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How to Become Your Small-Business Clients' BFF

Posted By Joyce Anne Grabel, Wednesday, September 11, 2019


To engage the trust, loyalty and continued business of a small-business client, a sincere demonstration of empathy on the part of an agent can go a long way.

That’s why Robert Klinger, LUTCF, CPIA, president, Klinger Insurance Group, which is based in Germantown, Maryland, and president, AIMS Society, suggests using the “Feel, Felt, and Found” technique.

“Most insurance agencies start out as a small business themselves, so they understand what it’s like to be a small business,” Klinger says. “You are the receptionist, human-resources person, producer, customer service representative and company psychologist when an employee has a problem. You do the employee evaluations, take care of the benefits, you are the cleaning crew, equipment maintenance person, etc.”

With that in mind, insurance agents are in an ideal position to relate to what their clients are going through, a great way to build relationships and demonstrate value. The “Feel, Felt, and Found technique” works like this, Klinger explains:

  • Feel: Put yourself in the customer’s shoes and assure them that you understand how they feel.
  • Felt: Tell the client that you felt the same way and did X and Y to get through that same issue.
  • Found: Assure the client that in you, they have found a trusted advisor they can go to again and again for the help they need.

“Over a period of time, I found that it is good to surround yourself with people that you can go to when you have particular issues. I have a CPA friend that I can ask advice on finances. I have a lawyer friend that I can go to when I have legal questions. Be that person for your small-business clients,” he suggests.

“Build a niche in certain industries. Learn and understand the issues small businesses face daily in that industry. Have solutions to those issues or people you can send small-business clients to that can help them with those issues. Become a trusted advisor to this niche as well as to all your customers,” Klinger advises.

“Sometimes small-business owners feel like they are on their own little island, barely staying afloat,” he points out. “Have resources for your clients that you can refer them to when they need help. Be the first person they think to call when they need help with their business issues.”

Klinger concludes: “You’ll become much more than just the client’s insurance agent; you’ll be an asset, partner and friend.”

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Small Business: Frustrated with Commercial Insurance Purchase

Posted By Administration, Monday, February 4, 2019

from, based on Accenture study

Small commercial insurers aren’t giving their client base what they want – a simple and easy purchase experience. Whether online or through an agent, business owners are left confused, frustrated and having to seek extra advice before they can find suitable coverage, according to new Accenture research. 

“Small businesses are extremely frustrated with the process of commercial insurance, whether they purchase directly or through an agent,” the report concludes. “Many report that they do not trust the sales process or fear that they are inadequately covered by the policies they eventually buy.” 

Among the report’s findings:

  • “Overwhelming,” “confusing” and “not fun” were words business owners used to describe pursuing the purchase of commercial insurance for the first time. They were confused about how insurers collect data, insurance industry language and how much coverage they actually needed. Businesses said they wanted the quoting process to be faster and simpler than it is.
  • Business owners may start pursuing the direct/online purchase of insurance, but they often feel overwhelmed by the complexity of it all and can’t find what they need. They end up needing more time and consultation with others.
  • Business owners are jaded about sales pitches from commercial or personal insurers, leaving them cynical and on a quest to find unbiased advice from somewhere else before they make a purchase.
  • Business owners complain that commercial insurance policies aren’t flexible, wishing instead that they could find policies that adjust to their needs over time.

The study argues that carriers should streamline information small business owners need to receive quotes or policy information; use artificial intelligence to update policies and improve coverage; and rely on clear, non-jargon language so people who don’t know insurance insider language can pursue buying a policy easily.

There’s plenty of room for improvement. As Accenture noted, the small commercial insurance market has no single carrier with more than a 4 percent market share. Also, more than 60 percent of small businesses in the United States will be owned by millennials and Gen Xers by 2020, according to data cited by Accenture, and those demographics prefer “digital purchases and self-service to face-to-face” interactions or the telephone. That means carriers will win and stand out if they revamp their buying process for small commercial business customers in a way that addresses their concerns and preferences, Accenture said.

“Carriers that want to win need to leverage design thinking co-creation with customers, imagination and experiential research capabilities to create and rapidly refine their target segments, channels and touch points,” Accenture said in its study. 

Accenture, working with the consulting company Fjord, based its conclusions on interviews with 12 small business organizations centered around identifying past and future insurance needs. They also held a business owner workshop with seven small business organizations to gauge participants’ perspective on buying insurance digitally and what carriers needed to do to boost business owners’ willingness to buy insurance directly. The report is based on participation from 19 total business owners, and it also involved “ethnographic research,” where researchers observe or interact with study participants in their real-life environment. Interviews and workshop took place in the U.S. in July. 



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Beware of Hidden Risks for Small Business Clients

Posted By Liana Roberts, Wednesday, January 9, 2019


While a small business owner’s personal holdings and business assets often are separated by the legal walls of the business’s limited-liability status, there is no doubt that owners often think of their personal and business wealth as one big pool.

