Analytics Are For Selling

Those of you who have written large accounts, as I have, know that you are always under the sword of proving your value. Whether it’s a new member of the C-Suite, an investment banker or change of ownership. And that doesn’t include the competitive pressures your fellow brokers exert when they want your position on the account!

For decades you have worked under the banner of “Value Added” services, showing clients how you have done an excellent job in reducing placement (insurance) inefficiencies, improving coverages and compressing losses.

But here is the truth (and you know it.) If push comes to shove, you really are hard pressed to answer the question: “How have you improved our business model?”

Now look, let’s not kid each other. If you actually believe you are in the selling business, shouldn’t you be able to show a buyer how much better off they are by doing business with you? Isn’t that an essential component of any selling strategy?

For years you have talked about the importance of differentiation. But then you go back to the same strategy that was developed 327 years ago at Lloyds Coffee House (circa 1688) and talk about coverage, terms and price.

And speaking of coffee, it's time for the insurance brokerage industry to wake up and smell it!

You now have the ability to actually call on a client and show them how your firm will impact their cost structure, earnings, ownership valuation and productivity, to name a few. Isn’t this what you have always wanted to do?

Imagine the power of calling on a new account and KNOWING that your firm will improve their outcome and business results. How does that change your entire new business approach? What about your hit ratio and income?

Now you would say, “How is that possible? Because, if that is true, I want it on every new business call I make!”

Not only is it possible, but it is currently being done by selected Analytic Brokers™ across North America.  

So, if you want to not only smell the coffee, but be able to make it, here is what you must accept RIGHT NOW:

  1. The world of Analytics is changing business at a speed that we have not seen since the adoption of the computer.

  2. Your Analytics must be around your impact for clients and include much more than simply the insurance costs and loss ratios.

  3. Your Analytics must be in real-time and change with the improvement of your results for clients.

  4. Your Analytics must be attached to the actual results of the prospect with their current broker.

  5. Your improvement must be translated to the buyer’s Key Performance Indicators (KPI’s) - They all have them.

  6. You must have the ability to replicate this method with all clients and prospects.

Notice I said RIGHT NOW. That is because if you don’t, the industry will pass you by. As will your clients. They want you to work this way, as they have set up their business to measure results with dashboards that keep them advised in real-time. They are looking for brokers who can help them impact these results and help them measure them.

Analytic Brokers™ are now providing their clients and prospects with all that I have mentioned above. Through TCORCalc®, they have the client data they need in real-time to ALWAYS compete on a basis of Broker of Record. They know their own Metrics and Analytics and are able to project and present them to a new prospect. They are guaranteed a future in the large account buyer’s world, while their competitors move into obsolescence.  

Best Regards to Analytic Brokers™

Rob Ekern, CAB (Certified Analytic Broker™)

Chairman, TCORCalc®


Writing Large Accounts Using Big Data

For the past year or so, you have been inundated by insurance carriers and service providers endlessly discussing their “Big Data” strategy with you.  But, when you look deeper into it, you are learning that the vast majority of it is about underwriting information, management benchmarks or exotic marketing strategies that most don’t have the ability to implement.

As we used to say... ‘That’s all great, but what does it have to do with the price of tea in China?’  In other words, ‘What do we need in order to compete at a higher level and actually grow our market share over our competition?’

Property Casualty brokerage firms have been extremely slow to adopt meaningful analytics, metrics and outcomes that show a client how they have impacted their profits, EBITDA, productivity and other important business goals.  The Property Casualty brokerage industry is woefully behind every other industry in this regard.

Yet, virtually every one of your C-Suite buyers operates their business based upon metrics, KPI’s and analytic performance.  If you don’t believe that, ask your top clients what KPI’s they use to judge their performance.  Then hold on because you will hear everything from turnaround time to CAPEX, shop rates to shareholder valuation, EBITDA to revenue per item, etc.

