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How Risk Assessment Tool in Insurance Broker CRM Improves Quoting Precision
Insurance brokers play a vital role between clients and insurance providers. Risk assessment is the lifeline of their professional practice. Brokers who assess risks with precision build strong business relationships that work for everyone involved. The precision of quote generation has a direct impact on client satisfaction. Customers who receive tailored quotes feel valued by the insurers, which helps in building trust from the start. This original positive connection guides them toward higher conversion rates and better client retention. A full picture of risk assessment helps brokers protect themselves from potential liability issues. Brokers who document risk factors and match appropriate coverage shield themselves from claims of negligence. Their professional dedication creates a reputation for reliability that spreads through client networks. A modern CRM for insurance agency operations makes risk assessment more streamlined. Insurance brokers who utilize specialized insurance agent CRM software work faster while keeping their risk evaluations accurate. Embedded Risk Assessment Tool in Insurance Broker CRM: Improving Quoting Precision Insurance agent CRM software serves as a central hub that organizes client data and streamlines communication to boost efficiency. The CRM for insurance brokers does much more than simple contact management. It includes specialized risk assessment tools that revolutionize the quoting process. The native risk assessment module in insurance CRM solutions enables brokers to evaluate risks using diverse factors. Smart algorithms assess client data, industry trends, and historical data to discover potential risks that brokers might disregard during a manual assessment approach. This enables brokers to recommend coverage options that target certain vulnerabilities rather than generic scenarios. These platforms come with immediate practical benefits: Risk assessment tools automatically gather and analyze client information, reducing manual data entry errors. This automation ensures consistent evaluation standards across all client assessments. Cloud-based systems enable team members to access and update risk profiles from any location. Multiple brokers can collaborate on complex cases without version control issues or communication delays. Customizable risk templates ensure all brokers follow the same evaluation procedures. This standardization improves quality control and reduces assessment inconsistencies between team members. CRM for life insurance agents really shines when tracking health changes and life events that affect policy needs. Advanced platforms blend with third-party data services. This gives brokers rich information about properties, businesses, and individuals without needing multiple subscriptions or research tools. Such a combined approach saves time and improves accuracy in assessments. Visual Metrics Offered By Risk Assessment Tool in Insurance Agency CRM Visual intelligence leads modern CRM for insurance agency solutions. These powerful graphical tools turn complex risk data into useful information that insurance professionals can understand quickly. 1. Client Risk Scorecards Client risk scorecards offered by the risk assessment tools show detailed visual snapshots of each client's risk profile. Color-coded scorecards help brokers spot high-risk areas and coverage gaps right away. Insurance professionals can detect patterns and unusual trends to make better recommendations. The scorecards work well as communication tools that explain risk factors to clients and make abstract concepts easy to understand. 2. Portfolio Risk Distribu... Dynamic visualizations in insurance CRM solutions help brokers understand risk distribution throughout their client base. Insurance agent CRM software with portfolio charts enables professionals to spot risk concentrations by industry, geography, or coverage type. This broader viewpoint helps agencies balance their business and prepare for market changes before they affect profits. 3. Exposure Maps and Geospatial Heatmaps Geospatial tools create visual maps of risk across locations. CRM for life insurance agents uses these maps to show geographic concentrations of health risks or mortality factors. Property insurance professionals use them to identify natural disaster zones, crime hotspots, and location-based risk factors that shape pricing and coverage decisions. 4. Claims Propensity and Claims Velocity Charts These visualization tools show past claims patterns and predict future activity. Brokers learn about clients or industries with higher claim frequency. This knowledge helps them tackle potential problems before they turn into losses. Key Ways Risk Assessment Tool Embedded in Insurance CRM Drive Modernization Risk assessment tools within insurance agent CRM software are driving a technological revolution in the brokerage industry. These integrated systems are reshaping traditional insurance practices through several key innovations. I. Enhancing Underwriting Precision with Informed Analysis Modern CRM for insurance agency operations uses sophisticated analytics to refine the underwriting process. The system assesses client histories, discovers patterns, and forecasts future risk scenarios with greater precision. This enables brokers to make decisions based on extensive factors rather than basic information or intuition. II. Improving Policy Personalization and Product Suitability Insurance agencies can invest in the development of a tailored CRM for insurance brokers to manage and access extensive client profiles. CRM for life insurance agents makes it easier to recommend appropriate coverage options that align with their customers' needs. This approach replaces the generic marketing approach that dominated the insurance sector in the past. III. Accelerating Decision-Making and Policy Issuance The automated workflows in insurance CRM systems accelerate the quote-to-policy process. Tasks that once took days now take hours or even minutes to accomplish, improving policy issuance effectiveness and client satisfaction. IV. Strengthening Fraud Detection and Prevention Mechanisms Smart risk assessment algorithms in insurance CRM systems can discover suspicious patterns or inaccuracies that might denote fraudulent activity. These tools flag potential problems before policy distribution, which protects the reputation of insurance firms. V. Supporting Regulatory Compliance and Risk Governance The CRM for insurance brokers meets complex regulatory requirements by automating compliance checks and documentation. Agencies can remain compliant while focusing their energy on serving clients instead of managing paperwork. Final Words Modern risk assessment tools in insurance broker CRM systems are reshaping how professionals assess client needs and create accurate quotes. These tools help brokers make evidence-based decisions instead of relying on gut feelings or limited data. So, agencies now offer precise coverage recommendations that target specific risks rather than one-size-fits-all solutions. Risk scorecards, distribution charts, and geospatial mapping give brokers quick insights that once took hours to analyze. Professionals can spot patterns fast, predict problems, and explain complex ideas to clients clearly. This better communication builds trust and strengthens client relationships right from the first meeting. These integrated systems represent more than just better operations. They signal a transformation toward precision, personalization, and proactive risk management.

