Do You RTFP?

I first heard about the above acronym when listening to Bill Wilson’s farewell webinar earlier this month.  For those of my readers who don’t know, Mr. Wilson was one of the founders of the IIABA’s Virtual University and has been largely responsible for its growth into one of the premier educational tools for independent insurance agents since its beginning around the turn of the century.  He is retiring from IIABA at the end of this year and for his last webinar, chose to speak about the six worst things to happen in the insurance industry during his almost 50 year involvement with it.  Mr Wilson has many interesting and thought provoking things to say about that and other subjects in his webinar, which lasts a little over an hour.  For those of you who don’t have the time for that, Mr. Wilson also wrote an article in the current IA Magazine that summarizes his thoughts about the main topic of his webinar.

The acronym RTFP recurs in many of Mr. Wilson’s observations as a cure for the bad things he sees happening in the insurance industry.  They range from the increasing belief that insurance is a commodity to the rise of disruptors who claim to have a better way to provide insurance to what he refers to as the “dumbing down” of the industry.  A response to these trends is to remind the consumer that what they are buying for their premium payment is not what appears on a TV ad or smart phone app, but what is contained in the language of the insurance policy itself.  With respect to the Farmer’s Insurance TV ad about dogs swimming in a flooded living room that was caused by a pet, Mr. Wilson made the point that after actually reading its basic homeowner’s policy, he could not find anything in the policy that would provide coverage for such an event.

By now, you have probably guessed what RTFP stands for, if you did not already know. Although it could be “Read the Fine Print”, that does not pertain specifically to the insurance industry.  The industry specific meaning is “Read the F***king Policy”, or for those who prefer a less vulgar interpretation, “Read the Freaking Policy.”  By doing so, both an agent and the consumer will realize that every insurance company’s policy is different in some way.  They may well find out that the policies of the so-called disruptors provide much less coverage than those of the established insurance companies.  What better way for an agent to convince a customer to buy a policy through him or her than to point that out and how that lack of coverage can come back to haunt the customer if the unexpected happens.

Discovering the differences in the coverage provided by both the policies that an agent sells and those of his or her competitors is at the heart of providing the “added value” that distinguishes the services of an independent insurance agent.  Providing all the coverage needed by a particular potential customer can only be done if the agent knows what coverages are provided by the policies offered by the companies he or she represents, which requires the agent to RTFP.  Being able to explain why such policies are better than those of a competitor or a disruptor also requires the agent to RTFP of those entities. (For those who would like a reminder of this essential fact, an agent in Missouri sells t-shirts with this logo here.)



Payment of Referral Fees – Is It Legal?

The above question continues to come up every so often in the Free Legal Service program that I run for the members of the Independent Insurance Agents of Georgia. There is no definitive answer to the question in either the Insurance Code of Georgia or the regulations or other pronouncements issued by the Georgia Insurance Commissioner’s Office.  However,  I have advised my clients for a long time that a very strong argument can be made that the payment of referral fees is permissible, as long as their payment is not conditioned on the purchase of an insurance product by the person or business who is the subject of the referral.

The basis for my argument is that the law most often cited in support of the position that the payment of referral fees is illegal is the prohibition on the sharing of commissions by an insurance agent with a person or entity that is not licensed by the Insurance Commissioner’s Office.  I agree that this prohibition would most likely make illegal the payment of a referral fee only for referrals that resulted in the sale of an insurance policy or other product.  In that situation, it is easy to see how the agent or agency could be said to be sharing the commissions earned for such a sale with the referral source.

However, if the referral fee is paid regardless of whether the person or business who is referred buys an insurance policy or other product from the agent or agency, to say that such an arrangement would be the sharing of commissions with an unlicensed person would mean that an agency could not pay its employees who are not licensed by the Insurance Commissioner’s Office for the services rendered to the agency.  This because the source of the compensation paid to those employees was the commissions received by the agency for the insurance policies and other products it sold to its customers.

