The Time is Now!

Demographics, technology and advertising threaten the future of independent agents and brokers. As the client base ages and evolves their expectations, demands and buying patterns are changing as well. It’s influenced by the information consumers can obtain on the internet. The internet also offers 24/7 access for pricing and purchasing insurance. At the same time an enormous amount of advertising is designed to convince consumers that price should be the major influencer in buying insurance.

These ads also encourage consumers to cut out the middle man and buy direct from the carrier, who is available anytime you want to buy and for the lowest price possible. If independent agents are to remain a significant player in the insurance marketplace they must change how they operate. Recent surveys show that although consumers frequently get pricing and information about insurance on the internet they want to deal with someone they know, like and trust when it comes to purchasing.

Agents need to seize on this and reinforce the idea that having someone watching out for what is in the consumer’s best interest is the right way to buy protection. Consumers need to be educated on exactly what they are buying and the importance of it. Agents need to stress the knowledge, expertise and support they provide clients who have been involved in a loss. Be candid letting them know when they purchase coverage direct from an insurance company there will be no one to make sure that they receive everything they’re entitled to and in a timely manner. The New York Department of Financial Services offers many consumer protections however unless they know and understand what they are and how to have them enforced they won’t do consumers much good.

Agent’s primary objective needs to be educating consumers on the importance of selecting the best protection for themselves, their family and their business. Let them know that you always provide the most competitive price possible. The key is to get the best protection and value you can for the insurance premium you pay. Consumers believe the advertising they are bombarded with for 3 reasons:

1. No one likes paying for insurance so the less they have to pay the better they like it.

2. They don’t ever picture themselves being involved in a serious loss. That’s something that will happen to somebody else but not to them.

3. They don’t understand and appreciate the value of having the proper protection provided and serviced by a professional insurance agent.

Sadly some independent agents and brokers help to perpetuate the lowest price myth. They operate as order takers, not offering personalized insurance protection but instead playing the lowest price game promoted by the direct response online insurers.

Technology has made it highly cost effective for direct response carriers to write large volumes of consumers very inexpensively. They place the responsibility for deciding what coverage is appropriate and adequate on the consumer. Unfortunately most consumers don’t have the level of knowledge to know what coverage to choose and many put themselves at risk.

If independent agents and brokers are going to solidify and grow their market share they must educate consumers on the complexity of coverage and the need to have solid professional advice on what coverage to carry. They should not be afraid to expose the danger of consumers making coverage decisions without the professional advice provided by a knowlegable and professional agent or broker.

It’s also important for agents and brokers to get consumers to realize that no one knows who will be involved in a serious accident or loss. It’s very possible they could be the victims. They only have to look at the recent natural and manmade catastrophes for examples of this. The most effective way to buy insurance is having personalized protection recommended by an insurance professional they like and trust and who provides excellent service including support in handling a claim. Good agents know that they must offer that protection and service at a competitive premium.

In order to have the time to spend with consumers developing their protection package and providing it at a competitive premium based on value requires maximizing technology in your agency.

Workflows need to be streamlined and automated. The goal is to provide your staff dealing with clients and prospects the maximum amount of time to work with them.

Social media, digital marketing, a dynamic and constantly evolving website as well as an informative blog are all critical in reaching the diverse groups of consumers looking for insurance protection.

It’s important to be seen and recognized as a professional and expert by the internet community as well as the community you interact with face-to-face.

You must be also be accessible to clients and prospects when they want and need information, advice and service. This may mean changes in your operation or obtaining outside support services when you are not available. In today’s environment it’s not business as usual. Consumers want instant service and they want it when it is convenient for them. If you don’t provide it they will find someone that will.

None of what I have written in this column is new. Much of it I have touched upon in past articles and classes I teach. Some of you are probably tired of hearing me mention it. The problem is time is of the essence and agents have to commit to doing these things or they will continue to lose business to direct response carriers.

I firmly believe in the value of the independent agency system. I also believe that given good information about the benefits of buying from an independent agent, consumers will see the value as well. The key is making sure consumers are given all the facts and understand all the pitfalls.

No one will deny that it is hard work yet anything worthwhile is. I would hope that most agencies rise to the challenge because it will magnify the messages consumers see and hear. I’m confident that those agencies that do make these changes will see positive results. The key is making it a regular part of your agency operations and focusing on it every day.