Opportunity Knocks

No one will argue that operating an insurance business today is challenging. The recession has put pressure on consumers’ wallets, causing them to consider reducing coverages; credit is difficult to come by, meaning businesses are feeling financial pressures; and the insurance industry itself has been muddling through the soft market for some time.

With increasing job instability and the value of paychecks and investments going down, consumers may be tempted to cut corners on insurance, according to the Insurance Information Institute (I.I.I.). While there are smart ways to save money on insurance, the I.I.I. is alerting the industry and consumers that there are also mistakes that could result in being underinsured. “This could result in a financial disaster if there is a fire, hurricane, severe winter weather or other catastrophe,” said Jeanne M. Salvatore, senior vice president and consumer spokeswoman for the I.I.I.

Given the dismal economic environment, agents would be wise to alert their customers about the dangers of too little insurance. Research indicates that this might be the perfect time, in fact, for agents to converse with their customers. A study by InTouch Corp. showed that consumers actually are eager to discuss their policies and the economic crisis with agents, because then they feel more empowered about their finances (see page 14 of this issue).

Furthermore, even amidst the soft insurance market, there are areas where independent insurance agents can grow their business — if they find out what their customers need. Coverage for data security breaches, for example, can be immensely useful to businesses knowing that the number of technological breaches increase each year and businesses are holding more information that should be kept confidential.

“Ninety-eight percent of the time, companies have voids in their secure data information that will expose them,” said Thomas Katona of Apogee Insurance. Yet Katona estimates only 5 percent of the world has coverage for secured data, which could be useful if a company needs to notify customers or provide credit monitoring.

“I think agents, in a soft market, should be paying attention to the emerging coverages,” Katona said. “This is one of those coverages, and one that most of their clients probably do not have. I think when they talk to their insureds, [agents] will find that they are concerned about it.”

We’ve also identified some other emerging insurance opportunities agents might want to consider talking to their customers about — from financial investment activities to residential care facilities (see page N16). As Chris Boggs of MyNewMarkets said, “Becoming well-versed and knowledgeable in fast-growing industries can give any independent property/casualty insurance agent a head start toward growth.”

Above all, when it comes to insurance, customers want an insurance agent and company that can help answer questions and handle claims fairly and efficiently if a mishap occurs. The economy might be tight now, but that doesn’t mean it’s not a great time to reassure customers that you’re concerned about their welfare. Because unless you’re in touch with your customers, you won’t know when the next opportunity will come knocking.