Biz P&C Renewal Process - Thru The Client's Eyes

[scott]

Here are broad ideas I have been looking in the renewal process from the insurance buyer's perspective:

- The most important part of the insurance transaction is the relationship the insurance buyer has with the insurance agent. That being said, few agents have unique skills and resources. Almost any insurance buyer can easily find an agent who will provide superior service. In fact, a search will usually uncover several.

- Insurance agents all tout the exceptional service they provide. The reality is often different. Insurance buyers expect great service and dismiss service claims of potential agents.

- A match in personalities of the insurance agent and the insurance buyer is important.

- Trust of the agent by the insurance buyer is important.

- The geographic location of an agent is important. Different states have different laws. Regional insurance markets are different. Understanding the insurer's resources in an area can help at time of claim.

- An agent's specific industry expertise can trump the importance of an agent's location.

- An insurance agent's access to a broad range of insurance companies is important.

- An insurance agent's relationship with their insurance companies is important. Large premium volume with an insurer means that the agent has some pull with the insurer - in underwriting and in claims.

- When using multiple insurance agents in a bid process, the buyer must assign insurers to agents. The assignment of a company to a particular agent is important. An insurer's performance does vary (coverage, service, and price) by the agent who has brought in the business.

- Insurance underwriters have wide latitude in the premiums they can charge and the coverage they can offer. Underwriters are charged with finding the right price based on the perception of the risk and the appetite of the insurance company. Most insurance rating starts with some kind of base premium. Underwriters can then increase premiums by as much as thirty percent. They can also decrease premiums as much as thirty percent from the base. (Note to insurance people: Yes, I am overly simplifying the rating process. However, the fact remains that underwriters can largely do whatever they want with premiums.) The authority of managers and supervisors is even greater.

- Underwriters can almost always hit a stationary price target if they like the risk, respect the agent, and want the business. Tell the underwriter they will lose the account unless they meet or beat a competitor's price, and the price will be beat. Give them a last shot, and that shot will almost always hit the target.

- The threat of losing a bid or an account makes agents and insurers sharper. Competition keeps service high, coverage broad, and pencils sharp.

- Price is always important to the insurance buyer. It is rarely the only consideration.

- Underwriters have a great deal of latitude in coverages, too. Not as broad as with pricing. However, when pushed for a reasonable coverage concession, most underwriters can get the job done - if they really want to.

- Most insurance buyers prefer to renew their policies with the same agent and same insurer. In most instances, where the relationship of the agent with the client is stable, a premium savings of 20% is needed for the account to move. Even then the current agent often gets the "last shot."

Comments and other ideas welcome.

[bobson]

How does an agent provide superior service? What kinds of things do you see with the agents you work with that create superior service?

Structured renewal processes? Newsletters? What else do you see?

[wlunday]

One thing we do with commercial accounts is to provide a very detailed summary of the actual service performed during the previous year. We share this at renewal discussions so the client understands what they are paying me for. Number of certificates, documented phone calls for service or advice, certainly the time representing them on claims as well. When they can see that they paid me, say $2000 on a $20,000 account and see that I earned it by providing 50 hours of service... it helps build value within this relationship.
Most clients simply don't think about what we do. Unless we share this with them they will continue to think we never do anything for our commission!
Just my two cents...

Wayne Lunday

[tcook23]

Insurance is something that is personal to me. When I am talking with customers I want them to know I care about them, granted I work in small community where I have a relationship with them outside of business, but I always want them to know I have their best interest in mind. In the future it will be interesting to see what practices the industry adopts in regards to enhancing customer service.

[scott]

Im hijacking my own thread...

tcook, your approach is certainly correct for any insular marketplace.

However, realize that it is the same approach used by almost every other agent.

Ask any group of ten agents what makes them different from other agents and at least 9 will say some version of," I provide exceptional, personalized service."

That is meaningless to any prospect - they expect you will provide exceptional service. Do you or anyone else hire anyone you think will provide average or substandard service?

What specifically is exceptional service? How do you manifest it for your clients?