Then ask yourself this question:  'How have we really impacted their important business metrics?'  Then throw in one more: 'Can we actually prove it with data-driven results?'

Some of you have invested hundreds of thousands of dollars in resource capabilities. Yet, you can’t answer those two important questions.  A bit frustrating isn’t it?

Oh, you can tell them about the reduced loss ratios or the reduced claim costs and even about how you have impacted their risk financing structure.  If you are lucky you can even show them how you have reduced costs around the collateral on a self-insured program.

But, here is what you probably can’t tell them... the specific impact your firm has had on their business goals and what it has been for all your top clients.  In a new business presentation you probably can’t provide Business Intelligence that will predict what the prospect’s results would have been.

So, it is time for the insurance brokerage business to join the rest of the business community in actually providing a quantifiable value that is based upon credible data and outcomes.   Up until now, it was not your fault.  The capabilities and data standards did not exist for middle and upper-middle market accounts.

But now they do.  TCORCalc® has changed the way that Analytic Brokerage firms attract and retain middle/upper-middle market accounts.  The TCORCalc Members and Analytic Brokers have access to information and client delivery tools that are broker-based.  TCORCalc members have a huge advantage over their competitors.

They know not only the price of tea in China, but exactly what their client results have been.  They are able to translate it to buyer KPI’s, metrics and analytics.  A strong currency in any language!

Learn More About TCORCalc Now

Best Regards to Analytic Brokers™

Rob Ekern, CAB (Certified Analytic Broker™)

Chairman, TCORCalc®

Metrics - The New Normal

The CFO of today uses metrics and analytics for any number of purposes. These new data points help ascertain product launches, business goals, customer acceptance and yes even vendor evaluation. So, if you want to do business with larger organizations one of the keys is to provide your clients and prospects with business metrics that others are not providing.

If you want to have an enlightening conversation with a CFO prospect or client, ask this question:

"What are some of the metrics you use to evaluate your business performance?" It will lead you into a discussion that will rock your world. The information that CFO's need and use has changed at light speed over the course of the past several years. They have moved into metrics and analytics that help them improve their business on a quantifiable basis.

The CFO of today uses metrics and analytics for any number of purposes. These new data points help ascertain product launches, business goals, customer acceptance and yes even vendor evaluation. So, if you want to do business with larger organizations one of the keys is to provide your clients and prospects with business metrics that others are not providing.

The insurance brokerage business has traditionally provided clients with only one key metric . . . How their insurance premiums stacked up historically against exposures. For the most part, everything we have done points to only one thing . . . Price.

Oh, I know. In many cases, we do show clients or prospects how we drive down their claim costs. I suppose some would call those metrics. Not me, I call those project features with no quantifiable outcome; other than a reduction in claim costs or risk financing price.

As a Consultative Broker(TM), you are now able to provide your clients with a number of meaningful metrics that actually proves your Value Proposition and places it on the client or prospects financial statements. This is done by translating your Total Cost of Risk impact into the 6 areas of Business Risk.

Ready, here goes:

1. Hazard Risk - This is the simple comparisons that we have always known. (Hazard Risk Only)

2. Financial Risk - The entire Total Cost of Risk impact as it relates to profits.

3. Operational Risk - The TCOR impact as it relates to the clients competitiveness.

4. Strategic Risk - The ability to translate TCOR into business productivity improvements.

5. Human Capital Costs - Focusing the impact of cost reductions in turnover, training and human productivity.

6. Equity Risk - Demonstrating the impact of TCOR improvements on ownership evaluation.

These are the metrics that Consultative Brokers are becoming astute at providing their prospects and clients. They understand that to be acknowledged as a consultant and paid like one; it is imperative that they provide CFO buyer's metrics that are meaningful. These Consultative Brokerage Metrics become the backbone of their quantifiable value proposition.

