"A Commodity in PC Sales?"

[Matt37]

The key to making a lot of money is don't write personal lines ... unless you are writing HOs in South FL.

I am in the E&S world but have buddies that write HOs and have clients that pay them like $1500/yr in HO insurance.. I am not answering the phone for that to be honest.

I was in the commercial world for years and just recently started an RRG in the E&S world and my rule of thumb is nothing below $5k-$10k in premium and nothing where the agent wont tell me pricing.

my advice is get out of a captive because that is a dead end and start going after hard to place stuff.

 

[shawnmwalker]

Some advice:

The industry is huge. There is not a correct side of the industry to be on. This is a Fallacy. There is ridiculous amounts of money to be made at all ends.

I started in a Non Standard Insurance agency, where I saw average polices Prem of 3k. Agency fees, Fast moving carriers, Fast transactions.

Thinking I was on the wrong end of the industry I went to a Preferred carrier where I saw average Package policies for 3k. (Auto, Home, Umbrella.) And carriers not capable of moving as fast as a NS carrier and being ran by UWers fighting Tech so the pass through rate stayed low and expense ratio stayed high

Back on the agency side, in my role today, I see The entire P&C spectrum, all over the US- Large Commercial to NS auto. Seeing Commercial from this perspective shows it too has its sex appeal and its down falls. Certs all day long. Longer courting process. More staff to court and put up with the "I need this yesterday" needs of the a commercial client.


No one end of the industry spectrum is sexier than the other. (I used to think this)

One end might have a bit more golf involved, one might have a bit more cash payments involved, but there is great money (And Pitfalls) to be made at all ends of the spectrum.

 

[nyc2phi]

As everyone mentioned, don't make it about price. Take the time to educate as much as possible, you'd be surprised how little people know about this "commodity" and how appreciate they are when you take time to explain what they are buying.

Biggest way to separate yourself from the product is through good customer service. Sounds basic but when you're there for your clients they no longer think about it as a commodity, they think of you as someone who makes their life easier.

 

[insurance1822]

^ Give it 5 years when you're too busy writing new business to run policy reviews & they get a quote from GEICO saving $300...many will leave. To do the volume required to make GOOD money in personal lines, you can't run those annual policy reviews which MAINTAIN & DRILL that customer service & relationship into them. I tried...no time.

That's why I just produce like a savage & our-WRITE my retention. I'm retaining around 88% (but I'm still a newer agency so that number will improve..) and that doesn't take into account inter-agency remarketing...so it's effectively higher.)

My stance is put ALL effort into growth & out-write attrition. You will slowly build blind loyalists over the years and your retention will continue to improve. Otherwise, you'll need to be running policy reviews all day long & it will impair new business.

 

[Andle]

INS1822 nailed it. Its all about volume.

Write until you cant keep up then hire. Continue the cycle over and over.

 

[GXR2]

If someone makes it clear to you they will leave at the slightest rate change, or they have little respect for what you do, don't waste your precious and valuable time.

Insurance is a commodity. Insurance business building is a numbers and volume game. Set the expectation when business is written that P&C insurance can increase each year like any other commodity no matter where they go.

Very few will ignore double digit increases. Let them know that you have options if rate gets out of hand and to contact you first before making a decision.

Service is still important. A client who feels disrespected regardless of rate will leave. So you can't disregard individuals for the sake of volume.

You will soon learn which clients need and want just fast quote and issue, and which ones need and want and deserve a more formal presentation. There is no one-size-fits-all. Hone your intuition. Efficiency is key.

For your higher end, multi policy accounts take a little extra time to explain coverages, protection value, benefits, etc.

If you maintain a constant position to protect your clients well you will write good business, sleep at night, and gain respect and loyalty from a good portion of your book. The other portion will be rate focused and volatile. That's just how it is.

Any agency (like SF, AS, AmFam, etc) that tells you a brand name will save the world and drive and retain all your business is delusional. Run for the hills.

You need a mix of diversified carriers so you can truly be unbiased, reach out to new markets, grow rapidly, and retain business.

Good luck.

 

[CJ Tibbs]

Good thread.

Insurance is a commodity, but so are many,many,MANY other businesses.
-there are shoppers (these you don't want) who will drop you in a heart-beat for $2 prem, savings.
-FIND those who you can develop a relationship with and appreciate your knowledge and service. Calling a switchboard in India, is not my idea of service.
-get ready for more competition in the personal lines, but I think rates will be about the same.
-don't compete on price. make sure the client KNOWS they are getting YOU. And not some random switch-board operator who doesn't know you from Adam.

Good input from some of the Pros.

 

[insurance1822]

I want to re-iterate that you can bring on a new customer & go over all the coverage's & set yourself apart as a great professional blah blah blah. But unless you're running annual policy reviews, it WILL fade away over the years.

That's why I advocate GROW GROW GROW GROW until you're making the money that you're happy with. Then...just run policy reviews all day long to get your retention up to 94-96% and chill out (writing whatever organically comes in.)

That's all folks!

 

[Susan J]

Thanks for all the good advice guys.

I knew it would be tough, and im willing to put in the time. I'm expecting a min 1 yr time frame to plug away and get the pipe full.

 

[djs]

This thread illustrates one of the best aspects of selling insurance..... There are MANY ways to do it!

Find a way that fits YOU. Be confident and comfortable in your knowledge and presentation. This shows and prospects sense it. If your sales method doesn't fit you, that comfort will never happen.

Despite what is mentioned here several times, service doesn't sell. Service helps keep a policy sold and P&C is really about retention and recurring revenue, so this is highly important, but it really doesn't sell much.

On the other hand.... Empathy Sells! Relate to your prospects. Listen to them and interact with them, learn the line, "I know how you feel" or "I know what you mean". At the same time, learn how to end a conversation quickly without being rude. The "Hey, I'm sorry but I've got another appointment I have to get ready for... Do you have any last questions?" tends to work very well. You'll thank me for this line later

Dan