How an Agent Can Go From a Vendor to a Trusted Advisor

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My goal in these articles is to create a dialogue among agents and insurance buyers about the differences between being a vendor and becoming a trusted advisor.  This concept starts with how insurance is viewed.  Insurance cannot be viewed as a product, but rather a relationship.  Insurance buyers need to understand that the insurance relationship consists of the agent, the buyer, and the insurer.  The insurer does not really care about the buyer; they offer a set of products.  The agent is the one who should care about the buyer, and develop a relationship through education, not selling.

You will not move from a vendor to trusted advisor overnight.  Here are the stages that include a process from: vendor, credible source, problem solver, then trusted advisor. To go through these steps an agent must consider the following.

What Are the steps an agent should consider?

  • Understand the needs of your client
  • Know your client’s industry
  • Be willing to do some work without compensation
  • Stop selling and do more educating
  • Develop other contacts within the business
  • Be willing to evaluate business processes
  • Don’t assume insurance holds all the answers
  • Ask your client to allow you access to information
  • Help them identify emerging issues and needs of their business and industry

Reichley Insurance believes insurance is more than a transaction.  Insurance involves a trusted relationship built on a promise to put people before policies.  Our promise is to listen to you, identify your risks and provide solutions. Every employee has the heart of a teacher.  Connect with us to experience The Reichley difference.

“The man who will use his skill and constructive imagination to see how much he can give for a dollar, instead of how little he can give for a dollar, is bound to succeed.”  – Henry Ford

An Example of How Agents Are Different…the Rest of the Story

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My last article had a very good real life example of how agents can differentiate themselves from other agents, and how trusted relationships can add real value to the customer.  In the case mentioned in the previous article, the agent added $440,000 of value to the customer!

So where do we go from here?  Where we will go is right to the heart of our value proposition.  That is, insurance is about building trusted relationships, open communication, identifying value, assessing risk, and developing solutions.

How Do Agents Accomplish This?

Many of my recent articles describe how and why agents can change their own, and their client’s, paradigm from “insurance transactions” to “relationship management.”  Here are a few questions that will help get you started in the process of this great shift in thinking.  You might be surprised when you start asking your clients and potential clients these questions.  Most likely, they have never before been asked these questions by an insurance person.  Notice how many times the word insurance is used.

  1. Are there business issues that keep you up at night? What are they?
  2. What changes do you anticipate will be made in your business in the coming year?
  3. If you were in charge and had unlimited time and resources, what would you change in your organization? In your department?
  4. What changes could your service providers make to improve your working relationship with them and your entity?
  5. What areas do you think offer the greatest opportunities for your broker or any service provider to do an even better job of serving you?
  6. Who are your clients/customers?
  7. Do you rely heavily on one, or just a few, customers?
  8. To what extent do you rely on technology to run your business?
  9. In your industry, have there been any major changes to the way you do business today versus prior years, that could give rise to new risk exposures? If so, what are they?
  10. Where do you see the future of your company 12, 24, or 36 months from now?
  11. What kinds of service does your current agent provide?
  12. When your agent meets with you, what kinds of items are on the agenda?
  13. Describe how you evaluate your agent and risk management program?

Well you get the idea, these questions are designed to have the client do most of the talking and you do most of the listening.  You may even come up with better questions after you read this.  If so, please share them with all of us.  Remember, one of the goals is not to just recommend an insurance solution, but to understand the risk and needs first, then use collaboration to develop business solutions.

Reichley Insurance believes insurance is more than a transaction.  Insurance involves a trusted relationship built on a promise to put people before policies. Our promise is to listen to you, identify your risks, and provide solutions.  Every Reichley employee has the heart of a teacher.  Connect with us to experience The Reichley difference.

Spend a lot of time talking to customers face to face. You’d be amazed how many companies don’t listen to their customers. – Ross Perot

An Example of How Not All Agents Are Alike

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I was having a conversation with an agent friend of mine discussing how we can differentiate ourselves from other agents.  He told me a stunning story that I want to share.  This story goes to the heart of my quest to educate agents and customers about the value of relationships.

My agent friend (call him John) told me that he recently was hired by a business to help them manage their commercial insurance and risk program. The client had been with their previous agent for ten years, so the change was a big decision for them.  John asked the new client why they decided to change, and they told him that they felt like all the previous agent did was renew their insurance.  They only saw him when a bill needed to be paid.  The client checked around, and another business associate recommended John.

As part of John’s relationship building, at the first meeting he asked a series of questions about the client’s business.  One of the questions led to the client telling John that they owned an underground storage tank that had been un-used for about 10 years.  The client never thought to tell their previous agent about the old tank.  The client said it just never came up.  John explained the risks of owning an underground tank, and directed them to various web pages showing the possible fines if there was ever an issue.  Obviously, the client became very concerned.  However, John suggested a number of solution options and the client decided to have John secure a quote for pollution liability.  The client ended up with a $1,000,000 policy at a cost of only $10,000.

This is where the story gets good.  About two years later as part of the annual client review meeting, John asked about the tank, and the client said they were removing the tank as part of a plant expansion.  Well once the tank came out, there was found to be $450,000 of soil damage and pollution cleanup.  That is a $440,000 cost benefit (minus the deductible).

