Some might consider it ironic…some may think it magical. But bottom line, there is actually a strong connection between solid sales skills and E&O loss prevention.
In my E&O classes, I will commonly ask “how many ladies diamond rings are insured on a floater in the United States? I probably have asked that question 250 times and in over 99% of the time, the response is some number less than 25%. Why? The normal response is that customers think that they have adequate coverage under a homeowners policy. When is it best to advise customers that “mysterious disappearance” is not covered under a HO policy; before they have a loss or after? Something tells me that the conversation will probably go smoother before the claim as opposed to after it.
What’s the solution? If every agency wrote to all of their personal lines customers and educated them on the coverage differences, there is a good chance that some of those customers will actually buy a floater. The result – increased sales! If not one customer purchased the floater, has this been a waste of time? Not at all! The letter advising the customer of the coverage differences would certainly strengthen the agent’s defense if a problem were to develop down the road.
A recent insurance survey indicated that less than 50% of “renters” actually have the proper coverage, liability or property. It was noted that many of the “renters” believe that the landlord’s insurance covers their personal belongings. When it is best to educate them – before the claim or after it? With the average renter having approximately $30,000 of personal belongings, a fire could certainly be catastrophic for customers without the proper coverage in place. An agency that takes a proactive position in reaching out to this segment of the market could benefit from increased sales while minimizing the likelihood of their agency facing an E&O claim.
Another example: a building owner suffers a fire only to find out their building was not insured to the necessary limit to satisfy the co-insurance clause. As a result, they suffered a co-insurance penalty. Educating your customers on insurance to value and why market value and replacement cost can be worlds apart should result in the proper property limits being secured. The result, increased sales!
Actually the opportunities are endless. At your next staff meeting, ask your CSR’s and producers what types of questions they are being asked by customers, then develop an education campaign.
Be an agency that educates their customers. Maybe a slogan like "We will make sure you understand the coverage you have and what options are available". By educating the customers, you will be adding an important value to your agency prospects and customers which should no doubt result in new business sales and high retention.
Some popular ways to do educate customers:
– Annual account reviews
– Social Media postings
– Proposals that provide definitions of key insurance terms
– Every time that your agency interacts with that customer, look for cross selling opportunities.