The beginning of a new year is always a good time for reflection; both about lessons learned from the past, and about what the future will bring. In that spirit, Insurance Forums has collected some thoughts from around our community about the challenges currently facing producers, given the insurance industry climate at present. While everyone has felt the acute frustration of the uncertainty that PPACA has brought over the past year or so, producers are also addressing challenges accompanying new technologies, complex product development, and competition. After all, what better way is there to solve a problem than by first identifying it?
We can get this one out of the way right away. There have been technological glitches, a fluid and unclear role for agents, and an annual enrollment process that hasn’t even been straightforward to the people implementing it, among other issues. PPACA has proven to be the number one headache for producers, of late. The agent who can educate and service clients, despite this complex set of rules and standards, within the given tight time windows, might just be a superhero.
A producer’s gotta eat, and that’s why there’s constant pressure to make the highest sale you can, at the most lucrative price. But producers know that the most valuable client relationships are established through trust, and making insurance sales based around products and services, not pricing. “Selling based on price is setting the stage for failure,” one agent told us.
While business development is a constant part of any enterprise, a lack of demand makes it a much less rewarding prospect. One producer wrote in that: “Increased costs of ‘affordable’ health insurance is making it hard for consumers to spend money on ‘luxury’ insurance like life and disability.” The insurance market is rapidly growing, which is generally positive for people in the industry. However, due to economic strains and a lack of client experience, potential clients may feel that investing in “non-essential” insurance services is beyond the capacity of their purse strings at the moment.
Since almost everyone has realized that the internet is here to stay, companies large and small are experimenting with ways that they can create efficiencies in their systems through technology and the web. Internet-based sales processed by major carriers, directly to consumers, may end up excluding independent agents from personal lines sales. Further, consumers now have more information at their fingertips, and might conclude that they have adequate knowledge to make solo insurance purchasing decisions.
Agents and agent advisors noted that overcoming the stereotypes associated with the insurance industry can leave lingering frustration. One agent advisor commented, “If you don’t have something that will truly set you apart from every other agent out there, you won’t leave much of an impression. Fact is – we all know agents that are out to sell a product.” Like any sales professional, producers have to overcome the idea that they’re out to make a quick buck and profit off of an unsuspecting “victim.”
Even though many insurance developments are living, changing, adaptable products, the market has become more and more commoditized. One agent summed it up best by saying, “Once insurance becomes a commodity, all products have the same perceived value, and now it becomes, ‘If it’s all the same, then why should I pay more for YOUR insurance?’” It’s also harder to differentiate with such a crowded market and so many players, if the benefits of product itself are taking a backseat.
It can be hard to get your message out there – in fact, what with large carriers, paid advertising and SEO tricks, and lots of competition – great marketing can actually like a hopeless impossibility. The most tech-enabled agents are combatting this challenge through using social media, newsletters, and other creative forms of copy to strengthen their business development efforts.