The profit in non-profits (Part 2)

Brokers and agents who manage to penetrate the non-profit and social services space have a good opportunity to build a base of loyal, lifelong clients

The profit in non-profits (Part 2)

Business strategy

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This story is the continuation of Monday’s “The profit in non-profits.” To read the first part, click here.

Communication and collaboration
Although this space of the market may present some unique challenges for brokers, it is not without its benefits. The non-profit industry is renowned for its communication and collaboration between organizations, so any broker or agent who goes the extra mile will be recognized by the client. “The great thing about non-profits is that they are fairly loyal to their agents if they feel they have been well taken care of,” Binford says.

“The best tactic to differentiate, fuel growth and drive retention is for agents to become their nonprofits’ risk management resource. In this capacity, they should provide guidance for things like child safety, sexual abuse controls and concussion management.” Binford believes it’s imperative for brokers to provide guidance and advice about the use of waivers and hold-harmless agreements in order to help their clients effectively manage risk. “Educational seminars for the non-profit’s key managers and employees should also be considered,” he says. “The broker should avoid selling on price alone and concentrate more on the risk management side.”

Randall Hedlund, program director at Care Providers Insurance, believes that working in this space of the market gives brokers rewards beyond the opportunity to sell insurance products. “Unique to the business is the fact that you’re helping organizations who help people with particular needs; you’re really giving back to the communities in which you operate,” Hedlund says. “I know a number of brokers who are not only great agents, but great partners to non-profits and social services, too. They help their clients by sitting on boards, providing volunteer labor and helping these organizations operate more efficiently.”

The reputation factor
Working with non-profits and social services agencies can also be a great brand-building process. Being attached to a philanthropic agency helps a broker stand out from the crowd and adds a layer of trustworthiness to their value proposition. “Many banks have insurance arms and have worked with non-profit organizations in order to become good stewards to their communities in providing lending, insurance and other financial services,” Hedlund says. “It’s all about being part of the community. You’re helping people grab their bootstraps and pull themselves up. All of that has a very positive impact and is a very good image-builder for the people involved.”

Although their budgets are inevitably low, non-profit organizations still have the ability to afford insurance products. In fact, these tight budgets make having comprehensive coverage all the more important. Whereas a for-profit company may be able to pay out of pocket for a claim, the same scenario could be devastating for a non-profit. Brokers have a good opportunity to gently inform and educate these clients that insurance is a necessity, not a luxury.

“To really help their clients in this space, brokers need to be familiar with non-profit operations and the various services they might offer,” explains Vince Terlaje, president of NIF Pacific and national director of the Non-profit Social Service Program. “There are tailor-made coverages for non-profits, and fully understanding the unique coverages that are offered in this space is paramount for brokers’ success. This space has very unique exposures, and the broker must be able to identify the risks and then provide the solution.”

Because 2016 is an election year, uncertainty is in the air for non-profits and social services agencies. It’s difficult to predict how the result will impact funding streams, but the hope is that organizations are not forced to consolidate, bringing about a reduction in the vital services that non-profits provide to the public.

For brokers, too, the space is ever-evolving. Terlaje believes that all brokers should take advantage of automation tools in an attempt to find ways to reduce costs for themselves and their clients. “Brokers also need to be ready for the next generation of required coverages that occur in this niche insurance space,” he says. “In the same way that the need for cyber liability policies has seen a rapid increase, there are going to be other new and innovative coverages, and brokers should stay current on what is coming next.”

 

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