The personal lines insurance landscape continues to change each year becoming more and more commoditized, with consumers being able to purchase policies directly online, sacrificing coverages to save money, and carriers driving premiums down to be competitive. As such, having a diverse product mix in your agency will not only allow you to compete more often, but it will also insulate your agency from the threat of dwindling margins on personal lines products.
One avenue to round out your client portfolio, expand your market reach and overcome these challenges in your agency is to introduce commercial insurance into your practice. Statistics have shown that commercial lines customers, particularly small business owners, have a higher retention rate with their agents when they know their business is being properly protected and are less likely to "shop" on price. Higher retention rates not only lead to more account rounding opportunities, but a more profitable book of business.
There are over seven million small businesses in the U.S., as of 2020, ranging from restaurants, dental offices, construction firms, to home-based businesses and more. Statistically, three out of every four U.S. companies don’t have adequate insurance, and 40% of small businesses carry no insurance whatsoever according to a report by Insureon. Many business owners in the U.S. seem to think that if insurance isn’t required by law, then they do not need to have it, which couldn’t be further from the truth. Commercial insurance is a critical element to protecting a business’ assets and shielding them from liability. Without the right insurance coverage, the future viability of a business could be wiped out by disaster or a lawsuit.
With that being said, there is a lot of opportunity for commercial line agents to prospect and convert those uninsured businesses and business owners. To an inexperienced insurance agent, commercial lines insurance can seem complex and intimidating at first. Most all commercial lines agents starting out have felt this way. It’s important to have the right commercial lines training to be successful offering and selling commercial insurance. It is also common for commercial lines insurance agents to have a niche or specific industry of focus to help them become experts in those areas.
For example, the insurance policy a hotel and resort company purchases are very different from the type of policy a trucking manufacturer buys. All businesses face different risks – whether a client is in real estate management, manufacturing, or oil refining. Getting additional training on commercial lines insurance, or even getting a commercial lines designation is recommended.
There are a lot of moving parts in commercial lines from understanding commercial coverages to understanding carrier appetites. Additional training on the wide array of commercial coverages and being able to understand them is key for being able to offer a product that properly protects a commercial customer's assets and properly mitigates their risk exposure. Carrier training is also key in being able to understand each carrier's diverse appetite and the specific products each carrier offers in their respective markets. What works with one carrier might not work with another and vice versa.
Agent’s that are a part of our alliance at Pacific Crest Services are all trained on commercial lines insurance and go through our commercial lines university. Equally important as being trained in commercial insurance our agents feel confident offering it to their clients. Our agents see a 40% increase in their agencies commercial production after completing Pacific Crest Commercial University.
Pacific Crest Commercial University courses include a live webinar instruction, practical assignments, and one-on-one coaching on how to market, sell and service commercial policies through a 12-week course. Our agents are assigned an experienced mentor to guide them through the sales process and assist with understanding commercial products. A sampling of the course outline follows although not inclusive of specialty commercial training:
Introduction to Commercial Lines
Business Owners Policy
Commercial Auto
Commercial Packages
Commercial Service
Workers Compensation
Employment Practices Liability Insurance
We also cover commercial marketing strategies, quoting commercial policies, carrier appetites, food service, and more.
Interested in expanding your agency’s product offering or pursuing a partnership that is focused on your growth and success? We can help. To learn more about how to start an independent insurance agency, visit our website at www.pacificcrestservices.com or contact us at 888-938-4197.
Article Written by Heather Orchard, Marketing Specialist
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