Life In The Fast Lane

Life in the Fast Lane By: Pat Wedeking

Life insurance is important…we all know that.  Life insurance rates have gone down significantly over the past 10 years as people live longer…many of us know that. Now life insurance is easier to transact… I know some of us might even challenge that one.  This article seeks to update you on the latest advancements in life insurance underwriting and how Smart Choice® is embracing this change making life insurance easy.

Americans are dangerously underinsured when it comes to life insurance; the opportunity to do the right thing for your clients and earn a significant income doing so has never been greater than it is today.  One of the largest life insurance growth markets in the world is the U.S. middle market and companies across the globe are recognizing this and investing in the effort to deliver life insurance to the masses.  As a result, there is more competition and prices have come down consistently for a decade. Recently, more and more companies are introducing new, better ways to get life insurance in force quickly.

Accelerated Underwriting Programs are hitting the market in a big way right now with different carriers introducing their version of Accelerated Underwriting each month.  These programs rely on data to assess risk as opposed to what used to be invasive bodily fluid draws asking your clients to give blood and urine to a medical professional they’ve never met in order to determine the proper underwriting class.  “What kind of data?” you ask, the list includes driving records, prescription data, credit scores, lifestyle index scores and the life insurance industry’s centralized database they call the medical information bureau (MIB.)  Add it all up and many actuaries are saying this is an equivalent way of assessing risk.

What was a 6, 8 or 10-week process can now be done in a matter of moments. Policies that used to be issued quickly at rates that are 200% to 500% of fully underwritten rates are now being issued at the same lowest rates available.

This is an evolution – or a revolution – so still most policies are underwritten the “old way” but more and more we are seeing products and processes that accelerate the process.

One of the carriers on the Smart Choice Quick Life platform, for example, has eliminated the need for blood and urine for all cases with face amounts of $500,000 and under.   Another carrier on this platform is offering some applicants the chance at the best prices without blood and urine up to $1 million and still another is reviewing all cases that fit a certain profile and giving us pleasant surprises with “Issued as applied for, underwriting requirements waived” messages often within hours of submitting the case to underwriting.

Yet another carrier has gone one-step further… the furthest of any carrier in the market today.  This carrier is instantly issuing policies up to $1 Million in face amount for all applicants who fit a certain profile and where data is available for consideration.  These are policies are issued on the spot, delivered electronically, with electronic payment and at a price that is most competitive.

Smart Choice has embraced this evolution and offers access to instant coverage through the expansion of the Smart Start program that we call Smart Start Life.  This makes Smart Choice among the select few in the country to have access to this product.  In partnership with InsureNOW, part of the largest distributor of life insurance in the United States, this program is available to Smart Choice offices nationwide.

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How to Sell (More) Life Insurance:

  1. Create awareness that you offer this type of insurance. We call this one “State Farm Sells Life Insurance” because this company is one of the top sellers of life insurance in the country simply by letting it be known that life insurance is available to their policy holders. No commercials, no pushing or pressing, just awareness.  Let your clients know that you offer life insurance.  Ask us, we can help you with email signatures, announcement letters and emails and even a customer friendly shopping mechanism you can link from your website.

Life Happens Pro ( https://lifehappenspro.org/ ) offers a simple, cost effective way to leverage best-in-class life insurance marketing resources to drive business to you.

  1. The one sentence that works. “Life insurance rates have gone down. Part of our service is to see if we can save you money so I am going to have our life insurance expert give you a call. Okay?”     When you get a “yes” to that simply enter the name and contact information into the Smart Start Life online form and you will hear from our life insurance expert that will act on your behalf.  Wait for commissions to arrive.
  2. Offer a Policy Review. “When is the last time you reviewed your life insurance progam?”  is another great question to ask.  They either say “Recently” in which case you can ask if you can review to see that they got the best price available – or they say, “It’s been a while” to which you can respond with an offer to do it right away – or they say, “I don’t have life insurance” which is your queue to help that family.
  3. Ask all Business Owners about Life Insurance. What can be an emotional, slow decision for families becomes a simple economic decision for most business owners. Buy Sell agreements and Key Person policies are some of the easiest life insurance sales you will ever make.
  4. Use a Quick Entry Process. Make your life easier with a new breed of processes that take the processing burden off your task list.  Smart Choice Quick Life and Smart Start Life are two of the best available.

