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Rewind back to the “world has changed” theme. It’s a fact. The du-jour underwriter-agent mentality is transactional and not relationship based. Just as we live in a sound byte society, we live in a culture where agency-carrier relationships have become based on a “what have you done for me lately” expectation. Unfortunately, they’ve been established without deeply rooted respect and long term commitment. It’s as if relationships, like our products, have become commoditized.
If a mutual respect for each other’s value proposition is non-existent, then success within the relationship will be equally
non-existent. It’s formulaic: if relationship value received does not equal value expended, one party ends up with the short
straw and short straws don’t fit anyone’s business plan.
Also, essential to the relationship is the issue of capital. Understand that it’s the carrier whose capital is at risk - expensive and obsessively regulated capital I might add. Ask yourself: whose capital is frittered away if relationship expectations are not attained? The answer equates to who will throw the most elbows in the relationship.
To understand this dynamic is to be able to work with it rather than against it – and avoid the elbow shots. Channel your conversations away from the generalized and annualized and focus instead on the specific, month-to-month, mutually compatible activities and services that will drive the partnership and enable it to prosper. Talk of targeted business segments where they can be the “go-to” market rather than the overall book of business. Commit to a “first-and-last” look policy on this target segment or class of business and look for ways to joint develop the business flow. Estimate the number of submissions that they can expect and the close ratio that you need to fulfill your commitment. Let them know, above all else, that every submission comes with an intent to sell.
Take out a piece of paper and jot down an answer to this question: Why do you want or need this carrier? If you can’t answer that in a paragraph or two, well? This is basic logic, not rocket science. Will you be able to meet the goals and expectations of the carrier? (remember, they have the sharpest elbows!) Will you be able to co-exist based on their criteria as well as yours, not simply yours? And, will you be able to generate a flow of business that kindles a long term agency partnership? Having done this, it is time to face the facts. Either you have the ingredients for a partnership or you don’t. If you do, make your relationship as transparent as possible by disclosing the answers to these questions – both good and not so good. Full disclosure will lead to a better understanding of each others strengths and weaknesses and, done proactively, will enable you and your partner to manage the relationship accordingly. If this is not done, you will be forced to figure it out as you go – a strategy that may repair but never builds.
If the relationship is not and will not be a partnership, it is probably destine to dissolve overtime. Don’t rush to turn in your contract, however, be prepared for them to be a marginal player within the agency and understand that the agency will be a marginal player in their ranks. This is unavoidable – you cannot keep them all happy all of the time. Instead, focus on keeping your most valued relationships happy most of the time.
Every carrier wants its fair share of the risk bearing landscape. Picture the top regional executives of an insurance carrier sitting in a strategy session exploring how to grow in their desired market segments. The questions inevitably distill to two: first, “who among our appointed agents have the production “oomph” to meet our (carrier’s) growth demands?” Second, “what other carriers does the agent represent and is there profitable opportunity to poach those competitor’s books of business?”
In this example, loyalty is being confused with opportunity. The theory is that if you are truly loyal, you will gleefully move business from subordinate carriers to your true partnerships. Your clients and Mr. Spitzer may beg to differ. The word “independent” that precedes the word “agent” means that you will have more than one option for all or most of your clients. If you find yourself being confronted with a request or an expectation for a book roll, revert back to our first step and
re-focus the conversation on a collaborative plan to grow the business, not to just shift it around. Point out that all of your carrier partnerships are strategically aligned with specific segments of your book, those that they specialize in, and that
no client is randomly and haphazardly submitted to any partner. Let them know that the traditional ranking system (number 1 carrier, number 2 carrier, number 3 carrier and so on.) does not exist within your agency and cannot co-exist with a true partnership agreement that you maintain with each of your selected carriers. Tell them that, by default, they too are partners with your other partners, and it is your practice not to pitch one against the other. Tell them that there is and will be plenty to
go around, that opportunities for organic growth are unlimited, and then focus the discussion back to how we grow together. That should do it.
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