The Facts Of Life About Personal Lines - And Having A Well-Trained Staff

• a variety of markets in the mid-price range or below
• the ability of your staff to sell and close
• the knowledge base of your staff and how they manage customers on the telephone

Once upon a time, insurance buyers who wanted Auto and Homeowners insurance found it necessary to visit their insurance agents (or be visited by them in their homes) to protect their property and liability properly. Once upon a time, you had to visit a travel agency to arrange for a vacation. Once upon a time, the airlines had local offices to permit travelers to purchase, pay for, and pick up tickets.

The days of visiting airlines, travel agents, or insurance agencies are fast disappearing. Why? Airline tickets, vacation packages and Personal insurance have become commodities, available in similar fashion from many vendors. Does that mean that Personal Lines agencies will soon be defunct?

Maybe, but not necessarily.

Where people will get their insurance will depend on how easy it is for them to get the desired services. If you can make the quoting and purchase of Auto or Homeowners insurance as easy as getting reservations and tickets on an airline, your agency will succeed. If not, you will lose market share to those who make buying insurance as easy as possible.

I can get airline tickets by phone as easily from my travel agent as I can from the airline. And my travel agent guarantees the lowest available rate. The best will even monitor the rate until flight time to determine if a lower rate becomes available. I will certainly continue to use my travel agent because, unlike the airline itself, he can check on all airlines and represents my interest as much as he does that of the airline. I could use the Internet-but frankly, it's too much trouble, and my travel agent can do it faster and more efficiently. It's his business, not mine.

Vacation packages are complex and changing. Yet they too have become commodities. I use travel agents for this purpose, as well, because I assume they have access to all of the most recent vacation programs, while I would struggle to find them online.

Insurance agency operations are similar to both the ticket agent and the vacation planner. Insurance can be as simple as a competitive quote or as complex as designing a program to fit my special needs. The decision regarding what I need is mine (not the insurance agent's). The faster the agents can understand this, the faster they will write my insurance. Yes, I may need more or different coverage. I may even have been told that before and had forgotten (or disregarded the fact due to the extra cost). But I neither need nor want a lecture from another agent about things that I should insure. All I want is a comparative quote with as little pain as possible. If I want more, your prompting questions will open the way for me to ask. That's how tailored insurance programs can mature.

1. Insurance companies are struggling to advance their automated systems for quoting and for policy generation. Agencies are also struggling to gain efficiencies in the handling of their Personal Lines. As we all know, the outcome of our efforts in this area leave a great deal to be desired. The industry (carriers and automation vendors) have not made it easy to rate and update policies over different systems through a single, integrated program. The rating vendors, sometime owned by insurance companies or automation vendors, are complex and time consuming to use and understand. Although progress is being made (and some of these problems are out of the individual agent's control), the survivors are becoming much more proficient and proactive in their automation efforts. For instance, some agencies are 'live-testing' a variety of rating vendors each year to determine which are easiest to use. The employees, not the owners, decide the ease of use. The employees know that they have the choice of moving to another vendor if they don't get the service, speed, and quality they need to accomplish their jobs.
2. Agencies involved in Personal Lines must evaluate inter-connectivity between automated systems and their major carriers whenever they look to upgrade their systems. Some systems are better than others with specific carriers and those relationships are fluid. You must test them each time you're ready to upgrade. 
3. Finally, it has become as important for your Personal Lines staff to understand and be competent on your system as it's always been for them to understand the insurance products. Unfortunately, systems training has always been a hit-or-miss process that is learned on the job for most employees. But they learn only what they have to know to get by, not all they need to know to manage the system competently. The systems vendors are as guilty as the agencies in this, but the agency owner must take final responsibility for this problem.

Time and money should be set aside to train, retrain, and refresh the systems knowledge of your employees. Once each year, every employee should be tested by the most competent systems person you have (on staff or from the vendor's training group). The best test is to sit with each employee and watch him or her function for a day or two. The trainer will quickly identify soft areas that have been circumvented by short-cuts (which often have serious ramifications elsewhere in the systems or customer service process). An alternative is to provide annual refresher training on both the rating system and on the agency automation system.

Once we could boast that the telephone solicitors for the direct writers were not as knowledgeable as our agency staff with respect to asking the right questions and providing Personal Lines quotes. Every year, my firm (Agency Consulting Group, Inc.) makes blind calls to a number of direct writers (and agency companies who have direct-writing facilities) to get quotes on our Homeowners and Auto policies. You should try this-it would be an eye-opener.

There are still many direct-response representatives who are not as knowledgeable or sales-motivated as our independent agency owners. But there's a growing number who are as competent, professional, and knowledgeable as any Personal Lines agency staff. Some are more knowledgeable than the independent agents because they're responsible for more states and coverage than the local agent is-and they understand what they're responsible for (through systems programming).

The last quote we solicited was from Liberty Mutual, a direct writer. The young lady spent more than hour with us quoting Personal Auto, Homeowners, and Umbrella and taking information to provide a manual quote on a condo rented to others. She was pleasant, knowledgeable, and patient. She was able to ask us all the necessary questions to comparison-quote our policies and ensure that no needed coverage was omitted. She even asked about boats and airplanes! She was able to draw MVRs while I was online (it took about two minutes). How many of us can do that in our agencies?

