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T H U R S D A Y , D E C E M B E R 1 3 , 2 0 0 7 Industry News InVEST
Donate to InVEST During the Holidays While you are out holiday shopping, don’t forget to pick up an item for the InVEST Silent Auction. InVEST is looking for electronics, jewelry, trips, sports tickets, sports equipment and home décor items. If you would like to make a donation but aren’t sure what to buy, the InVEST national staff can do the shopping for you. All you need to do is fill out the contribution form indicating you would like the staff to shop for you, along with a check made out to InVEST for the amount you would like to donate. To download the InVEST Silent Auction contribution form, click here.
The 2008 InVEST Silent Auction will take place during the Big “I” Legislative Conference & Convention April 3-4 at the Marriott Wardman Park Hotel in Washington, D.C. All proceeds generated from the silent auction fund the scholarships for InVEST students who plan on majoring in insurance, risk management, actuarial science or business. Thank you in advance for your contribution and support of InVEST. For more information about the InVEST Silent Auction visit www.investprogram.org. To make a donation to the auction, contact Sandra Skipper at 703-706-5437; sandra.skipper@iiaba.net.
VIRTUAL UNIVERSITY
Get Answers at the VU Library No great university is complete without a great library, and the Big “I” Virtual University is no different. Students deserve the opportunity to get the information they need, when they need it, on their own terms. That’s why the Big “I” has poured resources into creating the VU Research Library, the most comprehensive source of information the industry has ever seen. The Research Library is broken down into three main sections:
Insurance Information
Here you’ll find all of the major ISO policy forms and endorsements along with those from other vendors (all for educational purposes only). There’s also an extensive body of expert-written articles and advice, including coverage analysis and sales tips.
Business Information
Everything you need to know to operate your business in the most successful, effective way possible can be found here. Organized under three main headings —agency management, business skills and professional skills—this section has articles on running your business, making the most out of your sales and marketing efforts and keeping your customer service efforts in tip-top shape.
Technology Information
Technology is complex and it changes fast. It’s also one of the most important tools to master in order to run a successful business. Use this section to keep up with the latest information on agency management systems, general automation issues, the Internet and other tech-related matters.
The VU is constantly updating and adding to the Research Library with the goal of making it the best it can possibly be. All Big “I” members are invited and encouraged to take advantage of this industry-leading educational resource that is available at no cost. Visit the Big “I” VU at www.iiaba.net/VU.
BIG “I” FLOOD PROGRAMSM
"Just Ask" About Flood Coverage What did our industry learn from Katrina? After the storm settled, many homeowners claimed that their agents had never asked them about flood insurance. That perception helped create an E&O disaster with thousands of E&O claims filed against insurance agents in the Gulf States. The simplest thing an agency can do is “just ask” all clients to let you review their homeowner’s policy to make sure they have proper flood protection. Every CSR and producer in your agency should be asking the “Just Ask” question before hanging up the phone after taking an endorsement request or payment. An agency focused on E&O would then document the client’s record about the offer to conduct a review. For clients who choose to do so, also document the review.
Don't delay. Call an office meeting and discuss the best way to launch your own “Just Ask” flood marketing campaign. For more information on the Big “I” Flood program, visit www.independentagent.com/flood.
ACT
Independent Agencies Making a Paradigm Shift ACT’s Strategic Future Issues Work Group conducted a focus group with 10 Generation X independent agents attending the Big “I” Young Agents Conference in San Diego in September. Facilitated by agency consultant Steve Anderson, the young agents were questioned about how they see their customers’ expectations changing and how they believe their agencies will need to respond. Most interestingly, these agents agreed that their agencies should make a paradigm shift to remain competitive in the future and made several recommendations about how the carriers can help in this transition.
Profile of the Young Agents
The participating young agents were in their 20s and 30s and are primarily focused on commercial lines production. Most were from family agencies, large and small, located in rural and suburban locations. They seem to be strapped for time and are striving to create more free time to spend with their families.
