ACG - Agency Consulting Group

The PIPELINE

A national monthly newsletter for agency principals dedicated to agency management topic

THE ASSET PROTECTION MODEL*

For 200 years insurance agents have been “selling” insurance to their clients. Whether a trusted advisor or a new encounter, the “selling” of insurance has always carried connotations of pressure that were never intended by the professional insurance agents.

When someone “sells” me something, I often feel that the salesperson is creating a need more than identifying and fulfilling a existing need. This is not far from correct, either. Many sales techniques try to identify need. But if none appears, the salesperson’s role converts to educating the consumer about the product and services available and creating a need. The assumption is that many consumers are uninformed and would recognize a need if educated. This is not the case for most business owners (unless they have purposely avoided understanding their needs – in which case they are likely not potential clients). Both personal and business insurance consumers have been “pounded” by product and service for years. They may not know or understand all of the coverage nuances, but they recognize that they risk a great deal by not carrying insurance. They understand that the need is there and must be fulfilled. The only question is who and how to fulfill their insurance based needs.

How many times have you heard, “I have enough insurance” even before you have finished explaining your purpose for the call or visit? Would you like to create an environment where the “selling” aspect disappears in favor of simply identifying and fulfilling pre-existing needs?

Over the last few years we at Agency Consulting Group, Inc. have developed and implemented a different method of providing protection to clients that eliminates the ‘selling’ aspect. The concept is called the ASSET PROTECTION MODEL.

Asset Protection Model was created to identify needs without consideration of how, with whom (or even if) the client fulfills those needs.

The beginning of Asset Protection Model is to inform the prospect that you are a UNIQUE kind of insurance agent – one who is not there to SELL anything. The entire role of the Asset Protection Manager is to analyze all asset protection needs of the customer and to identify strengths and weaknesses in their current asset protection model.

The key is that you are not concerned whether the customer actually buys their coverage from you – only in that they actually have the RIGHT coverage for their risks. That’s right – we’re not ASKING the client to buy from us when you are using the Asset Protection Model. As a matter of fact, agents using the Asset Protection Model actually advertise the fact that they don’t “Sell” insurance; they counsel clients on how best to protect their assets. In this way (and once you get over the disbelief rampant in the cynical insurance marketplace that we, ourselves, have created) you establish a trust relationship not unlike the one you have with a family doctor.

No one avoids your family doctor because you’re afraid that he’s going to “sell” you on a course of action that will be expensive and not help you. You go to the doctor because of a “PAIN” that you know needs attention and you expect the doctor to identify the cause and provide a solution. Or, you go for regular check-ups wanting to make sure you are in good physical condition.

Similarly, your insurance agent is someone you should contact when you feel something is out of sorts and exposed among your physical assets – and for regular check-ups to make sure that your changing lifestyle and environment is properly protected against unusual risks.

So, within the Asset Protection Model, we consult with individuals and businesses to advise them if they are healthy or, if not, what they should do to get healthy. If a trust relationship exists (as it does in most cases), they will WANT to use our services to solve their problem because they know that we’re doing this for their well-being, not just to sell something. But even if they choose to stay with another provider or to not do anything at all, it’s O.K.! We’ve fulfilled our commitment to show them the correct action. We certainly can’t force them to follow our advice.

We have been asked if this approach make an agent vulnerable to being “used”. Our answer is that you can only be “used” if you haven’t properly evaluated the motivation of your prospect (whether you are using this model or not). Too often we encounter agents who have spent hours and days working on insurance cases for which they have no chance of being successful. However, these agents believe that “busy” equates with “productive”, so they feel that working on something (whether a likely client or not) is better than looking for other prospects. That is simply not the case.

The Asset Protection Model does not imply that we are freewheeling quoters with no eye on creating clients for the agency. As a matter of fact, using the Asset Protection Model, it is even more incumbent upon us to qualify prospects as potential clients before performing our valued analyses for them. This qualification process is one of the most difficult aspects of being an agent that we have encountered. Most agents active in the insurance industry today don’t even try to qualify prospects as potential clients before they launch into their “sales spiel”. They feel that they (the agents) must prove that they are qualified to provide service to the prospect when, in fact, the agents already KNOW that they are qualified. The prospect will find that out IF (s)he is smart enough to listen. On the other hand, the agent has no idea if the prospect is qualified to become a client of the agency.

