Avoiding Insurance Policy Cancellations

Posted on May 21, 2013 by Meg

Cancellations account for a large percentage of lost business in the insurance industry each year, some of which result in charge backs to the agent when he or she is being paid on advanced commissions. Therefore, it is critical to develop some strategies for avoiding cancellations when at all possible, so this withdrawal rate can be minimized to the greatest extent.

Here are some tips to keep in mind to avoid canceled policies:

1) A good customer is a happy customer. Keeping this simple but true rule in mind will help turn the goal of getting and keeping good customers into a reality. If the sale you make is a solid sale, and you have provided all the information the customer needed to feel good about their purchase, they will rarely drop the policy.

One way you can make sure your customer is happy is to ask if there are any other questions they have before you go.

Doing this will not only allow them the opportunity to ask needed questions while you are there, but also increase their confidence in you, and assure them you have their best interests at heart.

2) Follow-up with your clientele. We’ll discuss this in our next post in more detail. Suffice it to say for now that following up to check on clients is just good business. In order to be successful, make a habit of touching base with your current clients at least once every 3 months, to see if they have any questions or if there is anything you can do for them. Customers who were thinking of dropping the policy may reconsider if you offer them personal and courteous service at the right moment.

3) Send birthday cards to clients. This is an old insurance sales technique that a lot of agents have been using for a long time. But it gets results. Some clients will call, thanking you for the gesture. You may not hear anything from others. But something like remembering someone’s birthday is important to that person, even if it does come from their insurance agent.

4) Send new flyers and information on their policy or the company when it is beneficial to your client. Giving them important information may be the key to keeping clients happy and on the policy.

5) Regarding cancellations which happen due to a bank issue: Treat this with kid gloves. Many customers are embarrassed when they are told that their policy lapsed due to non-payment. Just a friendly reminder with a presumptive tone which implies you know it was probably an oversight on their part can save face with the client and keep them on the policy.

Finally, when cancellations do occur, as they sometimes will despite your best efforts, just realize that this is part of the reality of insurance sales. Sometimes people shop around, just as they do with other services, and they have a right to do so. Likewise, remember that you want customers who will pay on time every month, and who are happy with your services. If you sign up solid customers to begin with, make yourself available to them, and help them when needed, the cancellation rate should be kept to a minimum.

Choosing a Leads Service

Posted on May 7, 2013 by Meg

One of the most difficult tasks for a beginning insurance agent is to find a leads service that really works. There are plenty of leads companies out there, but how do you know which one will be the most cost-effective for you, and make the biggest return on your investment? There are 6 basic tips which may prove helpful in determining how to choose a leads program.

1) Decide how much you can afford to spend. Any business has to exist on a budget. It does no good to get leads if you cannot afford the leads program. There are cases when a leads program becomes so costly that it shuts down an agent’s business. Budget a reasonable amount of leads money per month and stick with it, increasing it as you make more sales.

2) Shop around. It’s good to compare leads companies, much like you would when looking for any other service companies that will help your business. Look at the company’s claims on return on your investment and see how they stack up. Also compare cost and see how you can get the most “bang for your buck.”

3) Ask yourself if you even needs a leads company. If you can do this yourself, and your network is big enough, don’t use leads at all. Simply talk to everyone in your network of friends via social media and other means to drum up business. Leave business cards anywhere and everywhere you can. Pass the word. Do your own marketing, and ask for two referrals from every sales call. Doing these things may allow you to operate as an agent without a regular leads service.

4) Track and analyze sales. Decide how many of the sales are coming from the leads you are getting from your leads service. If there is not a direct result from the leads company, shop around for a new company or consider trying something else to generate leads, such as postcard mailers, hiring your own leads generators, or other methods.

5) Target your audience. Leads do no good if they are directed to a different audience than the one you are trying to sell to. Market only to your primary audience through your leads company, or through other methods you’re using. The main thing is determining that your leads company is targeting your main audience. For example, if you’re selling to seniors, aged 65 and over, make sure the leads that are being generated are 65+ seniors in need of insurance. Some companies say they will deliver on this, then the leads show a 25-year-old with $100,000 worth of coverage. If this happens, call your leads company and have them change the demographics. If they won’t, find another service. It does you no good to pay for leads which do nothing to target the people you need to market and sell to.