So, if you intend to stay in the game of writing and retaining larger accounts; here is a word to the wise. You really need to get on board with discussing business risk metrics with your clients and prospects. They are getting them from other industries and using them to plan and operate their businesses. I can assure you that many of your best opportunities will come from being perceived as a valuable organization that helps create and provide outcomes based upon metrics.

They are now the new normal!

Best Regards to Consultative Brokers,

Rob Ekern

For more information on how to quantify TCOR, manage projects, build a value proposition, and consistently deliver stewardship reports and new business presentations to your customers, check out the Major Account Development System (MADS), an on-line consultative broker's toolkit. Available now!

Ready to learn more about Consultative Brokerage Sales Training? Visit the Consultative Brokerage Academy.

To learn more about C.R. Ekern & Company, please visit our website


The Truths of TCOR

Total Cost of Risk is one of the most misunderstood methodologies inside the insurance brokerage and risk management community. This observation is based upon over 35 years of experience as both a successful working broker and brokerage consultant. In fact, I was there when TCOR was first conceived. (Unlike Al Gore who did not invent the internet!)

Total Cost of Risk is one of the most misunderstood methodologies inside the insurance brokerage and risk management community. This observation is based upon over 35 years of experience as both a successful working broker and brokerage consultant. In fact, I was there when TCOR was first conceived. (Unlike Al Gore who did not invent the internet!)

By being there, I mean being in the industry as a working broker when TCOR was first introduced by Risk Managers. Why did they create it? It allowed them to have some deeper discussion with their bosses and financial management of their respective firms. Now, known as the C-Suite.

Since then, Total Cost of Risk has stood the test of time. The acronym TCOR is well known and established. As many of you know, our firm has built its reputation on helping successful brokerage firms create a quantifiable value proposition for large clients, based upon developing a TCOR business model.

Over the past 15 years, since the inception of Consultative Brokerage™ the TCOR delivery system; we have been fortunate to work with many of the top brokerage firms in North America. In that capacity, we have run the gambit of firms, producers and buyers who are all espousing their version of TCOR.

In many cases, each TCOR advocate shows their various adaptation of Total Cost of Risk and claims it to be the Holy Grail of TCOR. So, let’s separate the wheat from the chaff regarding the truth of TCOR.

  1. TCOR is made up of 4 distinctive parts. They are Risk Financing Costs, Loss Costs (Direct and Indirect), Administrative Costs and Taxes/Fees. A TCOR calculation that does not include all of these is not Total Cost of Risk. In many cases, they are not provided because the broker is not in a position to capture and demonstrate each section. Therefore, they rely upon simply converting the insurance costs. Or, in many cases, they make up new words and lump them under the banner of Value Added Services. Without being able to demonstrate the Value!

  2. Total Cost of Risk is not an enthralling topic. Yeah, I know, this sounds like blasphemy from the guy who is credited for bringing TCOR to upper middle market brokers and clients. But, ask yourself this question; “When was the last time you witnessed a group of C-Suite executives sitting around a table and swapping tales of their TCOR accomplishments?” What makes it an enthralling topic is the outcome it provides clients as regards profitability, productivity, competitiveness, human capital expense and owners equity impact. This brings up the next point.

  3. Total Cost of Risk impact is the only way a broker has to actually create a Value Proposition. The Value Proposition is created by the impact of resources and client projects as they relate to demonstrable, evidence based, quantifiable cost reduction to clients. Everything else simply revolves around the marketing and placement of the insurance products. Here is a little secret: Many of the brokerage firms all represent the same markets and products . . .

  4. Total Cost of Risk leads clients to REAL Metrics. Now, stay tuned for an upcoming briefing on this subject alone. But for today it is enough to know this. The term metrics and analytics are becoming a huge buzzword in our industry. In most cases, when these metrics are evaluated, you will find them to be simply variations of comparing prices of insurance carriers and risk financing placements. These pricing comparisons and placement and Metrics are very narrow and simply show the buyer a product comparison. Of course we all know that the product is only 20% of the buyers cost structure!

