I promised an unvarnished “insider’s look” into the state of the industry. And how current forces will (and already are) affecting the retail agent. I said, “The overwhelming dog-pile of forces beating up and preparing to beat up on insurance agents today – and for the foreseeable future – will make those days look like a fondly remembered family picnic. And agents too-slow to react with accuracy and strategy will be road-kill. Overstated? Even if I am – by multiples – the truth remains:”
1. That much of the country wallows in a (mostly) commercial lines soft market – longer than the numbers justify. (Currently in its sixth sickening year of double digit rate decreases.) That at least three mega-carriers are intentionally extending the soft market for the purposes of buying massive market share and forcing smaller competitors to their knees - before they’re ultimately forced into rational price increases. The pain will continue. Yes, all objective criteria would indicate that carriers SHOULD be lined up to march toward a hard market. Underwriting profits – down. Investments – down. Surplus – down. But carriers aren’t in cahoots on some fantasy-pricing strategy that would make them all march in unison. Nope. The ones who can, the ones with cash and the ones who choose, will extend their soft market pricing. Your clients will love you for it. Some will leave you for the agent who can shave something off. And you’ll hurt. You will hurt. And any agent who is NOT marketing aggressively, nurturing aggressively and building cash and agency value NOW is making a grave error.
That’s “Force #1” affecting agents. NOTE: I’ve actually heard – in response to this – some agents say, “We’re pulling back on our marketing. It’s time to cut expenses.”
Sorry. Marketing is NOT an expense. Sure, that’s where your CPA, bookkeeper and accountant need to put it. Got to put it somewhere. But good marketing is an investment. It makes you money. Pull back? Sure. When your out on the ocean in your sea kayak and the storm hits, whatcha gonna do? Pull your paddles in and see where the storm takes you? No. Paddle hard. Paddle in the direction you want to go.
ACTION: review your Marketing Plan – for client attraction, conversion, optimization and retention. (Or, call my office for a copy of “The P&C Marketing Bible.” 800.606-0477. I’ll send ya one for free.)
Next: How you’re biggest competitor convinced 32 million American Consumers to reject you, ignore you and ignore you like the class dork at the 7th grade dance. Funny metaphor? Maybe. Funny reality? No. This may be the most serious threat EVER that retail agents have faced.
Michael
PS: Here’s precisely what the most successful agents in North America are doing this October to make sure they build income and wealth in the rocky year(s) ahead. (And I’m wondering why you would possibly want to be left out or left behind on this uniquely powerful opportunity.) If you DON’T know your 2010 Survival Plan, check this out.
PPS: The blue graphic is courtesy of my friend and insurance genius, Richard Kerr, president of MarketScout – the leading “insurance exchange” in America. Check out their site for 5.5 years of SAD, SAD price reductions. (Or check it out for insurance products that could fill a lucrative niche for you.)