Insurance Agent/Broker Licensing
INSURANCE AGENT/BROKER LICENSING by Marcus Ramsey Growing your agency's business might require you to obtain licenses in other states. Most experienced agents/brokers comprehend and are willing to do what it takes to ensure that the commercial side of the transaction succeeds. However, some seem to forget all this hard work is wasted if project planning fails to allow adequate time to obtain proper licensing in the target state(s). 'Ramsey's Rules' outlined below will direct you toward obtaining and maintaining proper licenses to help your new venture prosper. (I assume that anyone who reads this article already holds insurance licenses in one or more states but needs (at least one) additional license in another state to take advantage of a business opportunity. RAMSEY'S RULE #1: NEVER RELY SOLELY ON THE FREELY GIVEN ADVICE OF OTHERS. I am constantly reminded of the number of intelligent, thoughtful agency executives who for all intents and purposes jeopardize their business by accepting half-baked advice from someone they would not trust with their car and daughter on prom night. Obtaining the licensing information as the first step of your new project/program (not your third, 15th or 23rd step). How do you go about obtaining this information? Contact the agent licensing section of the department of insurance of the target state and request a copy of its agent/broker license instructions and application forms (see the State Insurance Department Directory in back). Most states have their own specific, easy-to-follow instructions on the licensing process. Get this packet and quickly read through it even if you intend to delegate the project of obtaining the license to a member of your staff or retain a consultant or licensing service. In fact, reading over the instructions will give you a good idea of the time and effort involved in obtaining the necessary license and whether you or a staff member will have the time to prepare, file, and follow up on license issuance within the time constraints you are working under. You should consider retaining outside assistance when you plan to seek licenses in several states at the same time. Be sure that whoever is going to do this work can focus the necessary attention on the project to complete it as quickly as possible. RAMSEY'S RULE #2: IF SOMEBODY ELSE IS DOING THE WORK FOR YOU, MAKE SURE YOU KNOW AT LEAST GENERALLY WHAT IS INVOLVED, REQUIRE PERIODIC PROGRESS REPORTS, AND QUESTION ANYTHING THAT SEEMS WRONG TO YOU. Remember, it is YOUR business and you had better look out for its best interests unless you are looking for a career change. RAMSEY'S RULE #3: RELATE THE LICENSING REQUIREMENTS TO YOUR ACTUAL BUSINESS SITUATION. Clearly define how you intend to operate and identify the key points to be covered in licensing. Licensing services and consultants who do licensing work usually ask the client to complete a form which requests most of the information contained on state application forms. This information is then typed onto the appropriate state forms and returned to the client for rechecking, signature, and attachment of the proper fees. The problem with this approach is that planned operations might not match license authorization. That can mean trouble later, unless someone is willing to take a couple of extra minutes to be sure everything is right. The answer to simple questions such as, 'Will you write Life/Disability or Property/Casualty coverages or both?' and 'Do you intend to open an office in the target state or do you plan to operate from your existing office?' will help define the types of licenses needed. Whether you intend to conduct business as an individual, partnership, or corporation can have a direct bearing on whether a license can be obtained for that entity (a few states, such as Alabama, issue nonresident licenses only to individuals, not to partnerships or corporations). If you are seeking a license for a corporation, make sure that an application for individual licenses are also filed. When you receive an approval, make sure you have approval for the corporation and all individual transactors. By carefully outlining how operations will be conducted, you can dictate whether you need to seek licensure as an agent, broker, managing general agency, surplus line broker, etc. Sometimes you find that you do not need to obtain a license in another state. For example, some states, such as California, do not require nonresidents to obtain a license to insure risks with incidental exposures in the state as long as the unlicensed nonresident does not enter the state to solicit, service, or inspect the entities insured; However, other states, such a Texas, do require nonresidents to be licensed under the same circumstances. Keep in mind that 'entering' the state may include obtaining information by mail and telephone as well as physical presence inside the state. Also, many states will not issue a surplus line broker's license to a nonresident except in connection with a risk retention group. If your activities will involve related services by the same or by one or more related entities, such as a third-party administrator or claims adjuster, check to see if those activities require licensing as well and, if they are, be sure that those licenses are obtained as well for the corporations and all individuals involved. 