August 2008

27
Aug

State of the Industry – Our Soft Insurance Market

One of my favorite Gilligan’s Island episodes was when a man named Lord Beasley Waterford landed on the island of castaways in pursuit of the world’s rarest butterfly, the Pussycat Swallowtail www.youtube.com/watch .  In one scene Lord Waterford is so focused on casting his net on this rare species that he never realizes he was stepping in quicksand.  Lord Waterford misses.  Still fixed on the butterfly’s escape path, he is up to his neck in quicksand.  With the Howells observing nearby, he exclaims, "never mind me, after that butterfly!"

This small, although simple, example often illustrates insurance agents in a soft market.  We can become so focused on what we’ve been doing over the last couple of months or even years that we realize it’s too late to respond to a changing market environment. 

There’s no doubt today’s soft insurance market is defined by slashed insurance premiums, cut commissions, an increase in agency mergers and acquisitions, standard companies entering previously unchartered markets, and smaller number of policies being premium financed.  We can’t say we didn’t see this coming since this market has been softening well before our economic credit, housing, and oil crisises.  Actually, according to www.marketscout.com the P&C insurance industry has been softening since April, 2003.  The chart below from MarketScout depicts the Average P&C Rate Increases over 2003.

 

It’s interesting to note the percent increase in December ’03 is less than half of what the percentage increase was in January ’03.  Moreover, MarketScout paints a multi-year picture of this trend.  Please follow this link and scroll half way through the page to see the charts of composite market conditions for 2001-2008.  www.marketscout.com/frontend/barometer2.asp

 

3 Ways Agents Can Grow In a Soft Market – Not only are the top performing insurance agencies surviving slashed premiums, curtailed commissions, and price wars, they’ve made this an opportunity.

  1. Educate your clients – Teach your insureds about the ebb and flow of insurance premiums.  Chances are they probably experience similar forms of business cycles so they may understand.  Maybe even some clients have been with you long enough to have seen their premiums rise and fall.  Now is a good time to reinforce that understanding and your relationship with that client.
  2. Find Other Gaps In Risk – A drop in premiums presents an opportunity for agents to probe their clients for other areas of risk.  Most businesses forecast a budget for expenses including insurance.  So take this opportunity to explore other areas of coverage.  You may uncover more business.
  3. Offer Other Lines of Coverage – In other words, diversify your offerings to your insureds and prospects.  Adding other components of insurance like life/health, key-man insurance, retirement benefits, and health benefits are examples of how agencies can smooth out the fluctuation of the soft P&C insurance market. 

All industries fluctuate over time.  No market trend lasts forever.  Both of these we know.  But the big take-away is to keep an eye on the macro-environment of the market and prepare for the next move.  The below chart (from MarketScout) is the silver lining in this soft market.  You don’t want to sound like Gilligan in the next market trend.  "Geez skipper, I didn’t see that one coming!".  -villageChief

 

 

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19
Aug

Insurance Agents – The Internet is Your Friend

"It has become appallingly obvious that our technology has exceeded our humanity." – Albert Einstein

We can’t ignore the efficiencies of technology nor can we live without it.  We engage with technology everyday.  In the independent insurance business it’s just a fact of life now.  Embrace technology or wither on the curb. So if we truly can’t beat ‘em, and we can’t, then let’s join ‘em.  I’m talking about harnessing the power of technology to enhance our business/process flows and communication.

I’ve compiled a short list of websites to help agency producers, CSRs, and principals with business efficiency, customer service, industry news and updates, as well as office organization.

You know your congratulatory card will not make it in time to one of your "A" clients so what do you do?  Try out www.hallmark.com.  And send them an E-Card.  It can be a song card, a card with a joke, or even a card that includes a picture you can upload.  Everyone loves to be remembered on his/her birthday so remind yourself to get something to that client or prospect on time through www.birthdayalarm.com.  Yes, it’s a free reminder so you won’t have to keep up with your best client’s or prospect’s birthday.

One of my all time favorite tools online is the ever-ready www.dictionary.com and http://thesaurus.reference.com/ .  Both of these are quick and pretty self-explanatory.  If you’re compiling a pitch or thanking a client for their business, this is a fast way to enhance your message.  One other site that assists me through the maze of daily techno-jargon is www.webopedia.com.  Not sure what exactly GUI stands for?  Well, this site has the answer.