Protecting wealth

This mindset, and the potential for a large personal property or casualty loss to prompt a business owner to tap company assets, creates the potential for an unexpected change of circumstances to a client’s wealth.

Consider the example of Brian Herndon, a fictional but typical 58 year-old entrepreneur who owns a successful metal fabricating business in suburban Chicago. A candle left burning on a counter in the Herndon’s recently renovated kitchen for some reason emitted an ember that caused a hanging potholder to catch fire. The fire spread quickly and destroyed the kitchen’s custom cabinetry, high-end appliances and flooring. Damages totaled $350,000.

Unfortunately, the Herndon family hadn’t updated their homeowners’ insurance after completing the kitchen renovation, leaving their coverage inadequate and saddling them with $150,000 in expenses they had to cover out of pocket.

Like many small business owners, the vast bulk of Mr. Herndon’s wealth was tied up in his business. The Herndons’ personal financial wealth was relatively small and held in qualified retirement accounts, which Mr. Herndon and wife didn’t want to tap to avoid paying the 10% early withdrawal penalty.

Instead, he decided to borrow cash from the business to cover the expense — also a complicated maneuver that should be undertaken only with the help of a tax expert to avoid IRS penalties.

Borrowing funds from the business proved costly in its own way. It depleted working capital, which the business had to borrow from its bank. That not only raised costs and reduced margins, but also lowered the value of the business, which Mr. Herndon was hoping to sell when he reached 60.

Also affecting retirement was the reduction in Mr. Herndon’s qualified plan contributions that had to be earmarked to repay the loan.

All this current and potential future damage to the Herndon family’s personal and business wealth could have been avoided by having adequate homeowners’ insurance and an umbrella policy.

But a financial advisor can help his or her clients with P&C issues — and protect assets — by developing ties to trusted and qualified independent insurance agents.

Because many affluent clients often have coverage that is inadequate or entirely absent, annual reviews by a qualified insurance agent suggested by a trusted financial advisor can eliminate major risks to a client’s business and personal wealth and their plans for the future.

Variety of threats

As too many business owner clients often discover, property & casualty risks come not only from familiar misfortunes such as fires and burglaries, but from threats that probably never cross their minds.

These include:

  • cybercrime losses owing to identity theft or to damage resulting from hacking into devices such as home security systems;
  • flood damage, for which only about 12% of Americans have insurance coverage; and
  • accidents, which often lead to litigation and settlements that are in excess of homeowners’ policy limits and can lead to large out-of-pocket costs unless an umbrella policy is in place.

A recent study by the management consulting firm of Oliver Wyman found that 77% of financial advisors’ clients would appreciate their financial advisor providing access to P&C guidance and counsel. There is little doubt that for small business owners with so much of their wealth at stake, that level of appreciation is likely far greater.

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Millennial Business Owners Want to Work with Insurance Agents

Posted By Jayleen R. Heft, Wednesday, December 12, 2018


Cautious millennial business owners are more likely than other generations to work with insurance agents on a wide variety of insurance and financial issues, according to recent survey data.

According to Nationwide’s fourth annual Business Owner Survey, 69% of millennial business owners work with an insurance agent, followed by boomers at 66% and Gen X at 59%.

The most common reason for working with an insurance agent among all generations is the trust that business owners place on the guidance and expertise from an agent.

Further, millennials are relying on agents for guidance in more areas than other generations, especially boomers. Retirement (37% vs. 26%), banking (25% vs. 4%) and succession planning (21% vs. 9%) show a wide generational gap.

“Millennial business owners came of age during the 2008 recession — a time of economic crisis marked by uncertainty in financial markets, significant job reductions across the country and a sudden downturn in the real estate market,” said Amy Shore, president of Nationwide’s P&C Sales & Distribution. ”For that reason, it’s not hard to understand why this generation is more motivated than the generations that came before them to proactively take steps that satisfy their need for stability. Seeking professional advice intended to position a business for success over the long-term is exactly what business owners stand to gain by working with an agent.”

Other key findings from the survey show:

Use of insurance agents is widespread among business owners.

  • Over six-in-ten business owners (63%) report having an insurance agent, while almost seven-in-ten millennials have one (69%).
  • Business owners with between 100-299 employees are most likely to work with an insurance agent (80%), those with fewer than 50 employees are least likely (57%).
  • Guidance and expertise (41%) are the driving forces behind the agent relationship, more so than practical considerations like level of coverage (25%) and efficiency (23%).

Price is the top consideration when selecting an insurance agent.

  • Next in line is insurance coverage/offerings, followed by customer service.
  • While trust and guidance are reasons for having an agent, reputation ranks No. 5 on the list of reasons provided by the survey.

