It goes without saying that property and casualty and life insurance agents work in two separate and, usually, nonintersecting worlds. They both sell insurance, but that’s where the similarity ends. It’s as if they’ve lived next door to each other for years, but have never spoken, watched a ballgame or grilled a burger together. In a significant way, they think, act and work differently, and neither understands the other’s language.
Most efforts to break down the seemingly impenetrable wall or overcome the gulf that keeps them apart have been notably unsuccessful. Many seem convinced this will never change.
While there’s plenty of evidence to support this view, Richard Hillberg, a 30-year P&C veteran and senior vice president of the Provider Insurance Group, an agency with 38 employees in Needham, Mass., has had a different experience.
“The word ‘insurance’ in our name is all inclusive,” he says. “We view ourselves as an agency that has the capabilities to meet all of a client’s insurance needs, everything from property and casualty to life, disability income, long-term care and group medical,” says Hillberg. “Although we have separate groups within our agency, our producers view their clients’ insurance needs in a unified, holistic way.”
Although Hillberg is a property and casualty agent, the close interaction with the agency’s life & benefits group makes it seamless for him to bring that resource into the picture. “That’s simply the way we work,” he notes. “The life people operate the same way.”
While the integrated approach may be working well at Provident, countless attempts to find a way to bridge the gap between life and P&C have been something less than highly successful at many firms.
At one time or another, many P&C agencies have established a relationship with either a life agency or an independent life producer with the idea of handing off leads to each other. Although there are exceptions, such arrangements often start out with enthusiasm—but that initial optimism usually fades rather quickly.
Here are some points for agencies to take into account as they consider whether to try to transcend the P&C and life chasm:
1 The need to protect client assets. If those at the top of a P&C agency see its insurance mission in terms of “protecting client assets,” then the “holistic” approach, as Hillberg suggests, offers possibilities for integrating life with P&C. Since insurance is a relationship business, having one person managing an account seems to make good sense.
2 The need for the relationship manager. More and more, the salesperson’s role seems to be morphing into that of “relationship manager,” particularly as products and services become more technical and product lines expand.
No one salesperson can be an expert in everything today, which is particularly true in the insurance business. Technical advice is coming from outside sources, whether insurance companies or wholesalers, a view that positions the salesperson as an “orchestrator of accounts.” This is the person who brings together the right resources at the right time to deliver the right product or service to achieve the desired result.
3 The need to strengthen the P&C agency’s reach and revenues. Needless to say, the pressure on revenue, demands from insurance carriers for increased volume, lower commissions, intense competition and the difficulty getting in to see prospects have all taken their toll. At the same time, personal-lines sales via the Internet and commercial-lines’ client downsizing have had a significant impact on the P&C agencies. And there’s little indication that this will change for the better in the near future.
Given this situation, having a life-insurance component would seem to make sense as a way to increase and diversify revenue, while opening the door to broadening the customer base.
4 Client get-togethers. While there are no sure-fire solutions, we have seen P&C agencies benefit from inviting business owners to quarterly luncheon sessions that include a discussion of various insurance issues—everything from buy-sell agreements, to retirement planning for those in their 40s and 50s, to estate planning for wealthy clients.
In each case, the presenter has been someone from a life agency. It conveys to clients a P&C agency’s commitment to a holistic approach to their clients. It also lets the agency get better acquainted with life producers who may eventually find a place in the P&C organization.
Every P&C agent has heard someone say, “If you have a customer’s auto insurance, you have a 25 percent chance of retaining the customer. Add the homeowners, and that goes up to 50 percent. Add life insurance, and it jumps up to 90 percent.” That’s a good reason—maybe the best—to put life in a P&C agency.