In most offices, it’s easier to get a bone from a starving dog than it is to take a commercial account from an agency producer. That’s because the current producer is always the executive on a business account until he or she loses it, right?
Well, it’s been the unwritten rule since forever. But sometimes there are compelling reasons to shift an account from one agency producer to another, in order to keep it on the books. To help managers and principals deal with this thorny growth issue, this column highlights instances where you should seriously consider such drastic action. Producers who are reading this will see many situations where they’ll actually benefit by handing over the reins of an account to another person. After all, the reassignment is intended to be a winning move for the agents, the agency, the carrier, and of course, the insured.
Age. Over time, the children of an established agency account may take over its ownership or management. After a while, they may prefer to do business with an agent who is significantly younger than the current producer. That’s because most producers and clients are happiest when they work with others who are within five to 10 years of their own age. Consider reassigning a next generation account to a capable younger agent, if the age difference between a firm’s management and its present producer will cause you to lose the business. Caution: Before taking or implying any action, check with a lawyer to avoid accidentally discriminating due to age.
Personality conflicts. Some agents and insureds just don’t get along. Encourage producers to be on the look out for personality issues that may lead to lost business. A change in the firm’s management or ownership may result in a new insurance buyer that clashes with the existing producer. Or the conflict may have evolved over time. Either way, continually remind your producers of the main personality types of clients and prospects and how best to cope with them. The sales training industry abounds with this type of basic information. But also recognize that sometimes a personality conflict is too great to be papered over by an adjustment in your agent’s behavioral style. When this is the case, it’s time to transfer the insured to another producer, in order to save it for the agency.
CSR conflicts. On occasion, CSRs, or account assistants, may not get along with their equivalent staffers at a commercial account. This friction may cause problems in servicing the business. If you can’t change the CSR because of a close relationship with the producer, then reassign the file to an entirely new agent and CSR.
Too close a relationship. It’s usually great for business when producers and their top clients become good friends. However, problems can arise when an agent places this friendship above his responsibility to the office. So, be wary when friendly accounts start appearing in the 60 and 90-day columns of the agent’s Aged Accounts Receivable, when they never did before. Also, be concerned when friendly clients show up on your agent’s expense account, over and over again. If you see problems like this developing, warn the current producer that the account may have to be reassigned.
Producer is about to leave. Some agents are always looking to move their book to another agency for what they perceive to be a better deal. Or maybe they want to open their own office. When you are certain that an unhappy agent is about to leave your employ, contemplate a preemptive strike, before the accounts go out the door for good. Reassign the business you want to salvage to more loyal producers. But beforehand, make sure that the agency, not the producer, owns the business he handles, and that you have a restrictive employment agreement in place. Tip: It’s best to have every agent sign a non-piracy agreement or covenant not-to-compete as part of their initial employment package. Check with your state agent’s association and attorney for details. This special agreement can help to protect you in the event that an agent becomes an unhappy camper, at some point in the future.
Producer burnout. Burnout is common in high-pressure professions like ours. It may manifest itself as irritability or in a highly cynical viewpoint of the P/C industry. Moving a favorite account away from an agent with an attitude (after a serious warning or two) may be just the wake-up call he needs.
Dramatic growth in account size. It’s time to reassign an account when it grows too large to be capably managed by its current agent. Size matters. Many producers who focus on small-to-medium-sized businesses will appreciate this reassignment, when one of their commercial insureds grows beyond their professional ability and comfort level. When you discover the need to switch the file, shift the account to an agency producer or principal who thrives on dealing with larger firms.
Producer is too successful. There are only so many accounts that a single producer can handle. Accordingly, you should routinely monitor the size and number of accounts that your agent manages. Transfer his smallest accounts, those not allied to a larger enterprise, to a less occupied producer, or to your small business CSRs. This reassignment rewards the agent with the time to solicit larger, more profitable business.
Career evolution. Traditionally, an agent starts out selling personal or small commercial lines. Then once he gains experience, he focuses more of his attention on larger prospects and select target markets. When this transition point is reached, consider converting all of his personal lines and his tiniest commercial lines into house accounts. Allow them to be managed by your CSRs. Compensate the producer for this loss of business by temporarily increasing his new business commissions on larger commercial lines by enough to offset the transferred accounts. Then over a period of a few years, gradually lower the new business commission percentage back down to a point where it is still slightly above the pre-transfer level.
Too many dead files. Your agency has lost business for reasons other than price, even though, on the surface, it seems that price was the cause. The only way to find out the true motive is to resolicit the account. And the best way to do it is to redistribute the most desirable of your cancelled commercial lines to different agency producers. Don’t return them to the agent who originally lost the client. By presenting a fresh face to the business, you can dramatically improve your chances of bringing the former insured back into the fold.
Too many prospects in the pipeline. Some producers are better bird-doggers than they are closers. They have a real talent for identifying and gathering large quantities of quality prospects. When you have a producer like this, check out his prospect pipeline. If he’s collected far more prospects than he can actually solicit, reassign some of them to others in the office. This way, they’ll be actively solicited, instead of merely accumulated for “later follow-up.”
Conclusion. Ego is one of the most essential ingredients for a producer’s success. Yet, every now and then, it must be set aside for the good of the agency. Account reassignment is one such instance. It isn’t easy to ask a producer to step aside, so here are a few tips for handling this potentially awkward situation.
Meet privately with the producer of each at-risk account. Lay out your reasons why a change is necessary. Be clear about why the account is in jeopardy. Point out that once it’s gone, the agency won’t just lose the client, it’ll also miss out on upgrade sales, additional policies, and referrals. Reassure him that the loss won’t instantly affect his income. Let him share commissions with the newly assigned agent on a declining scale, or make other adjustments. Ask him to graciously introduce the new producer to his insured. And always give him time to voice his opinion. After all, he may change your mind!
Alan Shulman, CPCU, is the publisher of Agency Ideas, a subscription-only sales and marketing newsletter. He is also the author of the 1001 Agency Ideas book series and other popular P/C sales resources. He may be reached at (800) 724-1435 or by e-mail at: shulman@agencyideas.com. His Web site is www.agencyideas.com.
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