They do a lot of their buying online to save time and do not waste time on sites that do not give them a good user experience. They are totally comfortable using their credit card online and like the value added services they receive – such as automatic resending of products or emails alerts when they are about to run out and customer rankings of products. They love Google Alerts because they can get automatic emails when there is new information about a client, competitor, vendor, carrier or industry their agency is targeting. They usually go online first to get information or resolve a problem.
These agents define good customer service to be – “they know what I want and they anticipate how I want to do business.” They like the Southwest Airlines business model not only because of the easy to use technology, but because their employees have a good attitude and they do not try to take advantage of the business traveler.
The agents use instant messaging internally within their agencies and use text messaging in their personal lives. They particularly like text messaging because it is currently reserved for personal messages from family and friends, and they do not want to receive business and commercial messages this way. They believe their clients would feel the same way.
The agents are using email primarily with their commercial clients and their carriers. One of the agents has started to use live Internet meetings with commercial lines clients where appropriate when the client is located some distance from the agency.
The agents use a lot of the electronic newsletters to get their industry news, but also try to read the industry magazines when they can find time. Some of the agents have started to download podcasts of sports news and news summaries. Even though these agents are not the primary users of technology in their agencies, they get frustrated because they perceive that the technology they use in the business is considerably behind the technology they use in their personal lives.
Changing Customer Expectations
The agents find their customers to be more knowledgeable than ever and want convenient options to deal with their agent when and how they see fit. One agent cited his cell phone company which provides him an email when his bill is due, with a link to pay the bill right there in the manner he chooses.
The agents believe most of their customers also have done insurance research on the Internet and perhaps have gotten quotes there, particularly in personal lines. One agent cited COM Score’s 2007 research which found that more than 50% of recent purchasers of automobile insurance from agents also got a quote online.
The agents believe their customers perceive personal lines and small commercial lines to be a commodity. One agent estimated 20% of his customers are with him for service and 80% for price. Another pointed out that most of his customers could replace him as agent and stay with the same carrier in his town, because his carriers are so widely represented there. Still another said that even though his agency provides his construction clients loss control, human resources and Department of Transportation consulting services as a value added, his price must continue to be in the ballpark to keep the business. The agents concluded that even in this highly competitive, commoditized environment, the keys remain building relationships with customers, providing distinctive value added services and providing responsive service.
The agents said that another change they have noted is that their customers want to have the option to pay by credit card so that they can get miles or points. Several of their carriers offer this option, but this remains a challenge on agency billed business.
The agents see the primary customer interest in their Web sites to be for information about their agency and for information and services relating to their policies – such as getting billing information, making payments, printing auto ID cards and generating certificates of insurance. Some of the agencies are generating online sales for certain specialty lines such as travel insurance and horse mortality insurance. So far, auto insurance and certain specialty coverages seem to be the only areas where online sales have taken off, but the agencies worry about “the model that has not been created yet” making a big impact on other lines of their business.
Shift in the Agency Paradigm
The discussion brought out that there needs to be a major shift in the type of value that independent agencies deliver. The value is no longer in the transactions that the agency performs. Customers today take these as a given. They are looking for a new value from the agent that justifies the customer’s buying from the agent rather than just going online.
“If we just turn ourselves into order takers, we’re out of business,” said one agent.
Another said we need to make transparent to clients all of the services we provide for them, such as the fact we have searched the market and here are the best options. This new value for personal lines customers might be pro-active risk assessment, providing cost saving options, claims counseling, disaster planning advice, etc. For commercial lines customers, it might be risk counseling with a special understanding of the particular industry, claims experience analysis for loss control, verifying experience modifications, assisting with the audit process, human resources counseling, disaster planning and recovery, legal and accounting seminars, etc.
