As you probably now know the New York State Insurance Department filed their final version of the Producer Compensation Disclosure Regulation on Feb 10, 2010. The regulation is scheduled to go into effect on January 1, 2011. Whether or not this regulation is defeated through some legal action or actually goes into effect it brings to light a serious issue affecting all independent agents and brokers and that is the public’s perception about who you are and what services you offer.
Independent agents and brokers need to have an aggressive PR campaign to highlight the important work they do for their clients and consumers as well as combating any negative public perception surrounding them. That campaign has to have significant and aggressive participation by each and every agency across New York State. The campaign is not only important to reverse the unfair and undeserved negative image painted by the Producer Compensation Disclosure Regulation but also to establish in the consumer’s mind the significant value of having an independent agent or broker handle their insurance needs.
Agents and brokers should not be afraid to inform their clients that the steering of business and bid rigging that went on was centered on very large commercial insurance accounts handled by extremely large mega-brokers. They should also inform consumers that all but one of the individuals convicted in the case were released from the conviction either having a misdemeanor completely wiped out to having a felony reduced to a misdemeanor that would go away in 6 months.
Those of you reading this that are IIABNY members can advise clients and prospects that your association’s board, as far back as 11/19/04, approved a policy statement encouraging voluntary disclosure. In that policy statement the board encouraged all agents and broker members to voluntarily disclose to clients and prospects the existence and nature of all compensation they received. That means that any client or prospect that asked about how and what an agent or broker was compensated would be provided the information. The truth of the matter is that very few if any consumers ask about compensation because they base their buying decision on the coverage limits they are purchasing and the premium being charged. In addition to dealing with the negative perceptions of the Producer Compensation Disclosure Regulation a solid and significant PR campaign would inform the public of who independent agents and brokers are and the value of the services they provide. It would help to differentiate their services from the direct writers and direct response companies. It would also combat the negative perceptions of certain consumer groups only interested in making headlines by spreading misleading and inflammatory information without factual support.
Each of you in your own agencies knows that the majority of your clients are very happy with the advice and service you provide. From time to time these same clients express their appreciation both verbally and in writing. You should make a point of seeing that all of these positive comments about your agency services and staff are communicated to the public in every way possible. Post them on your website, in your office, in your advertising as well as on any social media (Facebook, Twitter, LinkedIn, etc.) that you might be currently using. Create short video clips of satisfied clients telling how they feel to post on your website and social media. This brand of viral advertising is especially effective with younger consumers.
If you have access to it, and see the positive aspects of it, this PR can very easily be tied to a branding program. A successful branding campaign incorporating the public relations we are talking about will cause the brand logo to trigger in consumer’s minds the value associated with doing business with an independent agent or broker. So if possible give some real thought to incorporate your public relations campaign into a branding campaign that can provide your agency with a long term positive image.
Many of you who know me are aware of how I am sickened by the negative image portrayed in the recently posted regulation. I find it offensive to all the honest, hard working agents and brokers out there. I hate laws or regulations forced on everyone to catch the extremely small percentage of people actually committing the infraction. I hope this unnecessary and demeaning regulation is struck down by the court. However in the meantime I will continue to urge agents and brokers to work hard to communicate the positive image of the work they do. I promise all of you reading this column that I will personally work just as hard to create that positive image in consumers’ minds and to help any agent that asks for my assistance.
