Distributors use product knowledge and industry expertise
to penetrate the insurance niche.
Over the years, distributors have been attracted to the insurance industry's lucrative document management opportunities. In addition to utilizing large volumes of business forms and other printed products, insurance companies demand workflow management, warehousing and fulfillment services. Despite the potential profits, however, some distributors have shied away from this market, citing industry consolidation, reduced spending and increased competition as causes for concern.
FORM spoke with two distributors who say success in the insurance niche depends on strong customer relationships and an ability to offer time- and cost-saving ideas. They share the following tips for penetrating the market:
- Stay abreast of trends. While some distributors are discouraged by the insurance industry's declining demand for traditional products, Don Beiger, CFC, takes it all in stride. "You're seeing some products going away or becoming more simple and less profitable," says the owner of Marathon Information Management Systems, a distributorship in Stockton, N.J. "But on the other hand, [insurance companies are] doing more mailing. They're more aggressive in looking for new customers. I think it all balances out."
"I read everything that comes across my desk. I want to be able to provide what my customers ask for, and I like to tell them about new applications before
someone else does."
Don Beiger, CFC
Owner
Marathon Information
Management Systems,
Stockton, N.J. |
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Beiger says opportunities are available to distributors willing to learn about commercial printing and security documents. "I read everything that comes across my desk, [from trade magazines to] newsletters," he says. "I want to be able to provide what my customers ask for, and I like to tell them about new applications before someone else does."
Many insurance companies are interested in ad specialties, Beiger says. "They're looking to attract customers [and] employees," he says. "They're going to trade shows and doing a lot of giveaways." Beiger has provided a wide range of ad specialties, including magnets, letter openers, apparel, coloring books, bags, foam-insulated mugs, sewing kits, mouse pads, pencils, safety banners and beach towels.
- Increase your marketing savvy. In response to the stiff competition for customers, many insurance companies are increasing their marketing budgets. That's good news for distributors such as Mark Doerr, account executive at Dynamic Design & Systems in Chagrin Falls, Ohio. "With the insurance industry, it's all about repetition and image," he says. "Progressive Casualty Insurance Company is very good at that with their billboards and constant radio and TV spots."
Doerr helps his small and medium-sized insurance clients emulate Progressive by providing them with memorable 4-color pieces and quality ad specialty items. He recently provided one of his clients with a custom-designed policy packet that included a plastic 4-color process claims card and an auto policy booklet. The packet, which is about the size of a #10 envelope, is mailed to the insurance company's new clients. It's designed to fit in the glove compartment of the policy holder's car, making it easily accessible in the event of an accident.
"I know they are in an extremely competitive environment, so I try to think for them," Doerr says. "You have to act like you're within their marketing division. What is an economical way to assist them in getting their name out there?"
- Target key products. "[Distributors] need to be aware of what [each] product represents to an insurance company," says Beiger. "I had an executive from [my largest insurance account] tell me, 'Our business is billing and paying claims, so if we have a problem [with either of those], we're out of business.'"
Beiger provides his client with laser cut sheet checks that include void pantographs and control numbers. "It's an important item for the company, and it's a valuable product for me," Beiger says. "It gives me visibility in the account. If I can say to different departments, 'I produce your checks,' it gives me some credibility."
- Become service-minded. It didn't take long for Doerr to learn that in the insurance industry, service talks. His first large client was an insurance company with branch offices across Ohio. The company was growing so quickly that it couldn't keep track of all the printed products its employees required. Many of the branch offices were ordering business cards and letterhead on their own. "The company had a headquarters here in Cleveland that was giving them the nuts and bolts of what they needed, but their logo was looking different on different material," Doerr says. "I could sense that they were completely disorganized as a result of their rapid growth, [so I suggested] that we assist with inventory. I think that was the key that got me into the account."
For the past four years, Doerr has been visiting the company every other week to monitor its on-site inventory. In addition, his distributorship warehouses the client's envelopes, letterhead and business forms free of charge. "We tried to establish ourselves [as partners], and it has allowed us to become entrenched in this company," he says.
- Get used to constant change. It's common for distributors to receive frantic phone calls from insurance agencies demanding rush deliveries. Insurance companies can't afford to wait long for printed documents. Without proper forms, business can't move forward. "Last year, we had some insurance reform in [New Jersey], and [we had to do] a lot of last-minute printing, revisions and mailing," Beiger recalls. "My job was to provide the timely delivery of products when these changes came about."