Although half of the owners have never filed a claim for their business, 70% of millennials have.

  • Half (51%) admit to reviewing their insurance policy on an annual basis.
  • No universal milestone is driving insurance reviews. Business owners admit to a variety of reasons occurring across various time periods.
  • Part of this reasoning may be that business insurance goes largely unused. Half of owners (53%) have never filed a claim for their business.
  • Boomers have used their coverage to an even lesser extent, as 62% have never filed a claim compared to 30% of millennials.

It’s important for us to provide advice and advocacy to millennial business owners who are increasingly looking for ways to protect their assets, especially as their businesses grow,” said Craig Concklin, president of Concklin Insurance Agency Inc. in Chicago. “Insurance agents are business owners, too, so we can relate and respond to the concerns and questions from business owners who want to protect what matters most to them.”

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57 Million Americans Own a Side Business

Posted By Denny Jacob, Wednesday, October 3, 2018

Yet Most Lack Insurance


A new survey from The Hartford found that 25% of Americans — approximately 57 million people — own a side business (a business that is not their primary source of income), yet most don’t have insurance to protect it. Only 12% of side business owners in America have purchased insurance. Of those who have not purchased insurance: 91% do not plan to purchase.

“We were somewhat surprised to see how many Americans are operating side businesses largely to generate extra income, yet most are uninsured,” Stephanie Bush, The Hartford’s head of small commercial and personal lines, said in a statement. “These survey results highlight the need to ensure that small business owners have access to resources to understand when insurance protection makes economic sense.”

Insurance? Who needs it

While a majority (61%) of respondents overall said the primary reason for starting a side business was financial, many were willing to forego insurance. The top three reasons cited:

  • I don’t need business insurance (44%)
  • My business is too small to warrant buying insurance (18%)
  • I am protected by my current home or auto insurance (11%)

At the most basic level a small business insurance policy helps protect a company’s property and income, and safeguards against liability claims. As a small business grows, additional insurance coverage options are available to meet the unique needs of the business — including workers’ compensation, commercial auto and data breach coverage.

Side businesses are side businesses for a reason

Although the small business owners surveyed are looking to make extra income, it’s not enough for some to take their business full-time. Millennials (40%) are more likely to say that their side business could become their full-time job compared with baby boomers (38%) and Gen X (33%).

However, many owners cite numerous barriers regarding making their side business their primary source of income:

  • I don’t believe I can make a living at this business – 48%
  • I can’t afford to give up my income from my full-time job – 33%
  • I don’t want to give up the benefits from my full-time job – 27% 
  • I like my full-time job and don’t want to give it up – 23%
  • I don’t have the time to dedicate to the business – 13% 


Tags:  insurance  small business 

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When Small Business Needs Specialty Insurance

Posted By Bryan Salvatore, Wednesday, September 19, 2018


Small business used to be associated with small exposures — simple business risks addressed with simple insurance products. However, changing customer needs and expectations, technology advancements, new regulations and evolving legal environment issues have dramatically changed the way small business owners run their companies. Small business is no longer simple.

Small-business owners say employment-related issues, crime risks and professional liability risks are their top three exposures, according to the 2018 Small Business Risk Report by Forbes Insights and The Hanover. In the face of increasingly complex exposures, many small-business owners often require insurance coverage that goes beyond a standard policy. This creates an opportunity for insurance carriers and specialized independent agents to expand their businesses by moving downstream and offering specialty solutions that better align with the needs of small businesses.

Mutually Inclusive

Servicing small-business accounts with complex needs has been difficult for agents in the past. The industry focused on providing specialty insurance lines for businesses that are large or difficult to place. Most insurance carriers selling to small businesses have concentrated their efforts on more predictable business owner policies (BOP), leaving business owners with complex risks without an effective solution.

In turn, agents have had limited options when it comes to serving smaller clients. Those limited options were:

  • Avoiding the small business market to focus on mid to larger-sized complex accounts;
  • Sending all small accounts to wholesale partners for placement and servicing; or
  • Bringing these smaller, complex clients into the agency service structure but then struggling to serve them easily and efficiently.

Agents have repeatedly said they need more alternatives.

The good news is carriers are evolving to provide better coverage and servicing options for these small businesses’ complex needs, making it easier for specialty agents to capitalize on the opportunity.

Waves of Change

Carriers invested in the specialty space are already implementing distinctive changes. First, they’re staying on top of the various specialty risks customers face. Because risks evolve over time, the best carriers are closely monitoring the many trends that drive exposures for small businesses.

In addition, these carriers are providing standard and specialty coverage from different underwriting disciplines in a way that is seamless for the customer. For example, a carrier’s small commercial practice can provide a BOP, while its management liability operation can provide directors and officers liability coverage, enhanced employment practices liability limits and a broader crime policy in a seamless fashion, all behind the scenes.

