How COVID-19 Is Impacting Independent Insurance Agents

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  • COVID-19 has brought the world to a standstill. 

    As with nearly every business across industries, independent insurance agents have been impacted by the coronavirus, and it is affecting them in several different ways. Here we’ll discuss the details and what agents can do to help their customers and navigate workflows during the pandemic and into the new normal.


    Business Owners Are Scrambling to Cover Their Losses

    “Many businesses have had to close their doors because of the coronavirus pandemic — either because of specific government restrictions against ‘non-essential business’ or because they haven’t made enough money during the crisis to keep their doors open,” reports journalist Ann Schmidt. “To recoup some of those losses, business owners may look to their business insurance protection plans for help.”

    Unfortunately, viruses aren’t generally covered. This is because “in recent years, particularly in the aftermath of the SARS epidemic, many insurers added specific exclusions for bacterial or viral infections to their coverage,” writes David F. Klein, litigation partner at Pillsbury Law. He says the exclusion wording in the policy is extremely important: “If your policy only excludes coverage for bacteria, you may still have coverage for the coronavirus.”

    However, most independent agents who sell business insurance will find themselves in the uncomfortable position where they have to explain to customers who’ve bought commercial lines that they aren’t covered for business interruption due to COVID-19.

    It’s creating a lot of friction, but it’s important that agents are upfront with customers and let them know about the situation. The good news is that unemployment benefits are being expanded to small business owners.

    Kate Rockwood at Fortune Magazine says that historically, sole proprietors and independent contractors haven’t been eligible for unemployment unless they are set up as an “S corporation.” President Trump’s stimulus package, The Coronavirus Aid, Relief and Economic Security Act (CARES), however, does provide unemployment insurance to self-employed workers and independent contractors that meet the right criteria.

    Those eligible can receive an additional $600 per week in addition to state unemployment benefits for up to four months. Details can be found at the Tax Foundation website. For agents who focus on providing business insurance, this is important information to relay to their customers.


    Health and Safety Have Become Top Priorities at Work

    Besides the massive financial setbacks, many agents have commercial clients who are worried about health and safety at work — and for good reason. 

    The virus is mainly spread person to person, according to the U.S. Chamber of Commerce Foundation. Employees and customers in close proximity with one another can quickly accelerate the transmission of COVID-19. One of the ways independent agents can help is by encouraging business owners to follow the official best practices laid out by the Centers for Disease Control and Prevention (CDC) and the World Health Organization (WHO).

    There’s a lot of misinformation out there, which can create worry and chaos, writes Sydny Shepard at Occupational Health & Safety. That’s why business owners should only get their information from reliable resources such as these. They should also have an open dialogue with their employees about what’s going on and what everyone can do collectively to stay safe. 

    The CDC, for instance, has a helpful resource called “Interim Guidance for Businesses and Employers” which can increase knowledge and decrease transmission. They also have a quick guide that walks business owners through essential topics like basic hygiene, meetings and travel, handling food and when employees should stay at home. 

    Additionally, the WHO created an in-depth publication that addresses key topics such as how COVID-19 spreads, low cost measures that can prevent the spread of infections in the workplace and how employers can develop an effective response plan.

    When agents point business owners to resources like these, they help reduce misinformation and positively impact their entire community.

    How COVID-19 Is Impacting Independent Insurance Agents

    More Agents Are Working From Home

    Working remotely isn’t a new concept. In fact, some 8 million Americans worked from home in 2017, according to Dan Kopf, a senior data reporter for global business news and insights resource Quartz. 

    That number is quickly skyrocketing with the coronavirus pandemic. We’re at a point where a growing number of agents are being forced to work from home, and this is a trend that is likely to continue for the foreseeable future.

    “Coronavirus is going to expose more people to working remotely than ever,” says Greg Kaplan, CEO of Remote Year, a company that offers work and travel abroad programs. “Most people will see that it is very possible and start to grow accustomed to the benefits of [remote work], including autonomy, no commute, and less distractions than open offices.”

    Making the transition, however, can be difficult, especially for agents who have worked from a brick-and-mortar office throughout their careers. There are ways to make the transition easier.

    For example, career writer Kat Boogaard says it’s important to set up a comfortable home office that’s thoughtfully designed. This can help you stay organized and productive, and it creates a clear boundary between work and personal life.

    Structure your day in a similar way that you would when working at your office outside the home, recommends business writer Erik Devaney. This involves segmenting the workday so you’ll know what to focus on at different times and using an online calendar to set reminders and stay on task. 

    Gaetano DiNardi, director of demand generation at business communications company Nextiva, says digital tools can help agents be more productive and reduce stress at the same time. Project management apps like Asana and Trello keep daily workflow organized and facilitate better communication between team members, while time management apps like Harvest track time spent on given tasks, which makes invoicing easier and boosts long-term productivity.

    How COVID-19 Is Impacting Independent Insurance Agents

    Customer Communication More Important Than Ever

    One of the major selling points of independent agents is the level of personal attention they give to their customers. They assume the role of trusted advisor, often meeting with customers in person to explain how policies and claims work and answer questions.

    With quarantines and lockdowns now being the norm, however, offering this level of personalized attention simply isn’t feasible at the moment. Tech tools, however, can be used to help agents stay connected with customers. For instance, agents can use video communication tools like FaceTime and Skype so they still have “face-to-face” interactions with customers — only digitally. Social media and email communication is also perfect for our current situation, with many customers preferring these channels, according to Toby Cox at small business news site The Manifest. 

    Cox also points out that agents should strive to develop an omnichannel approach where customers have different options and can choose the communication channel that best suits them. Not only should this help immediately as agents attempt to ride out this pandemic, the strategy would be beneficial in the long term.


    Customers Need a Deeper Level of Empathy 

    There have always been events where smaller segments of the population were affected by adversity. States and regions frequently have to band together to deal with the devastation from natural disasters like hurricanes, droughts and floods, for example. But COVID-19 is a global event, decimating personal lives and businesses and that will likely take years to fully recover from.

    That’s why Paul A. Argenti, professor of corporate communication at the Tuck School of Business at Dartmouth College, points out that now is the time to “focus on empathy rather than trying to create selling opportunities.” Now more than ever, agents should provide support to their customers, as well as their communities in general and actively look for ways to help. 

    This could be as simple as rethinking ads and promotions or making themselves available to insurance customers who have urgent questions. They could take the time to reach out by helping their at-risk neighbors like elderly people and those with severe chronic illnesses, says reporter Chelsey Sanchez.


    Independent Agents Adapting 

    Zoom out for a moment to imagine the big picture. COVID-19 is dramatically changing the entire insurance industry, from the products being developed to whole business models, writes Mike Connor, co-founder and CEO of Silicon Valley Insurance Accelerator. 

    “It will redefine what it takes to successfully lead and manage insurance companies,” Connor says. “And, it will dramatically accelerate the digitization of the insurance world.” Adaptation among independent agents means embracing digitalization, and doing so quickly.

    On a more day-to-day level, many independent agents have been struggling immensely during this time and feeling overwhelmed. While there is no quick fix, having a better understanding of what’s happening and the specific issues that need to be addressed should help agents get themselves and their customers on the road to recovery. 

    In particular, agents should be able to put themselves in the shoes of their customers, be a helpful resource for quelling fears and learn how to adapt their business structure as needed. 

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