'FC&S Bulletins' published by the National Underwriter Company and the 'State Licensing Requirements Guide' published by Pictorial, Inc. offer helpful summaries of state licensing procedures and provide invaluable overviews of each state's licensing and continuing education requirements. Even if someone else is going to do the licensing work for you, you should at least review the state's overview/summary. RAMSEY'S RULE #4: OBTAIN AND REVIEW EACH STATE'S INSURANCE CODE. If someone else will actually do the licensing work for you, it may be enough for you to review a state overview or summary during the application process. However, the individual handling the licensing work for you MUST obtain and review all applicable sections of the target state's insurance code. Once the license has been obtained, you will need access to a copy of the state insurance code, regulations, and bulletins. How can you obtain another state's insurance code? Some state departments of insurance sell or can refer you to a source for a relatively inexpensive copy of the state insurance code, the department's regulations, and the department's bulletins. Otherwise, contact the National Insurance Law Service (NILS) or another law book publisher. If you are comfortable 'surfing the net,' you will find pricey but instant access to on-line law libraries on the Internet. Another possible source is the law library maintained by a local bar association or a nearby law school. RAMSEY'S RULE #5: IF THE WORK NECESSARY TO OBTAIN THE LICENSE(S) SEEMS TOO EASY OR QUICK, YOU ARE PROBABLY ON THE WRONG TRACK. This sounds cynical, but the people who drafted agent/broker licensing laws and regulations never considered whether the requirements being adopted would make it easier for the agent/broker to make a living. Just filling out the forms won't suffice. Most states require that you provide a copy of your license certified by your home state insurance department. If you are seeking licenses for a corporation, you probably will also need to obtain a copy of the articles of incorporation and/or certificate of good standing certified by your home state's Secretary of State. As a rule of thumb, it takes 30 to 60 days to gather all the information necessary to file the application. Once the application has been filed, don't expect to receive the approval by return mail: approval time frames of 60 to 90 days or even longer are not uncommon in certain states for certain types of licenses. Because the licensing process can be terribly slow (even when the process moves quickly, it is very slow), you need to begin as soon as possible. Since you cannot start writing the program/account until you have the necessary licenses, processing delays may push you beyond your frustration tolerance level. However, all you can do is relax, breathe deeply, and try to make sure that you aren't the reason for the delay. Keep the ball in the department's court by making certain the application and any required supplemental information are complete in every respect. Many states will simply return an incomplete application without action. Once the application and all necessary supplements have been submitted, your application will be 'ripened' according to the season of the year in a big pile of similar forms. Discount any claims by license services or consultants that they can obtain the license you need significantly faster than anyone else on earth. To deliver on such a promise, it would be necessary to overcome the Universal Laws of Orderly Bureaucratic Work Flow and Form Processing. While occasional triumphs over this inertia have been reported, they are rarely confirmed by reliable sources or any documented evidence. Only a complete application will allow unimpeded progress step to step. Again, if you make it your business to know generally what's involved in obtaining the license(s) you need and if you monitor activities through periodic progress reports, you should be able to assess the quality and timeliness of the work being done on your behalf. RAMSEY'S RULE #6: ONCE YOU OBTAIN THE NECESSARY LICENSE, KEEP IT CURRENT TO AVOID REPEATING THE RIGMAROLE. You should apply this rule to all licenses, permits, and/or