Independent Agents can Enhance Growth Opportunities by Writing More Commercial Insurance

According to IIABA’s 2023 Best Practice Study, small agencies (defined as under $1.25 million in revenue) on average generate 43.9% of overall revenue from commercial P&C. Within SIAA, the national average of overall revenue from commercial P&C is 40%. And although there are exceptions, agencies with a healthier mix of commercial P&C business grow faster and generate higher overall revenues than agencies primarily focused on personal lines P&C. Agencies below that revenue metric (40% split of commercial P&C) should consider increasing the amount of commercial business they write.

Consider a few reasons why commercial lines should be the primary focus of a growth-oriented independent insurance agency. First, the independent agency channel has proven its strength as evidenced by market share. Independent insurance agencies maintain a competitive advantage in writing commercial P&C. The most recent Agency Universe Study published by the Big “I” states that independent insurance agents “placed 62% of all property-casualty insurance written in the U.S. in 2022”. Breaking that number down by lines of business, independent agent market share in Personal Lines is only 37%. Commercial lines market share differs significantly in that the independent agent channel writes 88% of commercial lines written premium. According to Chris Bogg, the Big “I” Vice President of Agent Development, Education and Research: “(I)ndependent agents continue to prove their dominance in commercial lines.”

Commercial Insurance Sustainability

Second, in recent years commercial insurance commissions have been more stable than personal insurance commissions. Even before the recent hard market, personal insurance carriers have been restructuring commission schedules which has essentially lowered overall commission averages. While 12% to 15% remains common for most new business primary (auto and home) personal lines, renewal commissions tend to average around 12.5% to 13.0% and in some cases (i.e. monoline) can fall as low as 5% to 10%. Commercial lines commission schedules have for the most part remained steady at 15% or higher, and in the case of targeted classes can be as high as 18-20% for new business.

Faster Growth with Commercial Accounts

Third, since the average revenue per commercial insurance accounts are typically larger, agencies will typically realize faster growth and higher agency revenue. IIABA’s 2023 Best Practice study noted for small agencies, the average book of business (commissions) per producer is $317,314 for Commercial P&C compared to $198,858 for Personal P&C. Not only is the average revenue per account higher, but the average growth rate is also consistently higher as well. Within SIA of Northern Ohio, commercial-focused agencies grow 35% more than personal-focused agencies on an annual basis.

Availability of Commercial Appointments

Finally, considering current market conditions, the availability of new appointments with commercial lines carriers is generally better than personal lines focused carrier appointments. While the hard market is impacting commercial lines in certain classes of business, there are still multiple classes of business that are profitable and fit a commercial carrier’s appetite. Many of these carriers, as a result, are still looking to appoint new agents that can write those preferred business classes.

How to Increase Commercial Growth Opportunities

Agencies looking to increase their commercial mix of business can start by identifying target classes of businesses their company partners are willing to write. Gathering updated success/hit lists and prioritizing the types of business an agency can best approach is essential. The most successful commercial agents are those that can focus on a few targeted niches as opposed to being a generalist. Since different types of businesses require more specialized industry knowledge, focusing on a few related niche markets can help a producer gain expertise to become a trusted advisor. Many business types can be protected with a Business Owner’s Policy (BOP). However, niche-focused producers may be able to better explain why contractor’s need separate errors & omissions (E&O) insurance, or the benefits of Employment Practice Liability Insurance (EPLI) to a retail or restaurant owner.

Approaching those prospects does take time. The best commercial producing agents are most effective by methodically developing a commercial pipeline revolving around gathering XDates. By using Internet tools including Google, Bing, Yahoo, Yelp, Manta, miEdge, Data Axle, or several other resources, agents can easily generate a contact list for businesses within a target class to approach. Developing an effective marketing and prospecting campaign, such as those illustrated in SIAA’s Business Insurance Advantage (BIA) program, an agency can develop an effective process for a commercial producer to be successful.

We have successfully helped many agencies expand their commercial business and feel confident we can do the same for you. For more information about how to create an effective commercial insurance growth plan, please reach out to Russ Durst.

To successfully achieve annual new business plans, small business insurance producers should understand five key metrics and concepts to be effective.

