Agency Revenue Tools

Nov 30
Rough Notes
John Maes

America's Oldest National Insurance Journal Published Since 1878

Persistency and profitability. Keep an account on the books and the agency makes more money. And while that seems like Business Accounting 101, actually making it happen is another matter. Worksite marketing is one way to get business on the books and keep it there.

Worksite marketing has been advanced to a new level by Agency Revenue Tools (ART) of Portland, Maine, say developers of its new product, Worksite Marketing Manager. Insurance products can now be delivered to policyholders in multiple corporations with the agency acting as the centralized billing slot for participating employers, says John McDonald, vice president of marketing for ART.

Enormous cross-selling opportunities exist in the worksite arena, he says. Prospective groups might already be part of an agency's current client base. Independent agents, who already write some 75% of commercial lines coverage nationally, can easily plug into their existing commercial accounts for setting up workplace-based sales of homeowners, auto, life/health, dental and long term care coverages, says Asa Pike, a veteran insurance agent in Fryeburg, Maine, who founded ART.

Through worksite selling, independent agents can also gain a stronger foothold in the $150 billion personal lines market, about two-thirds of which is currently controlled by direct writers, Pike says.

"There are a lot of people buying personal lines insurance and not always at the cheapest price," he says.

Or, a mostly personal lines agency can position itself for eventual bidding on the commercial lines business of the companies they line up for worksite marketing, McDonald says.

"There's a whole new revenue opportunity in existing relationships, using existing products."

Many independent agents may mistakenly believe that commercial lines accounts are where the profits are. Pike-Conway-Dahl Agency in Fryeburg, Maine, has found otherwise. For example, one corporate account yields some $7,000 in commission for commercial property/casualty coverages alone. But selling through the worksite to numerous of the company's 135 employees has brought in approximately $18,000 in additional commissions for personal lines coverages along with some $2,600 for life/health/disability coverages.

"You'll never sell to everyone but in this case, the potential commission is about $29,000 and we're getting about half of it," Pike explains.

In another case, the roughly $71,000 in personal lines and life/health commissions coming from a company's 600-employee group is only several thousand dollars less than commissions from the commercial lines account, says Pike.

"And we never have to fight for the personal lines business," he says.

With changing work/home lifestyles, people are spending more time in the workplace, from where they also often manage their personal financial affairs. Such a shift will cause workers to migrate to worksite insurance purchasing, says Pike. Ease and convenience are the major reasons.

Workers will like the idea of premium payment notices becoming a thing of the past and being replaced with payments by payroll deductions.

"Once employees are paying premiums via payroll deduction, they'll never want to do it any other way. They'll be hooked on it when they see they never get an insurance bill again."

Pike goes so far as to say the method will revolutionize insurance buying habits much the same way that pay-at-the-pump gas did a generation ago.

Employers will like the concept as well when they see the additional cost-free entree to their menu of employee benefits, as well as the competitive recruiting edge to be gained by having a more attractive benefit array with which to lure more talented personnel, Pike says.

Even though the agent will act as the central biller for premium payments, reduced administrative time can be expected using Worksite Marketing Manager, Pike says. The program is an advanced software application that coordinates billing information for the agency from multiple employers and insurance carriers. Employees are added and deleted by the agency as necessary while coverage changes are also noted for reporting to the employer every pay period. The agency provides the employer with a single bill for all participating personnel. The agency then sends an individual payment to each insurer.

The program is "calendar-driven," Pike says. When users enter the system, "the first thing they see is a calendar telling them what they need to do this week or this month" such as preparation of payment reports for individual employers.
ART provides the product as a Web-based application service provider (ASP) where ART houses the software and stores the data in a secure environment with daily backup of each database. Authorized users can reach their agency's database from anywhere they can access a PC, Pike explains.

The system's $2,500 price tag also includes a two-day training course designed by ART for an agency's sales and administrative representatives. According to McDonald, the training begins with discussion of the "global aspects" and potential benefits of worksite marketing.

"We teach these individuals to think big and to look at this as an opportunity to gather in prospects by the thousands."

The focus then switches to reviewing the individual agency operations, particularly its marketing and customer service protocols, McDonald continues.

"We've seen too many agencies invest in an initiative then fail to execute. That's why we've taken the personal trainer approach," he explains.

ART also conducts regular follow-up to make sure users stay on track. The participating agency is also charged a $350 monthly support fee.

Seattle-based Safeco has mounted a campaign to provide the ART training for about 100 independent agents who will use the worksite marketing approach to sell its personal lines and life products, according to Alice Cameron, marketing director. The agents will have been trained by the end of the year.

"It provides agents a very affordable way to market their core products to customer communities, and we think it makes a lot of sense for them to use the commercial relationships they have to cross-sell and write personal insurance for those communities," says Cameron.

"People's lives are centered more around their trip to and from work and they enjoy the convenience of managing their personal business from the workplace," according to Cameron. "When you look at making personal insurance available through payroll deduction, there is tremendous potential there."

Safeco has built a marketing program around Worksite Marketing Manager to support agents, she says. It includes customized collateral marketing materials trumpeting the benefits of workplace marketing for use in contacts with employers as well as promotional payroll stuffers for distribution to employees.

Having recently seen a group of its personnel complete ART training, Columbus, Ohio-based RHK Group is entering the worksite marketing marketplace, says owner Ron Mooney. He says personal lines, along with life/health/disability-related coverages will be offered. Putting a variety of coverages on the menu is important because employers will be more likely to sign on when a comprehensive package of coverages is available for their workers to choose from, he continues.

He particularly likes the Web-based nature of the ART product. RHK has actually been involved with worksite marketing for about five years, but previously the software was housed in the agency's computer system necessitating regular upgrades and restricting access to only one user at a time.

"Now the database is stored with ART and it can be accessed by multiple users, even by one of our people at the client's office," he says.

Stewart Sneed Hewes in Gulfport, Mississippi, has also just trained a personnel team in the ART technique. The agency will offer insurance to about 4,000 employees of its parent corporation, Bancorp South, says Scott Naugle, vice president of agency management.

"Then we'll go out to other, larger employers in about six months," he says.

The agency is hoping to increase its presence in employee benefits by offering life and disability coverages in companies "where we don't have an employee benefit relationship," Naugle said. "This will be something unique that can open the door for us."

The author John Maes is a Chicago-area freelance writer.

"Through worksite selling, independent agents can gain a stronger foothold in the $150 billion personal lines market, about two-thirds of which is currently controlled by direct writers."
-- Asa Pike, President, Agency Revenue Tools

Worksite Marketing Manager 2.0
Central to Agency Catalyst is Worksite Marketing Manager 2.0. This online system enables your agency to make multiple products from multiple insurance companies available to employees while requiring only one employer payroll slot.

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