Agent Selection Process

Agent Selection Process, Step One: Building Your List of Agents

The agent selection process starts with building a list of possible participants. In most cases, you will include your current agent. You may have agents who approached you about quoting on your business. You may know of agents who specialize in bank insurance in your region. You may have customers or other business associates who are in the insurance business.

Sources of Agents for the Selection Process:
– Your current agent.
– Agents you have worked with in the past.
– Customers who are agents.
– Check with your state banking association.
– Talk with friendly competitor banks.
– Agents in your community.
– Referral from board members.

You should have at least three agents on your list. Five is a better number. I have never had more than ten — though it would not be wrong if you really have that many agents you want to consider.

There is no downside to including an agent at this point. In fact, many banks like to have a large list at the start so that they can be looked at in their community as considering a wide range of options, including all the local talent.

Agent Selection Process, Step Two: Send Questionnaire to Agents
Contact each agent on your list by email. Attach the questionnaire shown below (customized for your bank). The purpose of the questionnaire is to learn more about the agents and agencies so that you can move toward your final selections.

(Go to to get this form in digital format so you don’t have to type it up.)

Prepare the form by giving the agents an idea of who you are and what you do. Give the agents information about your bank. You need to share some data here — asset size, number of employees, etc.

There is one issue that comes up all the time: should you divulge current premiums or not?

I include the current premiums in the info I send to potential agents, as it puts everyone on an even field as to knowledge of the current situation. Your current agent and insurer know where they are now — they have no idea where the competitors will come in. Giving the competitors premium info does not jeopardize your current insurer. Your objective is the best coverage, best price, and best service. A competitive bid process gets that for you. Nobody knows the bids, so they have to come up with their best price.

Knowing your current premium does not really help the competing agents. However, it makes them feel like you are being open with them.

Agents and insurers feel that they are shooting in the dark without the current premium numbers. It really tells them nothing, but it makes them feel more comfortable.

Many bankers feel that showing the current premium hurts the integrity of the bid process. I find that the reality is that it makes insurers work harder. Strange but true, in my experience. My advice is to give the current premium.

Send the agent your customized form as a word processing document attached to an email. This will make it easier for the agent to respond.

I insist on email responses to my questionnaires. You can be more relaxed by allowing email, fax, and mail replies.

Some agents will want to meet with you prior to completing the form. Put them off.

The form is designed to give you a true feel for the agency. Can they follow instructions? Do they meet deadlines? Also, the form doesn’t require much effort on the agent’s part. Some brokers have a form they have used for other such projects. As long as I get the information I want about the agency, I don’t get too clutched about what format the agents use to respond — so long as they reply by email.

Give the agents a relatively short deadline – between five and ten days. Nobody needs more than that. This is not a tough process.

I suggest a date and time deadline. I usually say noon on a specific day.

Agent Selection Process, Step Three: Review the Responses
With responses in hand, you need to figure out your next step. Recall that you now have two options:

1. Select a single agent, allowing him or her access to all insurers.

2. Select several agents, moving to a bid process.

Your choice for option one might be your current agent, or you might select a new agent.

Here are the questions I use in the review of the questionnaires. No single question tells me the right agents to take on. I look at the overall quality. Some clients have assigned point values to each of the following criteria. Is there any doubt that some bank CEOs/CFOs have accounting backgrounds?

Did the agent acknowledge my initial email? I want to know if the agent follows good business practices. Acknowledging emails and expressing some level of enthusiasm at being asked to participate tells me what type of business person I am dealing with.

Did the agent reply on time? I’m pretty tough on this one. If your reply is late and you don’t tell me why, how can I trust you to respond to a claim?

What is the agent’s experience in the banking industry? The world of banking insurance is unique. An agent who has bank insurance experience is valuable.

Who did the agent use for references? Are the references current clients? Are they banks? Are they known to you?

What are the lead agent’s credentials? Who is the prime manager of your account? What is his experience? What insurance educational programs has he been involved in? Does he have an advanced insurance industry professional designation? (I am partial to the Chartered Property Casualty Underwriter designation, CPCU. It is a rigorous program that takes several years to complete. There are certainly great insurance people without a CPCU designation. However, I have met few CPCUs that are not dedicated to the insurance industry.)

Does the agent have a team of people who will work with him or her? How many? Where are they located? How easy will they be to contact? What are the team members’ duties?

What are the credentials of the team? Who is working on the team? What experience do they have? There should be competent backup to the prime agent (a.k.a. a producer — a horrible term, I think). Many agents are out of the office frequently. Who is there day-to-day to answer your billing questions and move paper for you?

How many employees does the agency have? A two-person insurance agency provides a different level of service from a twenty-person office. The size of an organization is important, as it tells you something about market strength. A small insurance agency may not have the heft to get the difficult coverage issues of claims settled with an insurance company.

