29 May 2017
The Most Valuable Advantage
Trust is the most valuable competitive advantage.
There is something in inherently intangible about insurance. When someone buys an insurance policy they are basically buying protection against something that may never happen. They’re also making a choice about who they will be able to trust if something does happen. Often, there is very little way for them to be 100 percent certain that they’ve made the right choice until after the fact.
Independent rating agencies like A.M. Best and Fitch Ratings can help to mitigate some of those doubts by reviewing the financial strength of insurance companies, taking into account their balance sheet, operating performance, business profile and their ability, in financial terms, to meet their obligations to policyholders.
Arguably however, financial advisors have one of the most crucial roles to play in earning a client’s trust. In many cases, an individual’s first real contact with the insurance business is through their advisor. The advisor then has the responsibility of establishing their expertise and demonstrating their integrity so that the client feels confident that they are in the right hands.
Trust has always been a key aspect of building a competitive advantage in business and particularly in the insurance business. Why is it now more relevant than ever before? The answer is that across the board and on a global scale, public trust in major institutions is declining. As a result people rely on more personal connections – people they know and already trust – for recommendations or information upon which to base decisions.
In that context, establishing strong and personal relationships with your clients is make or break. You have to earn their trust not by telling them that you are trustworthy but by proving it through your actions.
Cue the other traditional differentiating factor in insurance – customer service. You may not be able to deliver on your promise until something goes wrong in your client’s life but you can consistently demonstrate that their needs are important to you.
Regular service calls – whether it is to review coverage based on major life changes or simply offer congratulations on a personal accomplishment - can make all the difference.
The Bottom Line
In today’s insurance industry there is no success without the trust of the people – families, businesses I and communities – that make up the markets we serve. It is also important to note that when it comes to trust, there is no such thing as a neutral action. Everything you do as a financial advisor either builds or undermines the trust that exists between you and your stakeholders. Make it your mission to do the former and not the latter, and you’ll find that sustained success will follow naturally.