Obviously, such an interpretation of the law would make it cost prohibitive, if not impossible, for many agencies to conduct their business activities.  The passage of an amendment to the anti-rebate law by this year’s General Assembly lends further support to my argument.  In a change that took effect on July 1, 2016, that law was amended to allow an insurance company or producer to give a customer or potential customer certain kinds of gifts as part of an “advertising” or “promotional” program, as long as the giving of such gifts was not conditioned on the purchase or renewal of an insurance policy by the recipient of the gift. (Click here for more details on this new law).

If an agent and presumably an agency can give a customer or potential customer a gift as long as it is not conditioned on the purchase or renewal of an insurance policy, there is no difference in giving a fee or other gift to a third party for referring a potential customer regardless of whether that potential customer buys an insurance policy.




Can An Agency Create a Duty to Its Customers Based on Its Website?

The short answer to the above questions is Yes.  I have written a few blog posts in the past on how an agency or agent can unknowingly create a duty to their customers or potential customers that would not otherwise exist by what they say or do.  The same principles discussed in those blog posts also apply to the contents of an agency’s website or social media communications.  The dilemma faced by agencies and agents who are trying to do what the marketing consultants say (to attract customers you need to differentiate yourself from your competition) while limiting their exposure to E&O claims is perfectly illustrated by two articles in the most recent edition of IIAG’s Dec Page magazine.

As fate would have it, those two articles “Errors & Omissions:  Is Your Agency Making Empty Promises on Its Website?” and “Creating a Lead Friendly Website” appear back to back in that magazine.  The first article cautions agencies and agents against making statements on their website that indicate they will do things they are not prepared to do or can’t do, e.g., “our agents will help you choose the amount of coverage that best fits your needs”, “we work hard to ensure that you are fully covered for all those risks that apply to you”, “we are your business partner”, or “we will obtain coverage to fully protect the financial stability and assets of our customers.”  According to the article’s author, the last two statements were important reasons that Swiss Re Corporate Solutions, which handles the E&O insurance program that is available to IIAG members, decided to settle claims of inadequate or inappropriate coverage made by customers of the agencies on whose websites those statements appeared.

In the next article, IIAG’s communications coordinator advises agencies and agents to use their websites to give potential customers “a real reason to choose you as their insurance provider.”  This will not happen unless your website stands out the most from your competitors’ websites.  To do so, it needs to reflect the agent’s or agency’s personality and relate to the customers they are trying to attract.  This is done by offering to do what those customers need done.  Thus, the website should be ” a reflection of your area of expertise and should speak directly to the needs of your target customers.”

However, in doing so, the agent and agency need to be mindful of making statements that can then be used against them by a dissatisfied customer.  If a claim of expertise with respect to a certain type of risk is made, that may well create a duty to use that expertise in recommending insurance coverages and their amounts for such a risk.  Stating that an agency will satisfy the specific needs of its customers may well impose a duty to do so, which duty could be very difficult to fulfill.

In deciding what to say in social media posts and on a website, agencies and agents should only make statements about what they can or will do that they can live up to and recognize that once such a statement is made, they will be expected to live up to it with every customer.  It would be a good idea for every agency and agent to review what’s on their social media posts and websites to make sure that they can do for every customer what those posts and their websites say they will do.

Is Blogging For You?

According to most of the commentary I see on what agents and agencies should be doing to better market themselves and the services they offer, creating and maintaining a blog for your website is almost mandatory.  That was the advice I received from the consultant I hired a few years ago to help me with the marketing of my law practice.  Like many people, I lacked confidence in my technical ability to create a blog and I wondered how I would be able to continually come up with topics of interest for those persons who I wanted to reach with my blog.

Almost four years later, this will be the 190th blog post I have written.  The creation of my blog proved to be the easy part.  There are many good programs available that make that step doable for anyone who can follow directions.  Believe me, if I could do it, most anyone can.

Continually coming up with topics to write about has proven to be far more difficult.  But, as noted in a recent article on Property Casualty 360, one way to do that is to focus on topics that will be of interest to the people you are trying to reach.  The author of that article discusses this and nine other tips for writing a successful insurance agency blog.

One of those other tips is not to focus your blog posts on the sale of insurance.  Instead, as suggested in an article in IA Magazine at the end of last year, your posts should aim to explain potential risks or other problems likely to be faced by your target audience and how insurance can be used to help mitigate those risks or solve those problems.  Such posts can then be followed by what this author and others refer to as “a call to action”, which asks your reader to do something that can give you their contact information for later marketing efforts. Click here for another article that provides more technical ideas on how to get such contract information by the use of blog posts.  That article was written for attorneys, but the suggestions made apply to any blog.