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Brief Bio

Pat Wedeking is the Founding President of the Life Insurance Direct Marketing Association (LIDMA.org) and the Chair of the Life Happens. He is the founder of two life insurance distribution companies and now operates Crump’s InsureNOW platform.  Pat lives in

Front of the Pack: Coming Out Ahead in an Everchanging Financial Landscape

Front of the Pack: Coming Out Ahead in an Everchanging Financial Landscape

by Michael Miller, State Director Minnesota, Wisconsin, and Iowa

The stock market has climbed to new heights over the last few months. Recently, the Dow Jones Industrial Average closed over 26,000 points, a record high. While this is great news for the country, it overshadows some serious challenges the insurance industry faces.

While stocks climb, insurance companies are hurting after billions of dollars in losses after several major hurricanes last fall and wildfires and ensuing mudslides in California in December and January. The latest tax bill gave businesses substantial breaks, but left a wake of uncertainty regarding healthcare. Meanwhile, distracted driving is a persistent problem, driving claims and premiums up.

How does an independent insurance agent stay ahead of the game, despite the multiple financial challenges facing our industry? Here are a few ideas I’ve shared with my agents to help them get ahead and stay ahead.

Diversify your offerings and demonstrate your value.

One of the first things I recommend agents do is review the range of insurance products they offer. Many independent agents get into the business writing personal lines, but few expand into commercial, life, and health markets. They do so at their peril. Selling personal lines insurance is a great way to learn the insurance business, but there’s heavy competition from online brokers and captive agents. Adding commercial carriers and learning how to write a great life insurance policy can help you stay in the black, even when the personal lines market is in a downturn.

Regardless of what insurance products you offer, make an effort to demonstrate your value to every client and potential client who walks in your door. Your agency isn’t just a place to buy insurance, it’s a risk management consulting firm. Help your clients understand the risks they face as homeowners, business owners, spouses, and parents, then offer them custom insurance solutions that cover that risk. That’s a level of expertise and service the online brokers simply can’t provide.

Identify your lead generation strategy . . . and work it.

The most successful agents will all tell you that they never take their foot off the gas. They are always sourcing and reaching out to new leads, even when they’re running at or near capacity. Creating and implementing a consistent lead generation process ensures you’ll never run out of new business.

Where is your current business coming from? What opportunities are you ignoring? Identify them and create a plan. Will you join a networking group to get referrals or buy a list of leads? Once you have leads, will you reach out to them by phone, mail, or email marketing? How often? The answers to these questions will help you develop a lead generation strategy you can use all year.

Don’t leave talent on the table.

No agent is successful all on their own. We all rely on teams to grow our agencies, whether they’re outstanding producers and CSRs at our office or our families at home. Who are you underutilizing on your team? On the flip side, are you so overwhelmed with work that you need to hire someone? Make the most of the human talent available to you—your own and that of your team.

Think a year ahead.

The most successful agencies think long-term. It helps them stay focused on their goals and whether short-term financial downturns. Envision where you want your agency to be this time next year. What will you do to reach that goal? Consider subscribing to trade magazines and newsletters to stay ahead of trends in the insurance industry. Use these insights to recalibrate your goals and adjust your plan.

When It’s Time to Move On

You’ve spent your career helping families and businesses mitigate risk and protect their assets and loved ones. You have a full book of business, wonderful staff, and a great office. Have you ever wondered what will happen to the insurance agency you’ve worked so hard to build once it’s time to move on?

You’re in the risk management business, so chances are you’ve thought about this quite a bit. But if not, here are a few tips to take the mystery out of selling your agency:

  1. Get an insurance agency valuation to determine its actual worth, including your book of business, location, the markets you offer, and your phenomenal staff.
  2. Create a plan to sell your agency at least three years before you plan to leave the business with the help of a good business attorney.
  3. Know your sale options, from selling your agency for free through Smart Choice® to identifying a buyer within your agency, your family, or your professional connections.

 

Source:

Insurance Journal

Habits for Success in 2018

2018 will be here in a little over a week! What are you doing to increase your chances of finding financial growth and success next year? Here’s some advice of effective life habits small business owners should employ:

1)Surround yourself with successful people

American entrepreneur Jim Rohn once said: “You are the average of the five people you spend the most time with.”
Let that sink in for a minute. We all develop habits and mimic the behavior of our friends without meaning to. What kind of people are you surrounded by on a daily basis? Try spending time with people who are successful, positive and confident. It’s almost a given that the behaviors that have been the catalyst for their success will rub off on you!

