From the Front Line: Smart Choice Magazine, Issue III

From the Front Line
[From the 2018 Smart Choice Magazine, Issue III]

By: Luke Royal, Indiana State Director

According to Pew Research center, anyone born between 1981 and 1996, who will be ages 22-37 in 2018, is considered a Millennial. As a millennial working in insurance, my age is actually something I avoid bringing up, like the plague. With all of the labels my generation has acquired, both good and bad, most millennials, including myself, actually don’t identify as one. After working with hundreds of agencies and dozens of carriers, one thing is for certain – I see a shortage of millennials sticking around in our industry. To help curve this trend, I would like to highlight some key moments that have helped shape my career, as examples of ways, together, we can support more millennials in this business.

Like many others, working in insurance wasn’t something I originally planned, but it has been a great decision for me. Starting a new career in the industry did allow me to create, let’s say, several “coachable” moments. It can be appealing to change gears and try something else before you have a book of renewals. A week without progress can be tough. Receiving a cancellation is tough as well, but something we all must go through. Fortunately, I have been blessed to have great encouragers and mentors along the way that have helped make those moments not as bad. If you notice hardship or not, it never hurts to inspire and encourage those around you. All of us can likely relate to a deal that fell through for reasons that may or may not have been our fault. Encouraging the millennials in our industry will help maintain their interest, boost their efforts, and ultimately add to your bottom line.

To help millennials be successful in our industry, I suggest you take the time to coach and invest in them. With the amount of change occurring and something new around every corner, it takes time to learn everything. Millennials can spend their life reading tutorials, blogs, articles and even magazines like this, but 90 percent of what I learned came from individuals who purposefully coached me and were available as open resources for when I had questions – so many questions.

One lesson that my generation could benefit from is consultative selling. How many agents do you know who sell solely based on price, and leave out the value they provide as their local expert? Millennials are accustomed to buying basically everything online, without any personal interaction, and as a result, carriers are progressively marketing their products as commodities. The need for a true insurance adviser is greater than ever, as a result, and all it takes is a little coaching to make a profound difference in the effectiveness of what you do.

Coaching a millennial to help them set their foundation in insurance is still separate from being a true mentor. Mentoring is a long-term commitment and encompasses a larger breadth of involvement. It’s not necessarily a monetary commitment as much as a time commitment. For example, a mentor helps elevate professionalism and character, while a coach equips someone for the task at hand. There is no shortage of exemplary character around and the best way to mentor is by holding yourself to a higher standard that others see. Being a sounding board of reason, sharing experiences, lessons, and communicating what has made a difference for your career, so that the next generation doesn’t fall into the same ruts, makes all the difference to someone new to the business. You can be a mentor to anyone, but a millennial in this industry might be the most in need of your time and expertise.

With the pressure of new technology and the shift in how consumers want to transact, we need millennials to help us stay relevant and to keep the local agency alive.  As a result, millennials that chose to make a career out of insurance have a great future ahead of them. But, they won’t be able to do it without your help. You can be instrumental in bringing new talent into the industry and perpetuating the role of an agent by being an encourager, a coach and a mentor. I believe it could be a mutually rewarding experience for every generation and age group in our industry.

Sources:

Defining generations: Where Millennials end and post-Millennials begin

To Make The Sale, Leave

To Make the Sale, Leave

By: Josh Seibert, Sandler Training®
  

The STORY:

Nick was having trouble trying to close the prospect. Still never having attended any company sales training courses, he hit upon a solution to the problem. One of the most experienced salespeople was in the back, and Nick decided to go and ask his advice.

“If you could excuse me for one moment,” Nick said, “I just remembered that I have an important message for one of the other fellows who is in the back room . . . I forgot to give it to him earlier.”

“You are going to come back, aren’t you?” asked the prospect.

“Of course,” responded Nick, “why would you think I wouldn’t?”

“Oh, I know I’m a royal pain in the butt when it comes to making a decision about buying something,” responded the prospect. “Most of the time, the salespeople get tired of trying to convince me and wander away, and I never see them again.”

Nick wasn’t sure what to say. He really needed to get the experienced salesperson’s advice so he turned and headed toward the back room.

“Wait a minute,” said the prospect, “I don’t want you to leave. I’ll buy it.”

“You’re sure?” asked Nick, hoping he hadn’t said too much.

“Definitely. Wrap it up.”

When the customer is out the door, thought Nick, I’ll go back and ask the experienced salesperson what to do the next time this happens.

The RESULT:

Nick did something very important for the wrong reason. From the prospect’s point of view, which is the only one that counts in selling, Nick was getting up to leave, never to be seen again. Again, the prospect would be left standing alone, not having bought anything. This pressure on the prospect, which Nick applied without realizing it, was enough to make the prospect give up and buy. Unfortunately, if Nick does ask for advice, he’ll probably be told the wrong thing.