Consultative Brokerage™ was born 15 years ago. The Consultative Brokerage Methodology is based upon the development and delivery of Total Cost of Risk by brokers like you who are striving to make a quantifiable impact for your clients. During the course of that time, C. R. & Company has worked with successful brokerage firms who control over $3 Billion in revenues and fees.

By the way, if you intend to be in the agency/brokerage business over the next decade, it would be best to learn it now. The ship is sailing and the “me too” TCOR players will begin to fall of the vine.

But don’t worry, if you feel like you might be beginning to fall . . . we are here to help catch you!

-Rob Ekern

For more information on how to quantify TCOR, manage projects, build a value proposition, and consistently deliver stewardship reports and new business presentations to your customers, check out the Major Account Development System (MADS), an on-line consultative broker's toolkit. Available now!

Ready to learn more about Consultative Brokerage Sales Training? Visit the Consultative Brokerage Academy.

To learn more about C.R. Ekern & Company, please visit our website

Indirect Loss Costs - The Meat of the TCOR Sandwich

Understanding and explaining Indirect Loss Costs to clients and prospects is an acquired skill of Consultative Brokers™. They are at the heart of Total Cost of Risk and Total Cost of Human Capital (TCHC)™. In many cases, it is up to you as a Consultative Broker to make them understood by your clients or prospects.

Understanding and explaining Indirect Loss Costs to clients and prospects is an acquired skill of Consultative Brokers™.  They are at the heart of Total Cost of Risk and Total Cost of Human Capital (TCHC)™.  In many cases, it is up to you as a Consultative Broker to make them understood by your clients or prospects.

There are 3 important reasons why Indirect Loss Costs are so critical in the TCOR and TCHC methodologies:

These are the “hidden costs” that really eat up a businessperson’s profits and productivity.  Ask any true Risk Manager and they will tell you of this importance.

  1. The application of your resources is the only way to reduce these costs through risk control, claims management, and administration.  These become your points of quantifiable differentiation.
  2. In a first dollar or fully insured program, these costs remain even when the loss itself gets passed to the carrier.  It answers the client question:  “Why should I care about loss reduction?”  The answer is that while the insurance carrier pays the claims, the client absorbs the cost of indirect loss.

As I speak with brokers across North America on the subject of TCOR and TCHC™ there is one question that I am constantly asked:  “Where do you get those indirect loss cost factors?” or “What book can I find them in?”.

Now we are getting to the meat of the sandwich.  The only way to ascertain a client’s indirect loss cost factors is to have a business discussion with them regarding the costs associated with a loss.  These revolve around Business Risk Costs (profits, productivity, profitability and human capital).

There are guidelines you can use as points of discussion such as the OSHA Statistics and The Wausau Study.  However, both guidelines are in need of tremendous updating and should not be quoted as the Gospel.  That leaves you in a quandary as you attempt to quantify your impact and true nature of client costs.

Here is the truth about Indirect Loss Costs: they are what the client believes them to be.  Very few middle market accounts have a true understanding of their Indirect Loss Costs and it is up to you as a Consultative Broker to educate them.  Thereby, helping them to completely understand their Total Cost of Risk and Total Cost of Human Capital.

Why is this so important?  Because it provides you a quantitative benchmark from which to deploy resources.  If you have been the broker and the client’s indirect loss costs have declined, then it becomes a part of your quantifiable value proposition.  If you are competing for the account and you can determine ways to reduce losses, then the indirect cost savings becomes part of your Broker of Record Letter discussion.  Both approaches use TCOR and TCHC™ as your vehicle of credibility.

