Typically anywhere from about 90-120 days before your insurance policies are due to renew, your telephone probably starts ringing off the hook with brokers who want to work at providing you some insurance quotes. It can be a frustrating time of the year for insurance buyers.
But does it have to be that way?
Answer: Not exactly. (But it does take some knowledge to make it easier on your office staff who will provide information to these brokers. And here is why.)
Why Obtaining Insurance Quotes Is Hard Work
Back before I became an independent insurance consultant, I was an insurance broker.
For example, I would make cold calls to various construction companies around California to see who would let me quote their insurance. I would then set an appointment with the office manager (every company has this “lucky” person) in order to stop by to collect some data and give him or her my presentation.
I’d sit down with the office manager, go through my agency’s highlights, ask a few “pain” questions, and then make copies of their policies … all the while explaining to the office manager why I would do a better job than the other agents.
I’d then take my arsenal of policy data back to my office, put together a submission, and fax/email it off to practically every insurance carrier our agency was appointed with and who would typically even think about quoting that industry.
My hope was to “block the markets” before any other agents had a chance to submit to that insurance carrier first, since insurance carriers will only entertain a submission from one agent. And that agent was whoever faxed in his or her submission first.
The “Unknowns” of Obtaining Insurance Quotes
But here are four very real and quite typical examples as to why that mode of obtaining insurance quotes for your company is a bad, bad idea.
- Agent-A (a new agent) may have a better relationship with a particular underwriter than Agent-B (your current agent) does. If the underwriter doesn’t trust agent-B or agent-B’s insurance agency, the underwriter may decline to offer a quote altogether, or inflate the pricing in order to compensate for any unknowns.
- Agent-B’s brokerage may have placed $15,000,000 of insurance premium with a carrier/underwriter while Agent-A’s brokerage has placed nothing with that insurer and may be on the verge of losing its appointment altogether.
- Agent-A may market all his/her accounts himself/herself while Agent-B uses an internal marketing department which knows little about your company’s needs.
- Agent-A may be able to access an insurer directly while Agent-B and Agent-C may need to go through a wholesaler, which adds cost, hassle, and a lack of enhanced coverages.
So, what is the best way to assign the markets to the agents who are quoting your insurance?
Getting the Best Insurance Quotes Possible
Here are 5 things you can do to ensure the best possible outcome and receive the most competitively priced insurance quotes available.
- Only allow three (3) agents to obtain insurance quotes on your behalf. These three would consist of your current broker, and two specially selected agents.
- When an insurance agent calls your company, hoping to provide you a quote, ask him or her which are the top 3 insurance carriers their agency would quote on your behalf. If an agent is not familiar with your industry, he or she won’t have a quick answer. (That would be a red flag and you shouldn’t let that agent quote you.) If the agent does have some experience in your company’s industry, then have him or her give you a list of the top 3 carriers … in order of preference … which they would want access to.
- Obtain similar lists from each of the brokers you are allowing to gather quotes. The fact of the matter is that competition breeds better results, and allowing one agent (even your current agent) to blanket the market is not in your best interest. Allow your current agent to access the current carrier, but then strategically assign the next 9 or 10 markets to each of the three brokers. DO NOT ALLOW THE AGENTS TO SUBMIT TO ANY OTHER CARRIERS.
- As you continue to receive phone calls from other agents, you could ask them which carriers he or she would access. When the agent starts naming off some of the 10 or so carriers you’ve already assigned, you can explain that those carriers have already been accessed. If, however, an agent calls and says that his/her agency has a “special” or “exclusive” market that is not available to other agents, you can make the decision to allow that agent to ONLY access that carrier on your behalf.
- One of the problems is that, out of the 10 or so carriers you will assign, some agencies can access that insurance carrier directly while other agencies must go through a wholesaler. This can be both a positive and a negative. Ask the agent if he/she plans to go to that carrier directly or if they’ll use a wholesaler. Then ask them WHY. Assign the market accordingly.
In summary, if you do not assign the markets strategically to only a few agents, you are essentially throwing mud against the wall to see what sticks. And the problems with doing it this way is that it causes frustration for the person at your company gathering quotes, and it makes you pay a lot more premium for your renewal insurance quotes.
The best way to handle the renewal process is to hire an independent insurance consultant, such as Constructive Risk, to handle and manage the process for you. You are an expert at what your industry is. We are experts at how to manage the insurance markets to bring about the best results. Contact us for a free consultation on how we can be of service to you.