Agency/Producer Hit Ratio

Tracking the hit ratio (aka closing ratio) overall and by class of business can help producers identify where to focus. Low hit ratios may be the result of not having the right target market focus. This is where breaking down hit ratios by class-of-business can help identify where to spend more time and where to spend less time prospecting.  Also, if a producer’s overall close rate on small business is too low (typically below 30%), it may be an indication that the producer’s sales presentation is ineffective.

Carrier Hit Ratio

Knowing the hit ratio a carrier has on different lines of business can greatly help a producer focus on the right target markets.  Reaching out to partner carrier representatives and requesting target market lists that include classes of businesses that have higher “bindability” rates (typically 70% or greater) may help. Initially focusing prospecting efforts on these classes of business will help to optimize producer efforts. Partner carrier representatives can provide this information by class-of-business, typically at both a national and regional level.

Quote-to-Bind 

Quoting more policies that don’t have to reviewed by underwriting before binding means better efficiency through the quoting process. Lower quote-to-bind ratios typically reflect either an intentional effort to chase classes of business that require more underwriting sophistication or a lack of understanding of carrier appetite.

Average Account Premium

Understanding average premium written by account and line-of-business is important to understanding prospecting and production required to reach annual goals. For example, let’s assume a producer has annual new small business production goals of $250,000. If a producer’s targeted class of businesses has an average annual premium of $2,500, and the producer’s close rate is 40%, that means the producer will have to quote 250 businesses a year (approximately 5 per week) to write 100 BOPs (approximately 2 per week). One way to increase the average account premium is to identify businesses that also have other needs and can cross-sell other lines (i.e. business auto, cyber, EPLI, professional liability). A higher average account premium lowers the activity needed to achieve annual production goals.

Prospecting Pipeline / X Date

The most successful producers are those that understand two important concepts: (1) being top-of-mind for a customer when they are ready to buy is crucial, and (2) every sale means the producer has just lost their “best prospect”. A strong pipeline of engaged prospects (or contacted commercial X-date list) can be gold to a producer. The right number of engaged prospects will vary depending on average premium size, how many average attempts it takes to quote a business, and close ratio.

Understanding the business, what is important to the business owner, the business owner’s current insurance relationship, when they renew, and permission to follow-up prior to next renewal can fill a pipeline that will generate future results. Tracking, building, and replenishing an active pipeline to a desired number should be tracked. Falling behind means a producer needs to increase prospecting efforts. Once the desired pipeline number is achieved, a producer can then start replacing lower average premium/lower hit ratio prospects with higher average premium/higher hit ratio prospects.

 

To learn more about key metrics that small business insurance producers need to know, contact us at: CONTACT

Low unemployment and increasing wages make attracting and retaining talent more difficult than ever. Employees have more options when choosing where they want to work. A recent hire told me they chose our office between six different offers that they got in their first two weeks of looking for a new job!

With all that competition for employees, it is more important than ever that agencies work to distinguish themselves as a great place to work. Not only will this help them in obtaining new talent, but it will also allow them to hang on to the talent they already have in their agencies.

Four factors that employees view as important when it comes to job satisfaction include the following:

Learning and Development:

According to a recent LinkedIn Workforce Learning Report, 93% of employees would stay at a company longer if it invested in their careers. This is one of the easiest ways to differentiate your agency from others.  Encourage your employees to attend educational seminars.  Working with them to attain professional designations (CISR and CIC for example) can help to establish goals that will keep your employees focused and growing.  Take time to check in with your employees about topics in which they would like to expand their knowledge.  Investing in their knowledge will not only help to increase your employee’s happiness, but it will also greatly increase their productivity.

Work-Life Balance:

One of the common traits of successful entrepreneurs is that they have a strong work ethic.  Agency owners work long hours and often make personal sacrifices to sustain and grow their business.  However, we can’t expect that same dedication from all our employees.  Employees value freedom to enjoy their personal lives, even if it sometimes happens during work hours.  Consider having flexible hours, giving remote work options, focusing more on productivity than hours, and giving staff paid time off for volunteer opportunities.

Growth and Advancement:

Promoting growth and advancement for an employee starts with developing a plan.  Talk to your employee about their goals, understand where you can support them, and work with them to develop a path to get there. Set aside time to help provide feedback to help keep the employee engaged and continually working towards their goal. In doing so, make sure to clarify what opportunities are available and help set realistic expectations.

