Outsourcing allows you to focus on revenue-generating activities

By Jeff Reed

Kestler Financial Group


No man is an island. Or woman for that matter. What do I mean? It all started with a conversation I had this week with a prospective producer.

He was referred to me with a heads up that he works with a few insurance carriers directly, and had a case that had been declined. There was even mention of very high pay outs based on his direct relationship with the carriers.

When I caught him on the phone, we delved in to a number of issues including the case, but the most important thing we spoke about was how he interacts with his carriers. It came up when I asked him if he had a full medical file on the applicant who was declined. His answer was that he had a copy of the application he could send to me.

While a good start, it really is not enough to determine why the client, a diabetic, was declined. More importantly, even if we go ahead and assume that it is related to her diabetes (not a big stretch really), it is not enough for us to formulate a strategy to move the case forward either in the near term, or after sending her back to her doctor to address the issue.

The reason he only has the application copy and nothing more? He relies on his carriers to order his underwriting requirements, including the exam and the medical records. He never sees them.

Based on all of the producers I speak to each week, this has become more and more common over the last few years. The reason? Probably the biggest driving force is the retraction of our industry as a whole since the end of 2008.

Offices that once employed any number of people are now staffed by a skeleton crew. While this has kept expenses down, it has also had a dramatic impact on how much business can actually get done each week. As these same offices now focus their attention on trying to re-attain the production levels they saw prior to the end of 2008, the one thing they are extremely hesitant to do is invest in infrastructure and take on the overhead that comes with it.

So why I am spending my time talking to this producer about how he runs his practice? Simple. There may be a better way to tackle the challenge of growing production, and the only way I can even begin to have that conversation is to understand how he works.

The alternative strategy to growing his business? Outsourcing. Rather than hire someone to run illustrations, outsource it. Rather than relying on the carrier to order the requirements and lose the ability to truly control the case, utilize a third party that will step in and handle that aspect of the transaction for you.

Simply put, there are ways to leverage his time without taking on the staff and overheads directly. The result for this producer is significant: when he comes up against a case like this declined diabetic again, he will be able to quickly determine if there is a strategy to move it into the win column by working with this trusted third party.

Rather than having to spend his time moving from carrier to carrier like a nomad wandering the desert, if he outsources he can stay focused on revenue generating activities. By the end of the conversation he had admitted that placing more business, even at a reduced compensation level, was better than having higher compensation and placing fewer cases. He saw the value of the relationship in more actual dollars in his bank account. After all, it is not the percentage that matters nearly as much as the actual compensation.