Michael Jans: Hello, everybody this is Michael Jans, founder of Agency Revolution. We make it easy for you to automate your systems, engage your customers and grow your agency or brokerage. I want to welcome you to this episode of the Connected Insurance Podcast where we explore the trends, innovations, challenges and solutions to the biggest problems facing the retail agent and broker of today.
I want to welcome our guest, Scott Addis. He’s the CEO of Beyond Insurance. Beyond Insurance was founded in 2007 as a coaching and consulting firm that drives top line revenue growth of insurance organizations through a systematic process of differentiation, innovation and transformation, welcome Scott.
Scott Addis: Thanks for having me. I appreciate it.
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Michael: All right. I’ve told our listeners just a little bit about you but why don’t you give us a little more about your professional background because I think it’s really interesting. I think it really informs the unique work you do in the industry. Tell us, where did Scott Addis come from?
Scott: I guess in baseball terms if I could just talk about starting in the minor leagues and then progressing to the major leagues and now being a coach. I am a very lucky guy. I started with a firm called Johnson Higgins in the late 1970s. I was in a division which is called middle market. Middle market was focused on businesses without a risk manager.
So I was told at a young age my job is to become an outsource risk manager and first and foremost, I think strategically about every client I serve. I then went on. I was very fortunate. I was caught up with the University of Pennsylvania, Comcast Corporation, Campbell Soup as examples. I then had experienced directly directly working with a risk manager of a large corporation. What I saw was every waking day, the risk managers primary function was identification, prioritization and mitigation of risk. The insurance transaction was simply a piece of the equation but surely at no way did it dominate the risk manager.
Yet as you know and I know in most middle market businesses, the insurance transaction seems to dominate the time where they invest. Very simply, I started a firm from scratch in 1990 called the Addis Group. We had a great run. I was very fortunate. I was Inked Magazine entrepreneur of the year. Then we were the insurance broker of the year in the United States in 2003 by National Underwriter.
Scott: At that point, an article came out that said Addis risk management capital grow beyond insurance and touched on our formula. There were many people saying, “My gosh, you seem to have captured something, the essence of how we become differentiated in the marketplace. Would you coach? Would you train?” At this point, I have now left the firm that I built 25 year run with that firm. We wrap around 19 million dollars in revenue and now I am full time doing coaching and training and we are now called Beyond Insurance.
Michael: Well congratulations. Tell us, what’s your vision for Beyond Insurance?
Scott: Well, in reality, it’s a 10-year-old firm. I was able to go ahead and start the firm under the umbrella of my parent company who was a bank. Who gave me permission to do that and spend a portion of my time. Now obviously a hundred percent. So the mission has been very clear. It’s really trying to go right at the heart of commoditization.
If you think about so many businesses being commoditized and if something is commoditized, the consumer doesn’t truly appreciate the value of those who are delivering that. That’s been the whole beginning and now where we are is how do you actually help agency principles, producers, into the insurance carriers. How do you really help them break through the commodity trap?
Michael: Scott, you’ve been in the insurance world for quite a while. Do you think that the tremendous move towards the more higher perceive sense of commoditization among consumers?
Scott: No question about it. A little bit of background as you know, there is a process in our industry called the Risk Management Process. Unfortunately, today most consumers are not allowing the agent or broker to take them through the process. Step one is the art of discovering the customer. Step two are strategies to manage a risk. Step three is plan, design, and implementation. Step four is monitoring.
Most consumers today are demanding we come in and give them plans supported by products. Yet the art of what we do is based upon a process driven approach of discovering the customer to think strategically about what needs they have and then start to apply risk management techniques, of which insurance is simply one of many techniques.
Today’s consumer is simply thinking, the fundamental job of the agent or broker and carrier is delivering competitive products. The process — we must get back and realize the process must first and foremost dominate.
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Michael: They want you to jump in its sort of step two or three or four kind of at the end of the process. Is that what you think the consumer is moving towards?
Scott: Yes. Let’s talk in medical terms. In medical terms, a physician consults in step one. Step two is to diagnose and then in step three is to go ahead and implement the plan of treatment and that of course they monitor. Many of those listening today may realize you go into a consumer today, many of them have things such as policies prepared. They have loss runs prepared and the conversation starts about what markets might you approach. Who has a brought a policy forms, that is step three. The implementation process is dominating our industry and I don’t know whether it’s the personalized commercials that people are being fed today.