I have enjoyed writing posts for this blog and have received some compliments, as well as some business opportunities, as a result of things I have written.  The same thing can be true for any insurance agent or agency who is willing to devote the time and attention necessary to create and maintain a blog.  If the commentators are correct, having a blog will soon be an essential part of every agent and agency’s marketing plan, so now is as good a time as any to get started.





Social Media & Technology – More Tips

My post last week was about a presentation made by Steve Anderson on the use of social media by insurance agents and agencies.  Since then I have come across some articles on tips for making the most out of the time spent on social media that I would like to pass on to my readers.  But before doing so, Mr. Anderson’s presentation also touched on the topic of the use, or more appropriately, the lack of use of technology by agents and agencies to help streamline their business activities.  He mentioned that Best Practices agencies spend 1.9% of their annual budget on technology up from 1.5% a few years ago. In that same time period, the profitability of those Best Practices agencies has doubled.

One way that agencies can streamline their business activities is to increase the downloading of insurance policies and other documents from insurance companies.  The more such documents are downloaded the less time is spent handling and distributing them.  There is an online software program that allows an agency to see up to date information on those insurance companies from which they are currently downloading documents and those companies from which they could be downloading documents but are not.  The cost to use this program could be easily made up in greater efficiency through the increased downloading of documents from your agency’s companies.

Another technology mentioned by Mr. Anderson, which he said offers the largest productivity boost for an agency, is the ACORD eDocs system that allows insurance companies to send messages and documents directly to the agency’s management system, which in some cases can be programmed to automatically push those messages or documents to a portal for the affected customer.  If your agency does not use this system to communicate with its companies, it should look into doing so.

In planning how your agency will use social media and the other technology now available to it, Mr. Anderson made a comment about the three types of insurance customers that makes a lot of sense to me.  He said there are those customers who want to do it themselves, those who want the agent to do it with them, and those who want the agent to do it for them. Ideally, your agency should do what it takes to appeal to all three types of customers, but that may not be possible.  If not, decide what type of customer you want to focus on and then direct your social media and other marketing efforts to reaching them.

In a post earlier this year on the Employer Benefit Adviser site, the author suggested that you concentrate on only a few social media tools to avoid the feeling of being overwhelmed.  Mr. Anderson suggested Facebook and LinkedIn, the author choose LinkedIn and Twitter because he was already using them.  He also suggested that you share your own experience in your posts, not just repost content from other sources, and that everyone that you meet or have contact with in some other way be made a part of your social media world.  Above all, realize that it will take time and consistent effort to make the use of social media beneficial for your agency.

A later post on the Employee Benefit Adviser site offered more technical tips to make the best use of social media.  One such tip was to tag the people or companies that may be referred to in your posts, especially if you are saying something good about them.  By doing so, your posts may be visible to their followers and if what you said about them was favorable they are likely to share, like, or re-tweet your content, thereby exposing it to more people.

Social Media – A Plan of Action

A couple of weeks ago, I wrote a post about how what the Georgia Young Agents Committee was doing in marketing itself to current and potential new members could be applied to an insurance agency.  They are using social media, as well as other electronic delivery systems, to get their message out and tailor it to particular segments of their target audience.  The following weekend, I attended a conference at which a well-known speaker made a great presentation on how to use Facebook and LinkedIn to generate more business.

The speaker’s name was Steve Anderson.  His website has a great amount of information that would be of benefit to any insurance agent or agency.  I highly recommend subscribing to his TechTips newsletter.  It has given me some ideas on how better to use technology in my law practice.  His presentation at the conference was titled “Master Your Internet Presence: Learning to be Visible to the Digital Consumer” (click here for a copy of his presentation slides).

After talking about the trends that are enabling greater and greater use of the internet for business purposes and thus, requiring all businesses to develop a digital presence, he discussed some specifics about the use of Facebook and LinkedIn.  He considers it essential for insurance agencies to use both these forms of social media and to connect them with the agency’s website, which should be the hub for all an agency’s digital activities.  The idea is to use these and other social media tools to direct potential customers to specific landing pages on the agency’s website depending on the interests of those customers, so they don’t have to hunt through the website to find what they are looking for.