6) Don’t share leads. As much as possible, get leads which are only sold to you. If you have to share leads, other agents may beat you to the sale if you are doing something else at the time the lead is generated. Most leads are generated automatically to your email once the person fills out the information. While non-shared leads are typically more expensive, they also pay off more in the long run.

Summary: In conclusion, a leads company doesn’t make you sales. You do that. But a leads company opens the door. Let that door be to a customer who will want to purchase, carefully matched to the demographic audience you are trying to target. Some fine tuning of what your leads company is really offering and what it is really delivering, plus a regular monthly analysis of your sales, will go a long way to getting the most for your dollars and a higher return on your investments.

Closing the Sale: The Final Challenge

Posted on April 23, 2013 by Meg

One of the most challenging tasks before an insurance agent is the last action they must do to get a commission: closing the sale. Below are five tips to consider when closing a sale, and actions which may increase your sales record if you apply them.

1) Put yourself in the customer’s shoes. Instead of thinking like an agent, think like the client. If you were sitting in their place, with the information you laid out for them, would you make the final decision to purchase? Why or why not? Asking yourself this tough question will lead to a needed self-evaluation of your sales technique, which may prove effective in increasing sales.

2) Respond to objections. The most important task in sales of any kind is overcoming objections. This is very true in insurance. People may have a variety of reasons as to why they are hesitant to pay money to the insurance company you represent. The trick is to identify what the objections are, so you will know how to address them. Sometimes the client won’t tell you. If that’s the case, ask them. If they say it’s because they can’t afford it, you can respond with something like, “But Mary, can you really afford not to have insurance in these tough times?” In this example, you have shifted their concern of spending a little money per month to the bigger loss of thousands of dollars if they aren’t covered. You can also remind them, in the case of life insurance, of the consequences to the loved ones who are left behind. Reminding the client of the facts and how things work is important to closing the sale.

3) Be a teacher. As mentioned in the previous tip, one of your jobs is to inform your client of things they may not be aware of, or have forgotten. They depend on you, the insurance expert, to enlighten them if they have the wrong information. This is also critical for legal reasons, so that you don’t get an errors and omissions complaint.

4) Be sensitive to emotional needs. This requires some psychology. Understand that to many people, insurance is an emotional issue. They may have had an insurance company not pay for their grandmother’s funeral expenses or their child’s medical need. Be empathetic and listen to their story, even if the client is making inaccurate generalizations about the whole insurance industry. If you take the time to listen, it may set you apart from other insurance people in their minds. They will feel that you care, and you may win the sale because they trust you.

5) Don’t talk yourself out of a sale! Some sales people don’t know when to quit. When the customer says they have decided to try the policy, don’t feel the need to keep selling. Sometimes they will reconsider if you talk too much. Once you have convinced them, just thank them for their decision and tell them you are sure it will benefit them.

In conclusion, by informing your client, being considerate to their needs, and listening, you will develop a relationship of trust that the client feels comfortable with. Closing the sale is about maintaining that trust to the end. Ethics dictates that we keep our clients’ best interests at heart, and it is the only right way to do business.

Selling More Umbrella Policies Can Benefit Your Agency

Posted on March 26, 2013 by Meg

As an agent, you probably have several current and potential clients who could really benefit from having an umbrella policy, but do not have one. By simply spending a bit more time focusing on educating the consumer and promoting umbrella policies, your agency could begin seeing a significant increase in revenue.

There was once a widespread perception that clients didn’t need umbrella policies unless they were very affluent. However, some who we would consider middle-class could also benefit from these arrangements. Some examples include: rental property owners, parents with teenage children (those who are beginning drivers or who have terrible driving records), owners of luxury cars or those with large mortgage payments. In other words, those who are vulnerable to a loss would appreciate spending a few extra dollars for this peace of mind.

Understand that most consumers want to lower their premiums, so simply offering them another policy to pay for is not the most effective strategy. However, when you educate the consumer about what they may leave themselves exposed to by not having an umbrella, many will find themselves very open to a cost-manageable solution. For example, an at-fault accident resulting in multi-million dollar litigation can prove itself financially devastating without appropriate coverage.

So, how do you find clients who need an umbrella policy, and how do you convince them of the need? The following are a few simple, yet effective, strategies.