To the customer, it appears as though they have one comprehensive insurance program from a single carrier.

Finally, these carriers are working to solve coverage needs as efficiently as possible for both customers and agents. Implementing specialty lines capabilities within their customer service centers is a highly effective way to give small businesses all the insurance coverages they need, while providing them with high-quality service. This also saves insurance agencies valuable staff time.

Our industry has made good progress in recognizing that small businesses can have complex exposures. By building a broad portfolio of efficient, small specialty solutions, carriers will ultimately help agents grow their small commercial business and continue to make great strides in developing specialty lines solutions that serve the needs of small businesses with complex risks.

In turn, agents are able to better serve their small-business clients with more comprehensive solutions and streamlined service.


Tags:  commercial  insurance  small business  specialty 

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Prospecting for Commercial Insurance Online

Posted By David Siekman, Tuesday, August 7, 2018


We all know the value of prospecting for commercial insurance accounts. The advent of social media and the ability for social marketing has made it both harder and easier to reach our target market. This blog is intended to be an introduction for a commercial lines insurance producer in how to create a digital marketing effort. In years past a solid community-based presence combined with some print advertising in the yellow pages and newspapers would keep us at the top of mind for our clients as well as prospects in town. We may not have written everything but our prospects were aware of us and when they reached out to us we had a good shot at winning the business.

However, times change. In today’s world our target market may have grown outside of the reach of our community marketing efforts. Traditional groups such as Chambers of Commerce or more social or service groups such as Rotary, Elks, and Lions are struggling for membership. The benefit of social marketing is that we can now reach a larger, more diverse, and more spread out network of potential prospects. The drawback is that it can be a little overwhelming in how to approach prospecting commercial accounts today.

Like most marketing efforts, the key is a blended strategy. Anyone that says that traditional marketing is dead or that one particular social media platform can create all the prospects that you need are typically selling a niche program aimed at improving one aspect of your marketing strategy. While these niche programs have a place, they can only be one component of your marketing efforts.


There are some components to digital marketing that standard prospecting efforts should all include. On Facebook, you can promote yourself and the agency on both your personal page and your business page. Some insurance producers will create a 2nd personal page on which they promote their business efforts. I understand the desire to separate some of our personal details with our business lives but maintaining two different profiles on the same channel can take more effort than it is worth. I recommend creating one profile and merge your personal and professional lives. This is going to produce the greatest and most qualified leads.


On LinkedIn, it is important to make sure that you are promoting your personal page. All of the information on your personal page should line up well with a fully created company profile. Even if you do a great job of generating interest on your personal LinkedIn page, if people try to link over to your company profile and find a bare profile or one that doesn’t line up with the message on your profile, they will bail on a discussion before they even engage with you.

We highly recommend that you pay for LinkedIn Premium. There are a number of functions that the premium account offers. My personal favorite is that you can see the full list of people that have viewed your account. That is great to use to determine which of your prospects may be heating up a bit or to identify someone whom you haven’t even contacted. You also have some enhanced search capabilities to identify new prospects for your pipeline.

Your Personal URL

This is obviously easier for those of us with a unique name but owning your name as a url can be very helpful in prospecting. Not only does this give a fun and more personal way to brand yourself, it also can help if someone is searching your name. Even if you just point the url to the home page or a unique page on the agency website, it still helps to brand you.

Watching your Google Search

Doing a Google search of your own name can have some interesting results. Again, for those of us with unique names this is a little easier to see what a search of our name would reveal (Google Search: Dave Siekman). This will help you identify which digital marketing efforts are creating quality search results. It can also identify if there is any negative activity associated with your name. Many prospects (especially in commercial lines) will search both the agency and the producer’s name before engaging.

Your Website as Your Best Assistant Salesperson

It is vital that your agency page includes a good strong bio piece on who you are as well as information on the agency. While I don’t want to put too much focus on an About Us page, a lot of sites have done away with them under the “who cares” thought process. Well, a significant number of your prospects care. Especially at the top of the funnel when they are just hearing about you. Two great ways to learn more about you without having to contact you are by checking out your LinkedIn profile and the information on your website. Be sure to not only have a well put together and branded website but be sure that it gives the information for which people are looking. Also make sure that the entire website has strong content which includes text, video, and photos which are within the agency brand and are SEO friendly.

Other Platforms

Finally, we all know that there are countless platforms online for businesses to engage with potential prospects. To prevent resources being stretched too thin, determine which platforms your dream clients are utilizing and figure out a content strategy on that platform. For example, if you are working with retail you may find your clients are on Pinterest and Twitter; restaurants and hotels may be able to relate to someone with a strong Yelp presence.

I’ll close with one of our top commandments. You must be prospecting all of the time. There can be no excuse for letting prospecting go. It is vital (arguably the most important component) to your success as a salesperson!

