Fresh out of college, Eric Narcisco wasn’t prepared when a fire hit his apartment. He didn’t have renters insurance when he arrived back to a ruined home.
During Narcisco’s eight years as an underwriter with Chubb, he noticed landlords paying an overwhelming amount of claims alongside a startling amount of renters who didn’t carry insurance.
“Going from the life experience of being a renter to, years later, underwriting and paying for claims caused by renters—we needed a better solution to this problem,” Narcisco says.
That’s when Narcisco founded Effective Coverage: an independent agency centered on renters insurance. The biggest challenge? “Convincing people I wasn’t insane,” Narsisco says. “Everyone would say ‘Really? You’re the guy who would insure a 25,000 apartments.' I used to sell $7 million insurance policies and I was going to sell $187 insurance policies.”
Pulling It Off
According to Marty Agather, senior vice president of TrustedChoice.com, most agents aren’t as headstrong about renters insurance for a variety of reasons: The population is transient, renters are generally young and on a tight budget and policies are small and don’t generate a lot of commission.
But Narcisco “realized there was this huge underserved population of young people who didn’t know or understand the value of a tenant’s policy,” Agather says.
After Narcisco found the right insurance carrier—a struggle, since certain carriers “don’t like renters insurance and may not want a standalone policy,” he says—the rest of the pieces fell into place. “It’s exciting to go from the nothing idea as an underwriter to a full-blown insurance agency writing in the vast majority of states in the country—and being incredibly good at what we do,” he says.
Because renters policies have low premiums—an average of $187, according to the National Association of Insurance Commissioners—and low commission, the higher the volume of policies, the better. “Anytime you have a product like tenants insurance that doesn’t generate a lot of profit, you need to make sure you streamline your profit because there’s so little commission,” Agather says. “You have to be sure you’re leveraging your automation system.”
Narcisco knew that expediting and driving efficiencies had to be a priority—which is why the agency uses e-signatures and automated processes. Effective Coverage even built a complete proprietary software system for its agency management system from scratch to quickly identify and satisfy a renters insurance policy.
Raising the Bar
According to a March 2015 survey by ORC International, commissioned by Effective Coverage, 44% of renters have renters insurance—a rate that has increased yearly for the past four years.
Effective Coverage is working to continue that upsurge by partnering with other industry leaders in its 2015 Renters Insurance Challenge. After surpassing the 40% goal, Effective Coverage raised the stakes to encourage 50% of the nation’s renters to get insured by the end of 2015.
“We focus predominately on two major things: awareness and education, and customer experience,” Narcisco says. While the priority out of the starting gate was increasing the agency’s volume of policies, objectives have since shifted. “We really wanted to start a platform where we could talk and work with those groups—not as a vendor but more of a trusted thought leader of our own right in the space,” Narcisco explains.
And the company has done just that. To become a definitive expert nationwide, Narcisco and his team have produced more than 150 videos that answer questions designed for every state—just search “how to get renters insurance” in YouTube. The next step is to produce videos for designated cities and overhaul the agency’s digital marketing efforts.
“We are putting a tremendous amount of our effort on this,” he says, pointing out that Effective Coverage occupies the third search results position in a YouTube search for “New Jersey renters insurance.” “This is how people are looking to engage with insurance providers like us now and in the future.”
Although 72% of householders age 30 or younger live in rental housing, renters insurance applies to all generations. Effective Coverage recognizes it needs to pay attention to each client’s unique needs—whether that’s a 22-year old college graduate or senior citizen.
“They need it in two different ways, but they both need insurance and we need to be able to sell them that policy,” Narcisco says. “It all comes back to our mission. There are millions of renters across the country, and those renters need coverage. That’s why we exist.”
Morgan Smith is IA assistant editor.