Is the agent a local independent business, or a part of a regional/national agency? There are advantages and disadvantages to dealing with bigger agencies — as with every type of firm.

What insurers did the agent request access to and why? Take a piece of paper and build a chart. Each agent will be a column. List the insurers each agent has asked to use under that agent’s column. Some agents will list a single insurer. Some will list ten.

There are three different types of insurers listed on the questionnaire — bank specialty (i.e. bond, directors’ & officers’, e-banking), standard (i.e. property, liability, auto, umbrella), and workers’ compensation. Some insurers will offer all three categories. Some may only offer one.

Make three sections on your chart, one for each type of insurance.

Review the agents’ selections. Are there common insurers? Did one insurer only show up on one agent’s list?

With the above info, you have a growing picture of each agent.

Agent Selection Process, Step Four: Gather More Info
You may have enough info now to make your decision. Probably not.

In most cases, there will be questions you’d like to ask. Perhaps you need clarification. Pick up the phone.

A phone interview is often quite telling. If you leave a message, how long does it take the agent to call you back? How does the agent respond to questions? Is he long-winded or does he get to the point?

Here are some good phone interview questions for agents:

– You selected ABC Mutual as your first choice of insurer. Tell me why. What is your experience with that insurer?

– Main Street Bank is on your reference list. Tell me about your work for them. (How much does the agent tell you? Does she divulge confidential information?)

– If I have a claim, will I work with you or your claim department?

– I assume you are out of the office a fair amount. When I’m a client, do I call you or a customer service person with my questions?

Agent Selection Process, Step Five: Interviews
The first question for step five is: are you done now? Is there one agent who stands above the others?

Perhaps you now realize the actual quality of your current agent. Maybe you see just how terrible he really is. It’s possible that you now know that you want to move to another agent.

It would not surprise me if you were not ready yet. It does happen, though not often. Sometimes the insurance buyer looks at the field before him and decides to just stay with the current agent. If that’s you, then notify the other agents and get your agent moving forward for you.

If you have decided on a new agent and want to fire your current agent, do it now. Get the new agent working for you and notify the agents you did not select.

Firing Your Insurance Agent
Firing your insurance agent is like firing an employee. It should rarely be a surprise for either party. Prior to the termination, there should have been conversations over poor performance. Sometimes, however, insurance buyers are just not aware of how bad their agents really are (or they have been deluding themselves).

Once the decision is made to end an insurance relationship, pull the trigger quickly. Hire slow, fire fast. If in the middle of the agent selection process you become convinced that you will not select your current agent, do not tease the agent along. It causes him to do more work with no hope of success. Further, it limits what other agents can do for you, thus harming your chance for greatest value.

If you have any doubts, I urge you to continue on with the selection process.

At this point, there are probably some agents who are standing out. Maybe you have identified agents you know you cannot work with. If you cannot pick one single agent for yourself yet, you can undoubtedly narrow the field a bit. Cull the pack to two or three.

Perhaps these are the two or three agents you want in the bid process. Consider in-person interviews as a way to narrow the field further.

Call the successful agents to set up a presentation meeting. Be sure to call those agents who completed a questionnaire but were not selected. They put effort into the first phase of this project and deserve the courtesy of a call.

Your interviews should all be held on the same day. Tell each agent that he or she has thirty minutes. Schedule the presentations forty-five minutes apart. This gives you some time to discuss each presentation with other members of your team and builds in time for presentations running a bit longer. Don’t put off calling the agents who were not invited to make presentations. Procrastination here will only make the calls tougher.

Pre-interview Meetings
Some agents will want to meet with you before they make their presentations. They’ll want to get to know you and your business. Frankly, it’s the good agents who will ask for such a meeting. I don’t ask the agents for a meeting. I let them come up with the idea. Remember, you’re trying to get into the agents’ heads to see how interested they are in your business. What they don’t do may be as important as what they do.

Plan to spend about sixty minutes with an agent in a pre-presentation meeting. Don’t let the agent talk a great deal about himself or his agency. The purpose of the meeting is for the agent to get to know you so he can do a great job in his presentation.

The Interviews
In most cases, you’ll want to include several of your key people in the sessions. Depending on the size and structure of your bank, your corporate officers and human resource managers may be involved.

Some call these agent presentations “dog and pony shows.” It’s the agent’s opportunity to show off his or her qualifications and expertise. Different agents take different approaches to the presentation. Some will bore you with an overview of the history of their agency or give a live version of their résumé. Good agents will focus on the value they will provide you as your insurance agent. The best will provide you with a case study as an example of how they serve clients.

The presentation meeting is the agency’s opportunity to tell its story. From that meeting, you will select the right agency.