Positive Work Environment:

Employees that dread coming to work will not find it difficult to find a job elsewhere they will enjoy more! One of the most common reasons that employees are unhappy with their work environment is because of the attitude of their coworkers.  As an employer, you have two responsibilities. First, make sure you are not the one contributing to the negative work environment.  Second, make sure that you are dealing with any employees that are causing problems. If you avoid the tough conversations and decisions that come with a toxic employee, you can lose the respect and loyalty of the rest of your staff. Sometimes the best addition you can make to your staff is accomplished by removing the negativity.

Improving how your agency is perceived in these four areas will improve your agency’s ability to attract and retain great employees. Being known as a great place to work is a worthwhile pursuit for agency owners.

Policy renewal increases and customer quote requests are keeping agents busier than ever. With a finite amount of time available and knowing that it is unrealistic to expect agents to apply equal attention to all incoming work, effective prioritization becomes critical. One way to address this challenge is by developing a segmentation approach for Personal Lines.

What is Segmentation?

Segmentation is the process of dividing a larger group, such as customers, into definable and approachable subgroups based on shared characteristics, needs, and the actions to which these subgroups are most likely to respond. While there are many ways to segment larger groups, there are four primary types of segmentation: behavioristic (past purchases, shopping), geographic (zip code, urban/rural setting), demographic (homeowner, occupation), and psychographic (attitudes, values).

Agents looking to determine what variables to use for segmentation should ask the following questions with respect to their clients:

  • What do clients need? (i.e., auto, home, life)
  • How do they choose to do business? (i.e., digital, face-to-face)
  • Why do our clients work with agents? (i.e., price, service, advice)
  • Who are our clients? (i.e., homeowners, income level, occupation)
  • How much business do clients have with us? (i.e., policies per account, premium per account)
  • Who do our clients know? (i.e., large families, centers-of-influences)
  • How much do our clients advocate for our agency? (i.e., referrals, reviews)
  • What type of underwriting risk do our clients present? (i.e., number of recent claims)

Segmentation Approach: Variables

Once the variables to use are determined, agencies should consider how many subgroups (segments) should be created. As an example, an agency may differentiate segments by letters as A(typically VIP), B(preferred), C(standard), and D(other). While there may be different opinions as to the right number of segments to use, agency owners should make sure the process does not get too overwhelming to manage.

Defining segments and determining which variables to use should be led by agency owners with staff input. It should be well-reasoned to illustrate different characteristics that justify differentiated experiences. For example, using the above, “A” clients should be the most profitable, most likely largest average premiums, rounded accounts, and strongest referral source. “B” clients may look very similar, but perhaps they are not as strong of a referral source. “C” clients may be those with either monoline accounts or perhaps higher-than-average claims experiences. “D” client may look like Cs but perhaps they are also the most difficult to service (i.e., unreasonable expectations, do not value insurance advice). Regardless of how segments are defined, it should be clear which client segments most impact an agency’s overall operations (typically in terms of revenue and return on time invested).

Differentiating Client Experiences

Once segments are well-defined and categorized, determining how to differentiate client service experiences is where agencies will most gain time efficiencies. Since those clients in the most preferred segments have greater impact on an agency, more priority, time, and attention should be directed towards retaining those clients. For example, annual reviews may be more thorough for “A” clients. For “C” clients, rounding the account may take more of a priority. In another case, agencies may consider a lower premium increase threshold for “A” and “B” clients. An agent may only consider requoting “C” clients upon request. Again, differentiated experiences for different segments should help to prioritize tasks and help agents save time.

Developing a segmentation approach to personal lines will take some time. The plan should be developed, written, and communicated to all agency staff. Incorporating a segmentation plan into an agency workflow using existing agency management and CRM systems is also ideal. Segmentation in and of itself is not the goal. Instead using segmentation to help gain time efficiency is the point. So periodically reviewing a segmentation plan (perhaps annually) and adjusting to maximize results is also critical.

If you would like to discuss creating a customized segmentation plan for your agency, please reach out to Russ Durst to schedule some time.

With auto insurance premiums increasing by an average of 15%, consumers will look to agents for ways to respond. While independent agents can remarket accounts, the resulting disruption and potential to face increases again with another carrier at the next renewal may necessitate finding another alternative. Carrier telematic programs offer agents a better way to respond.