corporate authorizations held. For example, don't assume that meeting your home state's continuing education requirements will be sufficient to retain the license(s) obtained from other states. If your home state does not have a continuing education requirement, you will probably need to meet the continuing education requirements for each state in which you are licensed. Also, maintaining corporate authority usually requires making one or two filings each year. Make sure that you, your attorney, a consultant you have retained, or someone on your staff is assigned to monitor and ensure that all requirements are met when due, that all necessary filings are made in a timely manner. Demand that your files be clearly documented to show what must be done, what has been done, when it was done, who received copies, the check number, the date, the amount of any fees paid, etc. In summary, obtaining agent/broker licenses in new states can sometimes be a frustrating, humbling, time-consuming exercise which is nonetheless a necessary part of an agent/broker's success. In many ways, producer licensing is a lot like building a campfire: In the warmth of the glow, one can scarcely remember gathering the wood. STATE INSURANCE DEPARTMENT DIRECTORY Alabama, 135 S. Union St., Montgomery, AL 36130, (205) 269-3570 Alaska, P.O. Box 110805, Juneau, AK 99811, (907) 465-2515 Arizona, 2910 N. 44th St., #210 Phoenix, AZ 85018, (602) 912-8466 Arkansas, 1123 University Ave., #400 Little Rock, AR 72204, (501) 686-2900 California, 700 L St., 4th Floor, Sacramento, CA 95814, (916) 322-3555 Colorado, 1560 Broadway, #850, Denver, CO 80202, (303) 894-7499 Connecticut, P.O. Box 816, Hartford, CT 06142, (203) 297-3800 Delaware, 841 Silver Lake Blvd., Dover, DE 19901, (302) 739-4251 Dist of Columbia...) 266-8699 Wyoming, 122 W. 25th St., Cheyenne, WY 82002, (307) 777-7401 This article was written by Marcus Ramsey, CPCU, principal of Ramsey Consulting Services, 14026 Donart Drive, Poway, CA 92064, (619) 748-6315.

Tips To Forward Your Career As An Insurance Broker
If you think you’re right for a career in insurance, you’ll have to know the right path to travel to reach the peak of your potential. Networking and internships should help you get started in the industry while you’re still being educated, but there’s much more to come after you’re done with school. Take some time to start planning for the future, and make the moves you need to succeed. Here is a brief look at a few tips to help you forward your career as an insurance broker. Determine a clear goal within the insurance sector There are nine different ways you can go when you’re working your way into an entry-level position in insurance. It’s important to mark out your path early on in your journey, so you can properly prepare for what’s to come. You can choose to go the route of a broker, underwriter, loss adjuster, risk manager, claims investigator, loss control specialist, actuary, marketing representative, or appraiser. Each position has its own specialties, so figure out what to learn while your journey is young. Work to obtain a professional designation The path you choose for entry into the insurance world will require specific certifications and licenses, but you can also work towards the CIP (Chartered Insurance Professional) designation. A CIP designation shows that you have the foundational qualities to meet basic industry standards. If possible, do what you can to start this designation while you’re still in school. Research employers and thoroughly prep for interviews When it’s time to step into your profession, you don’t want to take a position that doesn’t really fit. Research is key. Just as there are several entry points in insurance, there are many different types of insurance companies. When you’re applying for a job in the field, you need to clearly identify your goals. Your goals are important for identifying your own path, but they also look good on your application. Remember you’re always selling yourself If you’re in the business of insurance, you’re selling much more than a coverage policy. Whether you’re on the job or just working towards getting a job, you need to be able to sell yourself as well as the insurance. Once you’re practicing your specialties, you'll need to know how to market what you are selling as well. If you want to be an overachiever for your agency or yourself, learn how to apply SEO to insurance. Taking your profession to the digital level is always a great way to expand your business potential. Work on developing your communication skills Working in insurance means you’re working with people. If you don’t have good people skills, you may not have the desired outcome in the long term. Invest in developing your communication skills on a business and personal level....

