The Push To Get Referrals From Accountants And Attorneys

The problem with the referral programs of the life insurance companies is that only 17.1% of their producers consider them to be very useful (see Exhibit 3), while 82.9% say they are not very useful at all.

This is a significant finding for carriers. In spite of the investment in developing these programs, producers do not find them effective tools in the field.

There are many reasons for the lack of success so many producers have with the professional referral programs provided to them by the life insurance companies.

Some of these problems have to do with the nature of the programs themselves. In our examination of a variety of programs, we found many of them to be derivative of each other. That is, they advocate the same approaches and provide basically the same tools (although many have components that could be very helpful to a motivated producer).

Another problem we uncovered is that many of them take a one-size-fits-all approach, rather than customizing the program to the practice of the individual producer.

Not all the problems are with the program. Part of the problem has to with the producers themselves. In particular, we are referring to the tendency for a number of producers not to put in the requisite effort to make the program work for them. Garnering a steady stream of affluent client referrals from lawyers and accountants is hard work. There are producers who are not willing to put in the effort it takes, even when the tools are given to them.

In spite of the institutional and producer problems with formal programs, it is worth pointing out that some have great merit. Some are extremely effective in providing producers with tools and resources that are put to use and produce results.

Regardless of whether the problem is on the institutional side or the producer side, the situation still is the same. Many of the methods of prospecting–especially for wealthier clients–are becoming dramatically less effective. Producers and the life insurance companies they represent need to find more effective prospecting methods. Of these more effective methods, attorney and accountant referrals remain very promising.

Producers who want the wealthier clients of lawyers and accountants, therefore, need to evaluate how the various life insurance companies can support them in creating strong strategic relationships with these professionals.

It is not only their primary carriers that producers should look to. They should also consider capitalizing on all the relationships they have with financial institutions including brokerage operations, investment companies and other life insurance companies.

Russ Alan Prince, right, is principal of Prince & Associates, a research and consulting firm in Shelton, Conn. He can be reached via e-mail at [email protected]. Arthur Bavelas, left, is president and CEO of Resource Network LTD, Radnor, Pa. He can be reached at [email protected].

Reproduced from National Underwriter Edition, May 12, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.