Telematics Opportunity

Consider the opportunity. According to J.D. Powers (2021 Pulse Survey), telematics participation has increased 30% since 2020. Another survey conducted by Nationwide (Agency Forward) states that “65% of consumers would be willing to use telematics to capture their data if it provided an insurance premium discount”. In fact, Nationwide Insurance projects 70% or more of new business will come from usage-based insurance programs by 2025. Telematics is, and will continue to be, increasingly accepted by consumers.

Telematics provide insurance agents with a way to help consumers lower their premiums. Most carriers offer an initial discount (typically 5-10%) for participating in their telematics program. Once enough time has passed and adequate driving behavior data is collected, some carriers offer as much as 30% in additional discounts for the safest drivers (discounts available and earned vary with driving behavior and carrier program guidelines). Many carrier representatives can provide insurance agents with information about best case, worst case, and on average what a typical client might save.

It allow agents to provide clients with a tool to help them drive better. Beyond the discounts, more information is becoming known about how telematics influences how clients drive. According to a recent article from Travelers’ website “(t)elematics can help drivers by heightening their awareness to their own driving behaviors”.

By helping clients save money and drive safer, agents will see three benefits as a result. First, by helping clients reduce their premium, agencies will notice higher client satisfaction. A recent J.D. Power survey shows that telematics consumers have a higher price satisfaction by nearly 60 points when compared to consumers that don’t utilize telematics. Second, increased client satisfaction will lead to higher long-term renewal retention. Referring again to a recent J.D. Power survey, consumers with telematics are 40% more likely to stay with their current carrier. And finally, considering clients using telematics notice safer driving behavior, their probability of being involved in an accident is reduced, which can lead to an improvement in an agency’s loss ratio.

Summary

Considering the benefits of higher client satisfaction, better retention, and lower loss ratios, independent insurance agents can no longer overlook the value of telematics. It may become one of the more powerful tools to offer clients during the ongoing hard market.

To learn more, CONTACT US at SIA of Northern Ohio today.

Creating a successful growth agency starts with having a focus on recruiting and hiring. Building upon that for the long-term, successful agency owners make ongoing training and internal development a priority.

Integrating training and development into an agency’s overall operations can be challenging. The components and resources available will vary from agency-to-agency. Typically, best practice agencies will leverage carrier, vendor, and professional association programs where available. In some cases, agency owners will customize their own programs to best fit their needs. Regardless, there are a few guidelines and ideas that successful agency owners consider for how to best train and develop staff:

  1. Define Knowledge and Skill Set Required for a Role – Successful owners clearly define agency roles and responsibilities through a written position profile. The position profile can include educational and professional certification needs, along with experience, knowledge, and skill set requirements. This helps to define the underlying characteristics that will allow someone to be more successful in their position. (Ideally, position profiles should be written prior to recruiting and hiring but should also be resourced when considering training and development).
  2. Evaluate and Assess Current Staff Capabilities – Referencing written position profiles and assessing current staff capabilities will help to identify potential areas for development. As an example, if an experienced client service representative excels at communication but struggles with technology, prioritize training to improve knowledge in various technology platforms. Another case could be an inexperienced producer that is great at prospecting but struggles with closing sales. Identifying a sales skills training program could help with that person’s development.
  3. Establish Training and Development Objectives – Most owners will have planned annual reviews. During this time professional training and development should be discussed. For employees that have expressed a desire for increasing their professional knowledge, evaluating various professional certifications could be mutually beneficial to the individual as well as the agency.
  4. Leverage Carrier Programs – Many of the larger insurance carriers (Liberty Mutual, Safeco, Nationwide, Travelers, The Hartford, and State Auto (just to name a few) will offer product training, sales, development, or certification programs for producers, client managers, and marketing staff. Programs may be available for new hires or for experienced staff. Carriers will offer programs to help develop agency staff. This in turn often leads to better new business production and client retention for them. While many of the carrier development programs will have a cost to participate in, a few carriers will offer discounts or reimbursements based on the strength of the relationship or for achieving production milestones.
  5. Affiliate with Experienced Professional Organizations – Professional industry associations (such as the Ohio Insurance Agents Association and Insurance Board of Northern Ohio) offer year-long educational, training, and development programs for both members and non-members. Many of these courses will also include continuing education certification and foster networking opportunities that allow insurance professionals to collaborate with others.
  6. Consider the Value of Professional Designations – Professional insurance designation programs allow employees an opportunity to become industry experts. Whether through prestige in recognition or knowledge gained, this will enable them to differentiate the level of service provided to clients. In Ohio, the most respected industry designations include the following: CIC (Certified Insurance Counselor), CPCU (Chartered Property Casualty Underwriter), CRM (Certified Risk Manager), CISR (Certified Insurance Service Representative), and AAI (Accredited Advisor in Insurance). While achieving these designations will take resources of time and cost, for a valued long-term employee, agency owners willing to make that investment demonstrate a commitment in staff development.