So, here are some thoughts on how to explain Indirect Loss Costs to a client and help ascertain the appropriate factors:

  1. Walk the client through a loss.  Once you have identified a loss, ask your client: “What happened inside your business because of the loss?”  This becomes a dollarized basis for your factors.
  2. Don’t forget the impact to “Brand”.  In the event a client has a loss that disrupts their business, some of their customers are also affected (deliveries not made, jobs not completed, bad press, etc.).  The brand loss can be the most expensive part of the indirect loss costs.
  3. Always focus on Business Risk Impact.  This is what makes the indirect loss costs real on the client’s financial statement.  They must understand how it translates to productivity, profitability, competitiveness and human capital expense.
  4. Reconfirm an understanding prior to proceeding with a TCOR or TCHC presentation.  Without this, your presentation will go flat.  This is because the client has not been motivated to remove these indirect loss costs.

So, the next time you intend to really help a client reduce their TCOR or TCHC, start the discussion around the client’s business operation and how losses impact their Business Risk.  As I have always said: “Any jamoke with an insurance license can discuss policies, coverages and carriers”.  It takes a Consultative Broker™ with real skill to focus on a client’s actual costs.  Indirect loss costs are the meat of the Consultative Brokerage™ value sandwich.  Make mine prime rib!

- Rob Ekern

For more information on how to quantify TCOR, manage projects, build a value proposition, and consistently deliver stewardship reports and new business presentations to your customers, check out the Major Account Development System (MADS), an on-line consultative broker's toolkit. Available now!

Ready to learn more about Consultative Brokerage Sales Training? Visit the Consultative Brokerage Academy.

To learn more about C.R. Ekern & Company, please visit our website

Stewardship Reports: If You Build It, They Will Come

To demonstrate to your clients how your firm has impacted their business, you must give them a quantifiable yardstick by which to measure your Value Proposition. This is critically important if you intend not to be judged only on your role as a “service organization.” Once you allow that to happen, you will no longer be in a unique space. After all, how do you prove a higher level of service when compared to others?

It has been close to 10 years and over 100 briefings ago, since we first spoke about Stewardship Reports.  Since that time I am glad to say that the awareness of Stewardship Reports and their importance has risen tremendously inside our business.  Stewardship Reports are a major part of the ongoing dialogue between clients and their brokerage representatives.

Yep, I am glad to say that the awareness and importance of Stewardship has risen.  Unfortunately, the quality of the reports has not!  In fact, over the past decade, most Stewardship Reports have become meaningless fluff, designed to shower clients with paper and superfluous information.

I am sorry to say that most Stewardship Reports have denigrated to claims reviews, policy analysis and timelines of activities.  While these are important activities, they should not be the key ingredients of a Stewardship Report.  If that was the case, we would call them “Activity Reports.” As most of you know, activities and results are two different kettles of fish.

So, let’s get back to the purpose of a Stewardship Report.  To demonstrate to your clients how your firm has impacted their business,  you must give them a quantifiable yardstick by which to measure your Value Proposition.  This is critically important if you intend not to be judged only on your role as a “service organization.”  Once you allow that to happen, you will no longer be in a unique space.  After all, how do you prove a higher level of service when compared to others?  Sadly it usually comes down to price.

After a decade of speaking and writing about it, we have finally taken matters into our own hands and created a unique tool that allows regional brokerage firms to demonstrate their actual Value Proposition.  We call it our Major Account Development System™.  It creates a 10-16 page client document that shows CFO’s and decision makers the actual results created inside their business. This is done through demonstrating your impact on profits, competitiveness, productivity and human capital.  In this process, insurance costs are the smallest ingredients.

The brokerage firms that are now using the Major Account Development System™ are achieving outstanding results.  Some have even had CFO’s invite them back to make boardroom presentations concerning how they have helped improve the firm’s business operations.  Now that is a beautiful place to be!