But the true necessity out there, especially for small middle market companies and personalized accounts is for some of them to take the time to take them through step one. Discover the organization or family and think strategically about risk. In medical terms, it’s the consultative and diagnostic phase before you get to the plan of treatment. Putting it simply, if you try to treat with insurance without first consulting and diagnosing, you can actually do more harm.
Michael: An agent or a broker comes to you Scott, they come into your system and they probably have — I mean clearly they’ve got some skills and if they’re going to be associated with you, they’ve got some passion. They probably have some problems or deficiencies that they want to overcome. What do you see is the most significant changes that agents or brokers need to make in their sales process.
Scott: Well, thanks for asking that question. It’s a great question and I’m going to use a big word and that word is transformation. I think a lot of the people that I see today have so much darn talent. It’s crazy but the talent isn’t being realized. People that are literally sitting back with hit ratios of 25% to 30% key accounts are, they’re under competition too frequently. Their retention ratio isn’t where it would be. These people came into this industry wanting to make a difference and they’re not making a difference they want.
They’re not having to clear a path that they want. All I have to do is simply in many ways like a baseball player or some other athlete or a entertainer, it’s a small, a mind shift. The first thing I do is to make them realize that this is there in maybe slightly different. They’re not in a business of selling insurance products or in the business of risk and risk analysis and risk identification. When you think about the business of risk, insurance is nothing more than a piece of risk. The first thing is, they’re not in product business, they’re in a process business.
They’re in a business of really, risk identification and analysis. That’s the first thing. The second is to hand them a process and the process is nothing that I invented. It’s simply is the basis of the CPSU, the basis of many other programs and that is really step one, the art of exposure identification. In simplistic terms, it’s discovering a business or family.
By doing that, you automatically become a strategist. You know the business, you’re thinking strategically about the business, as well as the risk that impact that. Step three then, is implementing the plan or process and four is monitoring.
All I’m really doing in simplistic terms, this is what people say so often, “My gosh, this is so darn simple.” All I’m doing is I’ve got to make sure I require the customer to go through this process. I do this simple formula Michael, it’s P5xI3.
Michael: P5xI3, okay.
Scott: Yes The first P is Process. They must go ahead and deliver a process, not product. The process I recommend is the proofing process that has been there for years and years, the risk management process. Step two is packaging. The second P is Packaging. How are they packaging themselves? Are they differentiating themselves in the eyes of the consumer? I, for example, detest the word producer. Producer to me is one who sells insurance products.
I truly believe, tell them who you are, you’re a risk analyst, a business risk analyst. A outsourced risk manager, a risk architect, whatever that might be. The first P is Process, Packaging and Positioning. If we try to position ourselves right in the heart and soul of getting competitive bids, we aren’t going to be seen as a vendor.
I think people need to step back and say, “When will the consumer truly take the time to appreciate my process?” The last two are the essence and that is purpose and passion. So many people today, I’m seeing people in their mid-40s that have even lost purpose and passion. I’ve seen people late 30s losing purpose and passion. But if you’d have a unique process, your packaging is cool and differentiated, your positioning at the opportune time, you will have tremendous purpose and passion. Those are the Ps.
The Is are Issues, Implications, Interventions. The job of anybody listening today, your primary fundamental job is understanding the issues that face the family or the business. If you sit back and say you do not know the fundamental issues facing the business or family, you can’t be diagnostic. If you don’t know the issues, how do you apply your strategies? The first is Issue, the second is Implication. Okay, you find an issue, what is the implication of that issue to a family or your business? Then lastly, it’s Intervention.
The formula, once again, is so vital and I just try to give people simple techniques to follow the formula and I have to say it’s simple but very, very powerful.
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Michael: Okay, so I want to go back to a word you used, transformation. What is the transformation that happens to, let’s say, an agency or to a broker when they go through this process? I’m going to jump to an assumption you can tell me I’m right or wrong, I think I’m right. The relationship with their customers is deeper. The relationship is a high loyalty relationship. The customers are willing probably to purchase more insurance. They’re probably willing to stay with you longer and they probably provide more referrals, did I get that right?
