Specialist or Generalist? One Size Doesnt Fit All

Generalist agencies have a virtually unlimited marketplace. Everyone is a potential customer. Carrier markets should be available in most cases, but at the same time, it may be difficult to find a market for some exposures if youre not specializing. It also may be tough to learn, retain and keep current pertinent information, as there is a lot to know if youre a generalist.

Specialists can focus marketing efforts. The agent develops "expert" knowledge and he or she becomes a resource for his or her specialty. On the other hand, the size of market opportunity may be limited and market changes could make it difficult to place business.

Agents still seem split on the subject. In recent discussions with agents in New England, I heard increasing requests for companies to take a more generalist approach. Due to the instability and uncertainty in the marketplace, some agents dont want to be too specialized or have the proverbial "eggs in one basket."

But focusing on a specialty market can be highly beneficial to producers because they get the chance to really understand their clients business. Ive seen phenomenal results, especially in classes of business that not all agents are comfortable with. For example, garagekeepers insurance, a product that covers damage to motor vehicles in garage operators care, is not always fully understood. So a producer learning all aspects of this exposure may be viewed as a value-added resource to this business owner.

The trick may be in finding a specialty that has a steady, consistent carrier market.

Agents should not allow others to make decisions on their direction. Dont allow your company partners to decide for you.

All too often, agencies allow their company partners to dictate this decision. In particular, smaller and mid-sized agencies end up being reactive depending on what their carriers say.

How many times have agents heard, "We have a new program for X, Y and Z risks and wed like you to write all the businesses you can?" Then, six or 18 months down the road, he or she discovers that the company no longer is interested in that class. So now the agency has become a specialist, but the agency no longer has carrier support behind it.

Do whats right for your agency in the partnership with your company, not just because of a new company edict.

It is important to understand your agency philosophy. The foundation for an agencys philosophy starts with the principal. He or she sets the tone for what the agency does, but then gets the appropriate players assigned to their piece on that team.

Agents must understand that there are no right or wrong answers. No one philosophy is better than another. Each is just different. So when considering your options for a generalist versus a specialist approach, make sure you align your strategic and tactical decisions with your philosophy.

For example, lets say you are an aggressive sales organization. You may decide it would be better to have a generalist approach. You want to write as many new customers as you can and you believe specializing may limit your opportunities.

On the other hand, you may decide that being a specialist may be the best way to support your vision. As a specialist, you believe you can become known as an expert quickly and develop a referral network within your specialty.

Or you may want to consider a combination of the two, with different producers focused on different approaches.

It is also important to understand what is best for your agency. Take the time to complete a SWOT analysis–a strategic-planning process any business can go through to examine its strengths, weaknesses, opportunities and threats to its success. Know your strengths that give you a competitive advantage, understand your weaknesses so you can mitigate or eliminate them, find opportunities in the marketplace to exploit, and know what threats may keep you from attaining your goals.

After all, one size does not fit all. Agents need to know what is right for them. By definition, agents are "independent." Dont be afraid to live it!

When choosing a path, consider internal and external influences such as availability of staffing, ability to train, market size, market availability and stability. Once you understand your vision, consider all aspects of your business before deciding on a specialist or generalist approach.

Agents should recognize the importance in aligning with strategic partners who support their vision.

For example, lets say the agencys mission is to provide clients with a consistent, stable market for small commercial, Main Street business. Find carriers that match up with that. Make sure your companies support the needs of agency customers. Avoid carriers that compete for that same customer via alternative distribution channels.

If your agency has a relationship that doesnt meet its needs, dont be afraid to find a new partner. Smart, well-run agencies will always attract smart, well-run carrier markets.

Another important assessment agents should make is to analyze the agencys staff. Do you have the talent to support your vision? If not, can you find it or develop it?

Too often I hear agents ask, "Do you know any good customer service representatives looking for a job?"

In your hiring decisions, make sure you take the time to understand what skills or talents are needed. They may have changed over time.

Also, dont be afraid to look inside your own agency. You may be surprised by what someone on your staff aspires to become. Maybe a CSR could be your best producer if he or she had someone who could help improve workflow.

As with most decisions, communication is critical. Make sure all staff members understand the agencys philosophy or purpose. Work as a team to ensure each member of staff knows his or her role and responsibilities toward achieving the agencys goals. No different than any other team, your agencys employees want to know what position they play in order to make the greatest contribution to the team. When you coach everyone to work together as a team, you ensure alignment with your goals and create a win-win situation for everyone.

Understanding the agencys brand is another important feature. Agents have frequently replied, "I dont have a brand." To that we say, "Oh, yes you do!"

Be sure your reputation, advertising, signage, image and even the way you answer the phone are of high quality and speak to the agencys brand. For instance, if the agency is a specialist, does everyone know it?

In the end, generalist versus specialist is a personal preference. Be sure you, the agent, are considering all aspects of your strategy, know how you will support it, and make sure everyone in the agency understands the approach.

Create your future; dont just let it happen around you.

Lisa Murman is director of marketplace planning and development for Jacksonville, Fla.-based Main Street America Group. She is also co-chair of the National Association of Professional Insurance Agents Company Council of Executive Officers, which sponsors the "Value Difference" program aimed at helping agents understand their philosophy or purpose. Her e-mail address is murmanl@msagroup.com.

Reproduced from National Underwriter Edition, May 5, 2003. Copyright 2003 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.