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The Rough Notes Company Inc.



September 20
10:14 2021

Those who’ve been around understand the cyclical nature of the market. In this hard market, you should know how best to protect yourself, your agency, and your book of business.


How to protect yourself and clients during second half of the hardening market—rising prices

by Michael Wayne

As I write this, COVID case numbers are on the rise, mask and vaccine mandates are being imposed, events scheduled for the fall have been called off, and more are in jeopardy. Between what we as an industry experienced in 2020, the ramifications that are being felt now, and the uncertainty of the future, the market’s hardening is simply continuing. The only question is just how much more prices will rise.

Those who have been around long enough understand the cyclical nature of what’s going on right now. For younger producers who may not have experienced what’s happening, it’s important for them to have a handle on what exactly is going on because if they don’t understand it, they absolutely won’t be able to provide reasoned answers to clients or prospects about what they can do.

If you have not done the due diligence to learn how the events of the last year-plus may have affected your clients and whether their needs are different, what the heck have you been doing?

The restructuring of programs is mostly settled at this point. Capacity and capital deployment have found their place. As alluded to earlier, the second half of the hardening market—rising prices—is still the great unknown. So, what actions should you be taking in this hard market to protect you and your book of business?

Educate yourself and your clients. As the old saying goes, “You don’t know what you don’t know.” If you have not done the due diligence to learn how the events of the last year-plus may have affected your clients and whether their needs are different, what the heck have you been doing?

If you haven’t been keeping in communication with your clients and giving them updates as to what they could be facing come renewal time, you’ve got work to do. Sticker shock is never good, and the last thing you want to do is disgruntle a client with a surprise hike in their premiums.

Take a deep dive into your accounts. To a large degree, this is an offshoot of the previous action. You need to figure out which clients have losses that could potentially be problematic come renewal time and address them in as timely a manner as possible. If nothing else, you need to show carriers that problems are being recognized as soon as possible and are being addressed so that corrective measures may be implemented promptly.

This, in turn, also helps indicate to your clients the importance of active loss control and other risk management protocols to improve both short- and long-term success. It stands to reason that lower claims activity is helpful.

Avoid settling for a quick fix. Insurance is not a one-size-fits-all proposition. There aren’t always simple solutions and, in a hard market, the impulse to lower coverage to combat it isn’t necessarily the first thing you should convince your client to do. Above all else, talk to your client. Find out what they are going through, what they believe their risk to be, and what they are thinking about as it pertains to future plans and goals.

Can you recall how many “I’m going to tell you the secret to making money” television and internet ads you’ve ignored or skipped in the last year? If you have a general approach to your clients and they haven’t already tuned you out, this may just be the time when they do so to find an agent who actually cares about their passion.

Reinforce carrier relationships. Maintaining regular check-ins with clients and prospects is one part of the puzzle. Another is sustaining and improving relationships with carriers. Do not leave the latter in the dark when issues are arising, especially if an issue is something widespread that you see. Being able to spot trends and letting your carriers know what you are witnessing is just one more way to help keep the industry-wide team effort of navigating a hard market going.

Exhaust available resources. This really is a simple case of best practices that you should already be employing. If you are not providing your clients with the resources at your disposal regarding cost containment strategies, safety, loss control, claims management, etc., you absolutely need to be from here on out. Suddenly introducing resources such as this could be a bit jarring for your clients, especially if they find out that these are capabilities you had all along or for a considerable amount of time.

The converse of this is true as well. If you have been providing all of this to your clients, make sure you have it documented and can show them how you have been working for just this sort of downturn to ensure that they would be in the best position possible and, hopefully, unaffected.

The author

Michael Wayne is a freelance insurance writer.

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