Scott: Oh boy, you nailed it. In many respects, transformation allows you to step back and view who you are and what you’re all about. But transformation applies to the customer experience journey. What we’re really trying to do is, how do we go ahead and transform ourselves in a way where we can deliver a very robust and very meaningful customer experienced journey which drives emotion. I talk a lot about great organizations, whether it be Disney or Ritz-Carlton in reality they deliver an engineered customer experienced journey.
I truly believe you must transform yourself if you can be in a position to say that, “Okay, now I want to go ahead and to release all of our capabilities, all of our talents, all of our energies to go and deliver this very unique and differentiated journey which is not that complicated. It’s simply going back to the art of discovery and the art of delivering strategies.”
Michael: A few minutes ago, you talked about the low hit ratios of 20/25% or something like that. What happens to that hit ratio when somebody really engages in this process?
Scott: We’re seeing 90/95% and I can just go through that very briefly. Everyone listening today should have a criteria fielder. Yes you want to put as many accounts as you can into your pipeline but at some point there must be a filter. Very simply, I teach people that there are three basically filters that you must go through, and the first meeting at some point in that session you ask three questions. Michael, tell me more about the relationship with your current agent or broker? Second question, might I come back next week and spend more time with your management team unless they’re enthused about my process?
Let’s assume they say, “Oh my gosh Michael, I’ve got a 25 year old relationship with my brother, but I do want a competitive bid.” This time of the year, our people are so busy. My CEO and COO, they would not have time to meet with you and I don’t know why they’d want to meet with you anyhow. And lastly is your process, I don’t know. I really didn’t want to go through steps one and two. There’s no reason for you to understand my business where things strategically. I just want a competitive bid.” That to me is three red lights.
What I teach people is basically, in the first meeting you must understand are you on a level playing field playing into the wind or you’re playing with a wind at your back. Let’s assume it’s a different conversation you say, “My gosh, my current agent or broker really a good person but doesn’t know my issues.” On a refer ability index, they’re a five. I don’t see them at the same level as my CPA or attorney. Yes I’d love you to come back and meet with my leadership team. I think they’d find your process fascinating. And last thing on the process, this is something I’ve been looking for for years. What’s so revolutionary Michael, in the first meeting basically, people walk out knowing that they had the order.
People literally today can walk out and know did the consumer buy into this process, are they enthused about the process of going through this? Number two, what is the relation with the incumbent and number two, do they have access to leadership team? If you can get all three green lights, you’re literally at the five yard line. On the other hand, you get three red lights, you’ve got to step back and say, “What’s at risk? Do I really go through this process?”
Michael: It could be an incredible waste of time, right? To keep them in the funnel just because you don’t want to lose that option.
Scott: Walk away power as you know is very powerful. So in some cases to say, “Sir or ma’am at this point in time, I don’t think it’s right to engage because it appears that our process is not right at this point or whatever it might be.” But I certainly think that walk away power is exactly that.
Michael: Scott, I understand that you and your team have developed some organizational producer growth surveys. Can you tell us more about that?
Scott: Yes. We’ve just finished something called the Beyond Insurance Institute and within the institute, it’s basically a very powerful portal. There are assessment tools there. The first thing we do, much like step one of the process, is basically to understand the needs of the agency as a whole or the producer.
I’d be glad to give that out. If anyone would like to go in there, it’s beyondinsurance.com/tcip. Once again, beyondinsurance.com/T as in Tom, C as in cat, I and then P. As an example, the producer could go through and get what we call a gross survey. There’s 24 questions and they would actually know where they stand in six areas.
The six are value proposition, referral network, new business hit ratio, prospect research and qualification, cross sale envisioning and goal setting. As they go through these questions, they get to see where they stand at each of those areas. I think Michael you’d agree if you do have a powerful value or proposition, you have a robust network, you have a full pipeline, you are having a cross sell program, you are visioning goal setting and you’re doing proper prospect and research, those are very helpful.
