Independent Agents: Alive and Thriving
Despite all the rumors that the independent agent may be in trouble, we (Infinity Insurance Company) find not only are Independent Agents alive but thriving in this ever increasing competitive environment.
For years, the local agent has been an integral part of insurance landscape; however, there has been a shift in the value that consumers place on activities that local agents have traditionally performed. Where local agents were once considered the only place to go – consumers today are increasingly using other channels to get what they need. This has been accelerated by the advertising barrage of the Direct Writers and Captive Agents over the last decade. We expect this barrage to continue but we also recognize and embrace that this advertising is creating golden opportunities for Independent Agents. Like it or not, the advertising from these organizations motivates consumers to call and shop around. When this occurs, the Independent Agent is uniquely qualified to provide the expertise, product, price and service level the consumer ultimately needs. And in our opinion, local Agents are much better at providing a solution than a Captive Agent representing one company or a Direct Company using a Call Center Agent that is perhaps more than a 1,000 miles away.
Agents that embrace this golden opportunity and adapt will outperform their peers and not only compete with the direct writers and captive agents but will win. These local agents will deliver an expertise with local service that is unable to be matched by other organizations. We do not believe that the local agent is in danger of becoming extinct; in fact, we believe the local agent is re-emerging as the best answer for consumers.
Across the country, we continue to witness Independent Agents finding ways to increase market share not only in the personal automobile business, but in other lines as well. Specifically, the Commercial Auto market is an area that in the past may have been somewhat ignored by many organizations. It is a proven fact that by expanding product offerings – local Independent Agents can generate more customers, more sales, more commissions and increase retention.
In California for 2012, the Top 15 Companies generated over 2.3 Billion in written premium in Commercial Auto. Did you know that Infinity’s Commercial Auto program is one of the fastest growing markets in the state of California?* This business, much like Automobile business is ripe for the taking. Commercial businesses are just like everyone else – they want to be protected and perhaps more importantly they want to save money. But capturing this business is not easy and it does require effort, investment and some “heavy lifting” on the part of the Independent Agent.
However, a three (3) step strategy can be implemented quickly and generate positive results:
1. Pick a niche. We see successful producers flourish when they are able to focus on a particular niche of a business or offer multiple products (CV, GL, BOP). The agency who becomes an expert at a certain type of client or profession will become invaluable to that client because they know the needs of their customer better than anyone else. This strategy also helps keep a competing agency from penetrating a market or stealing their customer. Specifically, we have witnessed a local agent change their direction and focus their time on becoming an Elevator repair contractor specialist and have tremendous success. They have built relationships will many contractors by networking, attending trade shows and targeting these business. Would they tell you it is hard work – yes. Would they tell you it is worth it – yes.
2. Generate leads. Our experience shows that Commercial customers are open to shopping and willing to do so. We have found that these businesses open and willing to respond to direct mailings, telemarketing, and old fashion cold calling. In addition, these businesses are increasingly willing to conduct business across a full range of channels including in person, through mobile devices, by phone and Internet. Does it take time, effort and financial investment – yes. Is it easy – no, but if you are interested, Infinity Insurance can assist any organization learn more about how to generate leads.
3. Local and visible. The last piece to this strategy is something that has been mentioned for years but that many agents have simply not been able to prefect. Agents need to become more active in their community. The successful agencies are extremely active in their local organizations including but not limited to Kiwanis, Rotary, Knight of Columbus, local chapters of real estate brokers, etc. They are not only members but are active in these organizations and extremely visible – this is something a call center cannot provide. This provides them the opportunity at the very least to get a shot at the business before someone picks up the phone to call to see if they can save 15% or more. Remember, local Agents who are thriving are not standing still. They continue to evolve. If you don’t know much about the Commercial Auto business, it is not too late and Infinity can help. Our Business Development team can get you “up to speed” in no time and help you develop a strategic and tactical plan to capture your share. All you have to do is call. We invite you to check us out.
*Data provided from A.M. Best 2013 A7 data for Commercial Auto Carriers in California.