Notes on Selling Insurance
A few weeks ago, a new agent asked for advice and insights as they pursue his/her new career. The inquiry was on a online insurance forum. I did not respond feeling there were more than enough experts and pundits to answer the question.
After some thought, I believe I should have responded. I do have some insights in the "Science of Selling Insurance" that I want to codify. After forty plus years, I did develop a set of "Rules" that I found are truisms.
In my opinion, these rules are direct, humanistic and simple.
I have limited expectations as to whether this blog will even be read - but it might help a salesperson to be successful.
Rule #1. Insurance Companies make decisions by profit; not underwriting. If the executives think they can make a profit, they will do anything. I mean anything. This rule will explain a lot.
Rule #2. "Sell One Item a day." This simple rule helped a friend and protégé become a multi-millionaire. In practical terms, generate each day something that will generate a commission. Selling is a numbers game. Selling one endorsement, one extension of coverage or one policy every business day is 270 sources of commission. You will surprised how fast your book grows.
Rule #3. "You only rent the big ones." When an account's income to you exceeds $100,000, no matter how well you service and/or price the account, the odds are that you will lose the account within five years. Write large accounts and enjoy but don't act like it is your only account. A large account builds your reputation with carriers; are a great door opener with new clients; and source for networking and referrals. They are not annuities.
Rule #4. "Get them with price, keep them with service." A good CSR will make you rich. A great CSR will make you very rich.
Rule #5 Visit your accounts other than 3 months before renewal or when there is a problem your CSR cannot solve. Once a year visit makes you - Doctor Doom. You are not delivering good news ninety percent of the time.
Expect to be bid against - that is how you got the account. Ask the question to the client - are we going to bid this year. I always hated when a salesperson did not know if there was competition until after they delivered the renewal. ASK. As a matter of fact, encourage competitive quotes, but always on your terms. After two years of bidding, the client knows you are the best.
Rule #6. READ the insurance companies policies - all of them. THE UNDERWRITERS and CLAIMS ADJUSTERS DO NOT. This simple act will give you control of the underwriting process and save you problems with claims.
Read Business Insurance and other Journals (follow the discourses on On-line Insurance Forums).
Know how the back room of the Industry works. Particularly, reinsurance. I wrote "elephant accounts" because I knew what could and could not be done with reinsurance.
Rule #7. READ. It is that important to have been said twice. It is your career and income and too important to let others tell you what can or cannot be done for your client.
Read the manuals and rule books. A great deal of what an underwriter tells you is based upon leaning over to their supervisor and asking the supervisor. The supervisor answer is based upon a conversation had five years ago. Insurance rules and rating are actually straight forward and make sense. Knowing the correct answer will make you rich.
Rule #8. Your scariest and most dangerous competitor is the salesperson who has just received their license and is on "draw" from the first day of employment. To them, all that matters is the sale. Ignorance allows the luxury of being able to say anything to get the sale and mean it.
They will last a few years and never make the "big bucks". You want to make the big bucks. Learn to deal with them - they will take money out of your pocket.
Rule #9. "Ask for the order - ask early and often." The error I saw constantly was asking "what will it take to get an order" at the end of the process when all is lost. Ask at the first meeting. You are going to ask eventually, why wait. Do it when it will help to make the sale - not when you are giving away commissions.
The "presumptive close" is very difficult. Very few are talented enough.
Rule #10. Most Important. ".A duck is a duck is a duck" A great salesperson does not waste time. Do not rationalize. No matter how much you wish, the account you quoted three years in a row or has four other agents quoting is a "duck".
Rule #11. ALWAYS take a tour of the prospect's and client's business. I have taken tours of one room office. I will guarantee a tour will increase your close ratio by 40%. You stop being an insurance salesperson. You become an advisor.
As a corollary, if the prospect will not give you the tour and wants only a quote, walk away.
Rule #12. "You are talented, skillful consultant and advisor, you deserve to be paid well." Walk away from a Prospect or Client does not respect you.
Rule #13. Go to local/state Insurance Industry events. Get to know your competitors. Get to know a wholesale broker. A wholesale broker is a great source of information and industry/agencies gossip.
As much as wholesale brokers can be helpful - Remember it is your E&O.
Rule #14. THERE IS NO MAGIC TO INSURANCE. Insurance is hard work. Most agents show up with their proposal and act as if they performed a miracle to get this together. All the client thinks is that the insurance company is taking him for a ride and the agent is robbing him with his commission. Educate the client/prospect on what is happening and why. If the client/prospect only wants "magic", find another client/prospect. And yes, I did resign from clients.
