by Jan K. Allen
SBJ Contributing Writer
It's pretty much business as usual for local independent insurance agencies in the face of mass marketing of
insurance products by major companies and organizations nationwide.
"The big trend right now is for banks to buy out insurance companies," said Jerry Sparks, vice president of Man-Morris Insurors.
Sparks said he doesn't feel he has lost any substantial block of business because of the trend. Banks may have an "in" with their customer base, but it all depends on the people they have running it as to how much market share they will pull, he added.
Independent agents depend on loyalty from their customers, and that loyalty is predicated on good service by the agent, according to Charles Thomison, president of Thomison Insurors.
Independent agents rely heavily on reputation and referral business. Ad campaigns play a very small part in building a client base. The emphasis is on hands-on involvement by the agent on behalf of his client, Thomison added.
"If we do the job properly, we can rely on our customer base," Thomison said.
Marketing campaigns by national
entities are nothing new in the insurance business. Organizations like AARP have long used their membership lists to market insurance products.
The trend of bankers becoming brokers is a concern, but it hasn't had an impact yet, according to Darren Coffman, president of Benefits Unlimited Inc. "We don't fear their efforts," he said.
As far as national groups making insurance a mail-order business, people still like to sit down with their agent face to face and know they can depend on him, Coffman said.
Sometimes independents actually benefit from national ad campaigns, Coffman added. Many of the major insurance carriers do business with independent agencies.
Major carriers who garner leads from national ads usually refer the prospects to the local agencies with which they do business.
However, insurance companies merging with banks is another matter, Coffman said. The impact, if any, hasn't reached Springfield yet, but Coffman said he feels banks should stick to banking and insurance agents to selling insurance.
Man Morris' Sparks attributes part of the "merger mania" to insurance carriers pushing for more from agents. Where a million-dollar block of business might have satisfied them a few years ago, they want $2 million in sales now.
"Up to this point, we haven't seen any effect of the merger trend in Springfield," Thomison said.
However, if a bank like NationsBank would establish an insurance department, it might have a major impact in the future, he added.
Thomison indicated some of his insurance carriers have suggested he form an alliance with smaller banks to draw from the pool of business in their customer base and defuse the threat.
Lots of big companies are going to direct-mail, television and radio advertising to sell insurance products. The primary benefit from these sources is name recognition, Sparks said.
The problem is, it is hard to measure how much business is actually generated from these campaigns. It still boils down to trust and personal service, he stated.
Agents see the Internet as a viable marketing tool of the future, but it is hard to measure the current impact of this new marketplace, according to local agents.
Coffman said his company is working on a web site and plans to have a presence on the web by the middle of this
"It's the wave of the future," he said.
Benefits Unlimited Inc. will link its service to related sites and try to get the companies it represents to participate with information about their specific products.
Lead generation is the goal of the site rather than direct sales, he said.
"You have to adapt to change," Coffman said.
Basically, local independents see national advertising as a benefit rather than a detriment. It gets people to thinking about their insurance coverage.
"If my client sees something that raises a question in his mind, he usually calls me for the answer," Coffman said.
All three agents firmly believe that personal service and reputation are the keys to success for an independent agent. People will always look for personal service with their insurance needs, they said.
Fishing retail shop Modern Outdoor Tackle moved; Healthy Spot LLC opened; and Springfield law firm Strong, Garner & Bauer PC changed names and moved its office.