Ask Everybody: Ask every new client if they want an umbrella policy. This will give you an opportunity to share the reasons the policy would be beneficial, including exposing potential risks the client may not have considered before. It sounds too simple to work, but unless you start the discussion, you’ll never know whether the client is open to the idea.

Target Existing Clients: Look through your book of business for every client currently carrying 250/500 limits (300 for homeowners). Reach out to these customers, explaining how an umbrella policy may benefit them. You may be able to easily identify any changes in lifestyle or need through this informal conversation.

Target Rental Property Owners: Landlords are often surprised to find themselves entangled in disputes started by their tenants. For example: a tenant whose pet injures someone may find themselves in “hot water” legally; however, if they do not have insurance, the frustrated litigant may seek damages directly from the property owner. This makes landlords a great target market.

Advertise in Affluent Areas: If your agency is located in or near an affluent area, you will want to educate those consumers regarding their potential need for an umbrella policy. Write an article for the local community newspaper or magazine, write about it in your agency’s monthly newsletter, publish a blog post, and don’t overlook the power of direct mail. After all, we all want the peace of mind that comes with knowing what’s dear to us, including our families, is fully protected.

Tips for Generating Leads

Posted on February 26, 2013 by Meg

The lifeline of any sales position – insurance sales included – is the availability of high-quality, responsive leads. While many insurance agents view prospecting as a difficult portion of their job, consistently working at generating leads can be a low-cost, high-yield effort that can help you to increase your business for years to come.

The following are some tips on how to generate a low-cost sales prospecting funnel:

Partner With Other Professionals. Certain industries require, or strongly recommend, insurance for the products they sell. For example, new and used automobile salespeople routinely interact with individuals who have to have a policy before they can leave the showroom with their new ride. Further, apartment leasing agents regularly recommend renter’s insurance to new residents. Real estate agents will also interact with clients needing homeowner’s insurance coverage (or to purchase additional coverage). Establishing a great working relationship with individuals in these and other professions can provide you a steady stream of new clients for minimal outlay.
Purchase Low-Cost Ads in Electronic Newsletters or Relevant Blogs: Establishing your own blog is a terrific idea (which we will discuss in a moment); however, an established newsletter or blog with an established readership can provide you with relevant leads for not much initial cost. The advantage of utilizing a medium like this is newsletters and blogs are generally niched, and the ones with a high number of routine visitors have established a trust factor you can take advantage of. Think of it as an implied endorsement, of sorts.
Establishing Yourself Within Your Industry/Area: As mentioned earlier, your own blog or website gives you the opportunity to find relevant surveys, statistics or other helpful information and publish it to your readers. You can give recommendations or advice on insurance-related topics, making you likeable and credible within your marketplace. New and established customers will come to see you as a trusted figure within the industry and seek you first for their insurance needs (as well as recommending you easily to others).
Word Of Mouth Referrals: As overlooked as this is, word of mouth is still the best and most-effective way to get new business. The oft-used adage, Your referrals are my highest compliment, is as true today as it was when the phrase was first coined, as a satisfied customer will convey a message to those in their sphere of influence you will never, ever be able to relay as convincingly.
Mine Your Database. A no always means not now, so if it has been awhile since you’ve reached out to your current database, or if you have prospects who didn’t convert the first time, begin to contact them again. You might also look through to determine upsell opportunities, as those who have bought from you before (and who remain satisfied) are likely to choose you first when their needs change or increase.
Contribute To Relevant Seminars/Workshops: Home buying and estate planning are frequent topics which draw potential customers, so if you can contact an organizer to contribute to these and other types of seminars which would appeal to qualified customers, it can be a great use of your time. Again, opportunities like this help establish you as the go-to expert in your field.

Marketing Your Insurance Agency Using Pinterest

Posted on February 12, 2013 by Meg

Business professionals have turned to social media sites such as Facebook and Twitter to promote significant events and immediately attend to customer problems. But these aren’t your only marketing possibilities when it comes to social media. You have a wide range of tools to choose from, and one of the most interesting is Pinterest.

If you’ve somehow managed not to come across all the news and attention Pinterest has gotten in the past year, here’s a quick primer. Pinterest is an online “bulletin board” where users choose images to “pin” to their boards, along with a brief description. Just as with Facebook and Twitter, people can “follow” the boards of others.

How Can Pinterest be Used to Brand My Insurance Company?

