Market Focus - Insurance Agents: Shine the Silver Lining
Imagine always being the bearer of bad news. Day in, day out, consistently reminding friendly clients that the worst is yet to come-accidents, floods, fires, even death. Insurance agents have it kind of rough.
Luckily, the nature of the beast means this sector is extremely open to products and services that make winning clients that much easier. Their wares might give new meaning to the term, "hard sell," but that doesn't mean their 9 to 5 has to be difficult, too.
Easy Does It
"Most agencies have at least basic accounting and client-management software, but they buy additional B-to-B software that helps their customers (families and businesses) manage risk," says Peter van Aartrijk, CEO and managing director for Springfield, Va.-based The van Aartrijk Group, a branding firm that specializes in financial services.
Though it might seem rather unbelievable in today's increasingly digital business environment, a major area of opportunity with insurance agents is Web site design and other Internet services. It's essential for client-agent communication. And, van Aartrijk frankly comments, "Agencies need help with their Web sites-design, hosting, content. Most of their sites are terrible right now."
The need for third-party Web consultants is especially strong in smaller agency environments. "Larger companies have IT departments just as in any larger company. And the smaller [independents] learn to be do-it-yourselfers, or they hire someone to build their Web sites and maintain their software," contends Turk Hassan, interactive department manager for Statlistics, a list management and brokerage firm in Danbury, Conn.
Similarly, on-the-go technology also plays an important role in client communication, and laptops and PDAs are vital for off-site agents. "They would respond well to VoIP (Voice over Internet Protocol) pitches, especially if the technology can be tailored to help the service staff handle customers from remote locations (e.g., the home), which is an increasing trend," van Aartrijk says.
On the brick-and-mortar side of the operation, there always is, of course, a demand for the standard fare that makes offices tick. "[Insurance agents] are excellent candidates for seminars, forms, labels, office supplies, corporate gifts, subscriptions to publications that would help them sell and stay on top of the goings-on of their industry including financial publications and newsletters," notes Hassan. He also adds that subscriber lists for major industry magazines, including Life Insurance Selling, National Underwriter Life & Health, National Underwriter Property & Casualty and American Agent & Broker, are excellent lists targeting insurance agents.
But once the staples are taken care of (literally and figuratively), there are still other avenues of opportunities within this niche. Van Aartrijk offers up a few:
- Automobiles. Considering agents often are on the road, car leases and related services are constantly in demand.
- Promotional products. Logoed items help keep an agent's name (or agency's branding) top-of-mind with clients. "These can run the gamut from cheap plastic pens all the way up to more expensive items," he says.
- Travel. Because agents have disposable income, offers for hotels, flights and the like can be marketed for both business and pleasure.
- Advisers. Accountants, lawyers and real-estate agents are necessary, especially for independent agencies that often reach out for third-party consulting.
Technology Trumps Tradition?
Though, as van Aartrijk mentions above, many agencies haven't yet cracked the Web code for their businesses, it's still a viable method for reaching the insurance community. Chris Luke, publisher of two insurance-industry B-to-B magazines, American Agent & Broker and The National Underwriter Property & Casualty (NUP), notes that each publication's Web site is extremely content-rich, with resources for time-crunched subscribers. "NUP focuses a lot of its resources on posting information on our Web site daily, sometimes hourly," he affirms, adding, "As for American Agent & Broker, again the Web is a strong vehicle for us to present compelling online products including podcasts, and special videos and exclusive Web content." Moreover, Luke says, 93 percent of American
Agent & Broker subscribers indicate they will conduct business over the Internet, so it's a strong vehicle for marketing promotions.
Van Aartrijk also has found this to be true. "They do read e-mail pitches, although mostly ones from insurance providers who are offering new products for them to sell," he says.
Yet, Hassan says, it's important to not let more traditional means go out the window in marketing to insurance agents-i.e., direct mail, phone pitches and good, old-fashioned face time. "Insurance agents are salespeople ... their comfort level is the phone and one-on-one meetings," he says.
Surveying the Landscape
Regardless of the medium, no message can get through if it's not hitting the right audience. "Smart direct marketers will know the differences among agencies ... so they can tailor pitches and find the right person, whether it be agency owners or salespersons (often one and the same in smaller firms) or service staff," van Aartrijk says.
The purchasing power for the market is considerable, yet Hassan is quick to note that, because income is largely commission-based, it can depend widely on numerous factors, including the economy and size of policy sold.
Van Aartrijk offers some numbers to chew on: "Small agencies might generate commission/fee revenue of $75,000 per person. Larger firms will be in the $200,000 range. Successful life insurance agents will be well past $150,000 a year."
Marketers looking to earn a piece of the pie will do well to pay attention to the industry's vastly segmented landscape. The industry comprises various subcategories, and each has its own way of responding to marketing efforts. "There are probably a couple million people on the insurance distribution side of the business. You have to look at it in segments, and they are run differently," van Aartrijk reports.
One of the greatest segments has to do with the type of product sold. Life and health agents deal with protection against the death of the insured, Hassan explains. The other category, property and casualty, is described thusly in the U.S. Department of Labor's Bureau of Labor Statistics "Career Guide to Industries," as "Insurance [that] protects against loss or damage to property resulting from hazards such as fire, theft and natural disasters." Notable companies dealing with this type of coverage include the industry standards-State Farm, Allstate and Nationwide, van Aartrijk contributes.
The insurance-agent sector can be further subdivided according to working situations, like if an agent is working for a firm or is an independent salesperson, says van Aartrijk. The "Career Guide to Industries" breaks it down similarly: "The insurance industry consists mainly of insurance carriers (or insurers) and insurance agencies and brokerages." Insurance carriers, such as the "big guys," provide insurance and assume policy-related risks, while independent agencies are free to sell policies from a variety of carriers, the report says. But the disparity between large and small is considerable. In describing his magazines' target audience, Luke says, "Both publications cater to Fortune 100 organizations, all the way down to family-run businesses."
Despite a wide range of outlets, however, one thing is fairly common across the board. "The ownership of these firms is still dominated by males, although females are increasing in ownership. Currently, I estimate 10 [percent] to 20 percent of firms are owned by females," van Aartrijk adds. When it comes to industry publication subscribers, Hassan finds the same holds true. "We would say that only 20 [percent] to 22 percent of the agents and brokers reading these publications are females," he reports.
A former Inside Direct Mail staffer, Christen Gruebel is currently senior editor at sister publication Promo Marketing. She can be reached at email@example.com.