How a Multi-line Approach Can Strengthen Your Business

Most everything I know about growing my book of business I learned from the J. Paul Getty Museum in Los Angeles. My lessons learned do not come from the beautiful and historic works of art, rather, my lessons learned are deeper than the art; literally, deeper, as in below ground.

I joined my father and brothers in the family business following a career in construction. I was the superintendent for the largest subcontractor on the J. Paul Getty Museum project. It was during my time in construction, and specifically on this project, that I learned the values of vision, goals and the importance of details. I learned from reading blueprints that anything can be built with a pre-designed plan.

The basic principles of construction-vision, goals and planned details-apply to building a structure as well as building a client’s portfolio, and their loyalty. I have found the most significant means of helping a client achieve their goals and fulfill their vision comes by building their portfolios detail-by-detail; for them, this means being an agent that meets multiple needs: their home, life, commercial and investment needs. For me and for my book of business, this multi-line approach means I have a client for life.

Carriers have been telling agents for many years about the benefits of cross selling; I can tell you from experience that it does produce benefits and in fact, offering multiple lines of business has increased the value of my agency in dollars, and sense. Cross selling is a passion of mine because of two simple reasons: communication and trust.

I believe the basic building blocks of cross selling have far more to do with the relationship you have with your client than the financials behind the lines. Our agency added life and investments to our offerings seven years ago. Over a three-year period we sold these products to our auto and home customers increasing our retention by about 47 percent. This increased our business growth by 15 percent. The growth in actual dollars could not have happened without applying common sense. It made sense to offer life insurance to our auto customers; it made sense to offer investments to our home customers.

I take great pride in spending time with my clients, knowing their families, their personal dreams and goals. It’s through this communication I build a trust. This trust is what enables me to introduce new lines of business-my efforts come across as less of a sales pitch and more of a personal interest-which, it is. Overall, since we began cross selling our agency has seen a 24 percent growth in revenue.

Economies of Scale

Our agency is a full-service agency offering 15,000 clients auto, home, commercial, life and investments; we also offer individual and group medical insurance. About 70 percent of our income is from personal lines, 20 percent is from commercial lines and life and investments make up 10 percent. I believe it’s my duty as an agent to enable my client to make the best decisions for their family and for their business by offering them a suite of products to meet every area of their personal life and their professional life. But I also have a duty to my business, and that duty is to enable my business to continue growing.

This is where I apply the economies of scale; for example, selling a life insurance policy. Whereas the sale of a life insurance policy on an individual basis may not be cost-effective for a life-only producer, the ability to leverage an existing property/casualty relationship with a client to make an individual life sale makes sense. This means you achieve greater economies of scale in your business through cross-selling life insurance to existing customers.

Just as a structure cannot be built with only one wall, a client cannot meet their goals with only one line of protection; and an agent cannot build a successfully-balanced book with only one product.

Brick-by-Brick

We’ve all heard the term the best defense is a good offense. Adding life and health insurance to your business is a good defensive move. Property/casualty agents are well-positioned to introduce life and health insurance to their client since the client already knows and trusts the agent. Direct writing companies are selling life insurance to your P/C customers; this makes you vulnerable to losing the property /casualty business from that customer.

Adding life and health insurance to your offerings not only enables you to meet more of your client’s needs; it enables you to protect your book of business. Additionally, the P/C industry is cyclical in nature, adding life and health insurance to your offerings can provide greater stability of income for the agency, to weather the rough cycles. Think of a bricklayer positioning a brick precisely on top of the brick below it; this is how an agent stabilizes their book of business.

Building Up and Out

I find life insurance is a great cross-sell for home insurance and motorcycle insurance; these make up the foundation of our agency. I also find clients are quite interested in term and permanent life insurance-but often, they’re intimidated by permanent insurance. I take the time to explain how permanent insurance can help them achieve their long-term goals.

Once a client knows I am able to offer more than home insurance or life insurance, they ask me to help them with their IRAs, 403(b) plans and 401(k) rollovers. As an independent agent, I believe I’m in the business of protection, and more importantly, service. I draw much satisfaction knowing I have done a complete job when offering multi-lines to my clients, as they build their family’s protection plan.

Selling life insurance, and investments, helped solidify our book and I believe it is the key to our success. It is important to note that while you may not be offering the lowest-priced product, if you sell a suite of products, then you only need to be competitive. Moreover, by offering a competitively-priced, multi-line product base you are meeting your client’s every need: home, life, casualty, auto, investment-you are building their protection plan while at the same time, strengthening your book of business. The J. Paul Getty Museum wasn’t built in a day; rather it was built layer-by-layer, on a solid foundation based on a detailed set of blueprints, drawn by someone with a vision.

Paul DiGerolamo is president of DFI DiGerolamo Family Insurance LLC., which is not a subsidiary or an affiliate of Symetra Investment Services Inc. DiGerolamo is a registered representative of and offers securities through Symetra Investment Services Inc., a member of NASD. To comment on this article please contact story@symetra.com.