Recently I responded to a blog sponsored by a vendor of an agency management system. Their most recent post centered on the need for independent agents and brokers to move with the times and to start effectively using the latest technology. I am totally in agreement with that idea, however in the post the author indicated “Those days where everyone wanted to personally know their insurance agent prior to buying a policy are long gone”. They then went on to say “Personal lines insurance, especially auto and home, have become more about ease of doing business and price than service, credibility and carriers”. I totally disagree with these statements and if I didn’t know better I would swear the author of the article worked in the Geico marketing department.

I responded to the post and expressed my disagreement. Consumers have been conditioned by the enormous advertising budgets and campaigns of direct response carriers to believe there is no difference in insurance other than price. I have to admit these carriers have done a great job and if the truth be known as independent agents and brokers some of us have helped them by allowing ourselves to be dragged into the price game.

We need to educate consumers on the real truth - professional advice and service, credibility and purchasing insurance with a quality insurance carrier really do matter. We need to paint a picture in consumer’s minds that highlights the disastrous affects of not carrying proper coverage. In today’s world with all the financial fraud and misrepresentation occurring consumers need to do business with people they can trust. Who better than the independent agent or broker who is located right in their community and has offered quality insurance products and service for so long.

We need to educate consumers on the pitfalls of buying protection based solely on price. Knowledgeable consumers who are interested in protecting their families and businesses need to be made aware of the problems that can occur if they only concentrate on the cost of their coverage. They need to understand that insurance policies are legal contracts that can include many variations in their wording that can dramatically alter how the policyholder is covered. They also need to work with an insurance professional that can explain and recommend the appropriate coverage to provide the level of protection most consumers want and need. In addition to recommending the right coverage they need to know that independent agents and brokers intercede on behalf of their client when there is a claim to make sure it is handled quickly and fairly. In order to identify your agency as one that meets all the above criteria and offers consumers proactive customer advice and service you must make sure that culture exists with everyone in your agency. Too many agencies believe that “quality service” stems from handling inbound phone calls for advice and service. They think processing customer change requests and having clients report claims to the company directly meets the standard of quality service. Far from it! Proactive customer advice and service means reviewing clients and prospects current coverage with them and making recommendations on improvements they might want to consider. It means updating and changing their protection based on their current life situation. It means discussing with them voluntary coverage like flood and umbrella insurance because you believe the client should seriously consider it. Recommending the coverage and providing a premium quote allows the client or prospect to make a conscious, educated decision on whether they will purchase the protection or not. It also means not allowing you or your agency to be sucked into selling coverage solely or primarily on price. If the client or prospect is only interested in price it may mean telling them that your agency may not be the right agency to handle their insurance needs.

Is proactive customer advice and service too expensive, time consuming and ineffective? I don’t believe so. I recently spoke to an agent member who does all the things I outlined previously in this article. Their on-hold message asks callers if they think Flo, the gecko or the caveman will respond quickly and effectively when they have a claim. They go on to ask callers how responsible it is for some carriers to offer limits that are not adequate to meet a consumer’s needs. How about offering them the opportunity to choose a premium and then design their coverage around that premium without regard to whether they are properly protected. This same agency is willing to walk away from any consumer that is merely price shopping and doesn’t see value in their professional advice and service. They may lose a few potential customers but in the long run they have better retention and find the referrals they get from clients that appreciate the professional advice they provide far outweighs that loss. Remember consumers that are price shoppers are easily lost because there is always someone with a lower price. I hope you agree with my comments on the blog that quality personal insurance protection is not about ease of doing business and price. As more agencies write consumers on the quality of their recommendations and service, the better chance we have of significantly reducing price as the primary criteria for purchasing insurance. Consumers see value in many items and services they purchase. That’s because they are aware of the differences that make their chosen product or service a better value.

Independent agents and brokers must educate consumers on the difference when it comes to insurance. Some agencies will say they don’t have the time and resources to do this. I contend you can’t afford not to get behind this initiative. The future of your agency and the independent agency system depends on it.