Facebook is especially important for reaching out to current and potential personal lines customers, as one of every two people in the United States has a Facebook page. Facebook offers over 200 different data points that can be used to target an agency’s message in the form of ads that provide information about the agency and lead interested customers back to a page on its website that is customized for such customers.  These data points enable an agency to find a lot of information about potential customers in its market area and then target its message to the customers it is interested in and no one else, unlike a newspaper or radio or TV ad or even a billboard.  The best part about these data points is that obtaining this information costs very little and in some cases, nothing. (Click here for an article that goes into detail about one way these data points can be used.)

There are 11 different types of Facebook ads and their cost is comparable to what an agency would pay for more traditional advertising and in some cases, much less.  As part of the cost of the ads, Facebook offers analytics that let an agency see which ads are working and which ones aren’t.  It is even possible to put a code on the agency’s website that will generate an ad in Facebook that goes only to the people who visit that part of the website.

LinkedIn is best used for current and potential commercial lines customers due to its more business oriented users.  Much of the same types of things that can be done to target ads on Facebook can also be done on LinkedIn, but it does not have as many data points to use for targeting ads and they cost more.  For those of my readers who are interested in learning more, Mr. Anderson has developed online courses that provide a step by step guide for the use of both Facebook and LinkedIn for maximum effectiveness. (Click here for three free video presentations about ads on Facebook).


What Georgia’s YAC Can Teach Georgia Agencies

I mentioned in my post right before Thanksgiving that the Independent Insurance Agents of Georgia’s Young Agents Committee (“YAC”) had won the 2015 Outstanding Communications Award given by the Independent Insurance Agents and Brokers of America (“IIABA”) “for achievement in establishing and maintaining an excellent communication vehicle for the young agents in their state.”  In that post, I failed to name the chair of YAC’s Communication Committee, who played a big part in overseeing the activities that led to YAC’s winning the award.  Her name was Emily Earp, which I learned when I listened to a webinar presented by IIABA a couple of weeks ago in which the Immediate Past Chair of YAC, Jarrett Bridges, explained what YAC did to win the award. (The webinar is supposed to be posted on IIABA’s website for Young Agents, but it hasn’t yet made it to that website.  When it does, it can be found here.)

As I listened to the webinar, which also included Jonathan Tease, who is the IIAG liaison for YAC as well as IIAG’s Digital Marketing Administrator, the thought struck me that what YAC was doing was marketing itself to young insurance agents in Georgia and giving them reasons why they should join the committee and take part in its events.  This is not much different from what an insurance agency wants to do in marketing itself to potential customers.  YAC’s coördinated use of newsletters, social media, e-mails, testimonial videos, direct mail, and even text messaging could be a marketing plan for any insurance agency.  In the case of YAC, it led to a 50% increase in attendance at its 2015 Sales and Leadership Conference and the largest attendance yet at that event.

This multi-channel approach to contacting and then staying in touch with its target market, young agents, was the same sort of approach that most commentators have recommended for some time for insurance agencies.  Georgia’s YAC has also taken the next step of segmenting its target market, so that it can send e-mails and other marketing materials that are customized for the interests of their recipients.  For example, it posts its newsletters and other publications online at its website and then sends e-mails with links to specific sections of those publications to the different segments of its target market.  Doing so, encourages those who may be interested in one subject to click through to the website to read about that subject, when they may not have taken the time to read through a complete newsletter that had been e-mailed to them.  It also gets those people to the website where they may find other things of interest.

The last piece is YAC’s ability to track the responses to their e-mails and other communications.  They know how many people open those communications and how many of those actually click on any links in them.  This information lets them know what topics are of greatest interest to the different segments of their target market and allows them to tweak their communication/marketing strategy to achieve greater effectiveness with those segments.

If Georgia’s YAC can do all the above with a volunteer run organization, there is no reason an insurance agency cannot do the same.   For help in getting started, those agencies who are members of IIAG may want to contact Jonathan Tease.