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The Rough Notes Company Inc.



June 30
11:00 2022


Conversations are simply opportunities to deepen the client relationship

The current inflationary climate will likely affect how your
clients react to the news. Some will be resigned to rising
costs as part of today’s reality. Others may be feeling
particularly vulnerable and have a more emotional reaction.

By Troy Korsgaden

Inflation, rising prices, and supply chain disruptions have become a dominant theme in 2022, and the insurance and financial services industry has not been immune to their effects. Many carriers are encountering higher costs to replace or repair homes, automobiles, and other insured articles.

Because of these increases, rate actions are imminent across the industry; indeed, for many, they have already arrived. In Q4 2021, personal property and casualty lines increased 4.25%, while rates for umbrella/excess lines increased 11%. A year-over-year comparison published by Market Scout showed that rates increased from plus 5.6% in 2020 to plus 6.6% in 2021.

Many of us are now faced with the task of sharing this news with our clients. Instead of approaching these conversations with apprehension, how-ever, think of them as opportunities to deepen the client relationship.

People appreciate knowing about increases before they happen. Ideally, you’ll want to get in front of a rate action so your customers hear about it directly from your team and aren’t surprised by their next premium statement. Connecting with clients ahead of time allows you to explain the increase and ensure clients are leveraging all discounts available to them. No one likes a rate increase, but your clients will know you are working to minimize the impact while still providing the best value.

The current inflationary climate will likely affect how your clients react to the news. Some will be resigned to rising costs as part of today’s reality. Others may be feeling particularly vulnerable and have a more emotional reaction. Whatever their response, it is important to deliver the news in a compassionate yet honest and straightforward manner. When it comes to receiving bad news, experts say that most people prefer directness, candor, and very little, if any, buffer.

Following a few simple guidelines can make the conversation easier for you and your clients.

Scripts and talking points

I advocate using scripts for almost every client conversation. Scripts and talking points keep everyone in your organization on the same page and ensure that all clients are receiving consistent messaging. Scripts also increase agent and associate confidence when they are relaying technical or disappointing information to clients.

It has been a trying few years for people, and they’re tired of bad news. This makes scripting rate-action conversations especially important. Make sure the message your team delivers is accurate, compassionate, easy to understand, and demonstrates unrivaled service.

Have team members role-play conversations until their potential responses to clients sound natural, not canned. The only thing worse than not following a script is having team members sound like they are reading from a script! Make sure every team member’s delivery is flawless.

Conversation components

Handling rate-action calls effectively requires four essential components.

Empathy. Empathy is a powerful tool to let clients know you recognize their concerns. Genuine empathy builds trust and can ease the way into explaining the rate increase. Here is one way to express empathy with clients:

  • “I understand how you feel seeing an increase. It seems as if every-thing is increasing today; I’ve experienced the same feeling.”
    Natural language. Our profession is full of jargon that many clients find confusing. Communication with clients—whether verbal or written—needs to be free of industry-speak, especially during sensitive conversations. Don’t compound clients’ disappointment with language that is difficult to understand.

Explanation. People respond better to disappointing news when they under-stand the reasons behind it. Transition the conversation from a personal issue (empathy) to an objective matter (changes in circumstances). Here are two sample talking points you can use to explain why rate actions are necessary:

  • “As you may know, the insurance industry is facing many challenges with the increasing cost of claims. It is necessary to charge adequate premiums to pay future claims for all policyholders.”
  • “An overall increase is necessary due to a high level of claims and losses, along with our company’s increased cost of paying these claims, including the costs of medical bills and car repairs (or “the increased cost of building materials, medical bills, and home repairs”). Our practice of reviewing rates, which determines an increase or decrease in premiums, is an industry-wide practice.”

Partnering with the client. Strength-en relationships and show clients you value them by partnering with them to come up with the best solutions:

  • “We appreciate your business and want to ensure that you are getting answers to all your questions. I understand that you are frustrated with this situation, and I know that [agent’s name] will be more than happy to meet with you to review your entire account. We want to make sure the information we have on file is accurate and that you are receiving all the appropriate discounts.”

Having a conversation with clients about a rate increase allows you to remind them of the value you provide. Here is an example of how you can speak with clients about a rate increase, with a focus on the overall service you provide:

  • “I understand how you must feel. Other clients have felt the same way, but over time they find that prices tend to even out across insurance providers. What matters to our clients is how well they are treated when they need help. I want you to know that my commitment to you is to provide you with the best possible service at the best possible price. Here’s what that includes:
  • “Around-the-clock access to our professional, licensed staff
  • A full-service agency with auto, home, life, and business protection with more than 40 products to choose from overall
  • Best-in-class claims service, including a high-tech catastrophe-response team
  • The financial strength of a well-known company to pay your claims now and in the future
  • A personal review of your policy coverage every year

Then remind them, “We know you have a decision to make. We want you to know how much we value you as a client. We want you to make that decision based on the total value of what we are offering.”

The importance of follow-up

It’s one thing to discuss with clients a pending rate action and another for clients to open their bill and see the in-crease. The rate-action conversation can be much more effective if you also follow up once premium statements have been sent.

You no longer have to break the news to clients. You’ve already had the hard conversation, and they are prepared for the higher rate. You’re simply following up to see if they have any questions or need further information.

Don’t underestimate the value of this follow-up conversation. A 2020 report by Nationwide Insurance indicated that 94% of agents reported they regularly check in with their clients, but only 69% of clients said they receive sufficient check-ins from their agents.

Encourage your clients to voice any questions or concerns they have. Listen to and acknowledge their concerns. Be empathetic and straightforward and remind them of the value you provide, then follow up to ensure that their questions have been answered. These simple steps will help you retain your clients’ business and trust, even when delivering unwelcome news. n

The author

Troy Korsgaden is the principal of Korsgaden International, a company that specializes in the seamless distribution ecosystem, global marketing, strategy and execution, agency building and technology implementation for many of the world’s largest insurance carriers and financial services companies. He can be reached at

About Author

Rough Notes Editor

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