Hard markets can mean huge opportunities for independent insurance agents
A hard insurance market is characterized by rising premium rates, decreasing capacity and tougher underwriting standards. For independent agents hard markets present a challenge. Clients react unfavorably to rising rates – or worse, policy cancellations –and agents have to work harder to find coverage.
Yet, for those independent insurance agents that are prepared and proactive, the hardening market presents an opportunity to strengthen your value proposition as a trusted advisor, and to solidify relationships with both carrier partners and clients
Build and strengthen relationships with carrier representatives.
In an uncertain market your carrier relationships become even more important. Cultivating trust with carriers and underwriters allows them to become familiar with you as an agent and comfortable with what you are submitting. Make sure your submissions are complete and paint a complete picture of the risk. Understand how each carrier is being impacted by the hard market and go out of your way to be a model partner.
Educate your clients and staff.
As clients see their renewal rates rise, not having a communication plan is not a good plan.. Make efforts to help clients understand what the market is experiencing and why. It is important to get well out in front of renewals and let them know what to expect. You may decide to offer to shop the policy for a better rate, suggest alternative coverage options, or look for opportunities for discounts. Having a bold marketing plan can help your agency win new clients who are price-shopping or seeking alternatives.
Agents can support their communications with references to reputable sources of relevant information. Some examples:
• Used car pricing (Manheim Used Car Index)
• Labor costs (US Bureau of Labor Statistics)
• Daily lumber prices (Statista)
You may also work with associations that have client-facing materials available to help educate your clients.
It’s also important that your staff understand what factors drive a hard market and are able to explain it to customers. Provide them with talking points and guidance around how to respond to questions and concerns.
Use available technology to gain operational efficiencies.
Remarketing business takes effort, and can result in less time to find new business. Now more than ever, seek digital solutions to help create efficiencies, freeing up time for account rounding and writing new business.
Does your agency utilize a CRM? Is your data accurate and up to date? Are you fully utilizing your agency management system and comparative rater?
Ask associations you work with what technologies they provide or recommend to their members.
Be more proactive than your competition.
Use the current market as an opportunity to revisit clients you may have lost in the past, or reopen communication with prospects you may have not been successful in winning their business. Your focus and diligence in these difficult times can really pay off.
Independent insurance agents don’t need to be intimidated by a hard market. It may call for a change in strategy and a little more work on the ground, but it also offers opportunities for new business and stronger professional relationships.
Doug Meacham
President, COO Midwest Insurance Agency Alliance, Inc.
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MIAA has helped hundreds of startups and existing independent insurance agencies prosper in any type of market. Find out how we can help you.