I was still a fairly “green” insurance broker when I was granted the distinct privilege of shadowing a veteran producer on a new business sales call. (For the sake of those involved, let’s refer to this veteran producer as Bob.)
FYI: Don’t Sell Insurance Like Bob
Bob had been selling insurance longer than I had been breathing air, and that doesn’t even include the many years he spent on the Company side of the industry. Bob had been both an Executive and an Underwriting Manager at a prestigious insurance carrier. He knew ISO policy language better than his own native tongue, and he had a handful of clients whose individual commissions each brought in mid six-figure revenue annually. He also happened to be a genuinely nice guy and his clients truly enjoyed working with him.
But when it came down to it, Bob was really more of an Account Executive than he was a Producer of new business.
The prospecting appointment that morning was with a very large supplement manufacturing facility in California. Bob was the lead producer on the account and I was there to watch him, to shadow him, to learn, and to take notes. (And now I’m using some of those memorable notes to teach you what not to do in the insurance sales cycle.)
What Was The Goal For That Day Again?
We met with the insured’s two primary decision makers and took a golf cart tour of their production plant. We then settled back into their plush office and the insured soon volunteered the news that they weren’t satisfied with either their current agent or their current insurance carrier.
Bob and I quickly scanned the Declarations pages of their General Liability policy and it was obvious they had some significant gaps in coverage based on their current exposures. In fact, we estimated that roughly 40% of their total revenue would not be covered (was excluded) by their current policy.
The General Liability policy was written by a non-standard insurance company with non-standard policy language. Almost everything in the policy was manuscript. Moreover, we felt the premium being charged was possibly two to three times what it should have been, even if it was covering all of their exposures.
It was a real mess.
Impressed by our immediate assessment, the insured then leaned across the table and asked us to take over their policies via a Broker of Record letter. I smiled, because that’s precisely what I was thinking too.
But not Bob. No, Bob had a different idea in mind.
Wait…What Just Happened?
Bob politely declined to take the current polices over on a Broker of Record letter. Instead, he announced that we would take our submission to the standard market, fill in the gaps with the proper coverages, save them a boat load of premium, and come back looking like superheroes.
I couldn’t believe what I was hearing. To this day I still think I may have gasped out loud. I did not at all agree with Bob’s decision on the account. But he was the lead producer on the account, so that was that.
We went back to your office, huddled with our team members to figure out a game plan, gathered all the loss runs, put together a massive submission with an auto schedule so long it would make your head spin, and then hand-delivered it to a few cherry-picked carriers Bob felt would be a great fit for the account.
Unfortunately, the account didn’t fit anywhere. Anywhere, that is, except where it was currently placed, in the non-standard market with one of the few non-standard carriers willing to entertain it. It turned out that the insured had some hairy exposures that no standard carrier was willing to consider. None would even quote it with an exclusion for such a large percentage of their known exposure.
In the end, we actually spent a lot of wasted time doing the dog and pony show with underwriters. We gathered data, had paperwork and folders coming out of our ears, our Customer Service Representatives developed Carpal Tunnel Syndrome from doing overtime on the auto schedule, and we spent a good day or so driving out to the underwriters offices to hand deliver our submission in person.
A submission which, unfortunately for us, was quickly declined and handed back to us in less than a few minutes.
Needless to say, that whole experience was a disaster. Bob declined the signed Broker of Record letter and we wasted a tremendous amount of personnel hours and resources on something that never panned out.
We were hoping to come out looking like superheroes in the end. Instead, we showed back up at the insured’s location the next month with our hats in hand.
Bob politely asked if they’d still be interested in assigning us as the Broker of Record on their current policies, but the damage had already been done. The insured rightly assumed that Bob was only asking because we had no other options for them.
Sent Home Broke and Empty-Handed
We were sent home with nothing to show for our team’s massive efforts.
TEACHING POINT: That particular new business prospecting fiasco is a perfect example of why insurance producers need to get out of their own way and start doing insurance sales the smart way. And the smart way begins by no longer being your own worst enemy, and earning the insured’s PERMISSION before you take one more step.