At the risk of this seeming to be a commercial, I wanted to tell you about MADs in this briefing.  We have been speaking about Stewardship Reports for a long time.  Now we have invented the ability to do one that is meaningful.  Here is what it includes:

  • A review of a client’s Total Cost of Risk, including benchmark comparisons by TCOR category and line of coverage.
  • The quantifiable impact on a client’s business risk by category.  This includes hazard, financial, operational, strategic and human capital.
  • A 10 page ValueReport™ that outlines the value and direction of your projects, along with their impact on Total Cost of Risk.
  • The creation of a PowerPoint presentation in real time.  This allows you to place the key results into a client overhead presentation for group presentations.
  • Middle market Total Cost of Risk Factors

Again, at the risk of sounding like a commercial, we needed to tell you about this.  Now that it has been developed by C. R. Ekern & Company, the game has changed.  No longer will Stewardship Reports and Value Propositions be simply conceptual in nature.  We have created the ability for regional brokerage firms to truly create and discuss their quantifiable value proposition with middle market clients.  There will be no longer the excuse for substituting price, features, timelines or claims analysis in exchange of a quantifiable impact for clients.

It has taken us over a decade to accomplish this.  The Major Account Development System™ is the creation of thousands of hours of discussion with brokers across North America.  It contains over 10,000 data points involving client data, brokerage projects and quantifiable impacts.  It is complex, but extremely easy to work with.

So, I wanted you to know about this.  Our clients are using it right now and eventually, the MAD System will become a staple in virtually all brokerages that intend to compete and retain larger middle market accounts.  As was said in that great movie Field of Dreams: “If you build it they will come.”  The MAD System™ is built; and brokerages along with their clients are coming!

- Rob Ekern

For more information on how to quantify TCOR, manage projects, build a value proposition, and consistently deliver stewardship reports and new business presentations to your customers, check out the Major Account Development System (MADS), an on-line consultative broker's toolkit. Available now!

Ready to learn more about Consultative Brokerage Sales Training? Visit the Consultative Brokerage Academy.

To learn more about C.R. Ekern & Company, please visit our website

Paul's Death or Real Truths of Indirect Loss Costs

I can tell you for certain, that very large organizations have a very good handle on what their indirect loss costs are inside their firms. These more sophisticated business entities have gone so far as to price these “real” costs inside of their expense loads. But, just because you may be dealing with a much smaller firm, does that make the costs any less real?

Some of you, who have a little grey hair, will remember the very first Urban Legend: the rumored death of Paul McCartney.  Those of you who have not heard about this should ask your Baby Booming Parents!

Simply put, there was a rumor that started in college campuses and spread around the world in the days before the internet (1969 to be exact). The rumor claimed Paul McCartney had died and that the Beatles were playing a hoax on the rest of us.  So, many of us who were college students at the time, spent literally dozens or in some cases hundreds of hours investigating this disturbing report concerning Paul. We played records (yeah records) backwards listening for the clues, we interpreted truths from album covers (yeah albums) and read everything we could find on the subject.  Frankly, if we had spent that time studying, a whole generation might have become the doctors our parents always wanted!

We believed Paul was dead.  Many of us spent significant amount of time and energy in order to prove this “truth.”  No one had to convince us, we all knew it to be a truth.

You probably know how that one ended (think, Sir Paul).

Why is it then, that in today’s business world, we have so much trouble in believing and communicating to clients the “truth” of Indirect Loss Costs?  Why do so many brokers resist this conversation or have no confidence in the discussion? 

Any of you who represent clients from the Baby Boomer generation are probably speaking with someone who believed in the death of Paul (or know someone who did). If they believed in the death of Paul, chances are they are capable of grasping a “Factual Truth” regarding the impact of indirect loss costs and their quantifiable expenses.

I can tell you for certain, that very large organizations have a very good handle on what their indirect loss costs are inside their firms.  These more sophisticated business entities have gone so far as to price these “real” costs inside of their expense loads.  But, just because you may be dealing with a much smaller firm, does that make the costs any less real?

When speaking about indirect loss costs, many brokers exclaim, “Yes I do believe that indirect loss costs are real!”  Then in the next sentence they state their real problem.  “Where do I go to find out what that exact number is?”  Or, “What source do I use to prove this to my client or prospect?”  At that point the indirect loss cost discussion loses steam because they move off into the deep weeds.

