If a client asks their property-casualty agent about what life insurance policies are available for sale, one might often draw a blank stare. The same could be said if a p-c customer asks about other types of financial products and services–whether health insurance, retirement planning, long-term care coverage or the like.

Yet, as a growing number of producers can attest, there are big benefits to cross-selling such non-p-c products–and not just to middle-market personal lines clients. Many of the most successful commercial agencies, sources told National Underwriter, are doing a substantial business cross-selling life, health and financial planning solutions to individual business owners and high-net-worth individuals, with p-c accounts opening the door.

Thus, it's no surprise that carriers on “the other side” of the industry are eager to do business with their p-c agency counterparts.

“When you cross-sell products, customer satisfaction and retention rates go up and client acquisition costs go down,” according to Tom Houle, a vice president at Wilmington, Del.-based Nationwide Financial Network. “The inherent advantages are significant–a fact that we're promoting across our entire distribution network.”

Patricia Borowski, senior vice president at the National Association of Professional Insurance Agents in Alexandria, Va., said that “today, it's absolutely essential to avail clients of multiline products. A growing number of our [p-c member agencies] are entering the life and health space. And the younger the agency principal, the more likely it is he or she will be engaged on the life and health side.”

The potential for producers entrenched in the p-c world to enhance their competitive positioning and revenue by adding life and other financial services to their portfolios has not been lost on the Hartford Financial Services Group.

The Connecticut-based carrier launched an initiative in September to tap its nationwide-channel of 10,000 p-c agents for sales of pension products, group benefits and individual life insurance to business owners. The effort focuses near-term on helping appropriately licensed p-c agencies grow revenue from sales of these products, including 401(k) retirement plans.

“Many carriers have attempted to cross-sell through p-c channels in the past,” said Jack Kennedy, director of the cross-selling initiative at Hartford Financial. “What has situated us for success is the focus we're putting into rolling out our initiative in states where we have a substantial p-c agency presence.”

Those states–California, Illinois, Texas and Virginia–account for much of the company's existing commercial accounts business, which totals more than one million p-c policies, spread among 780,000 small and midsize business clients.

To help those agencies expand their portfolios, the company is arranging for training and licensing of p-c reps to sell life and other financial services products.

The company, noted Mr. Kennedy, is also availing these agencies of its “assisted sales model.” Home-office specialists will aid agents by prospecting for clients, developing plan recommendations and joining producers in meetings with clients.

The Hartford's cross-selling initiative puts the company in league with traditional multiline carriers–Allstate, MetLife, Nationwide and State Farm–that have long offered one-stop-shopping for p-c and life and health products. But these carriers have also been upping the ante in recent years by boosting educational requirements for their producers.

Since 2001, for example, State Farm has mandated all new recruits to be Registered Representatives–earning Series 6 licenses to sell variable universal life insurance, variable annuities and 401(k) products. Some 1,500 of the company's 17,000-strong field force now offer these products, in addition to traditional p-c lines.

Like Hartford Financial, State Farm lends its producers training and administrative support through agency field offices, as well as internal sales support specialists to assist with executive compensation, business, retirement and estate planning needs.

Where advanced planning expertise is required in high-net-worth cases (generally involving clients with $1 million-plus in investment assets), the company's agents can call on experts available through a partnership with The Phoenix Companies in Hartford.

“Our agents generally fill the demand [for p-c] products first, then pivot over to the nondemand [life and health] products,” according to Susan Waring, executive vice president and chief administrative officer of State Farm's Life & Health Company, headquartered in Bloomington, Ill.

“We expect agents to take care of all new business they bring in each year by at least having life discovery conversations with clients about their financial services needs. To talk about what the client is concerned about if he or she should leave this earth tomorrow is a nondemand conversation,” she added.

“That's when an agent needs to get up close and personal with the customer,” said Ms. Waring. “Those advisors who do it successfully–who can elicit from clients what's most important in their lives–enjoy deeper and more long-lasting relationships.”

Small-business owners–independent contractors, franchisees, professionals and the like–are an integral part of State Farm's expanding customer base, which remains largely focused on the middle market.

Of the 27 million-plus households that State Farm serves, approximately 1.8 million are high-net-worth clients. The rest, according to Ms. Waring, have incomes ranging between $20,000 and $75,000 annually. The average life insurance death benefit is $140,000, she noted.

