According to Investopedia, the "Pareto Principle" states that for many events, roughly 80% of the effects come from 20% of the causes. Management consultant Joseph M. Juran suggested the principle and named it after Italian economist Vilfredo Pareto, who noted the 80/20 connection in 1896, showing that approximately 80% of the land in Italy was owned by 20% of the population. Fast forward to 2019, and we've all seen that rule play out in a variety of businesses and industries. In order to maximize opportunities with existing clients, then it stands to reason that insurance industry professionals should follow the 80/20 rule faithfully. But are there other things you can do to increase the book of business you have with your existing clients? |

Staying connected

Susan Toussaint, principal with Oceanus Partners, a ReSource Pro company located in St. Petersburg, Fla., says that "Staying connected to existing clients is critical, particularly the 20% of accounts that drive 80% of your revenue. These are the accounts that are most likely to be targeted by your competition." In addition, she notes, although retention rates in the industry hover around 87% to 92%, those numbers are drastically reduced when a new buyer in the client's company enters the picture. New buyers want to know: "Why should I continue to do business with you and your agency?" If you haven't been actively involved in helping your client identify and address newly emerging and escalating risks, they're likely to look for a new partner. "It's a proven fact that word of mouth is the best advertising," says Kitty Ambers, the chief growth officer for Aurora, Colo.-based Avyst, a provider of sales and risk management solutions. "Being intentional and proactive in contacting your current clients keeps you and your value top of mind." She explains that communications that help to educate about possible risks insureds' may face (cyber, for example), how coverages might apply to them (long term care, for instance), and how life and business changes should be communicated to their agent to ensure protection is in place (possibly adding a pool at home or a business location), can lead to helpful conversations that clients will mention to their friends and colleagues. Patrick Kelahan (also known as the "Insurance Elephant" on Twitter) makes sure to contact clients to let them know of changes that might affect them, for example, changes in staff or carriers being represented. "It sounds obvious, but it's important to let clients know that your address is changing," Kelahan notes. He also contacts clients to follow up on a question or a claim. Clients that are already aligned with a company — either with its products, services or deliverables — provide frequent opportunities to foster and strengthen relationships, observes Brian Rawlings, practice leader for fitness facilities, health clubs and spas coverage from Venture Programs, West Chester, Pa. "These deep relationships can then lead our clients to serve as ambassadors for our company," he explains. Depending on the depth and strength of the relationship, Rawlings generally looks to have touchpoints with key clients weekly, monthly or quarterly. He and his team use phone, email and personal visits to provide clients with updates on claims trends and risk management practices that are key to their industries. |

Timing is everything

As for how often you should get in touch with clients, there are no hard and fast rules, says Toussaint. She believes that the frequency of contact with your existing clients depends on the work that you're doing together to identify and mitigate risks. "We recommend the use of action plans that speak to the collaborative work to be done over the course of the year," she says. "Typically, larger accounts require more touches than smaller ones." Ambers finds that with current technology, there are many client contact strategies to consider. These might include automated, personalized messaging that's triggered by some type of event (buying a new car or having a baby, for example); regular monthly or quarterly educational newsletters; and seasonal promotions regarding inherent risks around the holidays, for example. "One of the best things I ever saw an agent do was a postcard with a smoke detector battery at daylight savings change time," Ambers notes. "All can have a positive impact on the valuable knowledge the independent agent brings. Keep in mind that any content can be repurposed on an 'FAQ' section or blog area on the agency's website for future use with electronic communications." The frequency of contact differs for each customer, but it should be at least once a year. "During a claim, that tempo picks up to an almost daily level of review and contact," Kelahan adds. |

Year-round process

Renewal season is probably the time of year when brokers have the most contact with their insureds, from renewal application requests to questions about the application, new operations the insured may have undertaken, and then negotiating the renewal. Too often, agents only connect with their clients at renewal, and that can put the relationship at risk. "Business owners make the mistake of thinking of insurance buying and risk management as an event instead of a process," notes Toussaint. She believes agents would be wise to work with clients throughout the year, not just at renewal. "This limits the risk of losing the account," she says, "and it ensures that the business is addressing issues before they present a significant risk." Tory Brownyard, president of the Brownyard Group, a program administrator based in Bayshore, N.Y., advises agents and brokers to keep in touch with the insured periodically over the year, so there are no surprises at renewal. "Check in every couple months to see how business is going," he suggests. "For example, if payrolls or exposures are up, you can help the insured avoid a large accounts payable at audit by making changes during the policy term. Also, check-in about new operations to make sure the insured has the proper coverage in place for new risks. Keeping a constant stream of contact with the insured helps build a more solid relationship." Ambers has found that, so often, the renewal date is the only thing that might trigger agents to proactively reach out to their customers. "By adding value throughout the year, agents can minimize the risk that their customer will entertain other quotes when their renewal notice or invoice shows up," she says. "Agents tend to have a pretty solid account review and renewal process for larger commercial accounts, but strategic decisions should be considered for all lines." You never know when an opportunity to provide more coverage will appear. Rawlings agrees that "Renewal is obviously a key time to work with the client — presenting us with a scheduled opportunity to get updates on their business and insurance needs." However, he looks to provide touchpoints throughout the lifecycle of the relationship based on each policyholder's unique situation. |

