Just for fun, let’s play the "what if" game. It’s Friday afternoon and a client calls and informs you that she needs coverage for a new 45-foot houseboat she just purchased and plans to take out for the weekend. Or it’s early Monday morning and a client tells you he purchased a 28-foot center console fishing boat at the boat show over the weekend. He is picking it up today and needs coverage.
Obviously, these boats are too large to be covered under their homeowners’ policies and they fall outside the appetite of your standard personal insurance carriers. You don’t have a specialty marine market in house for high performance boats or boats more than 26 feet in length. How do you respond?
Too many agents are not prepared to handle these types of recreational watercraft exposures for their clients. They may think that without direct market access or knowledge of watercraft and watercraft policies, they are not equipped to help their customers.
Sadly, for many agents, the "what if" game results with their customers sent elsewhere to find coverage. But it doesn’t have to end that way. Recreational watercraft experts who have access to a wide array of carriers and products can meet the needs of your boating clientele.
With the traditional boating season just around the corner, now is the time to partner with one of these experts to ensure you are ready to provide your clients with the proper solutions to their recreational watercraft needs. By doing so, you are strengthening your agency and opening new opportunities for growth.
Partner with an Expert
Finding the right partner is your first step. Any time one of your customers goes outside your agency to find coverage, you run the risk of losing the entire account. Therefore, it is critical that you protect your client base by finding a partner who will work with you and not compete against you. There are two ways to do this. The first is to find a "watercraft only" retail agency. While you may not be able to retain the revenue, at least you know this agency will not attempt to cross sell auto, home or other lines of business to your customers.
Another option is to work with a wholesale specialist who does not own or support another retail distribution channel. With a wholesale partner, you don’t have to worry about cross-selling but you also have the ability to share in the commission revenue. You will find that having access to the specialty watercraft marketplace will benefit your agency.
First, tap into the expert’s knowledge and expertise. Marine specialists know their stuff. If you are not familiar with boats, marine policies and nautical terminology, you could get yourself and your clients in real trouble. Consider the following:
- A typical recreational marine policy contains a warranty clause that states the agent and insured certify that the boat is well maintained and "seaworthy." If you have little knowledge of boats, are you comfortable putting your agency’s reputation on the line?
- At some point most specialty watercraft will require a marine survey. This is an inspection done on the vessel similar to a home appraisal. The surveyor comments on the overall seaworthiness of the boat, its operating systems and determines a market value for the vessel. A marine survey can contain as many as 100 pages of technical information. Are you prepared to read through this document and certify that the boat meets National Fire Protection Assn. and U.S. Coast Guard standards?
- At the time of a loss, a marine specialist will be inspecting the boat and adjusting the loss. Are you equipped to knowledgeably advocate on behalf of your client and ensure they are getting a fair settlement?
If you cannot confidently answer yes to all these statements, then you should seek out a specialty marine partner to handle your boat coverage placements. Qualified marine wholesale specialists can provide all this and more. They will help you understand your clients’ exposures and advise you on the right options and solutions. They also should provide you with the right questions to ask your customers so you can professionally and efficiently get coverage written. In short, the right partner will make you look good in front of your customer.
Another benefit of partnering with a boat specialist is, through them, you gain access to the markets you need to properly protect your clients. Many retail agents do not write enough boat business to support a direct appointment with these specialty carriers. Be sure that your partner has access to multiple markets with the ability to handle a wide variety of boats in the geographic areas that are important to you and your customers. If your potential partner cannot place high performance boats, yachts, older boats, high value vessels, sailboats, coastal mooring or navigation outside the U.S., keep looking.
In addition to knowledge and access to the right markets, real experts have strong relationships and credibility with their carriers. This credibility translates into flexibility when your client’s exposure doesn’t "fit" the stated underwriting guidelines. Being able to negotiate deals is important in the marine marketplace. This is another example of how the right partner makes you look good to your clients.
Increase Retention and Revenue
Once you have a watercraft partner in place, you immediately begin impacting the bottom line of your agency. Given a choice, most consumers prefer to deal with a single agent for all their insurance needs. As outlined earlier, having a recreational watercraft partner who doesn’t compete against you for other lines of business lessens the vulnerability of losing your clients to another agency. With a "wholesale only" partner, you have the added benefit of generating revenue directly from this new line of business.
Industry studies show that customer retention increases with the number of polices you have with that customer. Increased client retention improves your agency’s productivity, efficiency and revenue.
With a solid recreational watercraft solution in your office, you also gain the ability to market this product line directly to your clients. You may find that you have a significant number of boat owners in your agency management system. What was once an insignificant line of business for your agency may now become a legitimate revenue stream for your organization. In this way, offering watercraft coverage to your clients strengthens the long term profitability of your agency.
Opportunities Through Referrals
Like most enthusiasts of a particular sport or hobby, boaters talk to one another. In fact, they are a very tight-knit fraternity. Whether out on the water or anchored in the marina, they swap stories, share experiences and develop friendships with fellow boat owners, boat dealers and marina operators. This is a network that your agency can tap into when you are able to write recreational watercraft products.
Boaters spend a considerable amount of time and money on their vessels. With a limited number of insurance options available to them, this group appreciates insurance professionals who understand watercraft and have the proper markets and products to protect their investments. Word of mouth advertising is strong in the boating community. When you begin handling watercraft coverage for your clients, they will refer other boaters to your agency. Referrals will call asking about coverage for their boats. Once handled, you then have the opportunity to cross-sell other lines of business. Where you once lost agency accounts by not writing watercraft coverage, you are now generating new business as a result of having this line of business in your agency.
With nearly 13 million registered pleasure watercraft in the U.S., this no small market. Can your agency afford to ignore this segment of the personal insurance market? Can you afford to run the risk of losing established clients because you cannot write specialty watercraft products?
Let’s play another round of the "what if" game. What if you had the ability to place recreational watercraft in your agency? What would that do to your overall sales? How could it impact retention? What would it do to your agency revenue?
Full steam ahead!