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June 09, 2014 at 12:41 PM
What kind of year are you having? At Zywave, we talk to hundreds of brokers each month, large and small, across the country. As a company, it allows us to see what is working, what is not, and what is propelling some to new levels. To verify the themes we see and even better understand the market, we recently conducted a survey of more than 900 brokers, both customers and noncustomers, and the results offered a lot of insight.
See also: Broker trends, an infographic
The changing market
One thing we’ve seen over the years working with insurance brokers is that the market is shifting. Simply delivering an insurance policy isn’t cutting it anymore; to differentiate and satisfy the needs of today’s clients, brokers need to offer more.
The survey bore that out, when asked what differentiates them:
- 74 percent of respondents said “our customers view us as trusted advisors rather than insurance salespersons”
- 64 percent said “consultative rather than product-focused sales process”
Of the consultative services benefits agencies are offering, more are moving to a fee-based pricing model. This is an area where the market is just starting to shift; we hear it in our conversations. A small percentage of brokers are fully comfortable charging fees, while most are either testing the waters, thinking about it, or not ready to take the plunge. Of those surveyed:
- 47 percent of respondents don’t charge any fees
- 35 percent charge fees less than 10 percent of the time
- 2 percent of brokers charge fees all the time
Some things stay the same
One area that hasn’t changed is how brokers get new business. Typically, when a broker is asked how they get new business, the standard answer is referrals – and the survey showed that. When asked their top strategies for acquiring new business, the overwhelming response was referrals, followed by cold calling and centers of influence.
The part I find interesting is that when asked if they have a formal referral program, 70 percent said they did not. If there is one takeaway from the survey that brokers should focus on, it is in this area. The top strategy for acquiring business at an agency doesn’t have a formal process around it. There’s nothing wrong with working off referrals, but it’s a much more potent strategy with an agency-wide process in place.