Developing Broker Services Agreements
DEVELOPING BROKER SERVICES AGREEMENTS by Gary Griffin This document by Gary Griffin illustrates the detail with which you can draft a broker service agreement and paves the way for you and your insured to develop a meaningful and profitable service partnership. For many businesses, insurance represents a substantial percentage of their revenues. In most instances, one or more insurance brokers places insurance policies on behalf of the insured. The brokers’ income is usually derived from insurer-paid commissions, from a fee negotiated with the insured, or from some combination of the two. The insured pays — directly or indirectly — for the broker to perform certain services which might be limited to the marketing and placement of insurance; or they might include hands-on assistance with such things as risk identification and measurement, loss control, claims consulting, and actuarial studies. Although most businesses enter into some form of written contractual arrangement with many of their vendors, most don’t have such contracts with their insurance brokers. This can hold true for even very large organizations where brokers’ fees and commissions can range from several hundred thousand to millions of dollars each year. The benefit of a broker-services agreement is that it defines in writing the expectations of the insured and the responsibilities of the broker. This helps eliminate disputes that might arise. A written service agreement also provides benchmarks for measuring performance. Developing such an agreement nails down what the broker will do and requires the insured to focus on the services they actually need. If the insured simply needs placement of certain coverages, the broker’s compensation might exceed the value of the service provided; and the insured might wish to renegotiate the compensation. It’s unclear why more insureds don’t have formal agreements with their brokers. One reason might be that developing a contract requires a good deal of thought and effort by both parties. Insureds who have had many years of satisfactory service from their broker might feel that a service agreement is unnecessary, or they might not fully appreciate the benefits such an agreement can provide. Although most brokers will agree to a service agreement, they might resist sweeping hold-harmless or indemnity provisions, particularly those that involve risk identification. Even small accounts might warrant services in addition to the mere placement of insurance. Here are some functions you might want to incorporate into your own broker-services agreements: SUGGESTED BROKER RISK MANAGEMENT FUNCTIONS Risk Identification and Analysis. The broker should gather and analyze operational and contractual data for the insured or assist the risk manager in accomplishing these tasks as required. The broker also should help prepare a report identifying key loss exposures. Where the gathering of data requires a physical inspection of property or personnel interviews, the broker should identify and schedule these activities. Articulate Risk Management Objectives. The broker service agreement should articulate the insured’s risk management priorities, goals, and strategic plan with the purpose of designing a program to meet those goals. The agreement also should establish performance criteria to measure results in attaining the stated goals. Insurance Coverage Audit. The broker should determine the loss exposure responsiveness of each insurance policy’s terms and conditions and recommend appropriate coverage modifications. The coverage audit should review all insurance agreements to assure that they’re placed with reputable and financially responsive insurers. The broker should provide all findings and recommendations to the insured in a written report. Risk Control Evaluation. Traditionally, risk-control services have been insurer provided. However, a broker can review the insured’s risk-control programs and help develop risk-control objectives. Once they establish those objectives, the broker could develop a plan for future servicing through a specialized insurer, broker, outside service provider, or consultant. The broker should establish risk-control criteria to measure its effectiveness. Risk-control services such as these might be outside the normal scope of service and incur additional costs. Risk-Financing Alternatives. Where agreed on, the broker can provide loss projections and statistical risk analysis. This might include identifying appropriate risk-retention levels based on loss exposures and financial data. Where appropriate, the broker should evaluate historical and current risk financing plans to assess their adequacy and effectiveness. The broker should develop risk-financing alternatives and report the relative advantages or disadvantages to the insured. SUGGESTED BROKER ADMINISTRATIVE FUNCTIONS Service Plan and Risk Management Administration. Some brokers might provide little or no service beyond renewing an existing policy, issuing certificates, and collecting full commission. To better serve your clients, make sure your service agreement contains the broker’s promise to fulfill these administrative functions: The broker should acknowledge that they’ve read each policy, binder, endorsement, or other documents, and that those documents are accurate and provide the coverage intended. Insureds would be appalled to discover blatant errors or omissions, poor grammar, or frequent misspellings in their policies. Insurance policies are legal documents; make meticulous policy review mandatory. If the insured’s risk manager doesn’t perform these functions, the broker should issue, record, and track insurance certificates, binders, auto identification cards, etc. The broker should verify rates, premium amounts, and audit results. As an optional service, the broker might review and analyze contract risks. This task usually requires the broker to develop a strategy for reviewing all contracts to ensure compliance with insurance requirements, noting any uninsured exposures. In addition, the broker should keep the insured abreast of pertinent insurance industry developments — both current and anticipated — and develop effective strategies for aggressively managing those developments. Claims Management. For some insureds, claims management is time consuming and expensive. Some brokerages have entire departments devoted to claims service. An insured expects such service as part of a broker’s normal