DPRMC Blog
You never know how a P&C project will end up!
Published on Tuesday, 27 December 2011 20:15 | 
Written by Bobby | 
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Recently I worked at persuading 2 P&C insurance clients to shop their insurance, as both were coming up on 3 years since they had done so. Both had very good incumbent agents. One avoided me and missed the opportunity. The other was reluctant to shop, but decided to listen to me.
Why was he reluctant? He didn’t want to spend the money on me, as his business sales volume was down about a 1/3 or so from pre-recession times. Without me involved he knew what a large amount of work he’d have to do. But I convinced him my cost would probably be less than a possible increase in his Worker’s Comp that we may be able to avoid with competition, since he had had some losses in that area.
I figured we’d mainly reduce the amount of an increase, as different sources tell me the market is firming, but right now it’s hard to figure out exactly where it’s going.
At the projects conclusion, the incumbent agent came up with 2 options. The first was a 1% premium increase by using a different carrier, and his second option was using the same carrier he’d used for 3 years, with their increase being 5%.
We had 2 other agents competing. One was unable to find an offer with his carriers. The other found a major carrier with a special program for this type business, and came in about 12% under the incumbent agent’s best offer. Their coverage was comparable, and the agent’s references checked out very well, so my client moved to take advantage of the significant (surprise!) savings*.
The moral of the story here is that the P&C insurance market can be very unpredictable, especially account by account. While overall we can usually see what direction it’s going, to predict exactly where a RFP (Request for Proposals) project will end up is similar to trying to predict where the stock market will be-60 to 90 days into the future.
*This client gave me a testimonial letter after the project. To see it, click on Testimonials, and then “…sometimes you have to spend money to save money.”
For P&C Insurance, how do the Better Agents affect your Bottom Line?
Published on Monday, 18 July 2011 21:54 | Written by Bobby | |
For your P&C insurance, how valuable are the better agents to your bottom line? Much more than appears at the surface. Why? Normally experienced insurance agents or brokers know who their best competition is. Whether they are trying to keep your business or write it as a new agent, when they know they have strong competition, this is communicated to the underwriters who price your insurance. As in any other sales activity, no one wants to lose and thus waste their time and effort. Therefore the underwriter and the agent want to price your coverage so that they win your business. If your business is desirable to insurance carriers, this pricing of your account is normally much more aggressive with strong competition versus weak competition. Why do I mention this?
In my 7.5 years of consulting, I have tweaked my agent network continuously. Even though for the short term less capable and disorganized agents would have generated more work for me in the form of causing problems I could solve, I have resisted being tempted to see this happen. Instead I have looked to bring the most organized and service oriented agents (including their very important back up team members) with the strongest carriers to my clients. While in the short term it often causes me to “work myself out of a job”; in the long haul I can feel the satisfaction of bringing the best value I can to my clients. Thus when you look to DesPortes Risk Management for assistance, you can feel secure that the agents or brokers I recommend to you will be the best ones I can find for your type business.
Have lower P&C Insurance premiums since 2005 reduced your chance of hearing "Sorry not Covered?"
Published on Monday, 18 July 2011 21:04 | Written by Bobby | |