Independent insurance agencies can connect with other agents around the US over any topic at www.insurancegossip.com.  You know sometimes the best information received at conventions or conferences is usually between fellow agents.  At this site they’ve created an open platform to learn and share.  The only drawback I’ve encountered is a slow response rate.  However, here’s another option.  www.mynewmarkets.com is sponsored by the Insurance Journal.  They have a forum as well, but I don’t think it offers as wide a scope of topics.  However, there is quality agent dialog.

Do you have multiple copies of a single spreadsheet or document on your desktop of the same information because it’s been amended by others and now it’s confusing to keep up with the latest revision?  Your answer is with google/documents.  Go to Google.com and type in the search window "google documents".  I share college basketball tickets with two friends.  Google documents allows us to sync everyone’s schedule with what games each one wants to attend on one spreadsheet which eliminates duplicates emailed back and forth.  Post your document or spreadsheet online and you can determine who can only view and who can view and edit.

Bottom line is this.  If you need a service or piece of automation, look to the web first.  There’s a darn good chance something out there exists to fill your need.  Take advantage of the free tools and services on the web.  If you’re willing to learn and adapt, these little technology nuggets can make your job easier.  -village chief

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11
Aug

Networking – Part 2 by Thom Singer

When you seriously want to network and build a reputation in your business community, an independent insurance professional must embrace three points:

1.  Establishing your network takes time.

2.  Nobody else can network for you.

3.  Consistency is the key.

The mistake that many make is that they decide to establish relationships and expect to have real connections, friendships and referral business instantly.  This cannot happen.  It is much like dating.  You most likely did not propose to your husband or wife the day you met them.  You invested time and shared mutual experiences that led you to creating a more permanent arrangement.  Why are other types of relationships different?  It takes many encounters and the developing of an understanding to have a true bond.  It also means that you have to invest in helping other people succeed without any guarantee that they will return the favor.  The "what’s in it for me" mentality keeps people on the sidelines and allows the competition to become established.

Networking and building a personal brand to those in your community does not happen by accident.  It involves dedication and planning.  It cannot be delegated.  You cannot ask your secretary to go network for you, nor can you ask a young associate to go forth and make you a known entity to potential clients and referral sources.  You have to personally show up at the events and spear head your own follow up activities with those whom you wish to get to know better.

Finally, nothing replaces consistency.  If you think that you can network and participate in business organizations on those rare occasions when you are not busy and are in the "mood" to socialize, you will find yourself all alone at the networking station.  To create a professional sphere of influence means that you are always engaged with others regardless of your workload or other factors.  Those who are best networked have always found time for others.   -  Thom Singer

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05
Aug

Networking – Part 1 by Thom Singer

Today is a guest post.  It is part one of a two part series on networking.  If you don’t think networking is vital to your agency’s reach in community and / or industry, keep reading.  Thom is the director of business development for vcfo, an operational accounting, HR and recruiting firm.  He is also a professional speaker and the author of four books on the power of business relationships and networking.  More information at www.thomsinger.com.  Enjoy!

You don’t believe in networking as an important tool to grow your business?

"Thank You" says your competition.

Let’s face it, people do business with those they know, like and trust.  However, many insurance professionals hide behind their busy work and do not dedicate the time to meet new people and cultivate real relationships.  Since you work in a competitive industry, anything that you can do to stand out from the competition should be a high priority.  Those who avoid networking are handing their competitors a valuable gift.  Being top of mind with clients, prospects and referral sources is the only way to succeed.

 All opportunities come from people.  Because of this everyone should put a heavy emphasis on serving others.  Instead many approach networking as a "what’s in it for me" mentality.  This is short-sighted, as those who help others are always rewarded in the long run.  The more you do for others, the more successful you will be over time.  Every action you take does not need to directly benefit your bottom line, as most people appreciate those who do favors out of the kindness of their heart.

 Look at those who are at the top of the heap in you town or industry.  Most likely you will find someone who has a deep rolodex of contacts with people who admire and respect them.  Those who are selfish or cheaters get left in the dust.

 Look at your client list and determine whom do you know that should meet each other?  Being a connector who assists others to discover key individuals that can help them succeed will make you indispensable.  It is easy to fire your insurance agent, but it is hard to fire the person who is always sending you new leads, referrals and information.

Make meeting new people and advancing existing relationships part of your daily routine.  Do not bury yourself in your office and pretend that you are too busy.  We all know that you can find the time for anything that it is a priority, thus realize your networking efforts are important and act in such a manner. 

You will never regret establishing a strong network that can and will refer you additional business.  If you are not meeting key people in your community, rest assured that your competition is constantly trying to expand their reach.  If you sit back and let them establish the lead brand in agency choices, you will never catch up.  Start now to make, grow and keep your business relationships. – Thom

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