How Independent Insurance Agents Can Combat Direct Writers

January 21, 2019

For years insurance agents and brokers have cannibalized one another. We – the insurance industry – have been turned from a technical and professional service into an on-demand commodity to the public. With lower expenses and more marketing dollars, direct writers have moved in and captured upwards of 30% of the personal insurance market.

How can independent agents stay relevant to keep insurance sales healthy and lead the charge in the combat for customers?

Many independent agents are quick to make claims of having more knowledge or better service, when in reality, they can’t or won’t live up to those claims.

While we can’t ignore the obvious perks of direct writers (like 24/7 phone lines for claims, always up-to-date information on changing trends and laws, and ever-growing budgets for newer technology), we must also not forget the perks that only independent agents can offer.

Independent agents can provide more value to customers than a cheaper premium.

If price was the only factor in purchasing decisions, there would be one car company called Cheap Motors. People buy perceived value. Insurance agents have been roped into playing the “apples to apples” price comparison game to win customers for so long that we have forgotten to take advantage of some of our biggest selling points:

  • The agent/client relationship: A true, growing relationship between two individuals – the client and their designated agent – compared to one-off interactions between the client and a random agent who happens to be available on the corporate phone system that day. 

  • Coverage consultation: The call center worker in San Antonio may not know what exposures exist in say Cleveland. They may not offer a coverage that you, the agent, knows is important due to losses you are seeing in your market. When selling or servicing a client, you must let them know you have expert-level coverage knowledge for their area.

  • Face-to-face interactions: In-person interactions are irreplaceable. Take a client to lunch to review that contract instead of talking over the phone. Invite them to stop by your office any time to say hello or ask a question. Your smile, non-verbal cues, and willingness to share valuable time with a customer will leave a lasting impression.

Know what your customers value – then sell it to them.

Many agents talk about value, but not many know what that means to their current customers or prospects. Do you really believe price is what closes the sell? Do you offer solutions for what customers really need, or do you just provide quotes and hope you are cheaper?

Research your target market. Interview your current customers. Ask questions and really listen to the answers. Are you actively listening by asking questions and responding to the feedback accordingly?

Your prospects and customers can be a wealth of knowledge to you, so start digging!

Take the path less traveled.

For years independent agents have been striving to operate their agencies in accordance with industry standards:

  • A call comes in through an automated phone system, just like the big boys. Why? 

  • The call is forwarded to a customer service representative (CSR) who begins the Q&A session: Name, address, car information, deductibles, etc. Will the caller and CSR remember each other’s names or ever talk again? Probably not.

  • The CSR inputs the caller’s information into the agency management system, which presents a quote that we give the caller. Has the CSR shared any of your perks or additional information with the caller before pitching a premium price?

  • The caller chooses to do business with another company that offered a slightly cheaper annual premium. For $50 more, they could receive exceptional service, additional coverages, peace of mind, and more perks from your agency, but it’s already too late.

Being different and standing out requires strategic change – some easy and some more difficult – from the industry standard. What is your agency doing today to pave the way down the path less traveled to more, happier customers and a continually rising written premium?

“If you always do what you’ve always done, you’ll always get what you always got.” —Henry Ford

WRONG: Times are changing – you will now get less!


 

Louie Watson, CIC, CRM, is the National Sales Leader and Agency Producer Coach at Indium. In addition to leading Indium’s Rock Star Producer Academy, Louie is the Vice President of Sales and a commercial broker for a large independent agency in New Hampshire. He is a U.S. veteran with a can-do attitude and works in the trenches selling personal and commercial insurance every day. 

Get access to Louie’s trench coaching through Indium's Rock Star Producer Academy →