Posted on 04 Aug 09
The new realities of the economy may present challenges for each one of us for several years, but there is also opportunity in the rough waters we find ourselves navigating through. In this issue we focus on approaches to help independent agents cope with this new environment and form stronger relationships with existing and new clients. We spoke about this with Nanci Evarts, president of Marketing Strategies Group, a marketing firm focused solely on the insurance and financial services industries.
Annie George (AG): Many companies are experiencing loss of business, cash flow issues, employee downsizing, budget cuts. How do you suggest insurance agents deal with their clients facing these pressures?
Nanci Evarts (NE): “There is both the reality and the psychological aspect to tough economic times. Panic sets in, uncertainty makes for insecurity and at times inertia. Some people are in a holding pattern, just waiting to see what will happen, while others react in a knee-jerk fashion and make decisions that have long-term consequences. As an agent you can either be controlled by your clients’ feelings and behaviors or you can attempt to gain control and steady their shaky nerves. The bottom line is that you and your clients, as business owners, are going through some of the same experiences. You need to empathize with your clients and what is going on, counter pessimism and inertia with sound counsel, become a “hero” in your clients’ eyes, and firm up your relationship for whatever cycle follows.”
Nanci lists some of the top-of-the-mind issues that your clients may be concerned about, including: lack of capital or tight or non-existent credit; expansion plan delays; inability to pay vendors and other expenses; the possibility of employee layoffs; and limited resource funding for future growth, such as investing in people, equipment, and technology.
“With all of these challenges, is there any wonder that the way in which clients view insurance is affected?”, says Nanci. “This is why looking at their concerns, stepping into their shoes first is what’s needed to best determine how to communicate with them and sell them the right insurance program.”
“You may find that your clients want to scale back on coverages or limits to reduce actual premium costs. This concern and knee-jerk reaction on their part may result in having inadequate coverage. Clients may begin to shop around and look for better deals. You may even find that ‘slam-dunk’ renewals and rollovers are being questioned. They may be looking at how they can trim back on ‘must-have’ coverages such as Workers Comp, GL and Property, then move on to scrutinizing whether coverages such as Professional Liability is necessary. Some may even be putting off EPL or D&O…asking you if this is ‘really needed.’ All of this has a negative effect on your agency income and the relationship with your clients.”
AG: What do you suggest an agent does to counteract this, to turn around the dialogue?
NE: “An agent needs to address this negativity and inertia head on with sound advice, with the experience their clients have come to trust. You need to become their ‘hero’, don’t succumb to the panic. Engage in sensible conversations while being empathetic to their challenges. Take control of the situation.”
Nanci recommends that agents take control and fight fear. She suggests the following action steps.
• Do a better job of researching programs that provide products that will protect the business and provide solutions to cover a client’s risk while offering a better pricing structure. What new solutions are out there?
• Emphasize risk management services and loss control, such as ways to improve potential losses and their workers’ comp experience mod. That way you’ll be setting the stage for better news next year!
• Work with your providers to develop creative solutions you can offer to your clients.
• Explore the specialty marketplace with wholesalers, program administrations that offer innovative niche programs.
• Identify cost-effective ways to layer primary and excess coverage.
• Evaluate payment flexibility, such as installment plans, and re-evaluate premium financing options and vendors that provide this service.
• Evaluate and take on “knee-jerk” reactions that could harm clients, such as foregoing EPL or cutting back on Workers Comp.
• Emphasize that this is not the time to cut back on either private or public D&O coverage…shareholder suits are on the rise.
• Protect yourself by stepping up to the plate and not cutting corners, providing advice that will stem any E&O clam.
Nanci emphasizes that it is critical to be proactive, to not simply wait for your clients to come to you with their concerns, but to tap into what they are going through and offer solutions before the panic sets in. “By offering these services now it helps to re-package and reinforce your agency’s image as a valued consultant. Remember, they chose you as their advisor and that is what they are looking for, especially now,” says Nanci.
About Nanci Evarts
Nanci’s 20-plus years of experience spans the breadth of the insurance marketplace, working with underwriters, brokerage firms, wholesale and reinsurance intermediaries and ancillary services, including TPA claims outsourcing, captive management, premium finance, forensic claims accounting, employee benefits, and insurance technology enterprises.
The focus of Nanci -- and her firm’s staff of insurance marketing experts -- includes development and execution of integrated marketing and business development campaigns, and award-winning efforts in advertising, direct mail, customer development, as well as public relations and employee communications. Based in Southern California, Marketing Strategies Group serves clients across the U.S.
Prior to the establishment of Marketing Strategies Group, Nanci was a Managing Director with Aon Corporation.
Also active in the larger industry, Nanci is a Past President of the Insurance Marketing Communications Association (IMCA), which represents over 100 insurance and insurance services companies. She serves on the editorial board and is a columnist for Rough Notes magazine -- and is a popular speaker and workshop leader at industry events. Nanci can be reached at: 805.379.1261 or at firstname.lastname@example.org.