Selling Value, Not Price Creates Winning Agencies

Resources

By combining an agency or brokerage firms resources with those of the carrier and other professionals, the producer can deliver thorough, complete service–from sales to claims–to the client.

Clients depend on an agent to provide competitive rates. They also expect the agent to know the market–to know the breadth of whats out there and how best to leverage the market to the clients advantage.

While low price is clearly a strong selling proposition, agents and brokers can serve their clients by combining their resources with insurers to forge true value for the client. The agents and brokers who stand out deliver support and services throughout the lifetime of a policy–from structuring the initial insurance deal, to risk mitigation, to claims handling.

For instance, agents and brokers can steer their clients towards carriers that offer dedicated customer support.

Some carriers offer services that may seem minor, such as automated certificate generation. But these kinds of value-added services augment the offering of a good price, making the offer more attractive and the sale easier.

Of more value to a client are pre- and post-loss services that an agent or broker can offer a client. Risk mitigation is as important to customers as risk transference.

An insurer is too far removed from a particular insured to implement loss measures on an operational level. Agents and brokers, on the other hand, know their clients well. This service affords the producer a unique opportunity to add value to the client relationship.

In this unique position, agents and brokers can demonstrate their resourcefulness by guiding their clients to risk reduction best practices. Already possessing a working knowledge of a clients individual risk position, the agent or broker has the stature to stand toe to toe with the business owner or top management to provide candid and meaningful advice. Producers can work with their clients to develop management practices that are consistent and sound.

For example, agents and brokers can work with the carrier, as well as consultants, to provide their clients with behavior-based tools that mitigate risk. This includes everything from up-to-date employee applications and background checks to advising clients to reduce concentrations of risk, which is especially important in light of new terrorism-associated risks.

Post-loss, a producer can hire a claims consultant who represents the client throughout the claim process.

The results of providing such thorough support are a veritable spiral of positive effects: the client enjoys a better business and the agent or broker enjoys a returning, satisfied customer.

Market Position.

Because an agent enjoys the unique position of knowing both the client and the market, he or she can position the clients account in the market to optimize deal structures.

In todays hard market, an agent must focus on providing diligently prepared submissions. With the high number of companies that have exited the property-casualty market or reduced their exposure, those insurers who remain are implementing more diligent underwriting practices. Just as the insured wants a reliable and financially solid company, insurers are seeking quality risks in this hard market.

It is therefore incumbent upon the broker to know how best to represent the client to the market. This is a matter of leveraging the unique position that brokers enjoy: knowing the client and the market.

In some situations, a broker may face a potential or even a return client with a difficult risk to place. But what the broker might know, which is not immediately obvious in a submission, is that the losses are either anomalous, their cause has been remedied, or the exposures are well controlled.

The broker can, of course, walk away from the business. But if he or she has a relationship with a particular carrier, the broker may be able to work with that carrier to create a deal structure that comes to terms with that particular risk. The smart broker then can leverage his or her place in the market and turn what seems like a bad risk into a satisfied client.

Yet, it is more than just market relations. Resourceful brokers or agents can create opportunity for a client, and for themselves, through their relationships with a carrier. For example, employment practices liability exposures have evolved quite rapidly, placing the hospitality industry in the odd position of facing risks due to the behavior of guests and invitees. Such risks may not be covered by workers compensation or general liability. The savvy broker, however, has an opportunity to work with a familiar carrier to extend EPL coverage to include guest behavior.

This, of course, involves a thorough understanding of an industry–an indispensable tool for a broker. But what it really involves is the ability, and the insight, to leverage the totality of the market, to combine knowledge of an industry with knowledge of both the client and the carrier.

Technology.

When it comes to the issue of technology, brokers must utilize it to solidify relationships with clients, rather than avoid critical client contact.

In the recent tech boom, many companies have capitalized on technology to automate and depersonalize customer relationships. Technology, however, should not be used to replace service but instead to augment value.

Wise producers utilize technology as a way to know customers better, to open up communication, rather than shut it down. It is a matter of utilizing technology appropriately to save time and money, while building value with clients.

Todays technology allows for ready access to critical information about both potential clients and the market in general. An agent can access information on a potential client in order to create pre-qualified leads to save time, money and crucial resources.

Technology allows producers to stay abreast of the latest information about exposures, such as new or pending legislation, new case law and regulatory changes, for example. Suddenly, an agent is more than a mere provider of the lowest available rates; he or she is a source of key information.

Contact management software allows agents to easily maintain important client relationships while building new ones. This software allows a broker or agent to proactively build client relations, to send that e-mail at the right time, to make a call, or to keep positive lines of communication open.

Facing todays business market, agents and brokers need to remember that it is very competitive out there. Those producers who succeed are the ones who take advantage of the resources available to them and who leverage all the market has to offer in order to build strong client relations and strong businesses.

Carl J. DeBarbrie Jr. is Senior Vice President for Applied Underwriters in San Francisco.

Reproduced from National Underwriter Edition, May 5, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.