Scott: For the agency, we have the same thing. We actually have the ability to assess the perception of every member of the agency in the agency consumer or agency principle then gets a report. By the way, those are complimentary tools that we have out there for those that have an interest. So yes, those are the gross surveys.
Michael: Anybody can log into that and get the results?
Scott: Yes, get the results instantaneously and the other is every article I’ve ever written and they’re about 60/70 articles, I take great pride and I research like crazy all the articles. So anybody listening today, those are complimentary. The gross surveys whether they be agency itself or for the producer or the articles, they are in the institute.
Michael: Got it. Scott, there are a lot of networks in our industry. What do you think differentiates Beyond Insurance from some of the others?
Scott: Well, good question. I never thought I would be doing what I’m doing. But today there are 62 agencies across the country. Part of something called the Beyond Insurance Global Network. I would say the biggest thing we’re doing is fighting through commoditization using diagnostic tools. If I could speak for an example about one sampling of a diagnostic tool, may I do that?
Michael: Yes, please.
Scott: There is a tool we all use called the Intelligent Quotient for Risk Management or IQRM. It’s a quantifiable risk assessment tool that consist of a systematic method to better understand the risk issues facing an organization. It also benchmarks performance against ideal standards. At this point, there are 21 vertical areas built and behind each one is a subject matter expert.
As an example, on business continent, we have the former worldwide head of Marsh who is standing behind that. We get to fleet safety formerly head of UPS standing behind fleet safety. On subs abuse, Dan Ruthers, former correspondent. So the verticals go from fiber to workers compensation, employment practices, background checks, you name it. From an acquisition tool, you can go into a business and as soon as you start uncovering and step one, what are the issues, you can start applying in IQRM. What really is it?
It’s number one, an educational tool. We’re trying to say, how do we in 15 to 20 minutes allow that very busy CEO, CFO HR director to understand what is the risk issue facing the business in whatever that might be? Fiber, employment practice is fleet safety. The second thing is what are best practices? There’s a brief survey and they get a score, much like a credit score or an SAT score. They might get a score of 65 or 73. The next is a response rationale. For every question asked, why is it so important and most importantly, there’s an action plan to improve the score.
I would think everybody listening today whether it’s a credit score or SAT score, would like to have a path to improve that score. This is exactly what we do. You can imagine how the insurance company underwriters are reacting when they can actually give evidence to their consumer along with the agent or broker has gone through the educational process of understanding a risk. The second thing they’ve done the assessment and most importantly, they have an action plan to improve the risk.
Michael: The carriers must love this, the insurers carriers.
Scott: Yes. That’s just a sampling of one of the tools in the toolkit. The network I think is very different. Our focus is really about a risk profile improvement. No one gets the network unless they can give evidence of their either ability or desire to truly do risk assessments and that’s really what makes it very different. The insurance carriers by the way as I mentioned are seeing a very very different breed of agent of broker and one of which is showing results that are like nothing they seen before.
Micheal: Really? Okay. Scott, I want to wind it up with a personal question because I think among your five P’s, there’s no question in my mind that purpose and passion probably mean a great deal to you. What gives you the most satisfaction?
Scott: Well, that’s a simple one. I think like you, you’re a game-changer, you’ve been that for your whole career and that’s your insider DNA. At this point in my life, I truly think my job is to inspire people to reach their peak. As you know, I did author a book a while ago called Summit and in there, I talked in the opening chapter about giving people a dose of confidence to begin their transformation jury attorney to get started to leave ordinary behind. But basically, it’s all about elevating one’s personal performance. Life is too short and I think everybody today wants to feel so they have truly maximize their opportunities for success. That’s what it’s all about. It’s about giving people the logic, the inspiration and then the tools to go ahead and maximize their potential.
Micheal: Scott, if any of our listeners want to find out more about you or find out more about Beyond Insurance, what should they do?
Scott: Well, the website is beyondinsurance.com. They can also call me. I’m fanatical about returning phone calls so if I’m not available and that number is 484-704-9501.
Micheal: Very good. Scott, this has been tremendous as always. It’s been terrific talking to you. I learn a lot every time I do so. I want to thank you very very much for joining us Thanks so much.
Scott: Well thank you for all you’re doing for the industry.