Let’s get to the heart of the matter.

  1. In order to actually demonstrate a value proposition, it is critical that clients acknowledge the impact of Indirect Loss Costs.  Much of your value is the reduction of these costs through application of resources.
  2. The source material on indirect loss costs is obsolete.  Yeah, that’s right.  The original material that many use was developed in 1926 by a fellow named Heinrich. All other studies are simply variations of the same material.  By the way, the OSHA statistics many use are derived from a study done at Stanford by college students in 1981.

So, if demonstrating the impact of indirect loss costs are critical and the data is obsolete; how does a Consultative Broker™ prove the FACTS?

  1. They do not try and sell the client/prospect on the concept of Indirect Loss Costs.  They simply walk them through the absorbed expenses or lost revenue of a recent loss or losses, having the client or prospect re-experience the facts of these costs.  That is a fact to them.
  2. They understand that the client perception is the client reality.  Just as some believed that Paul was dead, others believe their own experiences. That is real to them!

Now here is the very important piece that Consultative Brokers™ know and practice.  Costs by themselves have no meaning.  They must be attached to an outcome either pro or con.  The outcome that Indirect Loss Costs and TCOR are attached to is the concept of Business Risk.  When you have that discussion with a prospect or client, remember what they want.  They focus on profits, productivity, competitiveness and human capital expense.

So the next time you determine to discuss the reality of indirect loss costs, ask yourself this:  if an entire generation could believe a foolish rumor about Paul McCartney’s death, shouldn't today’s generation of business people accept the “real” facts of indirect loss costs?  (You don’t even have to play an album backwards to get to the truth!).

P.S. The rumor of Paul’s demise was finally put to rest by a cover story in Life Magazine in November of 1969.

- Rob Ekern

For more information on how to quantify TCOR, manage projects, build a value proposition, and consistently deliver stewardship reports and new business presentations to your customers, check out the Major Account Development System (MADS), an on-line consultative broker's toolkit. Available now!

Ready to learn more about Consultative Brokerage Sales Training? Visit the Consultative Brokerage Academy.   

TCOR: Building a Value Proposition

Total Cost of Risk (TCOR) is becoming one of the most important acronyms of the 21st century for agents and brokers. We at C. R. Ekern & Company are pleased to be the developer of the Total Cost of Risk strategy for middle market agents and brokers.

Total Cost of Risk (TCOR) is becoming one of the most important acronyms of the 21st century for agents and brokers. We at C. R. Ekern & Company are pleased to be the developer of the Total Cost of Risk strategy for middle market agents and brokers.

Like any great concept, Total Cost of Risk (TCOR) is now being trampled on by a number of ill informed agents, brokers, and sales training consultants. Why? This is due to the fact that the language of TCOR can be easily replicated. Unfortunately, the results can’t. Without the ability to quantify and replicate a value proposition, TCOR is simply sales buzz, not the consulting tool it was intended to be.

To that end, we have just released an important whitepaper that discusses how you and your firm can better understand how to use TCOR to demonstrate your value to clients.

-Rob Ekern

For more information on how to quantify TCOR, manage projects, build a value proposition, and consistently deliver stewardship reports and new business presentations to your customers, check out the Major Account Development System (MADS), an on-line consultative broker's toolkit. Available now!

Ready to learn more about Consultative Brokerage Sales Training? Visit the Consultative Brokerage Academy.

To learn more about C.R. Ekern & Company, please visit our website

Projects - The Mother's Milk of TCOR

Project is a word that consultancies use. They denote an action that will lead to a quantifiable outcome that benefits the client. They are not the typical insurance sales activities. By always having at least one project in progress, these astute brokers are able to demonstrate their ongoing “Value Proposition.”

Consultative Brokers™ know the huge importance of client “Projects.”  These are the actions taken and performed by their organization on behalf of clients.  The critical nature of these projects is very simple.  Without being able to demonstrate their projects, eventually they know that they will be fired by the client!