A paradigm shift in the value the agency provides its customers requires changes in the functions agency employees perform. Processing of transactions needs to be automated to the maximum extent possible, so that time is freed up for agency employees to be repositioned to provide these new services. In order to accomplish this, there must be a second paradigm shift and that is in how agency employees do their work, in how agents transact business with their carriers and in the number of transactions customers can perform for themselves on agency Web sites. Industry initiatives such as – real time, download, eliminating paper and enhancing agency Web site functionality – are creating the critical tools agencies will need to make these paradigm shifts.
The young agents expressed their frustrations with many of the older CSRs in their agencies who are reluctant to change and use the new technology tools that are available. One mentioned how the younger CSRs work fully electronically, while the older CSRs are reluctant to move away from their paper files. Another agent noted the importance of the agency’s taking the time to train the CSRs on the capabilities of their agency management systems so that more of the system’s time saving features are used. The agents also expressed their frustration with some older agency principals “who stand in the way” of the agency’s making the changes necessary to implement improved technologies and workflows and to transition their employees to more value-added roles.
How Carriers Can Help
The young agents had several recommendations as to how the carriers could help them make the needed paradigm shifts:
• Implement real time, download, and other of ease of doing business initiatives, so that agencies can reduce processing time.
• Reduce the time it takes to get a quote and eliminate as many of the “40 extra questions” as possible.
• Use Web services to pre-fill underwriting info, such as building size, age, etc.
• When the carrier has an interaction with the customer, share that information with the agent. Examples would be alerting the agent when the customer has filed a claim and providing claims download.
• Help agents provide customers with valuable risk management and loss control information by making real-time claims data easily available to agents, flagging important trends in that data, and providing useful analyses of that data.
Another important way for carriers to help agencies is to make their information more easily accessible. One agent said it takes him two hours a week to filter through his carrier emails. The agents recommended that carriers:
• Provide a Google Alert-type capability so that agents can specify the type of information each of their employees will receive automatically.
• Provide a robust search engine on the carrier Web site and provide past notices on the site so the agent can retrieve them easily when needed.
• Make it easy to locate any needed forms or endorsements and manuals online.
• Use email notifications sparingly and only when important. The agents said that when carriers send three or four emails a week, they delete them without reading them. Also, specify in the email the employees in the agency to whom the email has been sent, so the agent knows when forwarding is necessary.
Jeff Yates (jeff.yates@iiaba.net) is executive director of the Agents Council for Technology (ACT,) which is part of the Independent Insurance Agents & Brokers of America. ACT’s Web site is www.independentagent.com/act.
This article reflects the views of the author and should not be construed as an official statement by ACT.
IA MAGAZINE
Unwrap the December Issue
IA’s holiday gift to you is here—the December issue! Here’s a peak at what’s inside: “Winds of Change,” a look at four trends that could affect your bottom line in '08; “Outside the Lines: Carriers Enter New Roles,” which details how carriers' forays into non-insurance programs can help agents; “Clearing a Path,” a primer on utilizing existing clients via retirement services; and more. And it doesn't stop there—check out www.iamagazine.com for the issue’s Online Extras.
LEGISLATIVE CONFERENCE & CONVENTION
Register Now and Win an iPhone
The Big “I” Legislative Conference & Convention will be April 2-4, 2008 in Washington, D.C. The annual event offers agents an opportunity to experience advocacy, innovation and exhibits not available anywhere else. CNN political analyst Paul Begala and the host of MSNBC’s Tucker, Tucker Carlson, will address attendees at the general session on April 4 at 4:30 p.m.
The Big “I” is offering early registrants the opportunity to enter a drawing for one of three iPhones. Three names will be drawn from the registration system at 12 p.m. EST on Feb. 1, 2008. The three recipients of the items will be listed on the Big “I” Web site and will be contacted to coordinate delivery. Those who have already registered don’t need to do anything else. Those registering at 12:01 p.m. EST or later on Feb. 1 will not be eligible for this opportunity. All attendees registered through Feb. 14 will receive over a 20% discount (exclusive of company representatives). Click here to find details about the event or to register online.
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