But aren’t all prospects that have insurance needs “qualified” to be a client? NO! Each of us has met many prospects whose demeanor and attitude is not accepting or open, nor are they willing to have you review their insurance programs. In the Asset Protection Model these are definitely NOT customer material. The purpose of conducting Asset Protection Analyses is to provide valuable information to existing or potential clients.

The initial interview should concentrate on identifying needs and “hot buttons” of the prospect for the agent to determine if the client is, in fact, honest and concerned about his insurance issues. If so, you can provide him your background and credentials to show him that you are, if fact, qualified to analyze his program and counsel him on his insurance needs.

Many prospects have had bad experiences with unqualified agents. Don’t be surprised if the prospect’s agenda is to qualify you before you can qualify him. If so, and if the reason is a healthy distrust about someone about whom they have no idea – then provide your credentials first. However, do NOT launch into the specifics of his insurance program until you have qualified his intentions. In this way you avoid the pitfall of being “used”.

As you can imagine, the Asset Protection Model is a perfect vehicle for utilizing all products, services and specialty departments of an agency to provide the analysis of client needs by the most qualified person in the agency to perform the analysis. The agency industry has struggled with the “cross-sell” concept for many years and very few agents do it successfully. In small agencies it may still be the individual producer or owner who visits the client a number of times, each highlighting a different asset area for analysis. In larger agencies the producer should be accompanied by (or replaced by) a specialist in each area being analyzed. For instance, if our introduction to the client was through auto insurance, with a producer specializing in personal lines, the next contact will be from that producer (or from a separate specialist) to analyze the client’s life insurance needs. This is followed by contact on Long Term Care, Health Insurance, Commercial Lines and any other discipline for which the producer or agency is competent.

By providing a Welcome Letter to every client, regardless of product provided, the agency lets the customer know that the benefit of relating to the agency is the facility to have many products and services made available – with no pressure of a sale – as a part of the agency’s service to its clients. The letter tells the client that he will be contacted on occasion regarding different possible aspects of his asset base and that each will be analyzed at no cost or obligation as a standard part of the agency’s unique services. The asset in question will be analyzed (if the client desires – if not desired, we note the file, diary for a year and re-offer the service) and strengths and weaknesses will be explained. Then, if weaknesses are located, the client has the opportunity to either use the agency’s services to ‘plug the gaps’ or may go back to his other agent and have him address the issues. THIS IS A PART OF THE UNIQUENESS OF THE PROGRAM. As we tested this methodology, we found that the agencies who sincerely followed this program provided additional lines of insurance and services to over 70% of the clients offered (compared to 25% in the comparison group). But the system MUST be followed religiously and the analysis must be done without an offer of closing (as in most sales).

The most important part of the Asset Protection Model is the follow-up process. Some agents will follow up with new service analyses every month while others do it quarterly or semi-annually. No one should wait a year to follow-up. Once a new customer enters the Asset Protection Model, the originator is required to immediately refer the client to the next department to diary and schedule the next asset analysis. In some agencies, the producer is paid for an account ONLY upon referral of the account to the next department. In smaller agencies in which one producer handles multiple lines of business, the account is diaried for re-contact at the prescribed time for the next analysis. As soon as the next analysis is complete (whether or not a sale ensued) the account is again referred to the next department or diaried for the next asset analysis until the entire cycle is completed.

If the asset analysis confirms the appropriateness of the client’s current insurance device (that means their product and price is as good or better than you could provide), your recommendation confirms that and you tell him that “we” will leave the account in its current place for the time being and will re-analyze it in a year (since the industry and products are always changing). If the product has weaknesses, you point them out, giving the client alternatives that he can purchase from you or that he can take to his current agent and adjust the coverage according to your analysis and recommendations (of course asking the agent why (s)he didn’t find that weakness previously).

The results of the analyses will bring you more business, make you an insurance advisor instead of a salesperson and build a level of trust once the client understands that you are only interested in his best interest instead of in making a sale.

The intent of the Asset Protection Model is to “de-educate” the client base that insurance agents are next to used car salespeople in high-pressure sales tactics, creating need when none exists and fast-talking techniques. This program is “re-education” of both our own sales force and our customer base that their insurance agent (especially this agent) is a counselor, not a salesperson.