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January 16, 2014

How Using Agency of Records Letters Boost Retention

3 min read

Topic: Insurance Sales Insurance Agency Management strategy Grow an Agency

Every commercial lines agent (and some personal lines agents) have received one of these dreaded “YOU’RE FIRED!” letters. Let’s talk about what to do to get one from a prospect and what to do when you’re the subject of one.

If Your Prospect is Unhappy with Their Current Agency

two men shaking handsSometimes, when you’re visiting with a prospect, it’s obvious they aren’t happy with their agent relationship and/or they are very excited about the service level your agency promises in comparison.

Perhaps the insurance company they currently have is still the best fit for them in terms of price and coverage. What do you do? Ask for the business of course!

Ask for an Agent of Record Letter

You should in these cases ask them to give you an Agent of Record (AOR) letter. But be careful how you ask for it! Basically, you are asking them to fire their agent. So, put it in those terms! Be blunt. Tell them it’s not something to do lightly.

Tell them that the agent is going to call and complain (because he will) and that they need to decide before signing it that they are going to follow through. Tell them otherwise they are just wasting their time and yours.

I know what you’re thinking. You’re thinking, “They’ll never give an AOR then if I do it that way.” I understand.  BUT if you are only asking for one in cases where the agent truly needs to be replaced because of incompetence, unhappiness with service or something similar then you are only protecting your own time if you do it this way.

Explain Carefully to Make Sure it Sticks

Plus, you are preparing the prospect for the unpleasant conversation he is definitely going to have with the incumbent and by preparing him you make it far more likely that the AOR will stick.

Ask for AORs very carefully, understanding what you’re asking. Explain the downside to the customer carefully. You have a better chance of making it stick. If you do that and they subsequently rescind, my advice is to back out and not give a quote. They’ve shown they won’t follow through and why waste time.  

What if You’re on the Other Side of the Equation?

Now, what about when you receive one?

Recognize that most of the time the agent that got it didn’t do what I recommended above. In my experience, most of the time, the other agent actually misrepresented what the AOR meant. 

So, again in my experience, when I call my customer and say, “I just received an AOR you gave another agent on the insurance we do for you. Why are you firing me?” I get an answer that that is not what they meant to do. They then ask how to fix the issue, which means we do a rescinding AOR. 

A Great Opportunity to Cement a Relationship

What I don’t do is get upset. I don’t chew the customer out. I use the opportunity to reinforce our relationship and to inquire if there is something that they aren’t happy about that I can fix.

I also ask why they were even talking to another agent. This gives me the chance to reinforce the value proposition of an independent agent – which is that they don’t need other agents to be sure they are getting the best deal.  

Tony Caldwell is a modern “renaissance man,” who is not only immensely successful in the field of insurance, but is also a writer, children’s advocate, mentor and even a licensed pilot.

Always keen on helping others make their dreams come true, Tony and his team have helped independent agents grow into more than 250 independent agencies. This has made OAA the number one ranked Strategic Master Agency of SIAA for the last 5 years, and one of Oklahoma's 25 Best Companies to Work for.

Tony loves to share his knowledge, insight and wisdom through his bestselling books as well as in free mediums including podcasts and blogs.

Tony and his family are members of Crossings Community Church, and he is very active in community initiatives: he’s chairman of It’s My Community Initiative, Inc., a nonprofit working with disadvantaged people in Oklahoma City; and chairman of the Oklahoma Board of Juvenile Affairs., and he has served through many other organizations including the Salvation Army, Last Frontier Council of the Boy Scouts of America, and the Rotary Club.

In his spare time, Tony enjoys time with his family. He’s also an active outdoorsman and instrument-rated commercial pilot.