Last month I challenged your thinking by telling you about some of my own non-traditional sales activities that you can do with your present book of business — i.e., “inside” activities.
In this month's article, we'll take a look at “outside” activities, or those that reach beyond the internal structure of your agency.
For example: Some of my agency's greatest revenue opportunities came from the insurance companies we represented. I'm not talking about commissions or profit-sharing or contingencies, but about different ways of working with these companies for our mutual benefit.
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Beyond-the-norm carrier partnerships
For a period of time in the 1990s, Allstate made an underwriting decision to allow their representatives/agents to market lines of insurance that Allstate was not writing, primarily Homeowners' policies, to outside brokers.
Concerned about who would be best to align its agents with, Allstate turned to Northbrook P&C, which was distributing its products and services through the independent agency system.
As one of Northbrook's largest agencies in Long Island, N.Y., we were invited, among others, to submit a strategic plan that would work for Allstate, its agents, its customers and us. Our proposal, in which we created two response teams for Allstate agents to contact, was the one accepted by Allstate. The response teams were called “SMART1” and “SMART2”: Seigerman Mulvey Allstate Response Team. Two of our agency producers — one a former Allstate producer trainer and another a successful personal lines producer — headed the teams. Both of our producers were also Life licensed.
The arrangement worked very well, with Allstate agents able to place business they ordinarily couldn't write.
Through my participation on several insurance company producer councils, I became privy to internal carrier issues and participated in discussions to resolve them.
Two of our primary agency company partners had a major problem with an agency that was going bankrupt. (This agency was engaging in activities that left the two carriers with a financial exposure amounting to more than $1 million and no one to serve customers.) The companies, deciding they didn't want the negative publicity, would close the agency and walk away.
We proposed a solution to both carriers: The companies would basically give us the agency book of business and we would continue to service the accounts on a split-commission basis until the entire debt to each company was satisfied in full. At the end of the day, the total indebtedness to the carriers was satisfied and we acquired an agency by osmosis with no payment. The customer transition was seamless.
The moral of the story is to stay involved with your company partners. They need your input and, hey, you never know what opportunities might arise.
Keeping your options open
Keep an eye open for the eventual exit strategy you will need at the end of the journey.
I started to think about my exit strategy 10 years in advance. At the same time, the law that prevented banks from being in the insurance business was repealed. I had been on the board of directors of a fast-growing community bank for about 15 years. The board was considering new ways to generate revenue, especially non-interest fee income, and it seemed a natural fit for the bank to acquire an insurance agency — namely, mine. This was the same bank that gave me a $10,000 loan in 1975 to start my agency, so I had a very long, successful track record with them.
We created a joint venture to test the waters and see how the relationship would work. It was very profitable and resulted in the bank acquiring my agency several years later. Very few banks, and an even smaller number of agencies, looked at that scenario in the 1990s. But we did, and it really paid off.
To achieve success with outside activities, you literally have to go outside so that you can be in the right place at the right time. That means being out of the safety of your office, which is the graveyard for wannabe salespeople.
These non-traditional activities to grow sales revenue, both inside and outside, are not formulas, but rather examples of where your creativity can take you and how it can allow you to seize opportunities for success. If you dream it, you can do it.
Barry Seigerman founded the Seigerman Agency, a full-service, multi-line agency in 1975, and is now a producer for People's United Insurance Agency. Contact him at bmseigerman@gmail.com.
Related: Agency mergers and acquisitions hit record high in 2015
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