Making the foreign familiar: insurers can reap great benefits by successfully cross-selling life products through property/casualty agents and advisers.

Some recipes for cross-selling failure could include "build a great product and they will come" and LI "money talks--advisers will sell whatever you pay them to sell." History offers few examples of clear success in cross-selling, and many executives express frustration at the persistent gap between what they believe is a significant market opportunity and their modest--and unprofitable--sales results. A typical comment is: "Virtually all of our auto and homeowner customers have life insurance needs, yet we have achieved only 10% penetration with life sales." Cross-selling is a critical focus for distributors and product manufacturers as they seek growth in a mature marketplace, yet it remains a daunting challenge to accomplish profitably. For a consumer who has a meaningful relationship with a professional adviser, effective cross-selling can be a convenient means of addressing additional, related needs. For the professional adviser--agent, producer, account executive, broker, financial adviser/planner--cross-selling helps to build a base of satisfied, loyal and profitable clients, and can result in career success and increased compensation. For the manufacturer of financial products, supporting advisers' cross-selling efforts can be a profitable means of realizing new business growth and building adviser loyalty.

As an example, many consumers need to protect their families, estates of businesses from the financial harm that can result from their death. Such needs can be credibly and conveniently addressed with help from a variety of advisers: certified public accountant, attorney, real estate broker, life agent, property/casualty agent, financial planner or securities broker. By definition, many of these adviser relationships begin with other needs and services, so the development and fulfillment of a life insurance solution will depend on the adviser's ability to cross-sell.

Therein lies the challenge and the opportunity. Except for the experienced life insurance agent, most advisers will not cross-sell life insurance because they lack the interest, experience, expertise, capability, confidence or motivation to do so. The client need and sales opportunity notwithstanding, they simply won't tackle, on their own, the challenges inherent in cross-selling a product that is foreign to them.

With the right help, however, non-life insurance advisers can succeed at cross-selling life insurance. The key to unlock the cross-selling potential is for the life insurance manufacturer/wholesaler to turn its "foreign" (to the non-life insurance adviser) product into a familiar product whose role and sales support resources integrate effectively with the adviser's business practice. A five-step process should guide the cross-selling support effort:

1. Understand the strategic fit. Establish the business case (of not) for integrating life products into the non-life adviser's business. Consider the extent of unmet client needs, the adviser's credibility in life insurance, the likely magnitude of effort/cost necessary to produce meaningful results and the magnitude of the expected benefit to the adviser and product manufacturer/wholesaler.

2. Define the success requirements. Given the nature of the client's expectations, needs and buying process, the adviser's core business practice and the intended product solutions, be clear what functions need to be performed to deliver the value necessary to produce a "win" for the adviser and his/her client.

3. Evaluate the adviser's world. Segment the market of advisers to understand variations in business practices, priorities, capabilities, resources, client focus, motivations and the like. Walk in their shoes to anticipate what is likely to be successful in meeting the requirements identified in step two and thereby transform foreign into familiar.

4. Design the operating model. Draw from the insights developed in steps one, two and three to define the specific roles, processes, tools and resource commitments necessary for cost-effective cross-selling among the adviser, the life insurer and any third parties that may be involved. There must be clear understanding of the underlying economics, including the relative value being added by each party, which should guide how the allowance of margin available for marketing and distribution will be shared.

5. Execute. Put the plan into action with disciplined monitoring to support ongoing improvement.

Economic and marketing discipline applied to a critical understanding of the non-life insurance advisers circumstances is the foundation for a successful cross-selling program. By transforming the foreign product into the familiar, profitable distribution partnerships are possible.

Richard K. Berry, a Best's Review columnist, is a Towers Perrin Principal with Tillinghast's North America Life Insurance Practice. He can be reached at [e-mail].