Tags:  commercial  insurance  prospecting 

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How to Succeed in Today’s Small Business Insurance Market

Posted By Andrea Wells, Wednesday, June 20, 2018


The small business market is big. The U.S. small commercial market represents about one-third of the total commercial lines market and generates between $99 billion and $103 billion in direct written premium, according to a 2016 McKinsey & Co. report.

It could be a much bigger market as more businesses are being started. Since 1994, the United States has had an average of 400,000 business startups a year. Business startup activity was up again in 2016, continuing a three-year ascension and reaching pre-recession levels, according to the 2017 Kauffman Index of Startup Activity, from the Ewing Marion Kauffman Foundation.

The number of startup firms — firms one year old or newer — rose to 415,226 in the year ended March 2017, according to the Bureau of Labor Statistics. In 2015, new startup firms created 2.5 million jobs.

“A three-year upward trend in new business formation is a promising sign for the economy,” said Victor Hwang, vice president of Entrepreneurship at the Kauffman Foundation. “Recent research demonstrates that more startups lead to higher productivity, wage growth and quality of life. Growing startups not only support individual entrepreneurs but lift surrounding communities.”

All of this small business activity presents opportunities for insurance agents and carriers because there is an insurance gap. Many small businesses have been caught without flood or business interruption insurance and many more report that they are not buying cyber insurance. But the gap is much bigger than that. The McKinsey report found that almost 40 percent of U.S. sole proprietorships don’t carry any commercial coverage. Digital small business insurer Next Insurance surveyed 30,000 small businesses and learned that 44 percent that have been in business for at least a year have never had insurance.

The market is also very competitive. Again, according to McKinsey, the U.S. small commercial segment is divided among many carriers, with the largest accounting for only 6 percent of total premiums. Market share is particularly fragmented at the smaller end of the market (businesses with one to 29 employees).

However, the largest carriers are moving quickly to secure their positions. In the past six years, the market share of large carriers with more than $2.5 billion in direct written premiums for U.S. small commercial has increased by 12 percentage points, suggesting that scale is an important driver of growth, McKinsey said. Large carriers now represent 51 percent of premiums in the group of small businesses with 1 to 29 full-time employees.

Competition is coming from online providers. For every incumbent insurer committing to agents and the small business market like Travelers, Chubb, CNA and The Hartford, there is also at least one investing in or partnering with online platforms that bypass agents and brokers. In addition, there is a growing number of tech-oriented online brokers focused on small commercial lines including Embroker, Next, Bunker and CoverWallet to name a few.

Carrier positions vary within the small business segment because small business accounts range widely in size and scope, says Craig Welsh, distribution leader at Westfield Insurance Co., an Ohio-based independent agency property/casualty carrier, ranked No. 13 on Insurance Journal’s Super Regional P/C Insurers list developed by Demotech.

“When you look at market size, small business is really the largest segment of commercial entities, mostly state-by-state, and overall, so there’s huge potential,” Welsh said. “It’s also an industry that’s fairly fragmented. When you look at market share by carrier, there’s no single carrier, or I should say group of carriers that tend to dominate the market. That’s because a lot of it is still handled through local agents.”

Welsh sees plenty of opportunity for agents and their carrier partners in small business given the evolving definition of a small business account, a better economy, and the fragmentation of the insurance market serving small business.

Steve Tombarelli, vice president of SIAA’s Business Insurance Advantage, sees opportunity for agents in the many new small businesses being opened. SIAA’s insurance carriers are loving small business opportunity, too. “It’s an area they want to grow and expand,” says Tombarelli. “They all want to grow small commercial business.”

The Hartford, which recently bought the small business accounts of Foremost, has been committed to the market for a long time. “It is a critical business for us,” says Matt Kirk, head of sales and distribution for small commercial at The Hartford. “It’s very important that we support our agency partners in this space.”

Kirk says that from an agency perspective small business is an area with real opportunity. “When you look at the economic data, and who drives a local economy, small businesses tend to be the ones hiring and buying equipment,” he said. Plus, small businesses sometimes turn into large businesses. “It’s a great space but it’s very important from an agent’s perspective to ensure that their carriers bring product and capabilities that are going to be responsive to their agency and the small business owners.”

So how can agents best capitalize on this opportunity?

Five Strategies for Small Business Success

Insurance Journal’s discussions with agents and carriers unearthed strategies for succeeding in the small commercial lines segment today: rearrange and redefine; utilize service centers; specialize; upgrade technology and stay committed. Here are five strategies to agents to consider:

1. Rearrange and Redefine

McKinsey’s definition of small business includes businesses with up to 100 employees and $100,000 in annual premiums. But not everyone follows that formula.

“Both agencies and carriers tend to define small business a little bit differently and there’s some interesting aspects to that,” according to Westfield’s Welsh. “For a long time, small business implied smaller premiums, and oftentimes I think in our industry small premiums mean small service.”