DISCUSSION:

Getting up and leaving a prospect is almost impossible for a salesperson to consider. Why would you ever want to give the impression that you are going to walk out the door?

The reason for getting up and leaving is to let the prospect know it is time to make a decision.

The pressure is now on the prospect where it belongs.

This is not a tactic that you want to try with every prospect you come across. But if you have reached the “end of your rope” with one, you have nothing to lose by trying. The worst that could happen is you won’t make the sale. But then, you had no chance anyway.

APPROACH:

There are many ways to get up and leave. One approach is to physically start to move away.

Another is to simply look at the prospect and say, “Off the record . . . I get the impression that you haven’t come to a decision. Let’s assume that you decide it’s over. You don’t buy. What happens now?”

This verbal getting up and leaving forces the prospect to see a future in which he does not have your product/service. If he is in enough pain to be seriously considering buying, then looking at a future without buying is more painful. The only catch to the verbal leaving is that you MUST wait for a response. Do not rescue him or physically leave him.

Do not change “What happens now?” to “What happens then?” The word “now” brings the future, without your product/service, into the present, and as a result, pressure to decide becomes overwhelming.

THOUGHT:

“Leaving” the prospect makes the prospect want to come to a decision.

 

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.

One Year Later: Progress and Potholes In Cyber Risk, The Most Dangerous Threat No One’s Talking About

One Year Later: Progress and Potholes in Cyber Risk, the Most Dangerous Threat No One’s Talking About
By: Michael Miller, State Director Minnesota, Wisconsin, and Iowa

A year ago in this magazine, I introduced the most dangerous threat no one is talking about in the insurance industry—cybersecurity—and why that was great news for your business. For every four business owners who walk into your agency, three will not be protected against cybersecurity risks. It’s a staggering number, and one that gave you a valuable opportunity to help your clients.

Now, a year has passed, and I wanted to update you on the state of cybersecurity risks today and the progress—and potholes—our industry is making to help protect individuals and businesses.

Notable Cyber Risks in 2017

More data breaches occurred in the first half of 2017 than in all of 2016. Misconfigured security settings, out-of-date software, and lack of strategy on how to prevent and stop data breaches were largely to blame. Uber, InterContinental Hotels Group (IHG), and Verizon all experienced cyber-attacks and data thefts, affecting millions of consumers.

But the largest breach of 2017 occurred at Equifax. In September 2017, Equifax announced 145.5 million consumers were affected by a data breach. That’s nearly half the US population’s sensitive information, including addresses, birth dates, Social Security numbers, and credit card information. The breach was absolutely massive, and experts believe it will cost consumers and Equifax around $4 billion to ameliorate.

Progress and Potholes within the Insurance Industry

Fortunately, the insurance industry continues to develop products to protect consumers and businesses from cyber risk. More than 60 carriers now write monoline cybersecurity policies, with gross premiums into the billions of dollars. Popular carriers include many in the Smart Choice® program, such as Travelers, Burns & Wilcox, Liberty Mutual, CNA, and Crump. Experts at the NAIC believe the number of carriers who offer cyber risk policies and the types of liability those policies cover will increase over the next few years.

However, protecting against cyber risk with insurance is still relatively novel for consumers and businesses. Many continue to learn the hard way that their general liability policies don’t cover losses from a data breach, hack, or other cyber-attack. This puts businesses and consumers at risk of having sensitive information stolen, held ransom, or used against them. Businesses face their own set of cyber risks, from damaged reputations to loss of valuable assets such as customer lists and trade secrets.

What 2018 Has in Store for Cyber Risk

While cyber insurance and cybersecurity regulations will grow stronger and more numerous this year, so will the intensity and frequency of cyber attacks. Sophisticated attacks using artificial intelligence will be increasingly difficult to identify and prevent. Bad actors will continue to hijack consumer and business networks and hold them ransom. Cryptocurrency technologies will sustain attacks, too.

With these threats on the horizon, you can’t afford not to offer cyber insurance to your consumer and business clients. This year, learn about the cyber insurance policies your carriers offer and develop a plan on how to cross-sell them to your current commercial insurance clients. Once you have your pitch down, start promoting cyber insurance in every conversation you have with potential commercial insurance clients. Become the local resource on cyber risk and offer solutions that empower businesses to protect their own data and the personal information of their customers.

What Cyber Insurance Covers

Cyber insurance policies cover liability and property losses that occur when a business is hit with a cyber attack.

