Almost every insurance carrier has a field marketing organization (FMO) through which they sell their products. For example, if an insurance agent is looking to sell final expense insurance packages of insurance company X, there’s almost no chance that the insurance agent will engage the insurance carrier directly.
Instead, the insurance agent will buy the packages from a field marketing organization that has been contracted by the insurance company. As the insurance agent, you might prefer to sell the final expense insurance packages directly from the insurance company, but you have a lot to gain by working with a field marketing organization.
The need for field marketing organizations
The insurance industry, like other industries, is leveraging outsourcing to meet their business goals. As a company customer base grows, the company must find a way of keeping in touch with the customers without compromising on the quality of the products or overstretching the available resources. This is why insurance companies delegate sales and marketing to field marketing organizations.
Due to the nature of the insurance industry, field marketing organizations joined the insurance marketing chain as a matter of necessity, rather than a strategy of reducing costs. The insurance industry is very involving; much time is spent out in the field doing valuations and dealing with legal disputes. Insurance companies, therefore, prefer to focus on those tasks and outsource sales and marketing. Most insurance companies do not even have a sales workforce.
Do FMOs reduce insurance agents’ commissions?
In other industries, the presence of intermediaries means reduced commissions as you move down the marketing chain. However, the presence of FMOs in the insurance marketing hierarchy does not affect the insurance agent’s commission. FMOs work for the insurance company and they are paid by the insurance company, not the agents. In fact, in most arrangements, the insurance agent has a contract with the insurance carrier, not the marketing organizations. FMOs give insurance agents the same commissions they would receive if they were working directly with the insurance company.
Of what benefit are FMOS to insurance agents
Both the insurance carrier and the insurance agents benefit from the presence of FMOs in the insurance marketing hierarchy. Insurance agents receive better and faster service than they would receive when working with the insurance company directly. As earlier stated, insurance companies have many duties to handle, and their staff may be overwhelmed. But FMOs specialize in attending to the needs of insurance agents. Therefore, agents receive services such as quotes, certification, and contracting faster.
In addition to faster support, insurance agents also receive training from FMOs. Insurance marketing organizations are tasked with boosting sales of the insurance carrier’s products, and they do this by sharing marketing ideas with their agents. Also, they carry out market research to help their agents boost sales.
Finally, FMOs are like a one-stop shop for insurance agents; most FMOs work with different insurance carriers. Working with such FMOs saves insurance agents the hustle of negotiating with various insurance carriers.
The Final Word
In the insurance marketing hierarchy, FMOs come directly after the insurance carrier. They are tasked with marketing the carrier’s product by managing insurance agents. FMOs play an essential role in insurance marketing, and they benefit both the insurance agents and the insurance carrier.