2)Don’t let burnout get the better of you

To do this, you must adopt a world view that isn’t jaded. Do the right thing for the right reasons. What does that mean? It means give the best of your services and advice to each and every client who comes through your door. Make it your agency’s mission to provide a valuable service instead of just a commodity. When the monotony of our daily tasks becomes overwhelming, it’s tempting to just mark off tasks on our checklist and get through the day, but real success and growth comes when we are able to remain focused on that mission of providing value and doing the right thing. Keep your clients’ best interests at heart, and you’re no longer just working a job, you’re making a difference in peoples’ lives.

3) “Hope is not a strategy”

This famous quote is right on the money. Don’t let hope be your strategy in 2018. If you want to grow, you have set clear, defined goals, and most importantly…if you want to reach those goals, you absolutely must have a plan. Your goals are worth nothing without one. First, write down what your dream agency would look like. How many people work there? How much annual premium are you writing? How many customers do you have, and what’s the average client look like? What lines of business are your writing?
Now, contrast that to what your agency currently looks like. How far away are those numbers from your dream agency’s numbers? Take the difference, and divide it into three to five increments. Use those benchmarks to make a plan for the next three to five years. You now have a small attainable goal for each year of growth that ultimately will take you to your end goal. Take the first year and decide what needs to happen to reach each number goal you set – number of clients, of premium per client, etc. – until you have a goal for each quarter of the first year. Sometimes, the vision of our dream business seems so far away and insurmountable that we feel burnout before we even begin. Having a five year plan and strategy for success each year can invigorate our efforts and keep us moving forward.

Increase your book of business using existing clientele

One of the best ways to increase the size of your book quickly is by tapping into your existing base of customers. There’s almost always more business to be had with your existing clients. Start by doing a review of coverage with each client. Then sit down with them and ask the right questions to elicit and uncover coverage gaps you can offer to fill. Use that opportunity to make them more loyal to you when you offer to shop their coverage and find them better coverage at a better price.
Start with your top premium clients and work your way down – selling personal lines to commercial-only accounts, and ascertaining if your personal lines clients have businesses you could potentially write for them. You already have a number of P&C clients on your book. What better place to look to increase revenue, than the people you already do business with? Not only does this increase retention and loyalty, it makes less likely your client will want to shop and move their business elsewhere down the road.

Part 4, Fees: Should I Join An Insurance Aggregator or Agency Network?

Many independent insurance agents, both new to the industry and established agents, at some point find themselves asking the question: “Should I join an aggregator or agency network?” Independent agents aren’t tied down by the restrictive contracts and obligations that captive agents are – but they face their own set of challenges as an independent business owner. This ongoing blog series investigates both benefits and drawbacks of agency groups.

Drawback #1: Membership fees
Agency networks exist because there are many insurance agents who need access to markets for their customers. The networks provide a service, and have to be compensated in some way to make money and stay in business. Therefore, they charge fees to the agency owner in exchange for access to markets. For an agency owner who’s just starting out in the industry and needs markets, but has little profit and cash-flow, this can be a problem. Agency networks typically charge fees in one of three ways: Monthly membership fees, initial start-up fees, or commission splits.

Some agency networks charge agency owners fees in MORE than one way, requiring a start-up fee, a monthly fee, AND a commission split on business written through their program. While others only charge a commission split. The commission split charge in some networks is taken on income earned through the carriers the agent accesses through the group, and/or on the commissions agents earn on the carriers with whom they have a direct appointment.The agency owner must investigate the contract of each agency network, and decide which network offers them the best markets for the littlest cost.

Part 3: Should I Join An Insurance Aggregator or Agency Network?

Many independent insurance agents, both new to the industry and established agents, at some point find themselves asking the question: “Should I join an aggregator or agency network?” Independent agents aren’t tied down by the restrictive contracts and obligations that captive agents are – but they face their own set of challenges as an independent business owner. This ongoing blog series investigates both benefits and drawbacks of agency groups.

Benefit #3: Access to training and other resources

Often an agency network can help with a variety of different types of training to help keep your agency current and competitive. They can set you up with specialized product training through the carriers with whom they partner, including keeping you updated on current carrier appetites in your state, and new products and services. In addition, they can assist you with learning to add other lines of business to your agency, such as education on commercial quoting procedures, or specialized markets. The best part is that you’ll often have a dedicated customer service representative available for questions as they arise, so you can learn as you build your business. Some may even provide marketing and sales advice in some capacity.