Pinterest is known for content that relates to highly visual topics like crafts, decorating, and cooking and food. People post gorgeous pictures of the things that they love. At first glance, it may seem to be useless for insurance agents. Agents don’t sell something that’s visible, and most people consider insurance to be a boring necessity that doesn’t merit much enthusiasm. But like all salespeople, insurance agents need to build relationships. When used strategically and with sensitivity to what users of the site find appealing, Pinterest can be one more way for you to connect with potential clients and create positive PR for your business.

A few ideas for using Pinterest effectively:

Create original content. If you have an artistic streak or access to someone who does, think about what images might appeal to your target audience and create them. You can also create images that creatively display the title of an article on your company’s blog that would be of interest to potential customers. Find a way to subtly add your company’s name and website to the image, so that you can be sure people can still find you as your image gets shared.

Make it personal. To help establish your brand you’ll want to use your business logo as your user icon, but beyond that forget selling policies and be human. If there are a few people who work at your agency, assign just one person to manage Pinterest, and make it clear that there’s a real person behind your account. This will help your business build relationships on the site, as people are less likely to feel that they’re dealing with some faceless company.

Consider Pinterest’s demographic. This is not a site where you’re likely to find older baby boomer males looking to purchase long term care insurance. More than 70% of Pinterest users are in the 25-34 age range and female. This means that you want to make sure that your board targets these clients and their particular insurance needs. For example, you may select wedding-related photos that link to a page on your website about your life and home insurance offerings.

Repinned Images Build Upon Your Company’s Brand

One of the biggest advantages offered by Pinterest is the ability to repin an image. If someone sees an image on your board that they like, that image can be repinned on another board of their choice. The more your images are repinned the better. The effect this can have on building a stronger brand is much the same as a YouTube video. The more viewers watch and comment on that video, the more it spreads and becomes viral. The process works similarly on Pinterest.

A Word of Caution About Using Images on Pinterest

A potential problem that anyone pinning images on Pinterest must be made aware of is that legally, you need to obtain permission from the owner of that image before you use it. Of course, many casual, personal users ignore this formality, but businesses are more likely to come under scrutiny and should abide by the law so as to not leave the company vulnerable. Either make sure an image is in the public domain or reach out to obtain permission.

Does Outsourcing Save Time and Money for Insurance Agents?

Posted on January 29, 2013 by admin

How to outsource insurance agent help | Insurance CE

You’ve heard all the talk about outsourcing in the media, and perhaps even seen other insurance agencies take advantage of the benefits of using contractors rather than hiring staff, but will it really work out for you? It depends.

Many companies choose outsourcing because of the cost savings that come from not having to pay employee benefits, but another benefit is freeing your remaining staffers from administrative work, enabling them to spend more time doing what they do best. A number of companies have reported greater employee satisfaction and job performance as back-office tasks are turned over to an outside contractor, as well as a sense of enhanced job security and employee value.

Several outsourcing companies deal specifically with the insurance industry. If you need help with back-office processing or analytical tasks, ReSourcePro of New York can farm out the work to overseas facilities, where an English speaking college-degreed professional will be specifically assigned to work directly with you. Users have reported fast turnaround times on work that could have taken their regular employees many weeks to complete. Another option that’s closer to home is WAHVE, LLC, an agency that matches over-55 retired insurance professionals with insurance agencies needing help with customer service, claims, or processing. WHAVE workers can help reduce overhead and other costs via connection to a client agency’s system, while keeping jobs here in the US.

The Downside: A Cautionary Tale

Some companies have been less than happy with their outsourcing experience. Training and supervision of workers may not meet your standards. There can also be time and communication conflicts due to time zone differences, as well as language barriers and security issues – all of which can create extra problems due to contractor mistakes and unforeseen delays. Once functions are turned over to a contractor, you lose direct control over training, risking accountability and customer satisfaction. You have to keep an eye on the cost, too: in the end, for some companies there are no real savings. Be cautious before letting go of employees in favor of unproven contractors: you may wish later that you had them back!

The Last Word

• The trend among many insurance agencies is to hire mainly ‘core’ employees (sales and upper administrative) and outsource support personnel or those temporary positions

that don’t directly generate revenue. As companies continue to slash costs to remain competitive, outsourcing non-core work is fast becoming the norm.

