While many agents specializing in personal lines cite stability and customer retention as the reasons for their involvement with the line, most who are dedicated to selling personal lines auto and homeowners share one attribute: they like to help people, which is important in a poor economy.
“I love helping people,” said Celia Santana, CEO and president of Personal Risk Management Solutions, New York, who started in personal lines 17 years ago. “The fact that Personal Risk Management Solutions has a singular focus and passion for serving clients in this business really makes a difference in our service.” 
“Being successful in this business requires some type of involvement or connection with the community,” said Bruce C. Robins, president of Robins Insurance Agency Inc., Nashville, Tenn. “We work very hard to maintain persistency.”
These agents are not alone in their focus. Industry statistics show that more independent agencies have increased their personal lines sales over the past several years. According to the 2008 IIABA Agency Universe study, personal lines commissions remain the largest single source of agency revenue for 45 percent of its members’ average revenue, compared with 39 percent for commercial lines.
The study also indicates that agencies are representing more insurers for personal lines, with the average number of carriers for personal lines (excluding specialty lines) increasing to 6.2 per agency in 2007 compared with 5.4 average in 2006. The personal lines carrier/agency relationship has improved as well: Overall agency satisfaction with their personal lines carriers was 72 percent in 2008, compared with 65 percent in 2006.
Agents like selling personal lines in large part because of the stability it provides, especially during rough economic times. “Personal lines provides the consistent work flow and revenue through good times and bad that allows us to grow and plan for the long term future,” Robins said.
And because stability and consistency are key elements for successful personal lines sales, client satisfaction is a top priority for agencies specializing in personal lines. “Selling personal lines insurance is so important,” Santana said. “Hearing clients’ individual stories motivates our staff to deliver top-notch service.”
Because of the personal nature of the transaction, most agencies still rely on referrals and word of mouth in marketing their personal lines products and services. The AA&B reader survey shows that cross-selling from commercial lines and referrals from “trusted advisors” like real estate agents and others accounted for 72.2 percent and 71.8 percent of their marketing efforts, with only 28.8 percent using Internet marketing. However, most of the agencies we spoke with are in the beginning stages of incorporating social media and Internet marketing into their marketing techniques.
Although each agency has a different story to tell about their personal lines involvement, most have realized its importance over years of selling. Here are a few:
Tim Brenneman managing director,
Cook Hall & Hyde,
East Hampton, N.Y.
Cook Hall & Hyde, East Hampton, N.Y., is divided into 3 core businesses: commercial, personal and employee benefits. With 120 on staff and approaching $20 million in annual revenues, the agency has dedicated sales people in each department. Personal lines insurance sales comprise about 28 percent of the agency’s revenue. “This amount has remained fairly constant over the past 10 years,” said Tim Brenneman, managing director.
“Personal insurance has been a very stable business. We use our access to a multitude of markets as an advantage in selling and servicing our business,” he said.
Like many agencies and brokerages, Cook Hall relies on new client referrals from “trusted advisors” to build its personal lines business. “In terms of personal insurance marketing, our primary thrust is to develop key relationships with advisors and other centers of influence like wealth managers, financial planners, accountants, realtors, mortgage brokers and other professionals,” Brenneman said.
In addition, the agency maintains contact with its clients through the Internet. “A couple of our sales people have built their own blogs to enhance communication with clients and centers of influence,” Brenneman said, “but I do not think we can say they have brought in extra sales.”
Cook Hall & Hyde’s top carriers include Encompass, Chartis and Chubb. The relationship with each insurer is solid, which makes for more sales. “We have more than $2 million of volume with each carrier and generally try to get our key carriers to the $2 to $3 million premium range to maximize our relationship and ease of business,” Brenneman said. “At that level we are important to them and our sales and service team accesses each company enough to make business work better.”
Cook Hall focuses on homeowners, auto, home business, flood, watercraft and personal umbrella insurance. It also offers a personal insurance package that combines coverage for homes, automobiles, excess liability and boats under one policy. “We have an active cross selling and coverage upgrade program within our service team that generates an additional $1 million of premium each year,” Brenneman said.
Bruce C. Robins president,
Robins Insurance Agency Inc.,
Nashville, Tenn.
“When I started from scratch in 1976 I was a relative newcomer to Nashville, so writing personal lines and small commercial was all I could do,” said Bruce C. Robins, president. “Much of this new business came from real estate agents who I called on pretty aggressively.”
The agency began to develop while adding sales and support, which started growth for the company. Today, 45 percent of the agency’s $20 million in premium volume comes from personal lines sales. “This figure has not varied very much in our entire agency history of 33 years,” he said.
Robins explained that community involvement—including the Web—is essential in succeeding at personal lines sales. “Being successful in this business requires some type of involvement or connection with the community and social media plays very well into this objective,” he said. The agency uses Facebook to not only blast news to its “friends,” but agency producers also use Facebook as a prospect tool.
“As our agency has more than 10,000 policies in force, we work very hard to maintain a normal 89 percent persistency of renewals. This means we must write more than a thousand new policies per year just to stay even,” Robins said. To retain customers, the agency sends eblasts and CSR staff serve their assigned accounts.
Robins and his 23 employees are making a conscious effort to acquire new accounts by targeting families in their 20s through 40s. “As we continue to add a new generation of producers, we should be able to continue to capitalize on this excellent market,” he said. The agency’s philosophy is to build its relationships with its clients while they are young. Those in the 20 to 40 age group often include small families with children, people starting a business or opening a practice or those moving into management. “It’s the best time to build alliances,” Robins said. “As people get older, they are more set in their ways, families shrink as kids grow up, and business relationships tend to be more solidified.”
Jeff Cox
president,
Lloyd Bedford
Cox Inc.,
Bedford Hills, Conn.
