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to Articles list Insurance Agent Selection: Choosing Wisely Today Keeps You in Business Tomorrow By Tom Helbach Business owners and managers often spend more time picking out a putter than they do an insurance agent. Why are we willing to put our businesses and our personal affairs in the hands of those about whom we know so little? We're not that irresponsible or capricious in making other decisions. When buying a computer system, a building or a home we gather information and make comparisons. But when it comes to an insurance agent, we choose family members; agencies that advertise locally; or people we meet for five minutes at chamber of commerce meetings. We rely on "gut instincts" rather than facts. But making the wrong decision in the selection of a professional advisor can be disastrous. The lawyer who didn't follow through, the accountant who "missed a few things" and the insurance agent who didn't take the time to make a careful risk analysis are commonly seen prior to the demise of a business. When your business is on the line, having the right insurance advisor is vital. When you select your insurance agent, you need to be certain that person is the right professional for your business. To determine that, you should ask yourself these questions: 1. Does my agent know my business? Has your agent taken time to get acquainted with your operation? This is the critical question. The purpose of insurance exists to protect your business against losses that could put you out of business. You need to be confident that if a loss occurs today, you will be in business tomorrow. For this to happen, your insurance agent must have an intimate knowledge of your business. If your agent doesn't pass this test, look for one who does, or who is willing to learn. 2. Does my agent keep me informed? Do you only discover your insurance agent is still alive about 30 days before renewal time when you received your annual "friendly" call. Often an agent will wait as long as possible to deliver a renewal and leave no time for comparison-shopping. Not only should your agent give you ample time for comparison, he or she should point out issues that are pertinent to your business as they arise throughout the year so that you have time to think about the implications for your situation. If your agent isn't a constant source of helpful information, find one who understands the importance of briefing you. 3. Does my agent come forward with new ideas? Similar to other industries, in insurance there is a constant flow of new approaches and products, as well as innovative ways to cover risks. Your agent should be the one bringing you these ideas and not just at renewal time. The time to make a decision about changing coverages or adding new ones is not at the time of the presentation. Your agent should introduce new approaches during the year so you have time to review suggestions and discuss them outside of a selling situation. 4. Does my agent have the proper markets to service my account? Insurance carriers and brokerage firms, like any other retail "suppliers," specialize in certain areas/types of risk. Within these, they may be competitive, but their prices may be high for other types of risks. Like any other retailer, insurance agents are limited by the products or coverages that their suppliers/carriers offer. Also, carriers are now demanding higher volumes from agents and dropping those that don’t write enough business. This further limits the coverages some agents offer. Ask your agent about their markets. The ideal agent deals with enough carriers to match you with the right coverage and price. 5. Does my agent insure similar businesses? While it may be impossible for an agent to have a number of clients in every industry, it can be helpful if they have several in yours. The agent who writes three or four auto dealers, for example, has developed a working relationship with a particular carrier who has an appetite for car dealers. You benefit from this mutual understanding, particularly when it comes to pricing and claims. More agents are building niche blocks of business today; they want to build a name for working with contractors or optometrists and they take time to learn more about wholesalers and distributors. Finding an agent who understands your industry can be a plus. 6. Does my agent have adequate agency support? When you call for information, do you get it promptly or does someone say, "Someone will have to get back to you on that." At some point, an issue will arise that requires a professional to handle it correctly. The right agent for you invests in competent, experienced insurance specialists who deal on a daily basis with customers and carriers. If you're not confident in the people who are handling your account, look for another agent. 7. Does the agent offer references? Whether offered or not, references are essential. Ask the agent for a list of customers in your industry and then select several you want to contact. When you call them, try to get a sense of how well informed this person is about insurance. Ask why the customer selected the agent. Then use some of the questions in these guidelines to probe further as you attempt to determine the agent's competence. 8. Does my agent involve me in the discovery process? There is a tendency among some insurance agents to play down client involvement. They feel customers don't want to be bothered, don’t understand insurance, or see it only as an irritating cost that pays provides little or no benefit. But an objective of a competent agent should be educating clients on a continuing basis about the value of insurance to their business. If the agent approaches insurance from the viewpoint of business protection, the astute client will recognize the role insurance can play in protecting business assets. Finding the right insurance agency for a business can take time and effort, but the results are worth it. The return on your investment is the confidence of knowing that you will be in business tomorrow. * * * * * * * * * Tom Helbach is president of Mosinee Insurance, Inc. and is active in business insurance issues throughout Wisconsin. He is a director of the Independent Insurance Agents of Wisconsin; serves as chairman of InsurPac, the association’s state political action committee; and is a charter member of the National Society of Agents for Consumer Education. Mosinee Insurance, Inc. is located at 306 Water St., Mosinee, WI (phone: 715-693-2100; fax: 715-693-2538; Web: www.mosinee.com). Back to Articles list |
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