For SIAA member agencies, making use of the tools and resources available through SIAA’s Training & Learning Center (TLC) will also contribute to the professional development of an agency owner and staff. The TLC includes agency development, agency operations, personal & professional development, Web CE, and commercial lines training opportunities.

Agency owners that make training and development a priority in their operations. Management will improve their staff’s knowledge and expertise. Thus enabling exceptional service that will improve overall client retention. In addition, quality staff members are more often satisfied working for agency owners that invest in their training and professional development. This results in better staff retention. Achieving above-average agency growth is easier with a high client and staff retention.

There are several things to think about if you are a captive insurance agent who is considering becoming an independent agency. You are not a novice. You have the advantage of industry knowledge because you have worked in the insurance industry for a long time. Nevertheless, there will be some difficulties. However, with great preparation and consideration, these difficulties can be surmounted. 

When you overcome the obstacles, the rewards can be very satisfying. Owning your own business and being your own boss may be liberating and satisfying. You are responsible for your own success or failure. 

While switching from a captive to an independent insurance agency does not technically make you a “new agent” in the traditional sense of the term, it can feel like a fresh start. You won’t be able to rely on your current clientele and book of business for income. You’ll need to draw in fresh clients and figure out how to win their patronage and confidence. Here are some strategies for taking on this challenge: 

Be visible online and on social media.

Relying on word-of-mouth in the conventional sense is a bad strategy. This is because it can take time for the word of a happy customer to spread. To get your name out there and provide current and future clients access to rapid resources, you must create a social media presence and a beautiful, user-friendly website. A blog can help you become known as an industry authority. It also helps point visitors to your website and social media accounts for advice on the insurance industry. 

Make yourself known in your community.

Being an involved community member and networking are crucial. You probably didn’t have to put in all that much effort to build the brand name because your captive probably participated in a variety of charitable and community events. The independent insurance agent’s situation is quite different. You need to be known for more than simply insurance, too. Customers are seeking a personal connection that can only be achieved through local interactions, such as sponsoring a charitable event or giving to a local cause. 

Establish partnerships to maximize access to resources.

Associations play a significant role in the networking of independent insurance agents. By establishing contacts with other businesspeople in your field and gaining access to the association’s resources, you can learn vital information. SIA of Northern Ohio in partnership with SIAA has a multitude of services for independent insurance agents. 

While switching from a captive to an independent insurance agency can be difficult, it has advantages and rewards. We strongly advise you to look into the exclusive membership perks offered by SIA of Northern Ohio if you’re interested in switching from a captive to an independent agent. 

 

How can an owner grow their agency most effectively? Hiring and developing qualified staff is a key differentiator between successful growth agencies and their peers. For many owners an essential starting point begins with a focus on recruiting and hiring.

Agencies that grow faster than their peers prioritize revenue-generating activities. Growth can be achieved by developing new sources of business, increasing quoting/proposal opportunities, improving cross-selling techniques, rounding out accounts, earning positive reviews, and gaining referrals. To grow, it becomes necessary to add more capacity by hiring additional staff to help find new customers or service existing clients.

