3 Tips for Selling in a Hard Insurance Market

A hard insurance market is when there is a higher than normal demand for coverage but a reduced capacity for most types of insurance lines. As a result of a hard market, premiums are typically higher, and carriers are less likely to be flexible with policy limits and terms. So, with insurance professionals staring down the barrel of having to justify higher premiums to policyholders and fewer carriers in which to market accounts, is there a better way to approach selling in a hard market? While there are no guarantees, the following three tips may help you be more proactive in your selling efforts.

  • Get your renewals in earlier than normal. Renewals are the lifeblood of your insurance agency. In a hard market, it’s in your clients’ and your best interests to get renewals in 90 to 120 days before the expiration date. Not only does this allow you to block the market, but it also provides the extra time needed for you to approach multiple markets in the event an underwriter or carrier decides not to renew an account. For underwriters, this extra time may be needed in order to schedule an inspection company to physically review a risk and verify specific account information, such as the condition of an older home’s roof, the correct distance to a fire hydrant or fire station, or the heating, ventilation and air conditioning system of a restaurant or manufacturing operation.
  • Proactively communicate with your clients. To say that policyholders won’t be happy about a premium increase is an understatement. This is especially true for accounts that have not filed any claim losses during their policy period. In a hard market where rates and restrictions are destined to increase and limits will likely be lower, it’s important to be proactive and schedule a policy review with your clients sooner rather than later. Start by alerting clients that there will likely be an increase and as their agent, you are looking for ways to help them offset some of the expense. For example, can you apply any policy discounts? Are there claim losses that will be over the five-year mark come their next expiration date? Have there been new safety protocols implemented since the last renewal? It’ll take work, but just going through the process of keeping your clients informed can demonstrate your commitment that will hopefully keep them around for the long term.
  • Know that underwriters will require more time. When insurance professionals are heavily marketing renewal accounts and trying to put more new business on the books, underwriters and carriers will be at or near capacity levels. As a result, don’t expect a quick turnaround time on the release of renewal premiums or new business quotes. However, you can improve the situation by submitting only full and complete applications, saving a lot of back and forth. For example, if you have an account with a large claim loss, provide underwriters/carriers with the information they need upfront to make an informed decision. In addition to currently valued loss runs, be sure to include a detailed explanation of the loss and the efforts that have since been made to help mitigate future risks. Other account information should include supplemental forms, supporting marketing materials for businesses and a narrative that describes the account in more detail — something that is critical with more complex commercial accounts.

We’ve all had enough bad news this year. But the good news about a hard market is that it won’t last forever. By getting a head start on marketing your accounts, proactively communicating with your clients and working with and not against underwriters and carriers, you’ll be in a better position to weather the storm.

About FastrackCE

Pressed for time to complete your insurance continuing education credits before the end of the year? FastrackCE can help. We offer online courses in most states covering a broad range of topics, including most of the state-mandated courses such as ethics, flood, long-term care and annuity training. For more information, call 800-544-3605 or visit us at fastrackce.com.

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