Needless to say, the client now truly understands the value of relationships and the importance of having an agent who provides insurance and risk solutions.

Reichley insurance believes insurance is more than a transaction.  Insurance involves a trusted relationship built on a promise to put people before policies. Our promise is to listen to you, identify your risks, and provide solutions.  Every Reichley employee has the heart of a teacher.  Connect with us to experience The Reichley difference.

“People don’t buy what you do, they buy why you do it”  – Simon Sinek

 

Insurance Is About Peace of Mind and Trust

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We have been telling readers that we believe insurance is more about trust, relationships, and value than it is about a policy.  A recent article in PropertyCasualty360.com, by Brent Kelly confirms this concept.

For many people, buying something tends to be both emotional and financial.  With insurance, some people may buy a brand or base their buying decision on a TV commercial.  While other people may buy insurance with a focus on price, they want the lowest cost possible.  Mr. Kelly correctly points out that buying insurance has some of both the emotional and financial elements.

Insurance is a promise from the insurer to perform in the event of a loss, and insurance offers security to the buyer that when something bad happens, all is ok.

We believe that a promise and security are important enough to mandate a conversation with a professional agent who understands the importance of education.

So, why do most people view insurance as a transactional product?—because the insurance industry has trained consumers to view it as such with phrases like:

  • “Save 10%.”
  • “We will quote your insurance in 15 minutes.”
  • “Get a quick quote.”
  • “Apples to apples.”

Insurance companies and agents use these terms and others every day.  “They are catchy, easy for the consumer to understand and takes little effort,” according to Mr. Kelly.

The time has come to use new insurance buying terms like:

  • “I educate my clients about risk”
  • “Insurance is not your only option”
  • “Exclusions matter”
  • “Can I explain your cost of risk?”
  • “I don’t take orders, I provide peace of mind”

Reichley insurance believes insurance is more than a transaction. Insurance involves a trusted relationship built on a promise to put people before policies. Our promise is to listen to you, identify your risks and provide solutions. Every employee has the heart of a teacher. Connect with us to experience The Reichley difference.

How You, The Customer, Benefits From Hiring A Trusted Advisor

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Over the past year or so, we have been discussing the importance of looking at insurance as a service rather than a product.  One area we have not spent much time on is how this adds value and benefit to the customer.

It would seem to me that every family, business owner, or business manager would want to have the following benefits:

  • The complex becomes clear. When you have a relationship with the agent who is serving you, they will make the complex world of insurance understandable.  Only an agent who educates first will be able to help you understand your risk and how best to manage it.  The trusted advisor cuts through the clutter to find the right solution that will solve your problem.
  • Is Insurance the only option? Clients may not always understand that there may be other ways to handle a risk.  A trusted advisor is in the education business—not the selling insurance business.
  • Value-added benefits. With a trusted advisor, you the buyer will have all the resources and knowledge of the agent and his/her team.  You will have help in understanding the buying process, creating of solutions that are designed for you, and support in bringing recommendations to others in your organization.
  • You have access to other experts. Wouldn’t it be great if your agent brought to your team attorneys, accountants, claims experts, loss control professionals and more?  Well, a trusted advisor will do just that.

This is a different mindset for the buyer and agent, but when done correctly it can provide real benefits to your family, business, and life.

Reichley insurance believes insurance is more than a transaction. Insurance involves a trusted relationship built on a promise to put people before policies. Our promise is to listen to you, identify your risks and provide solutions. Every employee has the heart of a teacher. Connect with us to experience The Reichley difference.

What Do The Solar Eclipse And Insurance Have In Common?

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The world recently experienced the Solar eclipse. We know what the specific time it would happen and where the best place was to view the eclipse was. Did you stop to think, who figured that out? It was a complex process, someone very smart, (NASA) figured out the exact time of the eclipse and where the best places are to view it. The mathematically calculations involved in developing the information is well behind the skills of most people. But aren’t you glad there is someone who understands this so we can enjoy their detailed work?

If the eclipse were insurance, the independent agent would be NASA, the sun and moon would be the insurance companies and the public are the policy holders. Insurance is complex and the professional agent manages the complex for the benefit of the insurance buyer.

Insurance is about a relationship involving three parties; the buyer, the independent agent and the insurance company. Here is how we see the needs of each party.

The Insurance Buyer.  Buyers of insurance want peace of mind and confidence that in the event of a loss everything will be ok.

The Insurance Company.  Insurance companies simply want to insure good risks and are transaction focused. Their decisions are financially focused not relationship focused.

The Independent Agent.  Agents transform the complex so their clients can make educated decisions. Helping the client to understand their risks and providing a number of reasonable solutions are the goals of the agent.

The person best suited to bring these parties together is the independent agent.  The agent knows what risks the insurer desires and can educate the buyer in complex coverage design, safety, and claims management, in order to attract the best insurer option.  It is about building a trusted relationship that allows transparency between all parties.

