If you’re not writing commercial, you’re letting a major income opportunity pass you by. While independent agents compete with captive agencies and online brokers in the personal lines market, we have the corner on the commercial insurance market. Collectively, independent agents write the majority of commercial insurance policies in the United States, insuring everything from big manufacturers to home-office professionals to Uber drivers. It’s a great time to start writing commercial. With Smart Start™ Commercial and Express Markets™, it’s never been easier.
1. Nurture the client relationship.
Writing personal lines can be a bit transactional. Writing commercial policies gives you an opportunity to build long-term relationships. Business owners are busy people. They value an agent who understands their needs and can find an affordable solution for them. Providing that solution builds trust. Once you write and service a business account, you’ll likely be writing that business for years to come. As you develop the relationship, you will have the opportunity to cross-sell other insurance products, such as life, disability, and other supplemental business insurance. You may even have the opportunity to earn their personal insurance business.
2. Learn the market and find your niche.
The commercial insurance market is quite different from the personal lines market. It will take some time to understand the different products and the mandated coverage your state requires. The best way to learn how to write commercial is to start with one or two accounts and hone your process and expertise through trial and error. There’s a lot to learn in this market—you won’t become an expert in a week, month, or even a year.
Once you have written a few commercial policies, you will start to understand what carriers you like to work with, what you find easy, enjoyable, and profitable to write, and the market for commercial insurance in your area. Agencies that write a lot of commercial policies tend to find a sweet spot in one or several markets. Does your area have lots of class A office space? Consider becoming an expert in covering professional businesses. If your area is more industrial, you may find a good niche working with manufacturers.
3. Start with Smart Start™ Commercial and Express Markets™.
For most agents, the largest barrier to writing commercial insurance is obtaining carrier codes. Smart Choice® has eliminated this obstacle with the Smart Start™ Commercial internal brokerage and Express Markets™ program. Taking advantage of these member benefits is easy, and the programs fit seamlessly into how you already run your agency.
To write through Smart Start™, all you need to do is gather a little information about the business you’d like to write and send it to the Smart Start™ team. They will develop the prospect and send it to the carriers participating in the Smart Start™ program. The carrier’s sales team then contacts you or your prospect with a quote. If you write the policy, you’ll receive a commission from the carrier.
Smart Start™ is a great way to learn how to write policies carriers will quote and accept. Once you have a few policies under your belt, you can use your Smart Start™ experience to apply for a direct appointment with your favorite commercial carriers. This will give you the opportunity to cross-sell life, disability, and other supplemental policies that business owners find valuable.
Express Markets™ is another great program Smart Choice® offers. You work directly with Express Markets™ carriers and receive 100 percent of the commissions from policies you write with them. You also own the all premium and policies from day one.
If you’re not writing commercial insurance at your agency, I encourage you to write a few policies by the end of the year. Research the market for commercial insurance in your area, learn the basics of business insurance, and start submitting prospects to the Smart Start™ Commercial brokerage. Once you start seeing the revenue from commercial premiums coming in, I suspect you’ll want to write more.
Business Insurance Basics
Business insurance products are different from personal lines products. Here are a few terms you’ll want to know before you start writing commercial policies.
- General liability: covers insured’s legal responsibility for harm caused to others, including bodily injury and property damage.
- Professional liability: protects professionals against liability incurred by an error or omission in providing a product or service.
- Property insurance: covers business’s building, its contents, and other property.
- Business interruption insurance: covers costs of loss of income from fire or other catastrophe.
- Auto insurance: covers commercial vehicles and fleets.
- Worker’s compensation insurance: mandated coverage that covers employees’ workplace injuries.
- Supplemental insurance: policies, such as health, life, disability, and long-term-care insurance, employers may provide as benefits to their employees.
- Business owners policy (BOP): a policy for small- to mid-sized companies that includes property insurance, business interruption service, and general liability protection.
- Commercial Lines
We’ve talked over and over about the incentives of adding commercial business to your book – higher retention rates, higher referral rates, and increased commissions. But commercial business is more time-consuming to learn and can often be difficult to place, many agents just didn’t find it worth the investment. However, the Commercial growth we’ve seen proves that many agencies are moving this direction, and positioning themselves as leaders in the community when it comes to providing for the needs of consumers. Are you one of them? Check out the 2019 Issue 3 of Smart Choice Magazine for more.