From the thousands of agents and brokers Beyond Insurance has coached, we know that the enemy is not technology, it is the dominance of the insurance bid…a commodity force that must be removed as the focus of the customer experience. It must be replaced by the risk- management process—a consultative and diagnostic approach founded on risk evaluation and mitigation…strategies to protect a family and business properly with the goal of reducing claim frequency and severity.
Because the insurance bid has gained momentum as a primary means of valuing the success of agents, brokers, and carriers in the industry’s landscape, the perception of the industry has taken a direct hit. Insurance producers are tired and frustrated with competing in the “commodity trap”—the 90-day insurance bidding process. They are beginning to lose confidence in themselves because they are playing a game in which they have little impact on the outcome.
Commoditization is a battle insurance agents, brokers and carriers are confronting each day. It occurs when the consumer perceives little or no distinguishable difference between products, services, and resources—and when price has become the primary differentiator. To determine if your agency is affected by commoditization, ask yourself these questions:
- Are you losing your passion and purpose for the insurance business?
- Are you able to change the consumer’s perception of you?
- Are you angry and frustrated with the 90-day bidding process?
- When you introduce yourself as an insurance agent at a social event, do people treat you with dignity and respect? Are you perceived as a professional, trusted adviser, like a CPA, attorney, or physician, or do consumers perceive you as an order-taker?
- Is the insurance transaction, the 90-day bid, getting in the way of your ability to learn the customer’s business and its issues?
If you answered yes to these questions, start focusing on deeply engaging the client and building a lasting relationship. Develop emotional connections with your clients that transcend price and product. When you find your passion and begin to serve clients as a trusted risk strategist, you will climb out of the commodity trap and thrive.