The knowledge gap may thus be widening in the other direction. Our friends in the direct-writing business have shared their training programs with us. Their sales representatives must not only pass the licensing course, but annually take and pass refresher courses in each prevalent line of business. How many of us have continuing education requirements (outside of the state requirements)? This must become an area of concentration if you want to maintain a viable Personal Lines market. Direct professional management must include monitoring occasional calls (for content), refresher courses in all lines of insurance, and testing for knowledge every year. Keep the insurance skills honed if you want to stay in the game.

Sales and telephone skills have always been a hit-or-miss proposition for insurance agency staffs. We've always hired for presumed insurance knowledge-rarely for sales and telephone personality. The direct writers are far ahead of independent insurance agencies in this arena. They've always recognized that if they couldn't be in front of the client physically, they couldn't risk losing a sale because of poor telephone skills or because the representative never asks for the close.

Since insurance agents used to visit clients and many still require clients to visit the agency, physical presence often supplanted sales skills in the purchasing process. If they were in your office (or if you were in their home), the customers would be more likely to buy insurance unless they were motivated not to buy. On the other hand, telephone solicitors had to give the customers reasons they should buy because of the lack of intimacy in a call versus physical visits.

Few agencies have given their Personal Lines staff professional sales training. Even fewer spend regular time role-playing to familiarize the staff with all of the possible objections and the best responses to each. Yet that is exactly what needs to be done to make the staff comfortable with anything that may be thrown their way by prospects.

Even more shocking than a lack of sales skills are the abhorrent telephone skills that can be heard in many insurance agencies. The staff often treats a potential customer as an inconvenience and an interruption to their busy day. That attitude comes across loud and clear to the customer, who is deciding whether to spend their insurance dollars at your agency or elsewhere. What do you think they're going to do? If you have ever been frustrated by the number of calls that you get for quotes compared to the number of policies written, telephone attitude is certainly a part of the problem.

Why do you think that independent agencies are successful with approximately 10% of their Personal Lines telephone quotes versus 40% for direct writers-price alone? I assure you that a rude, unpleasant representative with low rates will sell as well as a pleasant, helpful representative with moderate rates. Many of us have experienced the result of a pleasant sales personality. Have you ever ended a sales situation actually wanting to do business with the salesperson? Perhaps you felt bad if the sale could not be made. You may even have helped search for ways to convert the sale. Certainly you know the feeling of a customer telling you that he was going to stay with you even though the other agent was a little less. You know that something in your relationship transcended the sales efforts of that other producer. While this doesn't work if the other agent offers discounts of 30% or more, in many cases the money is secondary to the personality (if the difference is not huge).

Provide professional telephone skills training to both management and to the line employees in your Personal Lines departments. Then keep those skills honed by monitoring of sales calls for evaluation purposes. Those messages you hear about a call potentially being monitored are not about criticizing employees, but to identify and remedy any soft spots in the training program and to provide consistently high professional sales and telephone skills to all clients.

If you can't monitor or manage your Personal Lines staff's telephone and sales skills, you may want to consider Agency Consulting Group, Inc.'s Sales Skills Test. For a small fee, we will call your Personal Lines department quarterly for a quote on a variety of Personal insurance products. A report back to you each quarter will identify sales and technical skills gaps that need to be addressed to further develop your staff's skills. Call our office at (800) 779-2430 for more information about this service.

This program is designed to test the sales and telephone skills of insurance agency staff. The best way to accomplish this is to call for a quote, monitor the sales process, and record the strengths and weaknesses. We strongly urge agencies to develop this program in house. Agency Consulting Group, Inc. will teach owners and managers the monitoring devices that it uses if the agency would like to manage this process itself. Agency Consulting Group, Inc. can also train staff in the sales process and in significant telephone skills required to deal with Personal Lines customers properly.

Many agents have found it useful to have an objective third party monitoring evaluate the employees and then evaluating them with management. The feedback reports to conduct specific or general training will hone the employees' sales or telephone skills.

Agency Consulting Group, Inc. will call your agency four times each year (randomly) for quotes on Auto, Homeowners, and other Personal Lines of insurance. The areas tested are technical knowledge (does the employee know the coverages?), sales skills (does the employee sell the policies or simply quote them?), and telephone skills (does the employee manage the client properly?).

• Technical Skills. Qualified Agency Consulting Group, Inc. staff determine whether the employee understands the coverages of basic-needs clients and the more complex accounts. This education process aids the agency in its E&O defense.
• Sales Skills. We will provide a number of challenges and objections to overcome, and critically analyze the employee's ability to ask for and close the sale.
• Telephone Skills. We will closely monitor the employee's telephone attitude and demeanor as the call progresses. We'll measure and report the telephone strengths and weaknesses encountered to permit the agency to institute further training as necessary.

Costs: Quarterly calls with reports to the agency owner will cost $500 per year (prepaid). If multiple calls are desired (to test multiple or specific employees), the costs increase accordingly. If the agency owner prefers to administer the tests locally, Agency Consulting Group, Inc. will provide the screening tool used by us in our standard evaluation for $1,000 (unlimited use by the licensed agency only).

The Sales Skills Test is provided by Agency Consulting Group, Inc. as a tool to help insurance agency principals to identify skills that require further training. It's not intended to be a personnel evaluation tool and should never be used as such.