Insurance brokerage firms have long served a critical function for independent agents, serving as the primary intermediary between the agent and the major carriers. Yet many agents have not always experienced the level of responsiveness they expect once they actually start working with a brokerage firm. Responsiveness is such a critical component that many agents will move to another brokerage house if calls are not returned or quotes are slow to come, despite the firm’s knowledge base and commissions.
“If I have a call in or email but I don’t get any response, I don’t know if anyone is working on it. As I have to get back to my client, that creates uncertainty on my part that I will be able to deliver on time,” says Scott Paine,CLU, of Paine Financial & Insurance Services. “I understand not everyone can do things right away. But I want to know someone has my request and will act on it as soon as they can. It has to be pretty expedient.”
Paine, who has worked with several brokerage firms over the course of his 36-year career, has left firms before, either when established relationships changed or when he felt he just wasn’t getting the responsiveness he desired. He recalls a situation where calls to a large brokerage firm went unreturned until the next week.
Mike Morgan, a licensed insurance agent and broker at Gene Morgan Insurance in Livermore, Calif. has had a similar experience with larger brokerage firms. His agency offers auto, home, life, business, health, farm and long-term care insurance, as well as annuities.
“You are just another caller to some brokerage houses, I find,” says Morgan. “When you call, you sometimes feel you are bothering them, but you’ve got a dilemma, an issue, and you need a quick response.”
In a highly competitive marketplace, the ability to win a customer’s business is often directly related to the speed with which an agent is able to return with a specific quote and policy that meets the client’s need. If too much time elapses, other agents or even online quoting services could swoop in and steal the deal. A quick, expert response enhances the reputation of the agent, creating trust and confidence that will be the foundation for future sales, as well.
“You want to get back to [the client] before they call somebody else, they give him another rate and he buys the policy somewhere else,” explains Morgan.
Interestingly, the role of technology has been both a blessing and a curse in this regard. Technology has facilitated online quoting for items like simple term insurance. But more complicated products like universal and whole life, as well as higher risk cases, still require picking up the phone and having a discussion with someone on the other end.
In the age of websites, voicemails and emails, there is still the need to have a hands-on, verbal give-and-take with agents to get them answers. The amount of time that is saved by simply being able to pick up a phone and get answers the moment they are needed — instead of two days later — saves crucial time, helps with the sale and ultimately makes the agent more profitable.
What’s in a brokerage firm?
Brokerage firms, also known as brokerage general agencies (BGAs), typically do business with 10–20 home offices, selected based on reputation and specialty. Others join with Independent Marketing Organizations (IMOs) that contract with an insurance company to perform distribution and other marketing functions for products.
Although brokerage firms today routinely handle online transactions for low-risk clients that require little or no communication, they often build their reputation on impaired risk underwriting. A brokerage firm working with an assortment of major life insurance carriers, for example, can often offer coverage to a person who, because of a medical condition, avocation or financial situation, is highly rated or declined by a broker’s primary carrier.
With the impaired risk segment of the life insurance business approaching 20 percent of total cases written, working with this market can be quite lucrative. Although it typically requires a little more work than low risk cases, the premiums — and by extension, the commission dollars — are significant.
This brings up the next point: case design. Does the brokerage help with recommendations on specific products, particularly for difficult-to-place cases? With a good brokerage, agents should be connected with an expert who knows the products and markets better than the agent, and is willing to do whatever it takes to get agents policies that can meet almost any need.
Some brokerages even have a dedicated team for their clients. Rather than calling a call center, an agent can build a relationship with one member of the brokerage team. With a relationship established, an agent then has someone to partner with to grow his or her business.
A brokerage firm that acts as a partner to agents has the unique ability to make a good assessment of the various companies’ underwriting actions, and to appraise a case in advance to determine what additional information, if any, will be required by the insurance company to assess the case. This may include additional medical examinations, blood studies, X-rays, or expansion of medical histories. In addition to selling policies, many brokerage firms provide support services, including taking online applications, tracking cases, providing immediate policy quotes and answering underwriting requirement questions. A significant part of the task is also keeping up to date with changes with the carriers, as well as newly enacted laws and regulations.
All of these services are part and parcel of going the extra mile for the agent. Consistency and good service go a long way toward making agents happy and increasing their own business. According to Scott Paine, “If you’re not raving about your relationship with your agency, maybe you should look around.”