- Learn more about mailing. Medium-sized insurance agencies are great prospects for mailing services. Companies with in-house mailing operations often spend a lot of money to lease mailing equipment and staff their mail rooms. Many welcome assistance from knowledgeable service providers.
"There are some very specific rules in the insurance industry about mailing that [cause] a lot of anxiety," Doerr says. For example, cancellation notices have to be mailed on specific days. If a company's mailing equipment brakes, and 3,000 cancellation notices aren't mailed, the company could lose thousands of dollars, Doerr says. One of the 3,000 intended recipients may have an accident, and the insurance company would be required to pay for it, even though the policy had been cancelled.
Before you begin taking over insurance company mail rooms, it's important to learn as much as possible about postal requirements, Doerr says. "Mailing takes a definite level of education," he says. "I've taken some coursework through the United States Postal Service because it's complicated."
- Propose cost-saving ideas. Insurance companies are always looking for ways to save money, and distributors say printing costs are usually among the first to be reduced. "It seems like the accounts we're working with don't have as much expendable money as they did a few years ago," Doerr says. "They're coming back to us and saying, 'What can we do to make this product less expensive?'" Doerr often urges cost-conscious clients to print on less expensive materials such as lower-grade papers and plastic cards. He also tries to negotiate discounts with his manufacturing vendors, and urges clients to order three to six months in advance so they receive quantity discounts.
- Develop lasting relationships. Getting to know your clients may take effort, but the benefits gained from those relationships are invaluable. Doerr makes time to visit customers on a regular basis. "Rather than just shipping them things and being somebody they call on the phone, I try to get in front of my clients as much as possible," he says. "I've found 50 percent of the time, when I hand-deliver a job, and we start chatting, [clients ask], 'Do you print these?' or, 'Can we look at these?'" Even if his drop-off lasts two minutes, and he doesn't get a chance to chat, Doerr says hand-deliveries help customers associate his face with their printed products.
Stacey Hawkins is assistant managing editor of FORM Magazine. Email her your comments at shawkins@dmia.org.
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Click Here for Market Research
Use the following Web sites to locate prospects and learn more about the insurance niche:
www.ambest.com The A.M. Best Company's Web site offers market research that covers all aspects of the insurance industry. It features news; press releases; an insurance company ratings search; and links to its three insurance publications, BestReview, BestWeek and BestWire.
www.UltimateInsurancelinks.com This site features links to insurance carriers nationwide. Companies are listed in alphabetical order and by specialty.
www.insure.com Targeted to consumers, this site provides special reports about evaluating health plans, dealing with claim denials and choosing an agent or broker. It also includes interesting tidbits for distributors such as the latest insurance industry news and legislation.
www.iiin.com This site for the Insurance Industry Internet Network features a list of insurance companies on the Internet, insurance law firms, and agents and brokers.
www.insurancenewsnet.com The Insurance News Net site provides breaking news, special reports and insurance company product news. It also includes a calendar of insurance-related conferences and events.
www.insurancecorner.com The agent directory portion of this site features a U.S. map. Distributors can click on their home states and get a list of insurance companies doing business there.
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5 Helpful Insurance Publications
Business Insurance Magazine (www.businessinsurance.com) serves business executives responsible for the purchase and administration of corporate insurance/self-insurance programs. The magazine includes news and feature articles related to property and liability insurance and employee benefit programs, including life, health and pensions. From its Web site, Business Insurance also delivers news and information daily.
Claims Magazine (www.claimsmag.com) is a monthly publication dedicated to covering the business of loss. It's targeted to property/casualty insurance claims professionals and corporate risk managers. Claims reports on disasters, insurance crime, emerging trends in insurance claims and regulatory, and judicial and legislative changes. In addition, it provides expert advice and educational articles covering techniques for handling insured losses.
Independent Agent (www.iamagazine.com) is an objective observer of the insurance industry and the American Agency System. The magazine is edited and published for members of Independent Insurance Agents of America (IIAA) and its state affiliates. It covers regulation, business practices and insurance industry news.
Insurance Journal (www.insurancejournal.com) covers property and casualty insurance and provides industry news and information for independent agents and brokers. In addition, the publication's Web site includes a number of tools for insurance agents worldwide. Among them are directories detailing available excess and surplus lines markets, automation vendors, and program businesses. There's also marketing advice, statistical data, classified advertising, a news archive and industry links.
Risk Management (www.rms.org) is published by Risk and Insurance Management Society Inc., an association for risk and insurance management professionals. It covers employment practices, environmental liability, catastrophe modeling, insurer perspectives and other topics relevant to risk management professionals.
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