Agents and E-Commerce Can Coexist.

As distribution channels are reshuffled, life insurance brokers must hold fast to what they do best--serve their clients on a personal level.

The squeeze is on in the life insurance industry. Nothing in the past comes close to the transformations taking place today. Nothing is sacred--nothing escapes--including mutualization and commissions. Even more to the point, will life insurance agents always be needed?

Let's face it. Everything is on the table. Just look at what's happening at Merrill Lynch & Co. with the major move to e-commerce. Anyone who says, "But they'll always need brokers," doesn't get it.

Professor Warren Bennis of the University of Southern California states the case for change in dramatic terms: "The factory of the future will have two employees: a man and a dog. The man will be there to feed the dog. The dog will be there to keep the man from touching the equipment."

In effect, all the change and restructuring is about reducing costs and improving the efficiency of product distribution. The process is relentless.

It is easy to blame the insurance companies, the suppliers of product, for distribution problems that affect agencies and agents. The recent Conning & Co. report titled "Life Distribution in the 21st Century" depicts an industry in distribution disarray. With all of the company mergers, there's inevitable culture change. Agents are heard to say, "Things sure have changed; it's not the way it used to be working with them." They're right. These companies have new goals, new objectives and new priorities. Even though this is the "new reality," trying to affix blame or attempting to recapture the "good old days" doesn't solve the essential problem: Agents need to find ways to do business easily and profitably--now.

If agents value their independence and ability to meet the needs of clients, then it is essential to take those steps that ensure independence and success. Here are a few thoughts on dealing with distribution issues:

* Don't panic. As companies gyrate in their marketing strategies and the Internet looms ever bigger as a competitor, there is cause for concern, of course. If you're panicky, you'll have trouble thinking clearly and creatively.

* Focus on what makes you valuable to your best clients. While you may recognize the need for agents, this does not mean prospects discern the same value--unless you are very clear about your role. Ask yourself this question: "What makes me valuable to my best clients?" And don't assume you know the answer. Interview them; ask them to spend an hour talking with you about why they want you working with them. Once you understand the messages, use this information to connect with prospects. Whatever the client feels is important is important. The focus is not on what you want to sell but what prospects and clients want to buy.

* Let the client make the sales pitch. Take your hands off the wheel. Your role is not to sell but to be a helpful, knowledgeable resource for the client. This is not just a new way to say "consultative selling." The customer makes the sale; you facilitate it by what you know.

* Be known for your niche. It's more and more difficult to be a generalist, since customers want to do business with specialists. Review your client base and look for common denominators: Do you deal with people in certain business categories? Do you specialize in certain products? Is there a common lifestyle thread? Once you have discovered your area of expertise, make this the focus of your marketing.

* Do what you do best--serve your clients. This seems obvious, but the high price of independence is paperwork, paperwork and more paperwork. All of it takes you away from being with clients and prospects. Becoming part of a network may be the answer to getting more done at a lower cost. A good network or "buying group" can increase your productivity by delivering the product and support you need at an affordable cost. Success today is a matter of available resources and competitive pricing. If your focus is working with clients, you don't want to spend your time negotiating with insurance companies, doing paperwork and answering questions. To be truly independent, you should be free from anything that interferes with client relationships.

From our vantage point, agents who are following these basic guidelines are more highly regarded and more successful now than at any time in their careers. The reason is simple. They recognize that the future is inside their heads, and they are practicing what they know to be right.

Ronald D. Verzone, a Best's Review columnist, is president of United Underwriters Inc., a life insurance brokerage firm based in Exeter, N.H.