Coverage may include:

  • Business interruption from cyber attack
  • Computer fraud
  • Costs of credit monitoring, fines, and loss after a data breach
  • Cyber extortion
  • Data loss and destruction
  • Funds transfer loss
  • Liability from data breaches
  • Liability from web content
  • Notification costs in the event of a data breach

Sources:
Burns & Wilcox
CSO
NAIC
Property Casualty 360

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

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

 

Marketing At Its Core…

Marketing At Its Core…
By: Katie Wilmoth, Director, Marketing and Communications

This past summer, my husband and I took our kids to the beach – our kids (at the time) were 6 years old, 4 years old, and 9 months old, so we had our hands full! I find that at their current ages, they’re like a mini case study in the ways of the world. I never cease to marvel at how perceptive and astute they are for their ages.

At home, we don’t keep cable or satellite and instead, stream or download things we’d like to watch. So our kids have no concept of what television was like in the old days, and therefore, they aren’t familiar with commercials.

Throughout the course of the week, our oldest daughter would run up to one of us and say something about one of the commercials, or “previews” as she called them. IN fact, our kids were more interested in the commercials than in the shows they watched. As someone who’s made a career in marketing, I marveled at just what an impact direct marketing had on my kids in that short amount of time. I even caught them singing “Nationwide is on your side!” repeatedly as they played in the waves one day – “Mom, did you know Nationwide is on our side?” my six year old asked me – proving that, whether or not they knew exactly what the product did or was, the message the marketers had intended for them to remember had indeed been successful.

One night, my daughter said “Hey Dad, we need to get some of this lotion because it will make our skin super soft and shiny.” And I listened as my husband said “Okay listen Lila…these are called commercials, and the people who make them are trying to sell you their product by making it sound like the greatest thing in the world. So they’re lying to you to make it sound better than it is…that’s what your mommy does for a living…”

I looked up at him shocked and amused that he would say such a thing to our daughter, and he was looking back at me laughing. My reply to him was “You’re a LAWYER! Why don’t you tell her what YOU do?!”

The story is funny, but it got me thinking about the definition of marketing at its core. Sure, there are plenty of infomercials that use over-exaggeration and half-truths to peddle cheap wares (though I’d say that’s closer to the definition of sales, not marketing) – but at its heart, that’s NOT what marketing is. Marketing is about highlighting what sets your product or service apart from the competition. And if you’re doing it RIGHT, it’s also about highlighting the things that you do well and at which your product or service excels. You pick out your best assets and tell people about them. Think of it as socially acceptable bragging!

If you would like to read more Marketing tips, check out Issue IV of the Smart Choice Magazine!

Top 5 Sales Tips For Insurance Advisors

Top 5 Sales Tips For Insurance Advisors
By: Ashley Wingate, Vice President, Personal Lines

Selling in the insurance industry is not the same as sales in many other industries. Unlike most commodities being sold and advertised, insurance isn’t a choice in most cases, it’s a necessity. Many customers don’t view insurance as something they want to spend money on, but rather something they HAVE to spend money on. So, you’re really trying to counsel your customer into meeting their own coverage needs, even when they don’t want to spend the money. YOU have to be able to flip the conversation into a positive one so they feel like they’re walking away with something tangible, and not just spending their money on a “have to.” After many years working in this industry, here are my top 5 sales tips for insurance advisors:

  1. Listen to your clients and their needs. It’s tempting to just sit down and begin explaining all the benefits of your insurance policies and plans that your agency offers. My suggestion is let the prospect lead the discussion and they will tell you everything you need to know to close the sale. Instead of pitching your product, ask the person you are speaking with about their life and their family or their concerns for the future. They will tell you everything you need to know and then you become an insurance consultant and not just another salesperson.
  1. Don’t just be an order taker. Too many agents fall into this trap. If you follow the first tip and listen to your client and their needs, then you can develop a consultative approach for your client and offer them Insurance solutions for their needs. Also, don’t be afraid to ask them for their business.
  1. Make sure your clients know what they are buying from you. Stop to go over the carrier you have placed them with and highlight the benefits and features that their policy offers them. Most people don’t understand insurance and this is the time to help them understand what they have just bought from your agency. It’s a time for you to shine and a time for you to educate the customer on why they’re better off with proper coverage.
  1. Ask for referrals. Referrals are an awesome way to grow your business and these customers are much easier to close. Think about a referral program for your agency and reward the customers that send you new customers. Independent agents should rely heavily on referrals, because they have the ability to really shop for their clients and customize coverage. You have the chance to foster a more personal relationship with your clients, and therefore a better chance at gaining referrals.
  2. Network, network, network.  Take advantage of the opportunity to attend trade shows, work with real estate agents, work with the local PTA, and network with other insurance professionals in your field. These are all great places to make connections and learn from industry leaders and stay up to date on what’s going on in the insurance industry.