• If considering outsourcing, ask questions designed to cover as many contingencies and hidden costs as possible, including the status of the contractor’s financial health.

• Get everything in writing about what you will get and what services will cost extra.

• Ask for references and be sure to follow up.

• Outsource only some of your tasks initially, to evaluate the servicer’s performance over a period of time, before risking your company’s reputation and goodwill.

InternetCE Editor Featured In State Newsletter

Posted on February 4, 2010 by admin

By Aaron Loring Davis

I am proud to announce that through the partnership forged with the Auto Insurance Agents of North Carolina (AIANC), I have been afforded an opporunity to contribute monthly to their news letter. A full text version of this month’s published material can be found here.

Streetwise is distributed to Insurance agents in North Carolina, through the AIANC via FYI Express. It highlights tips, tools, and advice to agents looking forward to making a difference.

InternetCE.com and the AIANC formed a partnership to share business and create tangible value for each other in Novermber, 2009. Both organizations also pledged to help agents in need complete their insurance continuing education.

I am really looking forward to sharing my experience and thoughts via this new channel. I feel it is a win for both of our organizations.

Onward and upward!

___

If you appreciate these ideas, it’d be swell for you would share them (button below) or subscribe via the feed.

Click here for 5 reasons why you should subscribe!

Interested in sales? Perhaps Insurance, Real Estate, or Finance is your calling.. Click here to get licensed.

Need your Insurance Continuing Education?..Click here to take your continuing education classes online.

Aaron Loring Davis is the CTO of InternetCE.com , provider of insurance continuing education, and Editor of this blog. He holds a Bachelor or Science in Business Administration from the University of North Carolina at Wilmington and enjoys just about anything that can be done outdoors. Visit Aaron’s personal website at www.aaronloringdavis.com.

An agent website, a must have!

Posted on February 4, 2010 by admin

By Aaron Loring Davis

When we get our license, there are suggestions for all kinds of tools – a cell phone, business cards, a nice pen..the list goes on and on. However, as the world looks toward the Internet for everything from wacky cat videos to yes, insurance, it is now essential to have a website. Read that again – Essential! The good news for the technically-challenged, it can be had in under 20 minutes and there is tons of support when you get stuck. A self-managed site is yours for as little as $10 a year or for a bit more, you can have it built for you…seamless!

With staggering rates of websites and blogs created every day, the programmers of said technologies have made it nearly dummy proof. Plus, when the relatively intuitive systems do not jive with our thinking, there are hosts of free resources to figure things out. Support forums host a wealth of community knowledge and their members always seem to be willing to lend a hand.

Where does one start? There are two ways to go -

Self-hosted – You will manage your website and configure it yourself. Don’t worry, it’s less daunting than it sounds.

1. Register a domain name – Visit godaddy.com or register.com to reserve your address on the web. Cost – $10 or less

2. Pick a host – AFMU.com provides free websites and your registrar may as well. Cost – Free

3. Install a template or blog software. I like to use WordPress to manage all of my sites, because they are so dang easy, but you may opt for Joomla or Typepad. Cost – Free

Hosted - Tthe site will be hosted and managed by a third party

1. Register with a hosting site – WordPress.com or Blogger.com. Cost – Free

- Or -

2. Register with a premium agent website hosting company – Agent Methods has a superior product! Cost – $39 and up

What should it include?

1. Welcome page with your message and instructions to find other resources

2. Contact page with all of your contact details. A lot of folks like to include phone numbers, mailing and office address, email addresses, links to other profiles such as Facebook and Twitter, and perhaps a contact form

3. Information page(s) – This should include information about you, your company, and the products you provide. It can be as brief or robust as you choose.

That just about sums it up. Not so bad, huh? Remember, it can be as simple as a business card or incredibly complex with calculators and multimedia. The point is that as a professional salesperson, it is essential to reserve a place for you and your business on the web.

If you need a hand setting yours up, please do not hesitate to ask. I am happy to help.

Onward and upward!

___

If you appreciate these ideas, it’d be swell for you would share them (button below) or subscribe via the feed.

Click here for 5 reasons why you should subscribe!

Interested in sales? Perhaps Insurance, Real Estate, or Finance is your calling.. Click here to get licensed.

Need your Insurance Continuing Education?..Click here to take your continuing education classes online.