commitment. The service agreement should reflect these needs and elaborate the insured’s claims philosophy. At a minimum, the broker should review and establish the insured’s claims-management needs. This should include a review of the adequacy and timelines of all loss runs and reports, and making changes as needed. The broker should help resolve all outstanding claim disputes and process all future claims to achieve timely payment. Where claim service providers are employed, the broker might be able to monitor and audit the effectiveness of those services. Ownership and Confidentiality of Records. All information, records, and data provided to or accumulated by the broker should remain the property of the insured. The broker should also agree to keep confidential all such information and material. The broker should agree not to disclose such information or records to any party without a direct underwriting need to know. Service Measurement and Stewardship Reports. The service agreement should schedule periodic services-evaluation meetings to determine whether the broker is accomplishing its service commitments as measured by pre-defined criteria. Periodic meetings also allow both parties to identify existing or potential problem areas and to deal with them before they get out of hand. Such meetings help foster an efficient and cordial working relationship between the risk manager and the broker service team members. Before renewal, the broker should give the insured a stewardship report that chronicles the activities during the service period and projects or recommends activities for the coming year. The report should detail the hours spent and expenses incurred by each service team member. Provide a summary for each policy showing the earned premium, incurred losses, and loss ratios. This summary also should include a full accounting of premiums and fees paid by the insured including all commissions or other income earned by the broker. SUGGESTED BROKER MARKETING FUNCTIONS Program Design and Specifications. Develop a risk-financing plan that includes a description of the proposed program structure, the desired terms and cost, a description of the desired services, and who’ll provide them. Be sure to prepare and present all insurance underwriting submissions to the insured for approval before you submit them to the markets. Marketing and Negotiation. Although marketing and placement of insurance is often taken for granted, establishing a plan can increase the likelihood of achieving the insured’s objectives. Having your insurance program successfully marketed and placed under the best terms is usually directly attributable to one or a few individuals in a brokerage who can get the best deals. Although it’s important to let them do their jobs, insist on certain milestone dates so you can deliver proposals with ample time to make informed decisions. IMPLEMENTING THE AGREEMENT The purpose of the broker service agreement is to identify the needed services and to make a commitment to provide them. The agreement doesn’t have to be complicated, but it does require some thought and effort. On existing business, and where a long-term relationship exists, there might be little if any urgency to finalize an agreement. You should set a target date to ensure that a hurried and inadequate agreement isn’t implemented. Key renewal dates often are good times to finalize such contracts, as they’re periods when the insured should already be focusing on risk management and insurance issues. Too often, insureds don’t know what to expect from their broker other than the placement of an insurance policy. A formal agreement documents the insured’s expectations, states the broker’s promise of service, and establishes a sound basis to determine the value of the relationship. Although these elements won’t be appropriate for all circumstances, they illustrate the extent to which such agreements can pave the way from which you and your insured can develop a service partnership. Gary W. Griffin, ARM, is principal consultant of Warren, McVeigh & Griffin, Inc., an independent risk management consulting firm based in Newport Beach, CA. He can be reached at (949) 752-1058, fax (949) 955-1929, e-mail griffco[email protected]etcom.com, or visit www.griffincom.com. ...

The Five Ways Agents Get Fired!
Independent agencies and brokerages are facing a growing threat to their middle market Commercial clients. These firms are being squeezed from below by the commodity sellers and from above by the resource providers. Previously, the competition for these larger accounts has been based mainly on price, coverage, and a single relationship. But now, the determining factors in the selection process have shifted with the awareness that price does not differentiate brokerage firms except in the commodity environment -- and this shift is having some dire consequences. Changing distribution systems have caused our clients to be more selective in the brokerage firms with whom they chose to do business. The expectations of these sophisticated clients have increased, as their perception of a firm's expertise has become the standard on which they base their decision of who to use. They have realized that in today's marketplace, price is readily available, and the insurance policy is a commodity. More and more, they're selecting brokerage firms based primarily on their ability to solve problems and provide resources. As competition for these middle-market accounts increases, the incumbent broker/agent is extremely vulnerable in several situations. However, this vulnerably doesn't generally center on their ability to provide the desired insurance policies or price. Instead, the competition is based on relationships and the perception that other venues might offer superior resources. Here are five classic examples of why agents can wind up getting fired in these situations. The purpose of this article is not to upset or depress you, but rather to help you know what to look out for and how to best protect yourself. Why Agents Get Fired! #1 - The New CFO Has it happened to you yet? You've just been introduced to the newly hired Chief Financial Officer of your largest account. In a flash, your previous relationship and all the personal loyalty it engendered are gone. There's no warmth, just the coldness of a new agenda -- an agenda that probably doesn't include you or your firm. Why should you be concerned when you've done a good job providing for the account and have