BGAs seek to expand distribution by selling direct, using call centers as 'laboratories' ( & more from NAILBA 34 )
Attending NAILBA 34 at the JW Marriott Orlando Grande Lakes last week, I noticed a recurring theme: General agencies increasingly looking to expand beyond traditional distribution by going direct with in-house agents and call centers.
It came up in discussions on the exhibit hall floor and at networking events, and was one of the more interesting common threads in a panel session during the meeting’s opening general session last Thursday.
“A lot of producers aren’t going to like that you’re in the direct marketing space, which is why you have to bring much more to the table,” said Ryan Pinney of Pinney Insurance Center (pictured at right), who was one of the four panelists. “We have a vastly underserved middle market, where less than 50% of the households don’t have insurance. We have a problem with distribution, and until we figure that out, we are in jeopardy.”
The “State of the Industry” panel discussion was facilitated by Gene Koster, DCG Corporation, and in addition to Pinney, also included Christi Daughenbaugh, Borden Hamman Insurance Marketing; Larry Herman, Herman Agency; and James Wong, Partners Advantage Insurance Services.
Each of the panelists was given the opportunity to talk about what’s happening within their agencies, and about successful initiatives they have undertaken. It stood out that two of the four – Pinney and Daughenbaugh, spoke at length about the need they see for general agencies to go direct to consumers – something that could potentially ruffle the feathers of traditional producers. But while both acknowledged that going direct could be seen as competing against their traditional distribution, to date it has not been a big issue for either of them. On the contrary, they say it actually can be beneficial to traditional distribution.
“We started looking at our direct marketing division more like a laboratory,” Pinney said, noting that in-house they can experiment with different scripts and processes, and what works gets pushed to traditional distribution.
“Because our call center is dealing with consumers every day, we are able to adjust our script and optimize it with language that is most effective. And we can share that script with our outside producers,” Pinney said.
Pinney said his agency currently has two call centers – one for agents and another for application fulfillment. He noted that getting the technology right has been one of the biggest challenges – but has also enabled them to generate more success. While he said it always takes longer and costs more than you think to build technological solutions, doing the time and resources to do so has “really helped us grow in the last five years.”
Christi Daughenbaugh of Borden Hamman Insurance Marketing says her agency is still currently in a state of transition, and the goal of that transition has been to increase their control over production. That has meant creating a call center with a handful of agents in-house.
“We need to be able to control about 50% of production. Going direct to consumer is a way to control that, in addition to working with financial advisors, wirehouses, and traditional distribution. It’s important to us to go direct to consumers. We are going to do it using agents in-house in a call center.”
She noted that creating a call center has been difficult, with challenges in training the in-house agents and how to provide them with leads. “That’s the secret sauce,” she said. She did echo Pinney’s viewpoint that having a call center and internally optimizing a script can be beneficial to their outside producers.
“We practice with consumers, and with what we learn, we can help our traditional producers,” Daughenbaugh said. “Most don’t look at it as competing with them.”
• Have some thoughts about BGAs expanding into the direct marketing channel? Please comment on this new thread: Trend of BGAs going direct?
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