Breathing Life into a P/C Agency

If someone were to hand you a blank check to enhance your bottom line, would you let it sit on your desk and collect dust? Or, would you fill in a number ending with a few zeroes and take some extra cash for doing no extra work.

For most business owners, that’s the ultimate no brainer. Even so, it’s surprising that many property/casualty agents are content with leaving money on the table. Although they have a life insurance license, they fail to capitalize on the opportunity for extra commissions and improved client retention.

At the top of just about any list of reasons why P/C agents are reluctant to sell life insurance is prolonged underwriting. They are used to relatively quick turnaround with auto, home, and liability insurance, while a life insurance app seems to hang in limbo forever. Such a complaint has not fallen on deaf ears. Carriers are recognizing the problem and many have developed express underwriting processes, particularly for term life products.

There are also policies that don’t require a physical. While the cost can be slightly higher than fully underwritten plans, some agents and clients prefer the convenience.

Additionally, P/C agents that work with a life brokerage agency discover that the process is as painless as possible. Simply submit the application and deliver the policy, while the brokerage handles everything else.

Benefits of Selling Life Insurance

Beyond the obvious benefit of additional income by adding life insurance to your product menu, there are others to consider.

As any good fisherman knows, the more hooks you have in a fish, the less likely it will get away. The same concept holds true for your clients. Already insuring their car and home is a great start, but adding life insurance can keep them from leaving.

Let’s say Bob, a life insurance agent in town, gets referred to your clients for life insurance. Bob sells the newly married couple two basic 20-year term-life insurance policies.

At first glance, this may not seem to be a particular threat to your business. However, there’s more to the story. Bob has a relationship with Sally, a local P/C agent, and recommends that the couple have her quote their auto and home insurance.

Whether they leave or not isn’t important, for this example. But what’s significant is the fact that you are now forced to work harder to beat anything Sally presents to your clients.

The big question is how you go about cutting Sally out of the picture before she even meets your client. You do it by selling life insurance and making it well known to your clients that you offer more than just auto and home coverage.

Let’s use this same example, but take it a step further. Let’s say Sally contacts your clients through a referral from a different source. Even if she can beat your current auto and homeowners rates, the clients may opt to stick with you for convenience. Many individuals, families and business owners prefer to keep all of their insurance in one place. If you offer life insurance and another agent doesn’t, it can only help you gain and retain more clients.

Growing Life Insurance Sales

There are two popular strategies you can use to increase your life insurance sales and bring more money into your agency. Many P/C agents are already life licensed and passively sell life insurance. The two strategies can take your current life insurance sales and increase them significantly. The first strategy is partnering with a life insurance agent.

There are many life insurance agents looking for a P/C agency to work beside. Life insurance agents are happy to give you up to 60 percent of the commission on anything they sell to your clients. There are a few important things to remember when selecting a partner:

• Be sure your personalities work well together.
• Have a detailed and clear working arrangement. You want to be sure the life agent works with your clients on your terms.
• Prescreen any proposed marketing material that’s to be sent on your behalf.

With the right combination, the additional sales that are generated will provide consistent agency income. The feedback from these partnerships has always been positive. The P/C owners are quite happy taking a cut of the life sales because even 50 percent of something is more than 100 percent of nothing. The life agent couldn’t be happier taking the other 50 percent of the commission since it comes from a new client that came from a referral. It doesn’t get better than that.

Even if you’re making some life insurance sales currently, this approach could dramatically increase your revenue. Life specialists are experienced in finding larger sales and even more of the smaller sales you haven’t tapped into yet.

There is another hidden benefit in using this strategy. Experienced life producers can easily identify large-case opportunities using advanced concepts such as buy-sell solutions, estate planning, and charitable gift strategies.

The life insurance agent is also accustomed to asking for referrals from each and every client, whether or not a sale is made. This will undoubtedly generate more business not only for the life agent, but also for you as a P/C agent as well. For example, your life insurance partner, Joe, is meeting with the Smiths. He doesn’t get a life insurance sale, but asks them for referrals.

The Smiths refer him to their friends, the Jones family, who recently had a baby and live in the next town over. Not only does Joe sell the Jones life insurance, but he also asks if they would like a free, no obligation quote on their homeowners and auto insurance. All of a sudden, you are collecting life commissions and receiving free leads, just because you partnered with a life insurance specialist.

Using Resources

Another effective strategy is to use the resources of a life brokerage agency, one that represents a broad range of life insurance companies. This gives you access to extensive marketing support opportunities, so you can send out company specific marketing pieces to generate more life insurance interest.

To make it even better, the brokerage firm takes care of everything in between the application and policy delivery.

Let’s assume you decide to try increasing your sales by working with a brokerage agency without bringing in a life specialist. If you do run into a case where there is an advanced concept opportunity, you won’t be alone. You will have access to advanced sales specialists within the brokerage, as well as from the life carriers. Whether you need a quick review or someone to join you in meeting with the client, everything is made as convenient as possible.

If, after taking the time to read this, you’re still not convinced that breathing life into your P/C practice is a step you want to take, there’s no need to worry. No one can force you to cash that blank check sitting on your desk.

However, you just may be missing out on an additional revenue stream that could take your practice to the next level. Don’t worry. Your competition may not hesitate at the chance to make that extra money.

Topics Auto Agencies Property Casualty