More from your book

Clients’ insurance needs evolve continually throughout their lives. Life events such as marriage, divorce, having children and changing jobs can trigger various changes in a client’s life- and health-insurance needs. By simply keeping in touch with the clients to whom you’ve previously sold policies, you can become the trusted advisor who takes care of these needs every step of the way, thus generating a regular stream of new sales.

“There could be a change in jobs or the addition of a family member,” says Chris Karram, financial advisor and partner with Safebridge Financial Group in Toronto. “Whatever the case may be, you’re only really going to get access to that information and know if there’s a need or an opportunity to help that client by being in contact with them. There are countless opportunities to build a business [by] working with the people you already have as clients.”

Working with existing clients also has the benefits of easier and more comfortable conversations; less money spent on seminars, lunches and other prospecting activities; and shorter sales cycles. This strategy also can lead to bigger commissions for you down the road, as your clients accumulate assets and their insurance needs grow over time.

“The policy you’re selling to a client today is going to be worth a multiple, in terms of compensation for you, if you just take care of that person and have a relationship with them,” says Mark Halpern, certified financial planner and president of illnessPROTECTION.com Inc. in Markham, Ont.

Despite these advantages, however, many insurance advisors are failing to capitalize on this massive sales opportunity. Most advisors target their sales efforts toward prospective new clients, while the changing needs of their existing clients may go largely ignored. Halpern calls this group “file and forget” advisors.

“They sell something, and the client never hears from them ever again,” Halpern says. “[These advisors] don’t appreciate the opportunity, the upside.”

– stay in touch

The first step to mining your book of business is simply to stay in touch with the clients you’ve done business with. Even touching base once a year, Karram says, will set you apart from the majority of your competitors. Whereas financial advisors who manage their clients’ investments generally make a habit of being in regular communication with their clients, many insurance advisors lose touch with their clients after closing that initial sale.

“With [investments], people expect to hear from you all the time,” Karram says. “With insurance, they don’t. So, when you actually are in touch with them, it automatically creates a rapport that gives you the opportunity to show value.”

Consider getting into the habit of having an annual review meeting with your clients, suggests Jim Ruta, business tactician at AdvisorCraft.com in Burlington, Ont. This strategy gives you an opportunity every year to touch base with your clients to find out whether there have been any changes to their situation and whether they might be interested in a new type of coverage.

Few insurance advisors conduct these types of reviews, Ruta says, and yet, they can be a highly effective way of generating more sales.

“The annual review is a great way to mine your book,” Ruta says. “You will trip over potential business by doing this.”

Even simply sending your clients birthday cards or quarterly newsletters can be an easy and effective way of maintaining contact and reminding your clients that you’re available to help with any needs that emerge.

“It comes down to just actually being in touch with them,” Karram says. “Opportunities will continue to present themselves as you continue to prove to them that you’re going to be there.”

– Look for changes

Adjustments to a client’s life insurance coverage may be necessary for a variety of reasons. A change in your client’s marital status or the birth of a child, for instance, could prompt the need for more coverage or a change in beneficiaries. Or, a client with a term policy may wish to renew it or shop around for permanent coverage.

“Perhaps now they’re in a situation in which they have more disposable money,” Halpern says, “and they’d like to have some permanent protection.”

Alternatively, a client with a 10-year term insurance policy might be interested in converting it to a 20-year policy within the first few years of the policy, thus saving on the hefty premium hike that would otherwise kick in at the end of the initial 10 years.

Product changes also can prompt the need to tweak a client’s coverage, or to get him or her coverage earlier than anticipated. If premiums on universal life policies are poised to rise, for example, it can be worthwhile to call clients who had been considering this type of policy to urge them to sign up now.

“You should always be looking for changes,” Ruta says. “Changes to the industry; changes to the product availability; changes to the client’s personal life. There are lots of possibilities.”

It’s a good idea to have a system in place to help identify which clients’ policies may soon be up for renewal or are otherwise in need of review. Many insurance carriers have systems to help advisors track this kind of information. In addition, certain software can provide a more thorough analysis of your in-force business. Such software can, for example, point out policies that may be affected by pending product changes, how the prices of clients’ existing policies compare with current market rates and the types of products a client may be interested in purchasing next.

Halpern has hired a junior advisor to help with this process. The junior advisor’s role is to analyze the policies currently in place and identify opportunities either to renew or extend those policies, or to switch a client to a different type of policy altogether. Each week, this junior advisor identifies between 10 and 15 of Halpern’s clients who might be eligible to make this type of change, and contacts them to discuss it. In the majority of cases, Halpern says, the clients are receptive.

