By John Ammendola, president, personal lines, Grange Insurance

Storm season is here, and according to The National Oceanic and Atmospheric Administration (NOAA), weather losses have been above-industry average since 2008, with more than $11.5 billion in losses in 2012 alone. When this weather volatility first entered the scene a few years ago, many carriers thought implementing rate increases would allow them to quickly return to profitability. But over time, the industry proved that this action alone would not save carriers, agents or their policyholders.

All of this activity has forced the industry as a whole to adapt, placing more of an emphasis on meaningful partnerships between carriers and agents.

As agents continue to work through this challenging environment and adjust their tactics, here are just a few attributes to look for in a supportive carrier partner that will ultimately help you continue to accommodate policyholder needs while remaining profitable.

1. Look for a partner who provides you with the tools and education needed to be successful.

Simply telling someone to brace for bad weather does not provide the details necessary to stay safe. But providing education on where to seek shelter during a storm or offering a severe weather survival kit can make an impact. Selling homeowners' insurance is no different. Most policyholders and prospects have a hard time understanding the details surrounding specific policies and options, so find a partner who provides you with educational materials and other tools to help explain these complex topics to your clients. Look for carriers that offer educational materials specific to industry situations (i.e., a fact sheet on actual cash value (ACV) roof or a video explaining separate wind/hail deductibles). Tools and educational training can not only help educate your policyholders on how to get the most out of their insurance coverage, but also allow you to position yourself as a knowledgeable advisor. Though this may seem minor, as the market becomes more complex, consumers will rely more heavily on trusted sources rather than always seeking the cheapest option.

2. Work with carriers who value frequent, convenient and open communications.

Some carriers may provide you with all the tools you need to sell particular products; however, it's also important to note how the actual communication takes place. For example:

Do they proactively share information about policy changes in advance, or while the changes are taking place?
Do they offer information about the greater direction of the business or industry?
Do they provide information in the manner you prefer to receive it? For example, is the information accessible through email, direct mail, text message, etc.?
Do they collaborate with you to gather feedback to identify the best solutions?

Ask yourself and potential carriers these questions as you work to identify the most strategic partner for you and your agency.

3. Find a carrier who understands no two clients are alike.

In addition to effective and customized communication, it's also important to identify carriers that offer options. Agents understand more than anyone that no two policyholders are alike, so strive to find a carrier who understands this, too. Given the current economic climate, consumers are seeking ways to modify their existing policies to remain insured while fitting within a particular budget. Partnering with a carrier that provides options to help you build unique policies to match different budgets and lifestyles will equip you with the necessary offerings to attract and retain business. Some examples of policy options may include:

Actual cash value (ACV) roof: This option allows the policyholder to insure the roof for its current value, taking into account wear and tear that has occurred over time, to receive a lower premium.
Separate wind/hail deductibles: It's separate from the standard deductible, but can help your clients save on premium by raising their deductible only on damage stemming from this type of loss.
Higher standard deductibles: This allows homeowners to easily lower their premiums.

Carriers that offer these types of features will help you consistently offer quality coverage to your clients at a fair price, while still allowing you to remain profitable.

The industry will likely see higher catastrophe losses, a relatively weak macroeconomic environment, lower investment yields and the tapering off of the benefit of reserve releases, all of which could combine to weigh on profitability for the overall property-casualty industry.

What does that mean for agents? The industry will likely see a fundamental shift in the way it operates, increasing co-insuring on the part of the customer, as in ACV roof, for example. Because this shift will yield a new definition of customization, agents will need to be the source of policyholder education, offering more tangible examples and a more creative approach to selling, which further underscores the importance of identifying and partnering with a strong carrier.

Special Reports /

Weather or Not: Disasters Underline Need for Good Carrier Relationships

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