However, small business can be larger premium accounts, too.

Minneapolis, Minn.-based Hays Companies has managed to grow its small business book by reorganizing its overall book to create a dedicated small business unit.

Erin Keys, Hays Companies’ Premier Programs practice leader, says the process began last year, and so far, it has improved the agency’s profitability as well as its relationships with key carrier partners.

“It’s very transactional business,” said Keys, noting that the agency understood it needed a better way to handle the many accounts it had on the books for small business. Prior to the transition, Hays had about 14 marketers on the property/casualty team, and everyone was handling a book that included both small to large national accounts even though small business is handled a little differently.

“We wanted to get the proper procedures in place to handle small business and just keep everything together, get organized,” she said.

Daily, transactional processing is now handled under the Premier Programs department. Keys says it helps to quickly turn around certificates of insurance and other endorsements, as well as answer any underwriting questions. They could immediately get ahold of someone to help in that front.

Producers and account servicers still interact with the clients to some extent, but the regular transactions are now concentrated within the new unit.

To make the change, Hays looked at its overall book of business and pulled out those accounts with $10,000 in revenue or less. “Then we looked at how many different carriers we were using and who was receiving the bulk of the business,” Keys said. “We vetted each carrier, starting at the zero to $2,500 (range) in revenue.”

Keys said that process made it clear that the agency could get by with fewer carriers to successfully run its small business and programs.

“We went from utilizing about 35 carriers and excess and surplus lines brokers to consolidating to just three. We are now up to about five,” she said. Keys says there are still a few “outlier” partners in small business, but now the agency tends to push the bulk of the business to its five partner carriers.

“It’s been great,” she said. “They’re all national providers, with strong Hays relationships on the small business side as well as the middle market, large/national account side.”

The move has helped profitability all-around, including growth in contingency income as well as improved loss ratios.

Carriers welcomed the change, Keys said. “We said to them, ‘Here’s what our book looks like. We need to partner with you guys, and we need you to think a little bit outside the box, and not just write your typical, four-walls, in-office exposure. We might need you to help us on an account with a little meat on it.'”

Keys has seen additional benefits of the move. The agency’s carriers have been writing some accounts they may not have written without the consolidation. Hays is now well-positioned as more “big name carriers” are making the move to build their small business books. New carriers to small business, such as Chubb and Liberty Mutual, as well as traditional legacy small business carriers, like The Hartford and Travelers, are investing in online rating systems and expanding appetite, she said.

Keys advises other agencies to find the right partner that has a large breath of appetite and is willing to think outside the box. “Then consolidate your book,” she said. “It’s been successful for us, on the front-end and on the back-end.”

Redefining the small business segment has worked for others as well. Herman S. Peery, senior vice president, at Insurance Office of America Inc. (IOA) based in Longwood, Fla., has selected a different way to refer to its “small” business.

“Small business is a very broad term,” Peery said. “In fact, we’ve eliminated the term ‘small’ in our definition of the clientele that would be identified for this group. We refer to them as ‘select’ because it is a select group of clients that would fit into this category.”

Rather than size of revenue, number of employees or even size of premium, IOA uses other criteria to define its “select” business. “We look at it as a service need,” he says. Once the account has secured coverage, and marketing is complete, “select” clients operate autonomously until the next renewal cycle comes up. “We would consider that a candidate for our select division.”

Deseriee Wanson, IOA’s director of commercial sales and development, says “select” accounts range anywhere from $500 in premium all the way up to several hundred thousand dollars in premium.

“We have a team here locally of 23 employees that are set up to support and provide a frictionless delivery of the policies to our clients, while maintaining our core coverages, and the high service levels that IOA as an organization displays to our clients,” she said.

2. Utilize Service Centers

Agencies have also found success in the small premium segment by utilizing insurance carrier service centers.

Lou Mitchell, chief operating officer, at Sihle Insurance Group, an independent agency based in Altamonte Springs, Fla., says that over the past five years, Sihle has grown its small business book about 10 percent to 15 percent per year. According to Mitchell, the growth has been purely organic due more small companies starting up in Florida.

As a general rule, Sihle defines small business accounts as any account less than $15,000 in premium. If an account is on the smaller end of that, say less than $2,500 in premium, Sihle requires that the business go to a carrier service center.

Typically, small commercial would generate 15 percent commission, but using a carrier service center costs the agency one to two percentage points of commission. In Mitchell’s view, the cut in commission is well worth the cost to the agency. “That eliminates us handling the $500, $600, or $1,000 policies that would put us in the ‘red’ as soon as we do a certificate of insurance,” he figures.

The service center handles all servicing needs and renewal activity. Plus, the carrier then assumes any errors and omissions exposure for that account, he said.