Part 2: Should I Join an Insurance Aggregator or Agency Network?

Many independent insurance agents, both new to the industry and established agents, at some point find themselves asking the question: “Should I join an aggregator or agency network?” Independent agents aren’t tied down by the restrictive contracts and obligations that captive agents are – but they face their own set of challenges as an independent business owner. This ongoing blog series investigates both benefits and drawbacks of agency groups.

Benefit #2: Higher Commissions

Another great benefit of an agency group is that they’ll likely be able to offer you better commissions with the carriers you access through them. Why? Because they’ve negotiated higher percentages paid out by their affiliated carriers on both new business and renewal business. Basically you have the benefit of being part of a large group which means you’ll have access to commission rates that are typically only given to larger, more established agencies. An additional commission point or two can make a big difference! This benefit can help off-set the fees or commission sharing required to become part of the agency group in the first place.

Should I join an insurance aggregator or agency network?

Many independent insurance agents, both new to the industry and established agents, at some point find themselves asking the question: “Should I join an aggregator or agency network?” Independent agents aren’t tied down by the restrictive contracts and obligations that captive agents are – but they face their own set of challenges as an independent business owner. This blog series will investigate the different types of groups that exist in the insurance marketplace, as well as the benefits and drawbacks of aggregators and agency networks.

Benefit #1: Access to markets and carriers

Perhaps the most obvious advantage, and the reason a majority of independent agents seek out these types of groups, is access to markets. What does that mean? It means independent agents don’t automatically have a carrier or insurance company they represent. They have to actively seek out contracts with multiple insurance carriers in order to offer their clients insurance coverage. The advantage for independent agents is that by representing multiple carriers, they can offer their clients more options, including TYPE of coverage plans, AND at the best price. Unfortunately, it’s extremely difficult to get markets when an agent first starts out in the business because they have no history with the carriers in the industry. They have to gain the trust of the carriers first. Agency networks and aggregators can help the agent achieve this by establishing a relationship with the carrier first. This means that the agency network is directly contracted with the carriers themselves, and then – with their pre-established relationship – helps agents they’ve vetted and contracted with themselves, become appointed to write business with those carriers.

Stay tuned for more in our blog series!

Off The Record

Off The Record
By: Josh Seibert, Sandler Training

The STORY:
Tim had mentally decided that the prospect he was talking to was never going to buy. For the past 20 minutes Tim had tried all of the trial closes that had worked in the past.

“I have to tell you Tim, I don’t know that this will do what I need.”

Tim had already tried the “what do you really need” response with no luck. Figuring he had nothing to lose and might learn something that he could use on other prospects, he innocently asked the following.

“Off the record . . . since you have decided not to buy . . . what are you really looking for?”

For Tim, the resulting silence was painful, but he really wanted to know the answer. If I can get this information, he thought, I can use it. So I’m just going to outwait the prospect.

Finally, and much to Tim’s relief, the prospect responded.

“Well, since you asked, off the record as you put it, here’s what I’m trying to do,” responded the prospect for the next five minutes.

At the conclusion of the prospect’s response, still convinced that he’d never close this one, Tim answered.

“That’s very interesting. So I suppose since we’re still off the record, you’ll never see yourself purchasing this . . .” and as Tim struggled to find the words to continue, the prospect jumped back in.

“Hold on a minute, Tim. I didn’t say I’d never buy it . . . and now that I talked out what I was looking for, well, you know, what you have might actually do it for me.”

The RESULT:
Perhaps Tim will make this sale. What Tim did do by going off the record was to subtly pressure the prospect into defining just what he needed. And by adding the assumption that the prospect was never going to buy, Tim was forcing the prospect to see a future where Tim’s product was not part of the solution. Either the prospect would view this future as good, in which case Tim never had a chance to make the sale, or bad. If bad, then Tim had an opportunity to make a sale. Off the record, how do you see it?

DISCUSSION:
Tim did not act like most salespeople. How many salespeople have the guts to state, “Off the record, since you have decided not to buy . . . what are you really looking for?” What is the salesperson afraid of when he makes this statement? Simple — the prospect is going to walk out the door. Consider this, if the prospect does immediately leave, then he never had any intention of purchasing. You’ve just saved yourself a lot of time.