Lloyd Bedford Cox Inc. (LBC) is a third-generation family agency that was founded in 1921. Approximately 10 years ago it began to carve out commercial lines and today is completely dedicated to selling and servicing high net worth personal insurance. “In specializing in the high net worth arena, our strategy was to only deal with the top carriers, primarily for claims reasons,” said Jeff Cox, president. 100 percent of LBC’s revenue comes from personal lines. Cox declined to reveal agency revenue figures.
LBC specializes in selling homeowners, auto, umbrella, watercraft and other personal lines insurance, focusing on providing value to clients by only dealing with carriers with the highest integrity. “We have found personal lines to be the most consistent of all lines of business,” Cox said. “This consistency allows us to run leaner than many competitors while still providing an exceptional level of service.”
Marketing plans for this agency revolve around referrals, existing clients and trusted advisors. “The market has been slow, especially in 2009,” Cox said. “A lot of clients and prospects have had their attention elsewhere, primarily due to turmoil in the financial markets. Toward the end of 2009 we had more clients doing complete reviews of their policies and acquired some larger accounts whose existing agents failed to complete adequate reviews for them.”
The agency is focused on long-term growth. “We market today for growth in 3 years, or 5 years, or 10 years,” he said. “We market by adhering to a higher standard of service than our competitors and as a result, clients refer friends and colleagues,” The agency plans to double its business every 5 years.
As for the economy’s effect on the company, Cox firmly believes that LBC is weathering the storm. “There aren’t a lot of homes closing right now and our company is doing complete reviews for clients. We are very equipped to handle the market,” he said.
About 80 percent of this agency’s clientele is serviced by Chubb. “Chubb’s service is fantastic,” Cox said. “Chubb’s service is largely provided on the merits of an account, not based solely upon rigid underwriting standards. If a client deserves an exception, they don’t hide behind the rule like most other carriers, they provide the exception.Chubb specializes in initial appraisal service that is done for every home on site.” Cox also believes that Chubb offers great service based on the ease and speed with which they issue policies and their settlement of claims.
Bob Loiselle
president,
Loiselle Insurance Agency,
Pawtucket, R.I.
“75 percent of our revenue comes from personal lines, which has been stable over the past several years,” said Bob Loiselle, president of Loiselle Insurance Agency, Pawtucket, R.I. Loiselle declined to reveal agency revenue figures. “No one client accounts for a large portion of our revenue which is why we have stability.”
Loiselle specializes in auto, homeowners and business insurance. Loiselle says that his agency has stable insurance carriers which offers the opportunity to meet a clients needs immediately. Offering this kind of service helps to maintain this level of personal lines sales.
Loiselle’s agency represents 20 insurance carriers including its top personal lines carriers: Safeco, Progressive and Travelers.
Marketing techniques include print media, direct mail, cable TV and the Internet. Loiselle says the Internet is becoming a major factor in marketing whereas print venues like the Yellow Pages are a diminishing factor.
Loiselle Insurance Agency has been serving consumers for 65 years. Loiselle believes that the agency’s future is very bright. “Once clients realize that we offer them choice of carriers, choice of coverage, advocacy, and personalized attention that is all a pretty tough combination for others to beat,” he said. Loiselle’s strategies for the future include “building a strong personalized agency that allows us to maintain profitability.” As for Loiselle’s 5-year plan, the agency is focusing on slow and steady growth and any potential acquisition.
Celia Santana
CEO/president,
Personal Risk Management Solutions,
New York
At PRMS, personal lines aren’t just a sideline; they’re the whole story, because high-net-worth personal lines business makes up 100 percent of the agency’s revenue. “Every single client is someone who is talking to us about their personal assets,” Santana said. “This is our agency’s focus and passion.” Santana declined to reveal agency revenue figures.
With Chubb, Ace and Chartis as its top carriers, PRMS’ close relationship with its companies results in clients receiving the best service the company can offer. “All our carriers are focused on high-end clients and delivering top-notch service,” Santana said. “This is what it’s all about. You want to work with a company that is going to offer fair hassle-free settlements.”
An example of this kind of service is when a client of PRMS suffered a fire at her home. “The home was a beach house that has been enjoyed by 3 generations in her family and so there’s a tremendous emotional connection to this home. They were devastated. We were able to help them get paid quickly and fairly by the insurance company [Chubb] and they were thrilled,” Santana said.
Along with the advantage of stability that selling personal lines offer, there are some challenges that come with this business. “Our biggest challenge is getting people to want to focus on their insurance,” Santana said. “Our clients would rather have a root canal than find the time to talk about their insurance.”
Another challenge that PRMS has faced is the effect from the economy. “Right now, because of the economy, people feel more vulnerable. If there is an opportunity to decrease expense, people are more motivated to do so,” Santana said. “Our revenues have not suffered because of the economy. In fact, we find that in today’s economy, more people are focused on making sure they have the right coverages at the right price.”
Additional questions on personal lines:
1. What do you find to be the best thing about writing personal lines? Answers included:
a. Loyalty of clients.
b. Saving clients money.
c. Stable revenue source.
d. Universally accepted by prospects.
e. Easy quoting.
f. Stability in an unstable economy.
g. Easier to cross/sell for combining coverages.
h. Less stress.
i. Providing a service to meet people's needs.
2. What is the most challenging aspect of writing personal lines? Answers included:
a. Competition within the industry.
b. Rate changes.
c. Customers only want to compare price, not coverage.
d. Time.
e. Expanding opportunity to quote more accounts.
f. The ever increasing requirements by companies and mortgage banks.
g. The high volume required because of low commissions.
h. Maintaining a profitable loss ratio with storms and attorneys.
i. Current economic climate, pricing and carriers taking rate increases.