We all know the two inevitable in life – death, and taxes. I suggest we add insurance to that list. But what is insurance? I once had a chance to meet the CEO of The Harford, Ramani Ayer. He said that insurance is nothing more than just a promise. That really resonated with me, because it was simple and true. We pay monthly premiums for a promise. Simple. The promise is if something unfortunate were to happen to us or ours, our insurance provider will be there for us. No less than a firefighter or a police office. Let’s see what an insurance broker is worth…. There are over 400,000 insurance brokers and agencies in America, making $160 billion in annual revenue, and employing over a million people.
There are four macro trends driving this industry. My colleague and CEO of CAL Insurance, Joe Delucchi, will share his perspective as he runs one of the fastest-growing insurance broker firms in California.
- Acquiring new clients (New Client Acquisition) – It really depends upon the customer and their level of need. Some buyers get coverage only when compelled by law, and without much regard to the actual insurance contract itself, and there are brokerages out there that can accommodate those needs. Those folks may be more attracted to the TV commercials and making an online purchase without really speaking to a professional. However, individuals, families, businesses, non-profit schools, and real estate investors with means should be reaching out to their own advisors for recommendations to insurance professionals. These folks should be interviewing prospective insurance advisors, instead of just asking for pricing the days of the quotes and the bids for these types of individuals and businesses really have come to end for any serious insurance buyer.
- Leveraging Technology – Leveraging technology within the insurance company marketplace so technology improvements as we know have been absolutely fantastic over the last decade, but I’m not all insurance carriers and underwriters have been quick to adopt these changes. As we know the ease of doing business is extremely important to any serious buyers these days any serious insurance policyholder, so companies need to understand that and work to really create a favorable client journey they are not yet there. I think they are going to get there soon.
- Outside of Pricing (Client Advisor) – Outside of pricing, this would be number three what attracts clients to broker these days, and I argue the more sophisticated insurance buyers know pricing certainly is important we all get that we all understand that, but they care much more about being sure that the actual insurance contract adheres to their own particular needs. and so really not just working with an insurance broker, but working with an insurance advisor, and there is a difference between the two.
- Employee Retention and expectations – so as we might know the insurance industry itself is a very aging industry, a very aging sector, we need new talent to be coming through the ranks right now and we as an industry need to do a better job of attracting recruiting training these future insurance superstars. The global pandemic really forced our profession to be serious about embracing remote working. so, the big question is how the company culture adheres to a new remote workforce. I believe we are going to start to see a hybrid model offices insurance office being downsized and during the workweek, there will be sometimes where people are in the office and other times where they are working remotely it is going to become a much more flexible, thing but we cannot get away from is sharing our intellectual capital and building upon the culture within the organization.
- Institutionalized Relationships – Are the customers and underwriter relationships with employees, or have they been won over by the business? How can these relationships be transferred to the business? If the customer considers the firm as her go-to for insurance coverage, then attrition after a transaction will be limited. Similarly, underwriter relationships too are just as important to ensure the new buyer can continue to service these customers efficiently. What can you do to institutionalize these relationships? How can you make your customers and underwriters raving fans?
- Diversified Products – It is difficult to manage a business during the ebbs and floods of the economic cycle. The smart way to maintain stable revenue is to offer diversified products. This is only possible when you have strong relationships with the underwriters, and customers, who will call you first as their business and family’s coverage need grows.
- Tech Rigor – Needless to say, a loyal, friendly, and trained workforce are important. But trained in what? A workforce that knows how to convert relationships into revenue is crucial. But this revenue will only show long-term and transferable earnings when you empower them with technology. Leveraging technology in insurance brokerage will reduce processing times, allow better access to products and underwriters, customize policies, and keep you close to your customers.