the service record to demonstrate it? Here's why! The new CFO has a financial background. He or she judges the value of the service you've provided based on resource capabilities and quality information. This person has a higher level of expectations. In the event the new CFO came from one of the Big Five, he or she is accustomed to global capabilities and team service. The person might well have relationships with one of the major international brokers. Your record of competitive pricing and personal service won't mean much to him or her. Take these steps to protect yourself: Find out why the new CFO is there. In most cases, either the firm is in difficult financial straits or it's positioning itself to go public. If you know the reason for the new CFO, you can determine the agenda. Get the background of his/her prior job. In many cases, a new CFO brings in the same brokerage firm who assisted them in their prior position. You need this information to protect yourself from being blind-sided. Provide a Stewardship Report ASAP! You must demonstrate to the new CFO how important your role has been to the development of your client. Remember that this person has no history with you and might not be aware of all the things your organization has done for the client. Test the Relationship. You have a problem if your calls go unreturned, your lunch meetings are unaccepted, or your recommendations are ignored. The client is getting advice from somewhere. Don't be afraid to be fired! Sometimes you need to have a serious discussion with the new CFO regarding your position. If need be, look this person in the eyes and say, 'My sense is that you might be happier to be represented by another brokerage firm.' This might well begin a dialogue that will lead to a understanding. Why Agents Get Fired! #2 - The Initial Public Offering I recently spoke with an agent who told me that his firm 'just didn't get involved' with lPOs. 'They're just too messy,' he said. 'We let the other guys do those.' This kind of thinking is completely counter-productive and shortsighted. How can you be in the Commercial insurance business and not work on lPOs? Although public offerings used to be reserved for large organizations or high tech start-ups, today they're prevalent in all industries from construction to transportation. They're the new brass ring for owners of smaller businesses. Yet, many agents still don't see the bullet coming because they don't realize that the rules have changed. The initial public offering injects two new entities into the relationship, and agents who aren't prepared to accommodate these new entities will almost certainly lose the account. The two entities are investment bankers and the Securities and Exchange Commission. Investment bankers might either provide private placement capital or underwrite a public offering. In either event, they bring their own professional advisors into the transaction. One of these advisors is usually an insurance brokerage firm. Once the Securities and Exchange Commission is in the game, your client is playing by a new set of rules. The SEC mandates confidentiality requirements, statutory filing requirements, and accounting rules. Your client will need advisors who can provide counsel in these transactions. If you're not prepared to address these changing circumstances and needs and able to answer the concerns of the investment bankers and SEC, you will almost surely lose the account. So, when an IPO is in the wind, take these steps to protect yourself and preserve your account: Understand the Deal. With the signature of confidentiality agreements, professional advisors can obtain access to the private placement documents or preliminary information. This is critical, as they will outline the strategy and issues going forward. In some cases, you can obtain public information on the Web. However, it's usually too late if the information is public, since someone else acted as an advisor to reach that point. Know the Steps and Timeframes. There's usually some lead time between the decision to bring in the investment bankers and the action. This is the period for you to position yourself as the advisor. Then, when the investment banker is chosen, you will already be in place as the professional advisor and your position will be secure. Know the Investment Banker and the Board. The investment banker and the board members might have favored professional relationships. It's important that you know who they are. Otherwise you might be surprised and excluded. The more you know about a person's background, preferences, style, etc., the better your ability to fit yourself into their existing dynamic. Know the Other Current Professional Advisors. You're not the only professional advisor who's vulnerable. Other advisors such as the local banker, accountant, and attorney firm are also at risk. An alliance with these individuals can be to your benefit. Together you can present a united front with a comprehensive action plan that coordinates all the various needs and services. Get Help! Recognize the fact that you're no longer in an insurance transaction. Your long-term value lies in the ability to bring information and solve problems. Align yourself with industry experts who have worked in this arena before. Your major competition has these experts. You need them, too. Why Agents Get Fired! #3 - The Request for Proposal (RFP) Visualize for a moment the construction of an atom. There's the impenetrable material of the nucleus with a variety of particles circling around it, trying to get in. That's basically the picture of an RFP. The client and his/her advisors sit in the center, while brokers and agents all spin in orbit trying to figure out the key to success. This is a critical time in your relationship with your client. In most cases, the RFP process is a smokescreen from behind which your client intends to change brokers. What many agent/brokers don't realize is that the Request for Proposal is not really intended as an insurance transaction. Buyers know that anyone can obtain the insurance at the same competitive rates. What they're really judging is the expertise and resource capabilities of your firm. Often they've already been shown a standard of capabilities they desire elsewhere and are simply going through the motions of the RFP to justify moving their account. Here's my advice to anyone invited to compete in the RFP: Unless you created the opportunity, or are intimately familiar with the issues, walk