Fin'l Services Can Bolster P-C Accounts

Expanding a property-casualty agencysportfolio to include financial services products offers independentagents the opportunity to increase profits and enhance customerloyalty, and the time is right to consider the expansion.

Although our environment today offers degrees of uncertainty, itis also a time that has raised the awareness among all Americans ofthe importance of planning for their future and that of theirdependents.

In addition, businessowners must consider their needs in areaslike key person insurance, succession planning, deferredcompensation programs and business transfers. Life insurance is aplanning tool that can address a variety of business and personalconcerns, while annuities and other investment products can assistasset accumulation and employee benefit programs.

How does this affect a p-c agency?

Experience proves that the typical p-c agency book of businessis a strong fit for estate planning and business benefits programs.More and more businesses are looking at executive benefits as a wayto attract and retain talent, and life insurance provides a costeffective way to offer a tax-advantaged, long-term benefit.

Companies are now extending these benefits to a broader pool ofindividuals, so there is tremendous growth opportunity for lifeinsurance in the executive benefits market.

Another business benefit product that might appeal to p-cclients is a 401(k) plan. Its good practice to discuss 401(k)opportunities with clients to ensure that they are current on401(k) program offerings.

There are, however, some key factors for a p-c agency toconsider when expanding their portfolio into the financial servicesarena.

The organization must be committed to a cross-selling strategyand have done the proper homework to qualify and quantify theprospect of offering an expanded portfolio of products to existingclients.

It is critical that there be a clear tactical plan for producersto follow. The agency principals should have a track for the agentsto run on that clearly defines the opportunity with personal linesclients, commercial accounts and major specialty and publiccompanies.

The plan should include a process that enhances the agentssuccess in walking through the business door as often aspossible.

Another significant ingredient in cross-selling success is toidentify and integrate a proven financial professional into the p-corganization. There must be a match between the producer and thep-c organization–in both market expertise and basic businessphilosophy. The principals should take the time to fully test andexpose the candidate to the organization, especially to therainmakers in the p-c organization.

Depending on the mix of business in the existing accounts, andthe three-year sales strategy, an agency might find it appropriateto affiliate with an independent financial services organizationwith a varied talent pool, versus bringing on just one individualproducer. The key is to build in the maximum potential to penetratethe p-c firms book of business by hiring or affiliating“selfishly.”

Of course, knowing your clients is the key to expanding yourbusiness. Prior to adding the financial services capability, thereal opportunity from the existing client base should be clearlydefined.

Find out from whom your clients seek advice in this arena. Inthe interest of “knowing your customer,” validate their interest inyour organization as a fully integrated insurance provider.

Since expanding your agency to include additional insuranceprofessionals will involve a significant investment of time,resources and change in management, it is prudent to confirm theplans expectations in the real world.

The final and most important ingredient to this success is toalign with a provider or providers that offer the necessary levelof professional support to the producer. There are several keyfactors to consider, including financial strength, service,product, underwriting, technology, marketing assistance, advancedsales expertise, a total compensation package and brandstrength.

The insurer must bring the right people to their businesspartners–from underwriters up to the highest levels of management.This is the resource pool that should be available to independentagencies that want to venture successfully and profitably into theworld of successful cross-selling.

Remember the keys to success:

Know your customer.

Create a strong strategic plan embraced by agencyowners-managers.

Build a complementary tactical plan.

Invest in the right talent.

Align with the best providers.

Execute consistently every day.

Warren H. May, chief executive officer of TravelersDistribution Services in Hartford, is responsible for thedistribution of Travelers life and annuity products. He alsooversees Tower Square Securities Inc., the proprietarybroker-dealer of Travelers Life & Annuity.

Reproduced from National Underwriter Property &Casualty/Risk & Benefits Management Edition, January 21, 2002.Copyright 2002 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.

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