“It’s amazing the number of people who say, ‘Let’s do it’,” Halpern says. “It’s probably 90% of the people. And you get paid on that.”

– Expand your service shelf

One of the easiest ways to generate new business from your existing book is to sell your clients a different type of coverage. If the bulk of your business is life insurance, for example, consider adding living-benefits products to your offerings, such as disability insurance, critical illness (CI) insurance and long-term care insurance.

Fewer than 25% of all advisors have ever sold a CI policy, according to Halpern. Because these policies are still relatively new to the market, he says, clients generally are unaware of this type of coverage. However, Halpern has found that many clients are interested in learning about it.

“Today, there’s a five times greater likelihood of getting sick before age 75 than dying,” Halpern says, “so I think people are more concerned about sickness than death. People are definitely receptive.”

Although not all your clients will jump on board with health-insurance products, it’s an important area of protection that should be brought to the attention of your clients.

“It’s up to them, ultimately – they make up their minds,” Halpern says. “But we have a responsibility to let them know about these [products] at least. It’s a way of getting in front of [clients].”

– Cut costs; boost revenue

Generating sales from your existing clients can be considerably less pricey than pursuing new prospects. In fact, Gilbert estimates, it’s eight times more expensive to gain a new client than to maintain an existing one.

“It’s less costly to increase the share of wallet that you have with your clients,” she says. “It costs a lot less than doing conferences, seminars and other prospecting initiatives. You already have that relationship.”

Over time, you could end up with multiple policies in force for a single client and, potentially, policies in force for their family members as well. And some clients may have accumulated more assets since you last worked with them, thus prompting the need for more coverage.

Says Gilbert: “There are great revenue opportunities.”

– Shorten the sales cycle

Earning the trust of new prospects can be a time-consuming endeavour. Karram estimates that when working with a new client, 60%-80% of the sales process involves getting to know the client and gaining his or her trust. By working with existing clients, he says, you can skip most of this process and reduce the sales cycle considerably.

“Part of the challenge with any insurance is that people, for the most part, have a negative connotation when they think of insurance and insurance salespeople,” Karram says. “When you’ve already established that you are someone [clients] can trust and someone they can build a rapport with, that entire process doesn’t need to be rehashed.”

Furthermore, it’s generally less stressful to pick up the phone and call someone you know – and who knows you – as opposed to calling a prospect you’ve never met. Conversations tend to be more natural and comfortable.

“It’s much easier to speak with clients than prospects,” Ruta says. “The reception is much better.”

Even if a client declines new coverage, any time you spend conversing with him or her helps to build upon the rapport you’ve already established.

“There’s no downside,” Ruta says. “You’re still providing value.”

– Give more meaningful advice

As you get to know your clients over time – and vice versa – they’re more likely to open up to you about other aspects of their lives. Having such a rapport can help you understand the full spectrum of your clients’ needs, and identify coverage opportunities that weren’t obvious before.

Says Karram: “The longer you’ve worked with someone, the more apt you are to give them advice that’s going to suit them – not just for today, but for their entire situation.”

This can result in advice that’s ultimately more meaningful and more practical, Ruta says: “If you have an ongoing relationship, you can be more helpful to these people than you could when you first meet them.”

It also can be more enjoyable to work with individuals you know well, says Karram: “Life is a lot easier and a lot more fun when you surround yourself with clients you enjoy spending time with and who enjoy spending time with you. That’s when it becomes the most rewarding for everybody involved.”

– Fend off the competition

Staying in close contact with your clients also reduces the risk of losing them to your competitors. If you’re not having regular conversations with your clients, Gilbert warns, that leaves the door open for another advisor to do so: “If you don’t, another advisor will.”

When you start working with a client, Gilbert suggests, outline all the types of financial protection you offer, even those not currently relevant to that client’s circumstances. Establish a plan for addressing these policies with the client at a later date, and make sure he or she is aware that you intend to do so.

“If you give people a clear road map of where things are going,”Gilbert says, “they’re not going to be shopping somewhere else.”

The habit of staying in contact with your clients and establishing an insurance plan also demonstrates value that sets you apart from other advisors. As the insurance sector moves toward more transparency and disclosure regarding compensation, Ruta says, it’s becoming increasingly important that you are able to prove your worth: “This is one of the things you can do for people to demonstrate value.”

For more on increasing your business with existing clients, see story on the next page.

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