Personal Lines and Partnerships – A Winning Combination

Regardless of the obstacles independent agents face in today’s market, there has never been a better time to sell personal lines. While the perception is that, with the economy struggling, consumers are tempted to “save” money by reducing their premiums, all signs point to increased consumer demand for more customized insurance products.

Everywhere we look, there is more customization. When picking out a cell phone, for example, buyers choose everything from the style, color and ringtone to the calling plan. There is a valuable lesson for our industry here: consumers want choice.

Still, many carriers are going in the opposite direction, making it more important than ever for independent agents to find great partners.

Many of the best markets are hunkering down, launching alternate distribution strategies and appointing as many agents as possible, commoditizing their products. At the same time, some companies are offering “cheap insurance,” or advertising products that back customers into policies based on the price they want to pay, instead of the protection they really need. The best agents are not threatened by these challenges and, instead, are competing on their own terms.

The most successful independent agents approach the current market as an opportunity, developing plans to escape the price wars and to be more distinctive. Not surprisingly, their plans focus on: avoiding a commodity trap; adding value to every sale; creating an operating model that maximizes the “moment of truth” with clients and working with carrier partners that believe in the value of an agency.

Personal lines are the cornerstone of some of the most outstanding agencies. Customers’ needs are evolving, and great agents know that if they meet those needs they will have a customer for life. A recent J.D. Power Study reinforces the point, finding that fewer insurance customers are shopping now than in the past—28%, compared with 36% in 2008. Agents who center the sale on value, and touch their customers throughout the policy period, experience even less shopping.

The best agents recognize this and believe breakthrough performance comes when producers write more lines per customer, solving unique problems with specialized coverages. They also provide trusted counsel, ensuring customers that their carrier is financially strong; that they are getting value from every dollar spent and that they are covered in the event of a loss. Winning agents better utilizing their front-lines ales talent to educate customers and, in this way, bring in new business, improve customer loyalty and increase retention rates.

Too often, agencies find their operating models are centered on providing a quick quote. Accommodating a more sales-focused culture is a necessity. The right operating model can improve an agency’s competitive and economic position by boosting service levels and encouraging a discussion about every client’s needs before a quote is provided. This way the customer will understand how buying cheaper insurance can be a costly mistake.

There are two ways to approach this. Agents can restructure the business to ensure that producers are delivering value cost effectively. Agents who choose this route use their time with clients to understand their needs, offer them real solutions for their risks and sell the full account. Working with agent-focused carriers that provide tools to make this process more effective is a key to this formula’s success.

Second, many agencies are establishing a thriving sales culture through customer service centers (CSCs), which help optimize their resources and deliver high-quality service efficiently.

CSCs make sense when agents want to reallocate resources to help grow revenues. For agencies where service resources and/or time pose a challenge, the best service centers will support cross-sell initiatives, handle renewals and other routine account transactions.

When CSCs have been selected carefully and integrated into an agency’s operations, the results have been increased efficiency, lower costs associated with routine service delivery and more time to devote to growing the business.

Given the complexity and competitive nature of the business, even the best agents can’t go it alone. The combination of winning agents and strong companies cannot be overstated.

While, in the past, agents traditionally have looked to their “go to” markets for help, many of the leading agents are re-assessing how they characterize their markets. For many, the carriers they relied on heavily are now under significant pressure, and agents increasingly are looking for more dependable partners.

Once they find the right carriers, the best agents look to develop partnerships that really work–choosing carriers that are delivering the product mix, responsive, local decision-makers and market presence they need to be distinctive in their market.

Marita Zuraitis is president of The Hanover Insurance Group’s property-casualty companies.