Five weeks ago, our agency received a call from a long-time client ordering loss runs–a firm's three- or five-year loss history. When a client orders a report, it usually means they're looking at other providers.

After 15 years with our agency, I don't blame them. Checking the market is prudent for every business owner, and the client had been approached by a specialist in their specific class of business.

When I met with the firm's executive director a couple of weeks later to touch base and review our coverage, I asked him who they were looking at for the comparison. He named another agency I knew quite well. They were headquartered in Indianapolis, very polished, they wear suits, and their office is in the high-rent district.

I decided to ask a couple of questions–such as how they were going to compare coverage. ”We're getting an apples-to-apples quote,” he said.

“So how are they looking?” I asked.

“Really good. They're much lower than you.”

I asked if I could review their proposal.

“Just come to our board meeting next month at 7 p.m., and you can review at that time,” he said.

At this point, lots of agents go into scramble mode. They begin getting alternative quotes, knowing they have to lower that price to match a competitor. I did nothing.

The day of the board meeting, I pulled together the client's information, wrote a two-page summary, and headed to the meeting. I figured that the competition would be there and it would be a good, spirited debate.

I entered the board room a little early and grabbed my seat. At 7 p.m. we said the Pledge of Allegiance and the meeting began. I kept looking for my competition, but no one ever showed up.

I was asked to speak and before I did, I handed each board member my two-page summary. I reviewed my agenda, asked if they had any questions, then proceeded with my review.

I explained that our agency process is to check the renewal pricing of each of our clients 90 days before renewal. We had done this with their account and found that premiums were going up about 3% to 4%. Because our agency is seeing average premium increases of 5% to 8%, we decided not to market their account. The fact that they give small increases or decreases provides stability and their coverage forms are some of the best in the industry.

I reviewed the amount of coverage, talked about various key coverage points, and concluded with their pricing increase, which would bring their annual premium to roughly $12,000.

The president thanked me for the review, then said, “Why don't you let us hash this out and we'll call you.”

I smiled and said, “I've got all night, I'll stick around while you hash.”

“We have a competitive proposal from XYZ Co., and it's apples to apples,” he said. “Their premium for the same exact thing is $8,000.”

Two-thirds of my premium. I smiled again.

As the president began reviewing the competition's presentation, we noticed their values were considerably less than ours on every building. The competing agency was given old information so their apples-to-apples numbers were incorrect.

“I wish he was here to review this with us,” I said.

“He was supposed to be, but something came up,” the president said.

After we debunked the “apples-to-apples” claim, I asked about the carrier. It turned out to be a carrier that was famous for getting into the market at a low price point and then making it up the following year. Our agency chose the markets with consistent year-after-year pricing, which I explained.

The board had a few more questions. We discussed specific insurance components like retroactive dates, blanket and agreed values, and other fine points of the coverage.

In the end, the board made the motion to keep our firm as their provider. They didn't trust the competitor's proposal and appreciated my stewardship of their insurance needs.

The client agreed to pay my firm one-third more in premiums. Why? There is no such thing as an apples-to-apples proposal and half of one's success is merely showing up.

Special Reports /

Rotten Apples: Beating a Competitor's 'Apples to Apples' Quote

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