The prospect who remains after hearing this question has no option other than to respond. What he says at this point will help you in determining whether he is a serious potential buyer or someone to follow up in a phone or mail sales effort.

APPROACH:
Pairing “off the record” with “since you have decided not to buy” accomplishes two goals for you.

First, “off the record” suggests that now you and the prospect can talk freely. Neither of you will use what is said to make or break the sale. Of course, this is ridiculous. Anything the prospect says will be used by you to either pursue the sale or end it. But just the phrase, “off the record,” often achieves the goal of getting the prospect to reveal what his concerns are.

Second, “Since you have decided not to buy” forces the prospect to bring the future into the present. In other words, he perceives right now what it will be like without your product. If his concerns are painful enough, seeing the future today is often enough to get a prospect moving toward purchasing.

THOUGHT:
Giving the prospect a way to see the future often helps the prospect buy today.

Josh Seibert is the president of Training & Development Solutions, Inc., Sandler Training located in the Piedmont Triad.  He can be reached at 336-884-1348 or www.training.sandler.com

©Sandler Systems, Inc. All rights reserved.

Writing Hard-To-Place Risks

Writing Hard-to-Place Risks Starts with a Good Relationship with Your Excess & Surplus Carrier—
and Your Underwriter
By: Michael Miller, Smart Choice® State Director

Most insurance agents can write auto and home policies in their sleep, and many understand commercial insurance like the back of their hands. But sometimes, clients throw us curve balls. They might have had multiple losses that make finding a policy difficult. Others might be in an industry so unusual or risky that standard carriers won’t cover them. In these cases, relationships with excess and surplus (E&S) lines carriers can be the difference between making the sale and turning a potential client away.

A look at what E&S lines carriers can do for you

E&S lines carriers are insurance companies that write policies for unusual or specialty businesses that standard carriers consider too risky. Sometimes, this is due to a history of loss. But more frequently, standard carriers simply do not have the experience writing these businesses to be able to offer a policy that comprehensively and appropriately covers the risk.

Many E&S lines carriers are licensed in a single state but can do business in other states. But they don’t have to be based in the United States. In fact, the largest E&S carrier in the United States is Lloyd’s of London, a British company. At Smart Choice®, we have partnerships with several E&S carriers, including Burns & Wilcox and Willis.

Your relationship with your E&S underwriter

The E&S lines market operates slightly differently from the standard commercial lines market. Usually, you must try to write the policy with one or more standard carriers before shopping the policy on the E&S market. Doing so requires a relationship with an E&S carrier.

It’s important to maintain your working relationships with the E&S carriers you have appointments with. That starts with your E&S carrier underwriter. If you invest a little time in your relationships with your underwriters, it’ll pay off in the long run.

Underwriters are in a tough position. They have to answer to their employers, the carriers, who reward them for writing high volume of policies with “good” risk. But they also need to please their agents, who bring in the business but often make requests that are riskier than their carriers prefer.

To write a good policy, your underwriter has to trust your judgment on the customer’s risk. And since most E&S policies do not have standard clauses regarding binding authority, back dating, and do not give advance notice of changes to policy, it’s important for you to understand how your E&S carrier underwriter operates and stay on top of each customer policy.

If you make it clear to your underwriter that you understand what “good” risk is, the more likely he or she will be willing to work with you on your more complicated policy requests. Give your underwriters the professional courtesy of asking thoughtful questions and submitting a clean request that has all the information they’ll need to feel comfortable writing it. Make your requests complete, clear, and timely.

If you take the time to get to know your underwriters and their carriers, you’ll learn certain carriers will never write particular policies, while others are eager to take on your riskier requests. But you’ll only know this if you invest some time and effort to understand how and why your underwriters write what they do. Take a moment to get to know them better. It’ll pay off for your agency in the long run.

Customers requiring E&S policies may not come through your door every day, but being proficient in writing this type of business can create real opportunities for your agency. You could become the resource for niche industries who can’t be insured through their current agent’s standard carriers. Imagine writing all the car dealerships or pizza delivery businesses in your metro area. What impact could that have on your agency’s profitability over the next five years?

Common Hard-to-Place Risks

  • Engineering Companies
  • General Contractors
  • Implement Dealerships
  • Motorcycle Dealerships
  • Large Habitational Risks
  • Trucking Companies
  • Used Car Lots with Inventory of 30 or Fewer Units
  • Vacant Buildings

[Sources]

Insurance Journal

Claims Journal

Property Casualty 360