves a disservice if they fail to pursue simple marketing opportunities that will help them enhance organic growth over time.

—Melissa Manus,  operations manager, Fourth Insurance Office, Inc.