Developing a hiring process and following through with it is vital. Finding people that are both loyal and high quality is the goal of every agency in the country. With remote work options on the rise, competition for that valued talent is tighter. Here are some guidelines that successful agency owners use when finding and hiring top-tier talent:

  1. Prepare their mindset – Understand that finding qualified staff requires an owner to proactively pitch an opportunity. For example, a top salesperson is extremely unlikely to walk into an agency and ask if they are hiring, much less respond to an ad or posting online. This means that an owner’s mindset needs to be geared toward active recruiting. An owner must always be recruiting and be ready to do the hard work.
  2. Explain the role – Create a position profile that defines the role, objectives, how success will be measured, key responsibilities, core competencies, requirements, and expectations. Clarity early in the process reduces future potential conflict resulting from ambiguity.
  3. Use a process – There are products that can help organize, track, and process applicants to postings online. Insurance agencies need to take advantage of them! Using technology can give an agency the perception of a successful enterprise providing an edge for recruiting. There are applications that will share job postings on multiple job boards. Other tools will manage and track the entire process and all communication right up to and through the hiring date. Two popular options are Ideal Traits (idealtraits.com) and Career Plug (careerplug.com). Like other recruiting sites, these two companies offer varying degrees of customization and automation to meet individual needs and goals.
  4. Hire Methodically – Successful agencies take time and use a multi-step process to screen, interview, and filter candidates. Agency owners may be tempted to rely too much on their ability to “read people” without validation. Skipping steps throughout the process could result in a bad hire. Employment assessment services provided by organizations like PeopleSense Consulting play an essential role in helping owners understand if a candidate fits a position profile. The opportunity costs of time and money wasted on a bad hire outweigh the small up-front costs to properly assess a candidate. Sticking to a proven process will significantly increase the chances of hiring success. Explaining the hiring process to candidates has advantages. This may allow “unqualified” applicants to self-eliminate. Also, it provides an opportunity for a good salesperson to question and interview the agency owner.
  5. Define the culture – People want to know who they work for. This means they want to understand the vision and mission of the agency. Candidates want to know why their work matters. Top talent will want to know what difference they will be making for the business and the world it serves. It all begins with how a business wants to be perceived in the market. Fit is critical. An average but consistent agent that fits in well with a team may be a better hire in the long run than a top producing agent that seems to bring pain and irritation in with every deal.

Even with a consistent recruiting and hiring process, what works for one agent may not work the same for another. Following the guiding principles listed above will increase an agency’s chances of success.

Successfully Navigating through a Volatile Insurance Market

Inflation and higher gas prices continue to drive cost increases and volatility. It’s important to learn how our agents are navigating a volatile insurance market. Personal and commercial insurance premiums will continue increasing (10% and greater) as carriers cite underlying factors such as material shortages (car and parts inventory), higher automobile accident frequency and severity, escalating replacement costs, higher material demand (lumber), supply-chain bottlenecks, volatility driven by fuel prices, and labor cost increases. Verisk (which provides quarterly reconstruction cost trend information) notes “total reconstruction costs, including materials and retail labor, rose 13.5% from April 2021 to April 2022, nearly doubling the pace of increase from January 2021 to January 2022, when costs rose 7.2%” (Source: Verisk 360Value Q2 2022 Quarterly Reconstruction Cost Analysis).

Insurance carriers will respond by continuing to increase premiums to stay ahead of loss trends driven by higher costs, frequency, and severity. Carriers will also assess their agency relationships to make sure production and profitability are meeting their standards. New business production, policy retention, and loss ratio trends (year-to-date and 36 months) will be priority metrics used by carriers to evaluate agency codes.

Many of these factors remain outside of an agency’s control. However, there are ways that agents can respond and be successful. First, client engagement is key. Having confidence in responding to client questions regarding rising premiums is important. Staying educated on premium trends, comprehending the underlying factors, and being able to communicate this clearly and concisely to clients are critical. Most clients see how inflation and rising gas prices are impacting other areas of their lives. While they may not like also seeing their insurance premiums rise, they are more likely to understand it.

Second, having a written client loyalty and retention plan is valuable. For agencies with multiple licensed staff, taking time to ensure everyone is aware of the plan is important. This could include developing talking points to handle incoming client calls, when and how to proactively engage clients (i.e., frequency and timing of annual reviews), what premium change threshold (i.e., 15% increase) should trigger remarketing efforts, and the steps to follow for client reviews (this could include selling carrier value, finding discounts, and cross-selling where appropriate).

Third, considering the possibility of increased insurance consumer shopping, efficient independent insurance agencies have a greater opportunity to acquire new clients. Boosting marketing efforts through direct mail, email marketing, and social media, along with an effective consumer-facing agency website and the utilization of sales and marketing automation, may afford opportunities to find new clients who are likely to shop for their insurance.

