In a recent discussion with one of our member agencies, we were reviewing the strengths, weaknesses, opportunities and threats the agency was facing. As we continued our discussion we realized that many of these factors were common to the entire industry and not just this agency located in a medium sized town in Ohio.
We figured out the book in that agency was similar to the demographics that made up the town…
The average age was nearing 60.
The number of residences was flat or declining.
There were no new businesses entering the area.
(That could be a simple summary of the agency’s production reports as well!)
We also established that this agency had significant market share of its local community, and it was viewed as “the place to go” for insurance stuff.
We analyzed what the average customer’s total revenue would look like based on the products and services that have traditionally been offered to them as a customer of the agency. The home and auto insurance and possibly the umbrella or floater coverage that would likely be a part of their insurance program. The average premium came in right around $3,000 producing an average renewal commission of $450.
Then we asked the question…What else?
What else would this group of people possibly need as they were navigating their 60s into their 70s?
Retirement transitions… how could we help?
Medical insurance needs… what could we do here?
Medicare decisions… what do they need in this situation?
This last area…Medicare…every 64-year-old has a required election that must be made related to how they will engage with the Medicare system. The federal, state and county governments provide different rules and programs that are offered to individuals around their 65th birthday.
Most seniors don’t realize that they have options between things like plain Medicare, Advantage Plans or Supplement Plans.
Some of these options are mutually exclusive if selected.
Some of these options can be free.
Most 64-year-olds are unaware that they have a limited window to make the election and that each county provides different pricing and programming on what will be offered in that county.
Now here’s where it all comes together.
These 64-year-olds are already a customer of the agency.
They already recognize the principal as a trusted advisor.
A new decision about insurance is required…who should be helping them with this?
We think their current insurance agent…YOU!
It’s not all that easy to jump into the Medicare space, but finding a good partner that has already met all the requirements for registration is a great way to get started. Being in the business and learning what is needed to do it successfully for your customers will come in time and provide the right level of insight to determine what will work best for your agency long term.
For our member, they moved quickly through the process and are registered Medicare advisors providing the maximum level of support to their existing customers in their 60s. What they have found is pretty astonishing. The average revenue generated from the conversation around Medicare is roughly equal to the revenue that is generated from the primary lines of insurance that these individuals already have with the agency.
The agency is DOUBLING the average revenue from every one of these customers!
Another interesting fact is what comes next in many cases with these individuals…the life insurance review or the annuity roll over or 401k transfer or the inheritance that needs to be invested.
I’m not suggesting that you try to be all things to every one of your customers, but when these conversations come up it’s great to know that your customers value your opinion and directing them to a strategic partner – inside your agency or an outside partner – to help them on these matters keeps the customer engaged with your agency.
Recapping, our member:
- Doubled the revenue coming from their customers.
- Reduced the competitive pressure from other agents to move the business.
- Created more potential sales by helping address a decision required of every 64 year old.
- Increased their visibility as a resource and the value of their brand in their community.
Sounds pretty good to me!
Let us know if you would like to speak with any of our members. All of them have volunteered to share their story and the best practices they use to be manage their agencies.
Thanks,
Ted Rusinoff
To learn more about our story, visit www.secured-advantage.com.
You can also email me back at ted.rusinoff@secured-advantage.com, or send a note to my partner Tim Buren at tim.buren@secured-advantage.com.