Stand out from the crowd with an industry-specific risk survey

I recently spoke at the Florida Association of Insurance Agents (FAIA) annual convention. My main stage presentation was “The Agency of the Future,” which I followed with a two-hour workshop on “Predictable and Guaranteed Sales Success.”

As I was rehearsing my presentations (yes, I still rehearse—don’t you?), it hit me that there are really two types of producers: Application Fillers and Risk Solutions Providers. Let’s review the differences

App fillers

These are the “Old Way” producers. If you’ve been following me through the years, you know the type I’m talking about. They’re the Look, Copy, Quote and Pray producers. They get an opportunity with a prospect based on Old Way credentials: “We provide great service, we have the best people, we represent all of the biggest and best companies, and we’ve been in business for over 50 years! We’d like to provide you with an apples-to-apples, noobligation quote on your insurance. We believe we can save you money.”

Wow! Where do I sign up? What a compelling Unique Selling Proposition (USP)! The definition of a USP is the unique and appealing ideas and things that separate you from all of your “me too” competitors.

It’s no wonder why so many producers have probably heard the following: “You insurance people are all the same. Sure, if you want to give me a quote, I’ll listen. It’s a good way to keep our current agent honest.” That’s music to the ears of the Old Way producer, who thinks, “Oh boy, a great prospect!”

The next thing they do is look at the current policies, copy them and then fill out the apps (or worse yet, they give partial information to their service team to fill out the apps and end up sending Incomplete information to the carriers). After receiving the quotes from the carriers, they present the lowest price, then pray (and beg) for the account.

Let’s face it. This is nothing more than commodity- based Practice Quoting and Unpaid Consulting.And by the way, the closing ratio is far less than 25%!

If the risk transfer mechanism known as insurance is the only solution you provide, I believe your days of continual growth of revenue and profits (and that’s all that really matters) are very, very limited.

Yes, I realize you’ve heard all this before. But does it still sound all too familiar?

Risk solutions providers

These producers, and the agencies they own or represent, will always stand out in a crowded marketplace.Sure, they’ll provide insurance products as part of an overall risk solutions proposal. However, they are much more concerned about their clients’ Total Cost of Risk and overall Risk Reduction Plan than they are about just selling insurance.

In our Producer Training Camps, we teach that there are three types of risk: Strategic, Hazard, and Business. We also teach that there are five ways to handle risk: Prevent, Mitigate, Transfer, Finance, and Assume.

So when we look at risk, we must Identify, Quantify and Prioritize the risk. This process starts with an industry-specific risk survey that looks at all areas of risk for a particular type of business.(Personally, I always recommend the use of Producer Online from The Rough Notes Company.)There are many benefits to this approach.

First, you will totally differentiate yourself in the marketplace. I mean, how many of your Competitors from other agencies are doing formal risk surveys on their clients? (Side question: What percentage of the top 20% of your clients that are generating 80% of your revenue have an Annual Risk Survey [ARS] in place today?) What’s more, it will make you appear to be an expert on the risks faced by the prospect’s type of business

In the early days of our Producer Training Camps, long before we’d developed the Risk Reduction Approach™, one of our younger producers shared an experience that reinforced this point. At the time, he was prospecting restaurants, so his “30-second commercial” focused on the idea that he was an expert on the insurance needs of restaurants and that he represented an insurance carrier that was actively pursuing that very type of business. Consequently, he believed he could provide the best coverage and the best price.

Following the typical meet-andgreet at the prospect’s office, the producer immediately began the risk survey. About 14 or 15 questions into it, the prospect stopped him and said, “Young man, when you called and said you were an expert in restaurant insurance, I quite frankly thought it was B.S. However, no one has ever asked me the last two questions you just asked me! I now believe my current agent had better know the answers to those questions too. You truly are an expert on my business.”

The producer thanked the prospect, continued the survey and eventually wrote the account. Now here’s the lesson: it was the first restaurant he had ever worked with! However, because he had studied the survey in advance, knew the underwriting concerns, and had practiced conducting the survey, he came across with authority —like an “expert.”

WHOA=WOE

I always say that when people deal with you, they either say “WOW!” Or “WHOA!”
• Wow! This is totally different from what I’ve seen in the past.
• Wow! No one has ever asked me that.
• Wow! No one has brought that to my attention before.
• Wow! I didn’t understand Total Cost of Risk.

Obviously, that’s what you want to hear from a prospect. Here is what you don’t want to hear:

• Whoa! You insurance people are all the same. Give me a quote.
• Whoa! I don’t have time to answer all these questions! Just take the information and give me a quote.
• Whoa! Our policies renew in January, so call me back in September.That’s when we bid it out.

The bottom line

So the overriding question becomes: What’s the unique approach you’re using in your marketplace? Are you App Fillers or Risk Solutions Providers?As always, it’s your choice!

Speaking of choice, the great future agency you are attempting to build is a matter of choice, not chance!

The author

Roger Sitkins is founder and chairman of Sitkins International, a private client group and membership program for some of the top independent insurance agencies and brokerages in the United States, Canada, and Latin America. Members participate in training, advising and networking opportunities focused around innovation, sales, growth, profitability and value. Sitkins International is inventing the future of the independent insurance system by providing intellectual property that empowers agents and brokers to become the innovators.