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Remember when the entry of banks and credit unions into the insurance business was going to put agents out of business? And then it was this new thing called the internet, which later spawned Insurtech, that would mark the demise of agents. Yet there are 881,500 licensed agencies and brokers working in the US currently, with an expected growth rate of 6% for agents in the next ten years (www.agentmethods.com/insurance-agent-trends-and-statistics). As one of the 881,500, you may have been battle-scarred by these threats, but you are still standing. However, now is not the time to coast in complacency. What is the next threat looming around the corner? Embedded? Commission cuts? And are you prepared?

“So agencies need to be on offense. I think they need to come out swinging. I think they need to be looking at themselves through the mirror. And sometimes that’s a little tough.”

Matt Masiello, President and CEO of SAN CEO of SIAA

So how do agents pursue Masiello’s stern advice?

Clearly identify what factors are under your control. Studies on coping behaviors in stressful settings, have revealed that during difficulties, people are more resilient when they focus on actions they can accomplish to move forward, instead of focusing on circumstances that bind them.

Focus on actions you can implement that will improve your situation. In The Future of Insurance Podcast – Matt Masiello (www.future-of-insurance.com/podcast/mattmasiello/), Masiello urges agents to know their segment, but recognize that it is continually evolving. Therefore, agents need to continually pivot the way they interact with their segment. Specifically, Masiello recommends identifying the price-sensitive, monoline shopper and minimizing your interaction with this segment, because they do not value agent advice. The prolific segment has multiline protection needs and values the guidance and support that an agent can provide.

Masiello also points out that the start of the insurance buying journey does not begin with the client walking into the agency and the agent greets them with: “Let me give you a quote.” 70- 80% of the insurance buying public starts the journey online obtaining basic information. First, agents need to digitally modernize to provide this information that the public seeks. Second, agents need to be able to drive potential clients to seek human interaction. This opens the opportunity for agents to guide clients on a more expansive insurance journey beyond the initial single policy.

In this consumer-dictated, tech-driven climate, agents need to be on the offense. Even though digitalization plays a major role in the insurance selling process, it is human optimized. Masiello explains that technology does not replace agents in this process but, rather, optimizes them. The extent to which technology can cross-sell products is not much beyond Amazon’s “customers also bought” section. To effectively cross-sell insurance, agents need to shift from the order-taking, or renewal-complacent mindset to a selling perspective. Clients who need auto and homeowner’s insurance will “order” it. With the client providing the data from these policies, agents can pivot with a life quote.

Furthermore, Masiello advises agencies to facilitate a business development culture. This goes beyond just looking at your role as an agency owner – review your staff. Could you implement changes in which your staff is also on the offensive and seeking business opportunities? For instance, train your staff to be versatile and capable of making sales calls in addition to servicing policies.

What does the offense look like for a captive agent facing commission cuts? Agents need to look beyond commissions. This means to look beyond the transaction. This is where Masiello’s offense of focusing on the proper segment comes into play. Survival mode for agents is targeting the appropriate class of business or niche. Also, cross selling is an apt battle cry in the campaign against commission cuts. However, it is not Excalibur and will not absolutely protect your job security.

Agents can feel like lady justice holding a beam balance scale, because they have to facilitate the balance between carriers and clients. There is no mistaken that agents work for two, often opposing, clienteles: carriers and policyholders. And they have to offer value to both parties.

Agents should always be mindful that carriers are like any other corporation. They, too, evolve not just to survive, but to be profitable. This does not entail condoning some of the decisions they make such as commission cuts; mitigating the growth of their captive agents; shifting to direct channels; layoffs.

Even in this climate of swirling threats, especially from direct channels, SIAA is opening new independent agencies and experiencing tremendous growth. Their distributions are expanding in part to agents moving away from captive. Rouge Risk, powered by SIAA, offers a “No Ceiling” insurance career which offers options to former captive agents who do not want to own their own agency (www.roguerisk.com/siaa).

Agents are still relevant, but they must evolve with the changing landscape of the industry and communicate their value in the modernized process. It is no longer about taking policy orders and pushing papers. It is about expertise. An agent’s value is directly linked to the value they provide to clients in the policy buying journey as risk advisors.

Steven White, NASFA VP of Marketing

This article originally appeared in The Mirror, Spring 2019, and is reprinted with permission of the National Association of State Farm Agents. ECRM is State Farm’s Electronic Customer Relationship Management Program.

I have visited with several agents recently. The same question comes up almost every time: “How are things going for you?” My response, “I guess it’s going okay,” seems to be the most fitting answer. I could give a more positive response, but it would not be honest. Is anyone really surprised by this? One agent told me it just wasn’t fun anymore. Our day-to-day activities are evolving rapidly, creating both challenges and uneasiness as we adjust.

I understand the concerns these agents have shared with me. How will all these changes ultimately impact our businesses and futures? IT appears that the biggest shift in this new world of Agency is our mindset. Agency has always been forced to deal with change, and every few years a new season of adjustment comes sweeping through. Some changes are positive, while others ended up in the “flavor of the month” trash bin.

Our corporate culture has been transformed and the evidence is everywhere. I’ve come to understand that when agents reminisce, “In the past, we…,” it means they miss their relationship with the company to which they dedicated their lives. They miss the company that valued agents as frontline underwriters and looked to agents as partners in growing the business. Sadly, this feeling of partnership no longer exists except in corporate talking points. I understand that change has occurred but many days I struggle to appreciate it. This era of change feels like a tidal wave, redefining our relationships to the company and even our policyholders. Rollouts of new applications are connecting the customer directly to the company and less to the agent. The most recent ECRM update video makes this abundantly clear. Our agency world has changed, and more changes are on the way.