“If that carrier decides they no longer want to write that type of business then they would give us proper notice at the agency level that it’s going to be non-renewed for whatever reason and then we get involved again and find another carrier to place it with,” he said. Sihle remains the agent of record.

Mitchell admits some carriers are much better at service centers than others. “But I think the overall key is that when a client is first written it has to go to the service center then. It’s very difficult to write a client and give it the personal service that we deliver to our clients from an agency standpoint and then the next year say, ‘Oh, well, you’re going to a service center,'” he said.

“The ones who do it best offer extended hours, can handle changes efficiently, and have the know-how to determine how changes will affect policies of the client,” added SIAA’s Tombarelli.

Mitchell maintains that service centers are one reason Sihle has increased its small business book. “Because of the volumes that we write we have with some carriers assign people and direct lines that all of our clients call to,” he said. “We even have one service center that answers the phone as Sihle Insurance and they have Sihle Insurance stationary and business cards. People have no idea that they’re actually being serviced by a carrier service center.”

Mitchell particularly likes Westfield’s approach. “I’ve dealt with tons of them but they’re by far the most unique in the way they’re set up and how they execute day to day business,” he said.

Sihle doesn’t discriminate on the type of small business account, which has helped the agency grow its small business, too, Mitchell says.

“We don’t market the size as much as we market the general community itself,” he said. “We don’t turn people away and we very seldom ever refer to somebody else. That’s why we use the service centers on the mini-accounts as we call them, so we don’t have to turn somebody away.”

3. Specialize

SIAA’s Tombarelli says one of the most important things about succeeding in small business is to have a diverse book. “We encourage agents to have a diverse book,” he said. “Each year, different segments of the economy go well or slow down. For instance, when the economy is strong, construction thrives and when the economy is weak, construction is one of the first industries to have cuts.”

Connecticut, home state to Smith Brothers Insurance in Glastonbury, lags behind the nation in job creation and drumming up new small business accounts has taken a bit more planning, according to Jared Carillo, director of foundation accounts at Smith Brothers, a core agency partner for BroadStreet Partners Inc.

“Connecticut is a challenging place to be attractive to bring new people in the door,” Carillo said. “In our world, where we’re growing is really by seeking out those clients that require the services of an advisor. To a degree, we are profiling those business that rely more heavily on the advice that we give them — businesses with a little bit more complexity than just vanilla.”

Smith Brothers defines small business clients as those generating commission income of $5,000 or less. Carillo estimates that roughly 90 percent of new small commercial business is organic, new business. “Most is being generated strictly through word of mouth via referrals,” he said.

Carillo says that while a lot of new business stems from typical “general insurance” in the small commercial space, the agency has found some areas where specialization has helped drive growth.

“We have three different spaces in our agency that we specialize in for small commercial — lawyers, trucking and transportation exposed risks, and jewelers,” he said.

For Smith Brothers, the ideal small business client is one that will really listen and understand the risks that they face, as well as the valued advice of an independent agent. “That’s the level of client that we desire and seek,” he said.

According to the Connecticut agent, success in this market comes with being deliberate in profiling the type of client that the agency wants to interact with, as well as having a variety of specialties.

“It’s not just the size of the revenue,” he said. Carillo says that it’s “pretty easy to start throwing more money at advertising, go door to door, distributing pamphlets” to get any client. “But we are finding the best success by getting solicitations and networking within our current satisfied group of clients.”

4. Upgrade Technology

Both carriers and agencies believe it is important to stay on the cutting edge of technology to make it in the small business market.

“As we move into the future in small business, a real key component to being successful is to stay on the forefront of the technology that’s available to us to deliver both product and service to our small business customer,” says Chris Rooker, managing director of commercial property/casualty at Higginbotham, headquartered in Fort Worth, Texas.

Rooker believes the industry lags at times in its delivery mechanisms for small commercial policies, which is a threat to agents. “We’re going to have to be able to utilize the technology that’s becoming available both in our agencies and as we interact with our customers, and partner insurance carriers.” In his view, the industry isn’t quite there.

Today, most people like to do business on their iPhone, he says. But most small businesses right now, from an insurance perspective can’t do their business off their iPhone. Rooker says that needs to change. “I think if an agent is going be successful five years from now, or maybe less, they’re going to have to develop the technologies that allow these small business owners to access their insurance policies — their auto ID cards, their certificates of insurance, and other service related matters in an easy fashion,” he said.

Some small business carriers and agency management systems provide some sort of mobile technology to meet customer needs, but most do not, according to Rooker. “There’s a true gap in the ability to service customers via an iPhone or mobile device,” he said.

5. Stay Committed

Whatever agencies do when it comes to being successful in small business they must be committed to the market, says Andy Wood, Insureon’s executive vice president of retail operations.