Nationwide, too, connects its 4,000 agents to a field force of sales directors who provide point-of-sale training and education for financial products directed at business owners and senior executives.

These products include insurance-funded business plans, buy-sell and nonqualified deferred compensation arrangements, Section 162 executive bonus arrangements, and employee stock ownership plans–better known as ESOPs.

At MetLife, licensing in both p-c and life and health products is required to participate in the company's fee-sharing arrangements.

Rudy Loney, vice president of agency distribution-financial services for MetLife Auto & Home in New York, said the fee-sharing is particularly valuable in cases involving executive compensation, employee benefits and succession planning, as many agents lack the requisite expertise.

When a specialist is needed, MetLife will partner the agent with a counterpart at the company's New England Financial unit. MetLife also fields a network of certified managing general agents who can assist with the marketing of long-term products to small businesses.

Mr. Loney said that approximately 25 percent of the 4,500 independent agencies affiliated with MetLife have at least one agent with a Series 6 license, issued by the National Association of Securities Dealers, to sell variable life, variable annuities and other investment products.

Most of the agencies also have life and employee benefits departments to handle small-business planning needs, while about 90 percent of their estimated 20,000 agents have a p-c license.

The multiline focus, added Mr. Loney, is key to enhancing revenue and client retention.

“Agents increasingly realize they must do more to diversify their income stream by writing other products,” he said. “And the most obvious areas in which to diversify are life and other financial services. Also, product diversification helps with retention by insulating the independent agent's existing customer base.”

Nationwide's Mr. Houle agrees. “If you're my p-c agent, and suddenly I want to shop, it's real easy to bolt to another carrier if you've only sold me one product,” he observed. “But if I have two or three products–and you take care of everything–I'm less likely to unbundle all that and go shop elsewhere.”

For those p-c agents looking to diversify into life and financial services, and vice versa, the transition won't necessarily be a smooth one because the two specialties involve different types of sales, multiline players warn. Property-casualty is highly transaction-oriented, they note, while life and financial services are more process and relationship-driven.

For many, the life and financial services sale can be more challenging. It demands of the producer a detailed exploration of the client's financial situation, goals and objectives, as well as an ability to motivate clients to act on recommended solutions.

Conversely, life and financial services professionals considering the addition of p-c insurance to their portfolios have to learn new insurance terms and concepts.

On the other side of the coin, p-c producers must learn the story-telling or other motivational sales techniques that are so widely used in the life and financial services space to help close the sale.

The hurdles entailed in integrating such disparate selling paradigms have not, however, stopped insurance agencies from taking the plunge. But unlike many producers affiliated with multiline carriers who have to be proficient in both product families, many small independent agencies employ specialists who concentrate on one area.

One example is the Logan Lavelle Hunt Insurance Agency, a Louisville, Ky.-based firm with seven owners/principals. Of the three who focus on sales, one deals strictly with p-c products, the second with life insurance, and the third with wealth management.

Stanley Logan Jr., one of the principals, said the firm's cross-selling efforts during the last 18 months yielded annualized revenue of $7 million. Property-casualty sales accounted for about 70 percent of the total, with the balance going to life sales and wealth management services.

“We tell clients, 'we want to be your total insurance solution, not just your p-c salesman or your life and health salesman,'” said Mr. Logan. “People are very receptive to this message.”

Richard DeBlasio, an independent agent and principal of DeBlasio Insurance and Gaspee Benefit Planners in Cranston, R.I., agrees. Initially a p-c agent in his father's agency, Mr. DeBlasio launched an independent financial services firm (Gaspee Benefit Planners) in the late 1980s, and then integrated Gaspee with DeBlasio in 2000.

Since the merger, Mr. DeBlasio points out the company has grown 350 percent and is on track to achieve a long-held goal to become a $15-to-20 million practice generating revenue equally from p-c and life/financial services sales.

Mr. DeBlasio ascribes the firm's robust expansion to a strict adherence to its cross-selling philosophy. That strategy, he added, has worked particularly well when interfacing with business-owner clients and their key executives.

“Quite often in p-c sales, you gain a great deal of knowledge about business owners' financial services needs and how much value to attach to the [insurable] risks they incur,” he said. “That's key to transitioning to the life side of our practice because we can recommend life insurance as a way to preserve assets for their owners and their families.”

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Cross-Selling Can Add Life To Any P-C Agency's Growth

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