Here is a “real life” example of an agency client of mine with a newer producer who is learning how to prospect, sell insurance and work with underwriters. We can all learn a thing or two…daily!
I emailed the below summary to all of the producers at the agency but I’m switching out the names for your benefit. Enjoy!
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I wanted to send this information to you in order to reemphasize the importance of putting together a quality submission upfront when sending it to Jane (the marketing department), and ultimately to the carriers. A poor, “bare bones” submission may be enough to secure a market for us and even get a quote…but it doesn’t mean you’ll receive a very good/competitive quote.
For example…
Jane sent a work comp submission to State Fund with the information supplied to her by the producer. We received a quote at $78,608 with a Rating Plan Modifier of 1.33920.
The State Fund underwriter was kind, helpful, and savvy enough to email Jane and say that they might be able to give us additional Scheduled Rating Credits if we can answer a few questions for them regarding the insured’s safety, training, loss control, etc. In fact, here is the last sentence from the underwriter’s email:
We can’t change the tier but as mentioned above if any additional information for schedule rating can be provided I can review the information to see if additional credits are warranted for this insured.
The producer answered the underwriter’s questions with “bare bones” answers. Jane took those “bare bones” answers and gave them to State Fund. State Fund revised the first quote of $78,608 down to $74,413 with a Rating Plan Modifier of 1.26720.
Then, after another request from the underwriter, the producer answered the EXACT SAME QUESTIONS with slightly more detail (although one of the underwriter’s initial questions went unanswered again for the second time around). The State Fund underwriter took this new information, went to her manager for credit approval, and got the quote lowered once again. The newly revised (3rd quote) is now at $70,218 with a Rating Plan Modifier of 1.19520.
This is an 11% decrease compared to the first quote. This decrease could likely be the difference between this agency winning the insured’s business and losing the business!
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TAKEAWAYS:
1) First of all, let me say that Jane did EXACTLY what she’s supposed to be doing on marketing your accounts. She takes what you give her and goes to market. It’s the producer’s responsibility to be thorough in the data and information, not hers.
2) Producers need to start thinking like an underwriter. This example is a worker’s compensation underwriter, who is interested in writing businesses that are concerned about claims, safety, loss control, best practices, etc. (If you’ve got a Mercedes Benz type of insured…don’t showcase it to look like a used Buick!)
3) You handcuff your underwriters when you don’t supply them with what they need in order to justify their pricing to their underwriting managers. Although the underwriter eventually got to this 11% credit revision, she could not initially justify it to her managers based upon what she had in front of her (our submission).
4) Your competition could convince the insured that they would be able to get a much better quote with the carriers because they will put together a superior submission showing financials, details of claims, etc. (And they might be correct)
5) Underwriters know which agents/agencies are known for “bare bones” submissions versus superior submissions. Let’s level-up our game!
6) The same goes for other P&C lines of coverage, such as GL, Auto, etc. There’s no difference.
7) I personally believe that the vast majority of business owners in California are paying anywhere from 5% – 15% more than they could/should, solely because their agent is not rating the account online wisely, practices a “bare bones submission” mentality, has a poor reputation with the markets/underwriters, or simply never renegotiates better pricing on the insured’s behalf. They simply show up with quotes!
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