Do You Know What Makes an Annuity Suitable – NAIC Does

Posted on January 18, 2010 by admin

Model for Suitability in Annuity Transactions Adopted

By Cathy Miller, Business Writer

For many consumers, the bitter taste of investment fraud and a bad economy lingers. The times encourage increased scrutiny on investment products and advice. On December 21, 2009, the Life and Annuities “A” Committee of the National Association of Insurance Commissioners (NAIC) unanimously adopted a revised annuity suitability model.

Where It Started

With a goal of providing better protection for consumers, the NAIC organized a Working Group that reports to the Life Insurance and Annuities Committee. To improve the regulation of annuity sales, the Group worked on changing the 2003 version of the Suitability in Annuity Transactions Model Regulation.

By reviewing an individual’s risks and financial objectives, “suitability” measures if specific insurance products are an appropriate choice. The Working Group used many of the suitability requirements of Rule 2821 of the Financial Industry Regulatory Authority (“FINRA”). Rule 2821 requires a “reasonable basis” for concluding a variable annuity transaction is suitable and “reasonable efforts” in evaluating assets and the intended use of the annuity.

The following are some of the more notable changes made to the 2003 Model version and how those changes affect insurers and insurance producers.

Suitability Information

Much of the required information mirrors the requirements of FINRA Rule 2821, including age, existing assets, liquidity needs, liquid net worth, tax status, and the “intended use of the deferred variable annuity.” Something included that is not part of FINRA Rule 2821 is a requirement for information on the “financial resources used for the funding of the annuity.”

Impact of Change: At a minimum, the additional requirement may mean insurers need to change forms for recording all required information. The bigger question for insurers and insurance producers is if a securities license is required for annuity transactions.

Recommendations

Under “Duties of Insurers and of Insurance Producers,” the new Model adds requirements for recommending the purchase or exchange of an annuity. It adds disclosure requirements that “the consumer has been reasonably informed of various features of the annuity…” The revised model includes evaluation of the benefit to the consumer, the suitability of the annuity or an exchange of an annuity.

Impact of Change: The model requires a “reasonable basis” for recommendations. Insurers and insurance producers must determine how they will establish compliance with disclosure and evaluation requirements. Supporting evidence for regulatory audits is a major consideration.

Compliance Oversight

Provisions of the new model include requirements that prohibit an insurer from issuing “an annuity…unless there is reasonable basis to believe the annuity is suitable…” and notes “an insurer is responsible for compliance…”

Impact of Change: The model requires insurers to have a tighter rein on annuity sales including a review of recommendations prior to issuing an annuity, and training and compliance oversight of insurance producers. It transfers much of the ultimate responsibility of insurance producers’ actions to the insurer. Individual states may have different interpretations of the responsibilities of insurers and insurance producers.

What’s Next

The next step for the Model is a final vote by the full NAIC at its spring meeting in March. If finalized, each state must adopt the Model for it to be effective in that state. Considering the impact on insurers, insurance producers can expect administrative and process changes when selling annuities. Unless (or until) required to do so, the decision for obtaining a securities license is an individual one. Stay tuned to the actions of individual states in determining what’s next in annuity transactions.

The amended model and additional information is on the NAIC’s website.

Cathy Miller, Business Writer/Consultant has over 30 years of professional writing with a specialty in health care, employee benefits and wellness. Cathy also has an active Life/Accident/Health insurance license. Visit Cathy at her business writing blog, Simply stated business to Keep it simple, clear & uniquely yours.

_____

If you appreciate these ideas, it’d be swell if you would share them (button below) or subscribe via the feed.

Click here for 5 reasons why you should subscribe!

Interested in sales? Perhaps Insurance, Real Estate, or Finance is your calling.. Click here to get licensed.

Need your Insurance Continuing Education?..Click here to take your continuing education classes online.

InternetCE

Insurance Continuing Education and Tools

Category Archives: Sales Tips

Avoiding Insurance Policy Cancellations

Choosing a Leads Service

Closing the Sale: The Final Challenge

Selling More Umbrella Policies Can Benefit Your Agency

Tips for Generating Leads

Marketing Your Insurance Agency Using Pinterest

Does Outsourcing Save Time and Money for Insurance Agents?

InternetCE Editor Featured In State Newsletter

An agent website, a must have!

Do You Know What Makes an Annuity Suitable – NAIC Does