At the conclusion of the presentation, have questions prepared to ask all the prospective agents. Here are some examples:

– Describe a situation where you provided exceptional client service.

– We are also interviewing the ABC Agency and folks from DEF Insurance. Why should we pick you?

– Tell me about a recent situation where you lost a client.

– Describe your service team and how a request for a certificate of insurance will be handled.

– What is your process for handling a small claim?

Some questions need to be asked of each agency. You will want to compare answers by each participant:

– Will you provide us with an annual account review? When in the year will this take place?

– How will you ensure that we have renewal quotes at least twenty–one days before our renewal?

– What claims management services will you provide?

– What loss control services will you provide?

You’re trying to get the agent talking about his or her services and approach to the business. You want to talk with the person who will be working on your account. In many cases, a supervisor or principal of the agency will attend the meeting. Don’t let the boss hog the spotlight. You want to hear from the people who will be working on your account on a day-to-day basis: the service reps.

I try to get the team off their scripts so I can have a conversation. Ask probing questions that cause the presenters to think and speak outside of their comfort zones. These people will have millions of dollars of your assets in their care. You want sharp people on your team.

After the Presentation
On occasion, your choice will be easy. One agency may be the clear winner. Don’t jump too fast. Pick your top two agents and ask each for a one-page, written service plan for the first year he or she will be handling your account. Explain that the choice is very difficult and that you need a bit more information.

Depending on geography, consider meeting the agents at their offices. It gives you a chance to learn more about the agency and its culture. Get to know the agent. Talk more with the service team. Perhaps go to lunch with people from the agency.

Agent Selection Process, Step Six: The Decision
After the questionnaire, the presentation, and the written service plan, you should have a good idea of who you’d like to work with.

If you’re having trouble with the decision, here are a few questions to ask yourself:

– Which agency would I like in my corner if I were in a claim dispute with my insurance company?

– Which agent seems to be the most comfortable with the banking industry and the unique exposures presented?

– If my attorney has a question about my insurance coverage, which agent do I feel confident about providing accurate information and assistance?

– If my administrative center were destroyed by a fire, which agent would I want on my team?

Here again you should be asking yourself if you want to pick the agent for you or if you want a bid process.

Picking The Agent
If the agent selection process has you at a place where you have decided to move forward with a single agent (perhaps your current agent), then contact that agent and set the expectations for the management of the renewal. Get a commitment on when proposals will be delivered to you, what insurers will be contacted, and how you expect the relationship to progress.

Notify the unsuccessful agents, and move forward with the renewal.

If you want to move forward with multiple agents in a bid process, see that section of the website.

My Approach
I have seen the process above be successful for bankers who are managing their own renewal. As a bank insurance consultant, I take a slightly different approach from what I prescribe above. After thirty years, I know many of the agents with whom I work. I know what to look for. I know that special brand of BS known as “Insurance BS.”

I use the same questionnaire I have given you. I also gauge the needs of my bank client and their willingness to really go through a bid process. I push and goad my clients to be sure they are serious about changing agents. Often, what started out as a bid process ends up with me pushing the bank to admit that they will not leave their current agent — thus saving everyone involved a great deal of time, effort, and angst.

I throw agents out of the selection process for minor infractions. I will not recommend an agent who does not show me a firm interest in my client’s business. I will not recommend an agent who is not 100% dedicated to insurance as a profession. If the agent mentions retirement in any of our conversations, he is out.

I question an agent’s dedication to the insurance business if he or she has been in the business for more than five years and has not at least started on an industry designation like CPCU (Chartered Property and Casualty Underwriter). Agents in the business for more than ten years without a CPCU are, in my mind, suspect.

Frankly, I have gotten pretty good at spending fifteen minutes on the phone with an agent and predicting his or her success with my clients.

I rarely allow preinterview meetings where the agent gets to learn about the bank. If I think my client will benefit from getting to know the agent, I do not attend the sessions.

I am acutely aware of the importance of an insurance buyer being comfortable with a particular agent. I often set up situations for the agent and banker to interact. That usually comes in the bid process, though.

If we do decide to have agent interviews, I keep them to twenty minutes. I am ruthless about keeping agents to the allotted time. I warn the agents ahead of time that they will not be allowed to go over. I suggest that they not bring any props or presentation items. I suggest that the boss stays home. I want the agent and the service team. I want the bank to meet with the day-to-day people who will help them manage risk.

I have questions prepared for the session, and coach the bankers in the room on how this session should work. I take full responsibility for being the bad guy.

In my process, as a consultant, interviews are for getting people off the list. If, after the interview, we still cannot agree on who to work with, I suggest that the insurance buyer meets with the agent at the agent’s office. I do not attend those meetings.

As they say on the TV action shows, I’m a professional. Do not try this at home.