Several decades ago, the “industry experts” determined that writing personal lines and small commercial lines was insignificant from a profit standpoint, expensive to both write and maintain and should be discarded in favor of focused or targeted marketing to specialty or larger commercial accounts.
Some agencies actually sold off their personal and small commercial accounts and wondered why, a few years later, they were struggling to write new accounts of any size. The problem is that your customer “needs” many forms of asset protection and many of your competitors have the facility (and specialists) to help the client with any form of coverage they need. Then, when one agency becomes a commercial specialist or a L&H specialist or a PL specialist, he finds himself at a disadvantage when the customer asks advice about other lines of business for which he needs protection. When you admit that you don’t have the markets or expertise to help the customer, he must wonder why you represent yourself as an insurance expert but limit yourself to only a segment of his asset protection needs.
Unless you can find many other agents who are willing to refer clients to you for your specialty line of business, we can’t be like the specialist in the medical field who have that exact situation feeding him clients who need the specific specialty in which the doctor operates.
Happily, our Agency Consulting Group, Inc. clients were always concentrated on writing all lines that were needed by their clients to properly protect their insurable assets, personal, commercial, lives, and health for the clients, for their families, for their employees, and, in some cases, for the customers of the clients to whom our agents were referred.
Our standards for agents have always been high and strong – WE DON’T SELL INSURANCE – WE PROTECT OUR CLIENTS. If that’s the concentration of our producers and our service staff with every call, every meeting and every contact we will never go wrong.
Will we write every prospect? Of course not! We should not be interested in writing insurance simply because we happened to present the lowest rate (this year). Our goal has always been to find the customers who are truly concerned that they and their families are properly protected, provide them with sound advice including an analysis of their exposures and the benefits and drawbacks to their current insurance programs, and alternatives, where appropriate, that will give them better protection at reasonable costs.
So please resist the temptation to over-analyze your lines of business and profit centers with an eye on paring down your organization to maximize profits. Instead, analyze every profit center in your organization with the intent to make every one of them more profitable than break-even and to maximize efficiency, effectiveness, and profitability of every department through procedural changes, better training, and effective use of automation. These seemingly mundane management tools will give you the best opportunity of changing the work efforts of your staff to reduce redundant handling of transactions (usually the biggest culprit of inefficiency). If you need help, call Al Diamond (800 779 2430) and we’ll conduct a GPP (Growth, Productivity, Profitability) Analysis with recommendations to enhance short and long-term profitability of each of your profit centers.
Every department, office or profit center must stand on its own and either break even or earn a profit for the agency.
I’VE NEVER SEEN A BUSINESS SHRINK TO GREATNESS, HAVE YOU??
—- Al Diamond