For an independent agent, a hard market can feel like a spin of the roulette wheel; tirelessly searching for a balance between coverage and cost when premiums are climbing, and policy stipulations are stricter than ever.
This cycle can be caused by a variety of events, including significant losses or broader economic challenges. For agents, this typically brings a wave of price-related grumbling from clients. How should these concerns be tackled, and when is the right time to consider requoting?
Understanding Client Concerns
First, it’s essential to empathize with the concerns of clients. The increase in premium isn’t just a number for them; it affects their budgeting, business, or personal finances. Open a line of genuine communication – listen to their worries and explain the reasons for the price hike. Understanding the underpinnings of a hard market can help in these discussions. Whether it’s due to increased claims in the industry, global economic shifts, or reduced investment income for insurers, a clear explanation often softens the blow.
Educate and Provide Context
Another critical element is to educate clients. This isn’t about inundating them with insurance jargon, but rather providing context. Compare the situation to other industries or provide historical data showing the cyclical nature of the market. While the present might be challenging, it’s just a phase, and will eventually shift. Clients often appreciate it when they are treated as informed partners rather than mere policyholders.
When to Consider Requoting
Whether prompted by client requests, premium shifts, or changes in risk profile, requoting ensures agents and clients consistently secure the best value. Here’s when it might be prudent to requote:
- Client Request: If a client explicitly requests a requote, it’s usually a good idea to comply. Their request shows that they are proactive and value the services but are hoping for a better rate.
- Significant Rate Increases: Small incremental raises are standard, but if there’s a massive jump in premium without a corresponding change in the client’s risk profile, it may be worth shopping around.
- Change in Risk Profile: Whether a business scales down operations, an individual installs advanced security systems at home, or other significant life or operational changes occur, it might be appropriate to requote. The goal is to ensure that the coverage still aligns with the current risk profile, without leaving anyone over-insured (or under-insured).
When Not to Requote
While it’s not that agents should never requote, discretion is key. Frequent shopping for a lower premium can be counterproductive and may undermine long-term relationships with carriers and clients. Here are some factors to consider:
- Trust with Current Providers: Long-term relationships with carriers foster better cooperation and support. Switching too frequently can compromise the quality of service you and your clients receive.
- Time Commitment: The process of requoting demands careful attention and time. Rather than spending hours seeking marginally better rates, this time could be more productively spent nurturing existing relationships or acquiring new clients.
- Cost-Benefit Analysis: Not all requotes lead to substantial savings. When you factor in administrative hassles and the potential loss of customer loyalty discounts, it’s crucial to weigh the actual benefits before proceeding.
- Minimal Cost Differences: Sometimes the savings realized from a requote might be marginal. If the difference in premium is only a small amount, it may not justify the effort, potential disruption, and paperwork.
The key to navigating price complaints in a hard market lies in a mix of open communication, education, and strategic decisions regarding requoting. It’s not just about the lowest price but the best value. An agent’s role isn’t only to sell policies, it’s also to guide and act in the best interests of clients, ensuring they understand the full picture and trust in their agent’s expertise.
Remember, while the hard market poses challenges, it also offers opportunities to solidify relationships, build trust, and position oneself as an indispensable advisor to clients. Navigate wisely.