Reichley insurance believes insurance is more than a transaction. Insurance involves a trusted relationship built on a promise to put people before policies. Our promise is to listen to you, identify your risks and provide solutions. Every employee has the heart of a teacher. Connect with us to experience The Reichley difference.

 

Agents…Learn to Be “Consultative” Rather Than “Transactional”

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For those who have been following my posts over the past few years, thank you!  We have been talking a lot about how to better serve the needs of our customers.

If I had to put customer service into one thought, it would be this; be consultative rather than transactional.  It is hard to get your head around this because it seems like our business is nothing but transactional.  Binders, certificates, billing, claims processes, and renewals all seem to focus on the transaction process.

Transactional selling is about need, price, and closing, and the word “client” is nowhere to be found.  Conversely, consulting is client focused through discovery, education, and problem solving.

Here are a few ways you can break out of the transactional cycle:

  • Educate yourself on the client’s risks and potential needs.
  • Realize that you are creating value, not “low cost.”
  • Develop relationships with your clients.
  • It feels better to help someone—rather than sell someone.
  • There is real satisfaction in creating solutions.

Consultative customer service is the direction in which our industry is going.  Trusted advisors actually generate more business and sales, receive more referrals (via their customers), and have long lasting customer relationships.

As author David Meister tells us, “There is no greater source of distrust than advisors who appear to be more interested in themselves than in trying to be of service to the client…A common trait of a trusted advisor relationship is that the advisor places a higher value on maintaining and preserving the relationship itself than on the outcomes of the current transaction, financial or otherwise.”

How You, The Customer, Benefits From Hiring A Trusted Advisor

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Max Integrity Meaning Upper Limit And Virtue

Over the past year or so, we have been discussing the importance of looking at insurance as a service rather than a product.  One area we have not spent much time on is how this adds value and benefit to the customer.

It would seem to me that every family, business owner, or business manager would want to have the following benefits:

  • The complex becomes clear. When you have a relationship with the agent who is serving you, they will make the complex world of insurance understandable.  Only an agent who educates first will be able to help you understand your risk and how best to manage it.  The trusted advisor cuts through the clutter to find the right solution that will solve your problem.
  • Is Insurance the only option? Clients may not always understand that there may be other ways to handle a risk.  A trusted advisor is in the education business—not the selling insurance business.
  • Value-added benefits. With a trusted advisor, you the buyer will have all the resources and knowledge of the agent and his/her team.  You will have help in understanding the buying process, creating of solutions that are designed for you, and support in bringing recommendations to others in your organization.
  • You have access to other experts. Wouldn’t it be great if your agent brought to your team attorneys, accountants, claims experts, loss control professionals and more?  Well, a trusted advisor will do just that.

This is a different mindset for the buyer and agent, but when done correctly it can provide real benefits to your family, business, and life.

Is Insurance A Noble Profession?

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We believe without question that insurance is a noble profession. Our reason for this is that the purpose of insurance is to protect society, businesses, and individuals from financial loss and to help them recover when loss or damage occurs.

Google defines “noble” as having, or showing, fine personal qualities or high moral principles and ideals.

“The promotion of human rights was a noble aspiration.”  Synonyms for noble are righteous, virtuous, good, honorable, upright, decent, worthy, moral, ethical, and reputable.

How does this definition of Nobility translate into action? It can be seen in many ways by an agent with Noble attributes. They show up on time and in person to discuss your individual needs. A Noble agent will tell you not to purchase insurance if he believes you do not need it. Insurance Nobility involves education rather than selling.

Here Is How We Define Nobility

Nobility is taking the right course of action when there is an opportunity to take an easier course. In other words, our industry serves a Noble purpose that is to restore those affected back to the same state prior to the loss. Like all industries there are those who look to personally benefit rather than to serve. Since insurance is a transaction of trust and not price, then hiring a Noble agent who serves a Noble cause to serve their customers before themselves, creates a better value and outcome.    We should all strive to earn the respect and trust of our customers and insurance buyers should strive to hire agents that can live up to that trust and respect.

Nobility is something that can only be seen over time, through personal interaction between the agent and customer. The customer with a Noble agent will have an added confidence that their agent is looking out after their needs rather than just collecting a commission.

 

Let’s keep talking!

 

 

 

 

 

Insurance Myth Busters… All I Need Is Replacement Cost Coverage

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Most people think, “If my policy has replacement cost coverage I am ok, right?”  Well, maybe not.  The term “replacement cost” means “the cost to replace the property on the same premises with other property of comparable material and quality used for the same purpose.”

A Common Myth

“My policy has replacement cost coverage, so I am covered in the event of a loss.”

Myth Busted

Replacement cost coverage has limitations. The most important limitation is that it will only repair or replace up to the policy limit.  So, if your building has a replacement value of $500,000, but your policy has a limit of $450,000, you are underinsured by $50,000.

There may also be a need for functional or extended replacement cost coverage in certain situations.  A guaranteed replacement cost policy pays whatever it costs to rebuild your building as it was before the fire or other disaster–even if it exceeds the policy limit.

The example above is an excellent example of why it is important to have an agent who knows and understands insurance, and one who can communicate complex issues in “English”. This allows our customers to make intelligent choices regarding their insurance.