What can you do that makes you truly different? How can you make your work remarkable - worthy of remark.

[bobson]

Im hijacking my own thread...

tcook, your approach is certainly correct for any insular marketplace.

However, realize that it is the same approach used by almost every other agent.

Ask any group of ten agents what makes them different from other agents and at least 9 will say some version of," I provide exceptional, personalized service."

That is meaningless to any prospect - they expect you will provide exceptional service. Do you or anyone else hire anyone you think will provide average or substandard service?

What specifically is exceptional service? How do you manifest it for your clients?

What can you do that makes you truly different? How can you make your work remarkable - worthy of remark.

My goal is to start a monthly newsletter. I also want to start a structured renewal process 90 days out. 2 other phone calls throughout the year. What kinds of stuff makes an insurance consultant stand up and take notice???

[scott]

My List of Required Actions (Plus) for Agents Serving My Commercial Clients:

-Annual review meeting to review coverage (at insured's office, at agent's office, or on the phone).

-Presentation of renewal proposals 30 days prior to expiration - 60 days prior if the account is being renewed with the current insurer without other proposals. (This is a new requirement, that I know will cause gnashing of teeth. However, it is a standard that can be reached.)

-If the account is dynamic or complex, a mid year review - or more.

-Claims reviews as needed - discussing all open claims.

-Experience modification claim review (agent talks with adjuster) 5 months into the WC policy - all open claims going back 4 years.

-Review of experience modification worksheets when issued.

-Responsive to service requests.

-Utilizes email.

-Able to scan documents and attach them to emails.

-Responsive to coverage questions and alternative quotes.

-Broad access to markets - standard and E&S (through a broker is fine).

-A student of insurance coverage - advanced designations, access to FC&S, and other reference materials.

-A general attitude of, "how can we make it easy for you to do business with us."

I bring business to agents that meet the above. I appreciate agents who bring me ideas and insurance thinking. Emails sent to me that start, "I saw the attached and thought you might find it interesting." Company reports, agency white papers, copies of marketing materials, and other materials that help me serve my clients better. Don't buy me gifts, offer me lunch, send me sporting events tickets - all will be refused and returned.

Other consultants might have other requirements.

[volstrike3]

If you do a good job of remarketing their account (or explaining why staying with the current carrier is their best option) and you keep them in the loop starting 90-120 days out... you will retain the vast majority (mid 90's) of your clients. Communication is the key... if you are talking to them and letting them know which carriers you are approaching and your marketing plan (just price checking the incumbent carrier, looking to upgrade carrier or coverage, etc). Clients get concerned and start to look around when they are not hearing anything from you but other agents are blowing up their phone. If you have been in contact with them and they feel you have a strong marketing plan and are on top of the renewal, chances are they don't want to go to the effort of getting competitive bids. It takes time to gather the information, fill out supplemental applications, request loss runs and have multiple meetings (introductions and presentations) with multiple agents. It is something that most busy business owners try to avoid and probably won't do if they are convinced you are doing a good job. If they don't fully trust you then they will always bid it out. In short... be proactive and responsive. It only takes a second to make a phone call or shoot off an email with a weekly progress report during the renewal process.

In terms of getting new clients... you need to have the relationship, a vastly superior product + industry knowledge or they need to be upset with their current agent. Even average agents keep 85% of their clients so you are wasting your time if you do not have any of those advantages. The key is getting and staying in front of enough prospects that you are the first agent they think of when their current agent slips up. Your pipeline needs to be huge because good accounts do not move very often. You do this by being visible in trade associations and networking with other professionals (CPA's, Attorney's, etc) that work with clients your target industries. A referral from a trusted advisor (their CPA, Esq., Business Banker, Property/Association Manager, etc) is often warm enough to put you on equal ground with their current agent if they are really shopping.

Many of the things mentioned (great service, market clout, market access, newsletters, e-newsletters, holiday/birthday cards, community involvement, etc) is the price of admission to be in the game. It doesn't make you stand out... it is expected.