Consultative brokerages develop spheres of resources to provide their clients a higher level of expertise and to broaden their ability to develop revenues in various industry niches.
The major brokerage firms know this. That's why they show their clients a list of industry groups in which they have world-class experts. In many cases, these experts are on staff to handle a major client in the Fortune 100 category. To help pay the experts (they ain't cheap), these major brokerages form industry groups and solicit these niche industries around the world.
The megabrokerages have teams of people around the globe who are specialists in each of the industries. The range of specialties includes London brokering, policy wordings, loss control, claims, and legal assistance. These brokerages are extremely skilled at presenting their experts to prospects across the country. This is how they differentiate themselves.
I spoke this week with a large regional broker in the Northeast, who told me, 'We recently came under attack by a megabroker on one of our largest accounts-the revenues are in the six figures. The client had just suffered a highly publicized property loss. The mega cold-called the client and offered its specialist resource assistance in the negotiation of the Business Interruption claim. We handled the claim and kept the account, but the mega now has a toehold in the account.'
The major players have dedicated resources in a number of industries. Here are a few of the industry niches in which these brokers have developed expertise:
- Health care
- Aviation
- Sports and entertainment
- High-tech industries
- Construction
- Energy
- Financial (FI)
- Transportation
- Marine
What do these niche industries have in common? The middle-market accounts in these niches produce large commissions and fees. It's not uncommon for an account in one of these groups to develop annual revenues of more than $100,000. That's enough for one of these resources to spend time on the account. Of course, there's a lot more to it than just providing insurance policies.
When consultative brokers compete for a middle-market account, they must come to the table loaded with resources. Chances are good that the buyer knows as much about the insurance coverages as you do. Over the years, the buyer has been educated about such things as markets, coverages, and claims service. So the broker differentiates itself by deploying expertise and resources.
Ask yourselves one question: Have I introduced resources to all my major clients and prospects? If the answer is no, make this an immediate goal. Without resources, you're left with only an insurance policy. You aren't a consultant; you're an insurance salesperson with little perceived value.
That's why resources are so important. When independent brokers and agents know where the resources are and how to deploy them effectively, they automatically differentiate themselves. In doing so, they can compete with the larger players on a level playing field.