Agency Tips: Alleviating Production Pressure
April 30, 2021
Insurance agents are constantly feeling the pressure to produce. Sales generate revenue, and we all know agents can’t stay in business without growth. However, there are only so many hours in the day, and agents often find themselves hard pressed trying to both attract new customers while effectively serving their existing ones, even more so when customers are in need of a product outside the agent’s core lines of business. So what’s the solution? Worst case scenario would be to turn away the business. Alternatively, agents can find a more efficient and profitable way to service non-core lines. In this week’s blog article, we break down how insurance agents can find the time to generate new business outside their core insurance lines without sacrificing service standards for existing customers.
Generating New Business is Crucial for Insurance Agents
Making sales is the primary job function for insurance agents, but unlike other sales orientated professionals, agents are selling both goods and services. The good is, of course, the insurance coverage and the service is the agent’s role as an adviser to their customers on the path to find the coverage that is right for them. Customers expect their agent to spend the time evaluating their levels of risk and ensuring their insurance needs are met, and oftentimes agents find it difficult to strike the appropriate balance between soliciting new business and servicing existing customers.
Obtaining Non-Core Product Lines Is Difficult
Most agents specialize in a particular product line. Whether it be home, auto or commercial lines, agents will generally have core competencies that make up the majority of the business provided to their customers. But what happens when a customer needs help obtaining a product outside the agent’s realm of expertise? Oftentimes agents may scramble trying to find a solution for their client, wasting time, energy and dollars in an effort to place the coverage for their customer. In cases such as these, the time spent obtaining the coverage vs the amount of commission agents receive ends up resulting in a nonexistent, if not negative, bottom line. Additionally, agents can end up paying a heavy price in the opportunity cost of foregoing soliciting new business to scramble to obtain coverages they know relatively little about.
So what’s the solution? Are agents just supposed to turn away these customers’ business or spend an exorbitant amount of time and effort tracking down coverage for a miniscule amount of commission? Thankfully no, as there is a simple solution for insurance agents seeking to service all customers who need coverage while still focusing on their core business.
Utilize Wholesale-Only Brokers For Non-Core Product Lines
By utilizing wholesale-only brokers for non-core product lines, insurance agents can quickly service customers seeking coverage outside their level of expertise, without directly competing with the broker for the same business. There are many benefits to using a wholesale-only broker, but the key reason is it allows agents to quickly and easily obtain non-core products that would otherwise take them days if not weeks to acquire on their own. So what’s the catch? Well, agents who use brokers do need to split the commission, but by servicing different classes of customers, agents will establish lasting agent-client relationships and create additional insurance selling opportunities. Simply put, using a wholesale-only broker allows agents to service more customers and grow their business.
Why Should Agents Only Use Wholesale Only Brokers?
Many brokers operate in the retail space and therefore compete with insurance agents for the same business. By using a wholesale broker, agents can avoid this conflict of interest. Additionally, wholesale brokers will oftentimes provide agents with additional marketing benefits. For instance, at BondExchange, we utilize our retail traffic to place customers with agents who are registered in our system, and even offer an agent finder tool to help retail customers find agents in their area.
Wholesale brokers are invested in the success of insurance agents, it is simply the nature of their business. They don’t compete with agents, and will actively promote them to help their business grow.
But how do agents know which broker to use? Well, there are a few key characteristics that insurance agents should look for when choosing their wholesale-only broker:
Technology
As mentioned above, agents use brokers to quickly obtain non-core product lines, so it is important that agents use brokers with the technology in place to quickly service their needs. Brokers with outdated and hard to use systems essentially eliminate the benefits of using a broker in the first place. When finding the right broker, agents should heavily consider the accessibility of the broker’s platform and their ability to quickly issue coverage.
Customer Service
Using a broker should be quick and easy, with as little hiccups as possible. But when an issue does arise, how does the broker handle it? Do brokers answer the phone on the first ring? Do they have dedicated customer service representatives ensuring the agent’s needs are being met? These are important metrics in determining the quality of a broker. We recommend agents read customer reviews and reach out to their peers to learn about their experiences with a broker before choosing to do business with them.
Market Access
There are many different brokers in the insurance industry, each specializing in specific product lines. Agents may find a wholesale only broker with an easy to use platform and stellar customer service, but if they can’t obtain the right coverage then they are essentially useless. Do some research on a broker’s market access before placing business with them. Most brokers list their markets on the “About Us” section of their website.
Commissions
Insurance agents should only utilize brokers who pay competitive commissions. For surety bonds, commission ranges should range from between 10% to 20%.
Insurance agents never want to turn away business, and actively strive to ensure their customers obtain the coverage that is right for them. At the same time, agents need to continuously grow their business and generate revenue. Agents don’t need to sacrifice sales to service non-core clients, and by using a broker, they are able to adequately serve their customers’ needs while still focusing on growing their business.
How Can an Insurance Agent Obtain a Surety Bond?
BondExchange makes obtaining a surety bond easy. Our thoroughly developed online system was built for insurance agents like you. Simply login to your account and use our keyword search to find your bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