away! You'll be part of the window dressing while the incumbent gets fired, and the firm who created the RFP gets hired. You'll expend time and energy pursuing a goal that's almost assuredly already out of your reach. So how does a firm successfully compete in an RFP? If you're the incumbent, don't let it begin. Stay on top of the issues and resource requirements of your client. This process takes place throughout the year, not just at renewal. Use stewardship reports as a way to demonstrate ongoing value. If you're not the incumbent, create the opportunity. By developing issues and demonstrating superior resource capabilities, firms put themselves in a dominant position. Creation of an RFP is merely the method in which the client anoints them. Understand the issues. Most RFPs occur because the incumbent agent has lost touch with the issues. These issues can be technical, resource, or relationship based. The successful participant must be fully versed on these issues and prepared to resolve them. Develop Spheres of Resource. Be prepared to reach outside your immediate organization for resources to assist your client/prospect. These resources will allow you to create the perception of adding value. In many cases, the perception of superior resources is what attracted the client in the first place. Learn Conceptual Presentation Techniques. In most cases RFPs require team presentations with visual and written materials. The ability to produce and deliver these effectively is critical to your success. These presentations are based on the creation and demonstration of ideas, not price. It will be too late to develop the needed skills once the RFP has been issued. Prepare now by learning presentation and material development skills. Why Agents Get Fired! #4 - The Acquisition or Merger An agent friend of mine received a call at 11:30 p.m. one Friday from his largest client telling him that he had just returned from signing the deal that sold his company. The client just couldn't sleep until he told his agent/friend about the sale. Guess who didn't sleep the remainder of that night! Although you might be happy for the success of your associate in a situation like this you'd be naïve not to worry. Usually these deals involve other multi-state or multinational firms and the acquiring firm has an established relationship with another broker. Someone must go, and the other broker is going to do everything possible to make certain it's you. So you have to do everything you can to make sure it's he: Become an advisor in the deal. Someone needs to perform due diligence on the risk-financing program. There are usually two appetites for risk, and the one program might not fit the other. What happens if one of the programs contains massive unfunded reserves in a cash flow program? What will the newly combined program look like on a pro-forma basis? Get the horsepower. Reach outside your immediate organization for the resources you need. In the case of a multi-state or multi-national merger you might need to form strategic alliances with other brokers in those locations. Be ethical. If you're the advisor in the deal, providing the due diligence, you'll need to place the client's interests above your own. It's quite possible that you might discover flaws in the program that could create problems inside the deal. You must disclose these at any cost, including your risk of being fired. Failure to do so will have significant consequences, as these flaws will eventually be discovered. Furthermore, though it might not always seem the case, ethics are valued and your willingness to do the right thing even at the risk of losing the account will make a highly positive statement about you. Why Agents Get Fired #5 - Depend on the Carrier or Product for Differentiation. Independent agents and brokers have traditionally relied on the product as a basis of differentiation. 'We represent XYZ Company', they say. 'XYZ has an excellent program for people in your industry.' Yet in most cases they're not the only firm who has access to XYZ. They haven't distinguished themselves, they've merely tied their fate to the commodity/product. Sophisticated buyers recognize that the product is readily available at virtually any price from numerous sources. They want and expect more from their agent/broker than simply the ability to place insurance. The insurance program is usually the last criterion of which agency/brokerage will represent them. Successful agents/brokers of the future will learn how to differentiate themselves -- first by demonstrating that the placement of insurance is just one of the tools they can provide to clients. They will learn how to be compensated on a fee basis, and provide value outside the insurance policy. It will be critical to be able to prosper without being tied to the commodity. Ways to do this include: 1. Learn 'Consultative Brokerage' Techniques. The ability to develop issue-based prospects, build relationships, introduce resources, institutionalize clients/prospects, and exercise broker control will differentiate successful agent/brokers from the competition. These consultative brokerage techniques allow an agent/broker of any size to create perceived value. 2. Learn How to Compete Conceptually. Conceptual competitions aren't based on the product, but how a firm intends to provide value to the client. This value is based on many things besides the insurance carrier or policy. 3. Institutionalize Your Franchise Accounts. Make certain your current major accounts are bulletproof before looking elsewhere for new business. Your largest accounts are probably targets for other brokers. They're an excellent way to practice and implement consultative brokerage techniques. 4. Master the Five Pathways to New Business. There are only five ways to create new revenue: Seminar selling, active prospecting, request for proposal, networking, and cross-selling. The firm that learns and masters these will control its marketplace. 5. Lead Change. Our industry is changing more rapidly than ever. New distribution systems are developing that are not dependent on traditional agents and brokers. For your organization to provide value in the future, you must establish a culture change that matches client expectations. CONCLUSION As competition intensifies for larger accounts, the successful agent/broker will learn how to match capabilities to buyers' expectations. Hopefully they will not experience the bitter lessons of Why Agents Get Fired!...