Do you recall the irrational rumor last year that the Independent Producer would soon be extinct? Despite all the rumors, we find that Independent Producers are still thriving in this ever-increasing competitive environment.
For many years, the local Producer has dominated the insurance landscape. There has been a shift in the value that consumers place on services that local Producers have traditionally performed. Consumers today are increasingly using other channels to get what they need. This has been accelerated by the advertising barrage of Direct Writers and Captive Producers 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 Producers. Like it or not, the advertising from these organizations motivates consumers to call and shop around. When this occurs, the Independent Producer is uniquely qualified to provide the expertise, product, price and service level the consumer ultimately needs. And in our opinion, local Producers are much better at providing a solution than a Captive Producer representing one company or a Direct Company using a Call Center Producer that is perhaps more than 1,000 miles away. In his latest best-seller, the famous author Malcolm Gladwell asserts that, “…Giants are not what we think they are. The same qualities that appear to give them strength are often the sources of great weakness.” David and Goliath, Underdogs, Misfits, and the Art of Battling Giants.
Producers that embrace this golden opportunity and adapt, will outperform their peers. Not only will they compete with the direct writers and captive Producers, but they will win. Local Producers can deliver expertise with local service that is unable to be matched by other organizations. We do not believe that the local Producer is in danger of becoming extinct; on the contrary, we believe the local Producer is re-emerging as the best answer for consumers.
Across the country, we continue to witness Independent Producers finding ways to increase market share not only in the personal automobile business but in other lines as well. Specifically, we see this in the Commercial Auto market. It is an area that in the past may have been somewhat ignored by many organizations or specialized by very few. It is a proven fact that by expanding product offerings, local Independent Producers can generate more customers, more sales, more commissions, and increase retention.
In California for 2014, 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? Commercial businesses are just like everyone else. They want to be protected and perhaps more importantly they want to save money. Capturing this business is not easy and it does require effort, investment, and some “heavy lifting” on the part of the Independent Producer.
To help you market your local Commercial Auto opportunities, Infinity has developed a three (3) step strategy that can be quickly implemented 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 (Commercial Auto, General Liability, BOP). The agency/broker 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/broker from penetrating a market or stealing their customer. Specifically, we have witnessed a local Producer change their direction and focus their time on becoming an elevator repair contractor insurance specialist and have tremendous success. They have built relationships with many contractors by networking, attending trade shows, and targeting these elevator repair businesses. Would they tell you it is hard work? – Yes. Would they tell you it is worth it? – Yes. Instead of being a little fish in a big pond going after the small bits of food (in our case like the big direct writers going after the auto insurance business), they are now the big fish in the little pond.
2. Generate leads.
Our experience shows that Commercial customers are open to shopping and willing to do so. We have found that these businesses 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 the 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 to 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 Producers have simply not been able to perfect. Producers 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 active participants 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 Producers who are thriving are not standing still. They continue to evolve.
If you don’t know much about the Commercial Auto business, it is never too late to learn. 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 of the growing Commercial Auto market. All you have to do is call your local Infinity Insurance Business Development Representative. We are here to serve you.