As these new ways of doing things are rolled out, they often reveal a lack of preparation or worse, a lack of concern of the impact on agent’s offices. Too often, replacement processes are released into the field at large before the bugs are worked out. The new ECRM software has seen its share of required updates to work out the kinks. I acknowledge my limitations with technology and implementation, but the pilot programs should give an indication of the system’s readiness for mass distribution. Agencies must, and do, roll with whatever comes at us.

I am cautiously optimistic about the full implementation of this new ECRM operating system. Like many, I realize the road is going to be bumpy and frustrating, and present challenges for agency and operations alike. Here’s my question to anyone reading this article. Do you have any other options but to change and adjust to ECRM? If you do, please let me know so I may consider them. If not, my office will adapt to the ECRM world out of necessity. I am not sure what will be included with this next version, but I am fairly certain there will be many more incarnations to follow. I agree with those of you who have expressed frustration regarding training, or lack thereof, with ECRM rollouts. I had a fellow agent explain to me that personal assistance is for “SL approved” agents only, and the rest get videos or chars. She might be right.

My office is adjusting as needed and we are learning in every way available, mostly through trial and error. Here’s what I understand about ECRM. It is not going away and it’s not designed to help Agency. It is getting adapted to help the company control more aspects of information regarding our policyholders while connecting directly with them.

In late 2018, I found myself visiting with a man who had grown up, unbeknownst to me, in a SF agent home. He shared personal memories of the agency picnics, agent trips, and the family atmosphere surrounding everything involving the company. His face lit up with joy as he remembered the past. As he smiled and shar3ed a few of his favorite memories I found myself feeling a little bit envious of what he referred to as “the good old days.”

Yes, times change, yet seldom can the present compete with memories of the past. If you are struggling, hang in there and know there are many agents who feel the same. Who knows? Maybe it will turn out better than it feels right now. I am hoping it does for all involved.

Homeowner Security and Safety

You’ve all been there, your longtime client’s son or daughter is buying their first home and you are writing their homeowners policy. They may not think of it, so reminding them to change the locks, all the locks, might help them out. You never know who the previous owners lent or gave keys too not to mention during the sales process realtors, inspectors, potential buyers, and workmen are in and out of the house. Many times these individuals are allowed the use of the door keys unsupervised. (This covers outside doors, garage doors and shed doors. Changing the garage door opener code is also suggested)

What about calling the local police department for a home security inspection? Local law enforcement agencies will review your home’s security and make suggestions on where to make improvements.

Most neighborhoods have a neighborhood watch program. Inquiring about the program and becoming active in neighborhood and community activities will allow you to meet your neighbors and will give you an idea who belongs and who doesn’t.

Most thieves look for easy targets, so don’t help them. Install ample lighting around outside doors and cut back shrubs and trees from pathways. Don’t give that thief a place to hide. Keep garage and shed windows covered and locked. Don’t leave tools, extra bricks or toys in the yard. These can be used to break into your home.

All homeowners should know where the main water and gas supply shutoff valves are for their house. This knowledge could prove to be very important in the case of an emergency. Each plumbing fixture should have its own shut off valve as well.

If the new house is 1-1/2 or more story house are there 2 ways out from the upper floors in case of a fire? If the primary way is blocked by fire or smoke, you will need a second way out. A secondary route might be a window onto an adjacent roof or using an Underwriter’s Laboratory (UL) approved collapsible ladder for escape from an upper story window. Make sure that windows are not stuck and that the screens can be taken out quickly and security bars can be opened.

Make sure everyone can open all locks from the inside of your home. Replace inside-key locks with deadbolt locks that have a “Thumb Turn” instead or attach the door key so that it cannot be lost, but not seen or reached from a broken window. Have window locks that open from the inside and NEVER nail windows shut.

You’ve all been there, your longtime client’s son or daughter is buying their first home and you are writing their homeowners policy. They may not think of it, so reminding them to change the locks, all the locks, might help them out. You never know who the previous owners lent or gave keys too not to mention during the sales process realtors, inspectors, potential buyers, and workmen are in and out of the house. Many times these individuals are allowed the use of the door keys unsupervised. (This covers outside doors, garage doors and shed doors. Changing the garage door opener code is also suggested)

What about calling the local police department for a home security inspection? Local law enforcement agencies will review your home’s security and make suggestions on where to make improvements.

Most neighborhoods have a neighborhood watch program. Inquiring about the program and becoming active in neighborhood and community activities will allow you to meet your neighbors and will give you an idea who belongs and who doesn’t.

Most thieves look for easy targets, so don’t help them. Install ample lighting around outside doors and cut back shrubs and trees from pathways. Don’t give that thief a place to hide. Keep garage and shed windows covered and locked. Don’t leave tools, extra bricks or toys in the yard. These can be used to break into your home.

All homeowners should know where the main water and gas supply shutoff valves are for their house. This knowledge could prove to be very important in the case of an emergency. Each plumbing fixture should have its own shut off valve as well.

If the new house is 1-1/2 or more story house are there 2 ways out from the upper floors in case of a fire? If the primary way is blocked by fire or smoke, you will need a second way out. A secondary route might be a window onto an adjacent roof or using an Underwriter’s Laboratory (UL) approved collapsible ladder for escape from an upper story window. Make sure that windows are not stuck and that the screens can be taken out quickly and security bars can be opened.

Make sure everyone can open all locks from the inside of your home. Replace inside-key locks with deadbolt locks that have a “Thumb Turn” instead or attach the door key so that it cannot be lost, but not seen or reached from a broken window. Have window locks that open from the inside and NEVER nail windows shut.