Fin'l Services Can Bolster P-C Accounts

Expanding a property-casualty agencys portfolio to include financial services products offers independent agents the opportunity to increase profits and enhance customer loyalty, and the time is right to consider the expansion.

Although our environment today offers degrees of uncertainty, it is also a time that has raised the awareness among all Americans of the importance of planning for their future and that of their dependents.

In addition, businessowners must consider their needs in areas like key person insurance, succession planning, deferred compensation programs and business transfers. Life insurance is a planning tool that can address a variety of business and personal concerns, while annuities and other investment products can assist asset accumulation and employee benefit programs.

How does this affect a p-c agency?

Experience proves that the typical p-c agency book of business is a strong fit for estate planning and business benefits programs. More and more businesses are looking at executive benefits as a way to attract and retain talent, and life insurance provides a cost effective way to offer a tax-advantaged, long-term benefit.

Companies are now extending these benefits to a broader pool of individuals, so there is tremendous growth opportunity for life insurance in the executive benefits market.

Another business benefit product that might appeal to p-c clients is a 401(k) plan. Its good practice to discuss 401(k) opportunities with clients to ensure that they are current on 401(k) program offerings.

There are, however, some key factors for a p-c agency to consider when expanding their portfolio into the financial services arena.

The organization must be committed to a cross-selling strategy and have done the proper homework to qualify and quantify the prospect of offering an expanded portfolio of products to existing clients.

It is critical that there be a clear tactical plan for producers to follow. The agency principals should have a track for the agents to run on that clearly defines the opportunity with personal lines clients, commercial accounts and major specialty and public companies.

The plan should include a process that enhances the agents success in walking through the business door as often as possible.

Another significant ingredient in cross-selling success is to identify and integrate a proven financial professional into the p-c organization. There must be a match between the producer and the p-c organization–in both market expertise and basic business philosophy. The principals should take the time to fully test and expose the candidate to the organization, especially to the rainmakers in the p-c organization.

Depending on the mix of business in the existing accounts, and the three-year sales strategy, an agency might find it appropriate to affiliate with an independent financial services organization with a varied talent pool, versus bringing on just one individual producer. The key is to build in the maximum potential to penetrate the p-c firms book of business by hiring or affiliating “selfishly.”

Of course, knowing your clients is the key to expanding your business. Prior to adding the financial services capability, the real opportunity from the existing client base should be clearly defined.

Find out from whom your clients seek advice in this arena. In the interest of “knowing your customer,” validate their interest in your organization as a fully integrated insurance provider.

Since expanding your agency to include additional insurance professionals will involve a significant investment of time, resources and change in management, it is prudent to confirm the plans expectations in the real world.

The final and most important ingredient to this success is to align with a provider or providers that offer the necessary level of professional support to the producer. There are several key factors to consider, including financial strength, service, product, underwriting, technology, marketing assistance, advanced sales expertise, a total compensation package and brand strength.

The insurer must bring the right people to their business partners–from underwriters up to the highest levels of management. This is the resource pool that should be available to independent agencies that want to venture successfully and profitably into the world of successful cross-selling.

Remember the keys to success:

Know your customer.

Create a strong strategic plan embraced by agency owners-managers.

Build a complementary tactical plan.

Invest in the right talent.

Align with the best providers.

Execute consistently every day.

Warren H. May, chief executive officer of Travelers Distribution Services in Hartford, is responsible for the distribution of Travelers life and annuity products. He also oversees Tower Square Securities Inc., the proprietary broker-dealer of Travelers Life & Annuity.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, January 21, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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Fin'l Services Can Bolster P-C Accounts

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