New products or coverages

Toussaint observes that risk assessments are an important but under-utilized tool that can inform the decision of which products, coverages and limits should be offered to an employer to protect their business, employees and ability to remain competitive. "Agencies that have built a pre-renewal questionnaire or client check-in into their processes are able to effectively recommend coverages that apply to changing situations," Ambers notes. She finds that another powerful tool can be reports run from the agency management system to identify potential coverage gaps or cross-selling and account rounding opportunities. These might include reports that show, for example: |

• Auto and home but no umbrella;
• Auto but no home or tenant policy; or
• Commercial liability but no employment practices liability or cyber coverage.

Marketing communications and client outreach strategies can then be created according to the various coverage types. "Often, it can be as simple as training the customer service agent to say something like, 'I see you have your home and auto insurance with us, but I don't see that we've ever discussed the benefits of an umbrella for you,'" Ambers explains. Rawlings believes that products and coverages should be tailored to meet the particular business needs of the client, which requires thoughtful and comprehensive individual assessments. "As consultative risk managers, we look at emerging trends within the industries we serve and offer relevant coverage to meet the changing marketplace, as well as educational risk mitigation support where appropriate," he adds. Brownyard finds that the primary time he hears from brokers with their security clients' concerns is when the insured is bidding on a new contract for its business. At that time, he says, they're seeking advice from the broker, so Brownyard asks whether a new type of work is acceptable and whether they have the proper coverage to bid on a contract. "This is a good time for us to help our brokers solidify their relationship with the client by counseling them on the contract being considered and whether it will affect the availability or cost of their insurance," Brownyard says. His team can also help brokers navigate the required coverage. "This is generally an opportunity for the broker to add lines, as many contract specifications call for additional coverage, such as higher limits of liability, employee dishonesty coverage or cyber liability coverage. |

A receptive ear?

Although clients need the advice and help that agents and brokers can provide, they may be resistant to listening to what many would consider just another sales pitch. How do you ensure that your clients are receptive when you propose revisions to their existing policies or new coverage? "When these initiatives are approached with the mentality of wanting to do the best job for the client based on their unique situation, vs. a high-pressure sales call, success rates seem to improve," observes Ambers. "Think of it as nurturing and educating your clients." Rawlings has found that his clients generally are receptive to frequent check-ins, though they vary in how often they want to hear from their insurer. "Not everyone wants you to personally visit with any frequency," he says, "but clients, in general, appreciate a gesture demonstrating that they are more than just a transaction." |

Agent and broker tips

When asked what advice she would give other agents and brokers, Toussaint recommends that they focus on the selection of right-fit clients. "The great benefit of being an agent is that you get to select your clients," she says. "If you spend time identifying the right-fit client for you and your agency, then focus on developing relationships with those prospects, you'll have a more rewarding career and profitable book of business." Brokers can grow their business by aligning themselves with a strong program manager in the field that they can lean on for advice, Brownyard says. "This helps brokers themselves become better versed in the field, and insureds will spread the word to others in their industry of their experience with that broker. Hence, the broker's business will grow." "Treat each client as if they are a valuable, key client of your firm, regardless of premium size or referral possibilities," Rawlings advises. "The fading art of genuine interpersonal interaction is still the most valuable sales tool." Kelahan believes it's important to know the customers' unique needs and do more listening than speaking on a call. "Always return calls, emails and texts," he says, "and always end the contact on a positive note." Make sure to leave your name and contact information. The client likely has your phone number, but make it easy for them to call you back without hunting up the number or email. If you're an independent agent: "Have multiple markets to shop, and present the client with three best options" during the quote, Kelahan adds. Ambers strongly recommends that agents and brokers create proactive communication strategies that address potential client needs and provide education on a regular basis. "Remember, agents who are purchasing leads or who have called on your clients previously are likely working the renewal lead aggressively. As the incumbent agent, you need to have 'face in the place' more frequently to reinforce your value." |

Thou shalt not …

Are there things not to do when trying to expand a book of business? "Don't allow a client to think they're not a valued partner or that they receive less consideration than any other," Rawlings says. "You never know when their business may grow or who they know!" Kelahan has strong feelings about one thing not to do: "Don't start into the business as a full-time venture. Begin on a part-time basis to build your skills, client base and knowledge." He also believes that many agents make the mistake of ending a claim inquiry with a sales pitch. The focus should be strictly on the claim, remembering that "customer needs come first." "Don't allow business owners and decision-makers to commoditize the insurance buying process with bidding and quoting," Toussaint stresses. "Agents must lead buyers to a more effective process that's focused on identifying risks and threats to the business. Bidding and quoting are ineffective, leaves the business at risk, and favors the incumbent agent. Don't do it!" See also: |

• Growth in 2019: Five common themes of successful independent insurance agents
• 5 more great habits to grow your insurance business
• 3 key strategies for growing your insurance agency