I’ve always wanted to own an insurance agency – even as a child.

Maybe it was watching my best friend’s father grow his insurance agency that inspired me, or maybe it was building a book of business in the underwriting department at Chubb Insurance in my 20’s.

Either way, there was no doubt agency ownership held big opportunity.

Walking Away From Chubb Insurance

In 2009, I walked away from a career and a bright future at Chubb to found www.EffectiveCoverage.com (a program based e-agency serving the national renters insurance market).

In building the organization, I’ve learned why industry best practices are what they are. I’ve learned when to throw the best practices to the wind because “that’s the way we’ve always done it” is not an acceptable answer to the current generation of employees and customers.

The internet and I grew up hand in hand. I saw the internet change every single industry, whether the industry liked it or not. Having witnessed the rise, fall, and rebirth of several large internet companies, I realized that an insurance agency needs to be able to bend with the winds of change in order to succeed.

It was a foregone conclusion from the beginning of my time that Effective Coverage would transact all of its renters insurance business online.

For those agents looking to expand the products they sell online or even the relationships they’ve started online, here are nine things that we at Effective Coverage learned along the way that will smooth your path to success.

1) Being available is hard work.

The hours are long and arduous, and the work can be mind-numbing from time to time. When we started, we handled billing reports and cancellations manually. But the reality is that renters move on Saturday and Sunday. They move late at night. They move early in the morning. They need to be able to get renters insurance whenever they want it.

Perhaps your target market will not require the same type of hours, but you should always be prepared to answer the call and provide the solution.

See Also: Creating a Less Responsive Insurance Agency Is Unacceptable

2) Focus on the destination but be prepared to change the course.

Regardless of the distribution channel, it takes time to build the pipeline of prospects. By focusing on the destination, you’re giving your new business the opportunity to grow. On the other hand, be aware that focusing on the destination does not imply you have to stay the course.

We had a big problem when we started: we needed to write business. Direct mail wasn’t ideal, but it worked well enough to get our foot in the door of the market so that we could create the paradigm shift renters deserved.

Once you identify the destination, keep your head up so you can find the opportunities that will help you get there.

3) Doctors specialize. You should too.

The internet is a big place. The US Census Population said at the time of this writing that there are approximately 117,000,000 households in the U.S. That means there is one insurance agent for every two hundred sixty-four households in America.

Does that saturation mean that all insurance agents are doomed? Not at all. It does, however, mean that some will survive and some will starve. My experiences at both Chubb and Effective Coverage have shown me the best way to survive is to specialize.

At Effective Coverage, we are the renters insurance experts. We often find ourselves selling a homeowners policy, but the vast majority of what we do every day is renters insurance. Consumers know that, and we’ve built a reputation the expert in our narrow field.

Your speciality can be more narrow or more broad than that, but you have to have a specialty.

4) Partner with the right carriers.

This has been a major factor in our success, and I would bet many have failed when they started with the wrong insurance carriers. Every carrier has an appetite for a specific type of business.

Carriers want business that’s profitable within their particular underwriting models. The way to sell and maintain a reasonable loss ratio is to place the right type of business with the right carrier. That means knowing your carriers, as well as knowing your insureds.

See Also: Is Risk Avoidance Holding Your Agency Back?

5) You can’t do it alone, but that doesn’t mean you need employees on day one.

There was no way I could have hired an employee from the start. That doesn’t mean I did it alone. Even bootstrapping an e-agency, I certainly needed someone to proofread proposals before they went out to potential clients.

I was able to lean on people close to me to pitch in when necessary without making them feel taken advantage of, and that was an important distinction that allowed me to continue getting the perspectives and the support that I needed.

6) Don’t advertise your startup e-agency. Market it.

You can’t compete with the billion dollar ad budget of GEICO. Not today, not tomorrow, not ever.

That’s incredibly depressing until you realize that GEICO doesn’t market anything at all. Are they an insurance company or a pet store? No one knows, at least not by their advertising.

All their ad spend does is get their name out there in front of people. That’s just not enough anymore. It’s crucial that people understand what you do, why you’re the expert in your niche, and associate your name with that niche and that expertise.

You have a thousand opportunities a day to explain what you do, why you do it, and why you’re awesome at it. Use every one of them. Don’t allow yourself to be constrained by lack of an advertising budget. Get creative and use what you have. Don’t sit there and pity the money you can’t spend. Do it right, and you’ll be worrying about ad spend soon enough!

See Also: Why Customer Value Hasn’t Changed – Relationship Selling in the Digital World

7) Hustle

If you’re considering starting an e-agency, you’ve probably been in the business for some time. You probably already have a book of business, and there’s a chance it may not move with you.

That’s scary, and it’s important to confront that fear. It’s valid and reasonable, but how did you get that book in the first place? What did you do when you first started selling insurance? Did people just start buying policies overnight?

Of course not! It doesn’t work that way. You had to hustle then, and you have to hustle now. Build your reputation as an honest expert with market access, and you’ll go far. The only way to get there is to hustle.

8) Control your automation, lest it control you.

When Effective Coverage was founded, we barely had a website. We didn’t actually sell anything online, and we barely had an agency management system The software we needed did not exist.

We built the software for the back end to create a minimum viable product, and we kept adding features as clients requested them or as they became necessary to grow the business.

Developing your own agency management system might not be a viable or even a necessary decision today. Whatever you do, it’s crucial to be able to automate nearly every segment of the customer experience. Is there still a fax machine in the corner of your office, or are you using a fax to email solution?

Are you delivering renewal and policy update information via email and text? Are you sending applications for e-signature? These are just a few examples of things you can and should take advantage of.

Why Should You Listen To Some Guy From New Jersey?

I built a brand, a team, and an agency that insures thousands. You can’t just hang out a sign on Main Street and expect people to walk in the door and buy a policy simply because you exist. You have to build that brand, and you have to prove yourself to people in order to do that.

If I had missed even one of these lessons along the way, Effective Coverage wouldn’t be a national contender. If you want to be a winner, learn lessons from people who are winning right now.


Eric Narcisco

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