Finally, agency owners will also need to strengthen carrier relationships. This means reviewing production and loss reports to make sure year-to-date and recent year-end (typically in the last 24 to 36 months) new business, retention, and loss ratio metrics meet carrier expectations. Where they fall short, reviewing agency sell sheets, carrier appetite guides, discounts/credits, product initiatives (i.e., use of telematics) and if possible, the book profile to help identify opportunities for improvement. Validating that new business guidelines are being met for writing standard/preferred business with key carrier partners should also be essential. And in the case that an agency owner feels there are too many carrier relationships to satisfy production requirements, book consolidation may also be something to consider.

While insurance premium increases and volatility are a challenge, it also presents an opportunity. Agency owners who can initiate a plan that responds and engages clients and prospects while maintaining carrier relationships will have a greater chance of navigating successfully through this volatile market.

Please feel free to reach out to contact us directly with questions or comments.

Having an established new client onboarding process is an essential foundational element that impacts retention and client loyalty (see article: Key Performance Indicator – Understanding the Impact of Retention and Renewable Income on Agency Growth). Determining what makes a successful client onboarding program varies from agency to agency. A few questions to consider with respect to newly acquired clients:

  • What were some things clients mentioned that their prior agency might have lacked?
  • What are some of the most common questions you have received from new clients in the past?
  • In the case of past clients who did not renew with your agency after the first 12 months, what were the reasons those clients left?

Knowing the answers to these questions might help an agency focus on what should be communicated to new clients. For example, if a new client left their prior agency because they felt service was not acceptable, how can your agency promote your service offerings to match the client expectations.

Let us consider a few touchpoint ideas that might be a worthwhile part of a new client onboarding program:

  • Thank You Cards – This is still a people business and relationships are key. Ideally, a signed thank you card will stand-out.
  • Agency Welcome Kit – Whether this is a printed packet or an email communication, a welcome kit that includes a few things that might be valuable for your client to know could include:
    • Brief Agency Overview
    • Staff Photos with a brief bio and most importantly a one-or-two sentence statement on how they help clients. (i.e., “my name is Russ and I handle service requests for personal lines clients”)
    • General Service Availability to include hours of operation and after-hours phone number (if available) or self-service links (if available)
    • General Claims Contact Information which may include carrier claims numbers and or websites
    • Information about the agency’s online presence (website and/or social media)
    • Value of the Independent Insurance Agent – it is important to make sure your client understands how they benefit working with an independent insurance agent
    • Any brief info with respect to agency community involvement that may be noteworthy
    • Any information with respect to an agency’s client referral program
  • Who-to-Call Information Page Specific to the Client – The agency welcome kit may be a general promotional piece. So, having a separate point-of-contact specific to the client and their policy could provide additional value. For example, perhaps it’s a letter from the assigned client service representative providing carrier clams numbers, promoting carrier self-service, or other useful information that may be more carrier specific.
  • Follow-Up Call – A quick follow-up call to make sure the policy, agency welcome kit, and/or information page was received and to see if the client has questions will typically be appreciated. During this call, a client service rep (CSR) may also direct the client to the agency website or social media page. In addition, the CSR may walk the client through the process of how to register for self-service on a carrier site or downloading any available carrier or agency mobile apps. This follow-up call may also be a great opportunity to let the client know about any agency client referral programs and inquire if the client may have referrals that come to mind.
  • Satisfaction Survey – This could be a quick survey to determine initial client satisfaction. For those that respond favorably, take an opportunity to request an online review.
  • Agency Product / Services Information – Once the new client has had an opportunity to get familiar with the people in the agency and received proactive onboarding assistance, a one-page information sheet detailing all the products and services the agency offers will create awareness for other products/services the client may need in the future. Do not assume that clients will remember information like this at point-of-sale.
  • Account Review Touchpoint – Prior to the first renewal, an email, letter, or phone call to check-in and verify that the client has been satisfied with agency relationship is important. Assuming the client is happy, remind them that you look forward to continuing providing that same high level of service. If not, it is important to address any issues before they receive any renewals. This is also an opportunity to see if anything has changed in the client’s life which may impact their insurance needs. It is better to have this conversation before they receive any renewal information so that they have the confidence to reach out to you first if any concerns do arise.

An onboarding program with multiple value-added client touchpoints will not guarantee second-year renewals. But, it will increase client-engagement to provide your agency every opportunity to improve the chances of working with new clients for many years.