Headquartered in Chicago, Insureon provides online capabilities that connect small business owners with insurance providers. Insureon has made small business its only business by delivering fast, online insurance to micro-small businesses, or those typically with less than 10 employees.

Most agencies cannot invest in the type of technology it takes to write more than 200,000 micro-small business customers, like Insureon, but Wood says independent agents can still find success.

“You’ve got to be committed to it,” he said. “It’s not something you can just jump into and jump out of.”

Insureon is a high-volume agency that emphasizes efficiency. “For us, that translates into imagining a funnel when somebody comes to our website and being able to drive them through the application process very quickly without a lot of people falling off, having processes in place to pick up those people who have dropped off to save them. Then once you get them in through the application process, get them quotes quickly and then bind quickly,” he said. “You’re not wasting lot of energy. You’re not wasting a lot of space. Obviously, there is money to be made, if you can do it efficiently and effectively.”

Woods says some agencies struggle in small commercial because they don’t have the economic mindset to invest in small business.

“By necessity, they will jump to where the opportunities are, so they work on some health. They might work on some personal lines. They might run across a small commercial account here and there,” he said. “But if you really want to be successful at it, you’ve got to have resources that are dedicated to it, and you’ve got to have a very well-defined, clearly articulated marketing plan on how you’re going to go after that small commercial space.”

Economics drive success in small business. “You’ve got to be super-efficient and super-effective,” he said.

Tags:  insurance  sales  small business  success 

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Poster: Small Business Owners WANT to Work With You

Posted By Administration, Saturday, March 3, 2018

Poster is available as a PDF to download and print.

Tags:  insurance  PIA  small business  study 

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Why (and How) You Should Sell to Small Businesses

Posted By Barry Seigerman, Saturday, March 3, 2018

from, February 7, 2018

Should you consider selling to small businesses? If so, how do you sell to them?

The first answer is yes. Suppose you decide on a marketing campaign to add $400,000 in new business premiums. Would you prefer to try to produce two or three large-premium new customers, or would it be easier to produce 25 new small-business customers? The potential retention rate on large accounts is probably one to three years, compared to seven-plus years for small businesses.

Small-business selling should be a major part of your sales strategy, provided you establish some clear guidelines: 

— Establish a minimum commission threshold that the prospect can generate in the first year. Depending on location, that could be between $800 and $1,200.

— Prospects must be willing to meet with you to conduct a "fact-finding" survey and premises inspection.

— Prospects must allow you to review all current policies, audits, leases, etc., and loss experience.

— Explain your agency's unique process. The first appointment is strictly fact-finding (no sales pressure); the second appointment is a presentation of the results of your fact finding and policy review. The third is to deliver policies and introduce the assigned CSR.

— Set the next meeting for three months to make sure everything is satisfactory. The customer should bring all personal insurance policies (P&C and Life) for review.

— Cross-train a good personal CSR to small commercial businesses. The customers like it, the agency will love it (one paycheck), and the CSR will love it.

The more policies a client has with the agency, the more your retention will increase. Develop long-term relationships and many of these small businesses will grow and take you along. Think of the referrals you can obtain with these relationships.

Prospecting in the small-business market is easier than with large accounts, and comes from referrals and personal contacts. By consistently communicating your agency's value proposition, you can develop a solid reputation as the go-to insurance source that understands the insurance needs of small businesses. After all, as a small business you face many of the same issues they do. Consider these activities:

— Select specific businesses to focus on and develop your expertise. Look to your present client base. For example, if you have three bakeries, prospect in that market. Mix in professional firms and blue-collar trades and services. Go out of your way to patronize these businesses as a customer and send others to them as referrals.

— Join one or more local Chambers of Commerce.

— Sponsor sports teams and other community events.

— Volunteer and support other businesses’ charity drives.

— By invitation to clients and prospects, conduct workshops to discuss mutual issues faced by small business and have one of your clients as a guest speaker.

— Reach out to others, such as community banks, museums, and historical societies to jointly sponsor after-hours events for local businesses to network while providing opportunities for the host/sponsors to talk a few minutes about their own organizations. Wine and cheese after hours always works, as does bringing in a few local food vendors to display their products.

— Hook up with a business or high-tech incubator at a nearby university or other facility. Incubators are desperate for business speakers who can volunteer some time to help prepare these start-ups for what they will need in the future.

— Look in your own checkbook. Where do you spend money? Approach everyone with an opportunity to get a second opinion on their business insurance program.

— While producing large commercial accounts will generally account for the major revenue of a successful agency, I still believe it is shortsighted to avoid selling to small businesses. The revenue from small businesses, including their personal business, can provide a very solid foundation and substantial percentage of an agency's revenue.

It still provides the best way for an agency to grow organically and for new staff and producers to gain the experience and expertise the agency will need in the future.

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PIA of Kentucky
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Fax: 502-227-0839