Project is a word that consultancies use.  They denote an action that will lead to a quantifiable outcome that benefits the client.  They are not the typical insurance sales activities.  By always having at least one project in progress, these astute brokers are able to demonstrate their ongoing “Value Proposition.”

Here are some examples of Projects that virtually all successful brokers regularly provide to clients:

  • Claims Review Projects – A regularly scheduled review of claims with analysis and suggestions of how to change the claim outcomes.
  • Experience Modification Reviews – An analysis of the workers comp emod using one of the fine programs that allow brokers to trend losses.
  • Risk Control Programs and Analysis – The study and implementation of risk control programs that will reduce loss costs.
  • Behavioral Modification Programs – Providing the training to employees that will improve their behaviors and reduce claims (Drivers Training, Ergonomics, etc.)


Of course there are many more examples.  Here is the key point, however.  If you don’t have any projects going you are not able to demonstrate how you impacted a client’s Total Cost of Risk.  Projects are the Mother’s Milk of TCOR!

I know that many of you are attempting to sharpen your Total Cost of Risk skills.  Without projects you can take no credit for helping a client reduce costs.  In these cases the client’s Total Cost of Risk is entirely dependent on luck or insurance carrier pricing.  This is a one dimensional view of TCOR.  As you know, insurance is the smallest TCOR expense.

It has been stunning to me over the years how some brokers avoid the discussion of projects with clients.   In some cases they either fail to offer them or assume the client didn’t care.  The worst transgression is to offer the project, have the client refuse and then drop the subject.  All of these hapless brokers will hear a common response from their client at a future date . . . “We think we have outgrown you.”

So, if you really intend to create value for your clients and wish to use a Total Cost of Risk Value Proposition, here is what you need to do right now on all your top accounts:

  • Speak with your risk control and claims personnel.  Ask them this simple question; “What one thing should we be doing right now to help this client?”
  • Prepare your client for the importance of the project you are offering.  Show them how this project will help them reduce TCOR in the coming years.
  • Sharpen your skills on leading a team.  If you are to be a successful Consultative Broker you must be perceived as a “gatekeeper.”
  • Feature your projects inside your Stewardship Report.  This is the point of differentiation between your firm and the other brokers.
  • Don’t take “no” for an answer. In the event a client rejects your suggested project, you must either press your point or find another project.  If you don’t have one, you will not be able to demonstrate your value and eventually fall victim to invisibility.


The delivery of Client Projects is the most important skill in the establishment of the TCOR Value Proposition.  These projects allow you to demonstrate how a client’s losses, indirect loss costs, and administrative costs have been reduced based upon your partnership.  So, you must ask yourself this question: “Do I have a project currently going with all my key accounts?”  The answer will determine whether you can sip the sweet “Mother’s Milk” of a TCOR Value Proposition, or suffer the bitter consequences of a value proposition based only on price and luck.

By the way, we built an extensive project management module into our Major Account Development System, giving users the ability to easily capture, quantify and create reusable templates for their project & resources. With the help from top industry risk management professionals, we've even provided key benchmarks to take away all of the guesswork on value quantification. Take a look.

- Rob Ekern  

For more information on how to quantify TCOR, manage projects, build a value proposition, and consistently deliver stewardship reports and new business presentations to your customers, check out the Major Account Development System (MADS), an on-line consultative broker's toolkit. Available now!

Ready to learn more about Consultative Brokerage Sales Training? Visit the Consultative Brokerage Academy.

To learn more about C.R. Ekern & Company, please visit our website

Outrunning Marketplace Change

Until last week, the soft market seemed to be a demon with no end in sight. We have been speaking to you about the importance of using Total Cost of Risk as a measure of your value, other than simply a cheaper price. Those of you who embraced our teachings are reporting a tremendous growth of new revenue. But...what about the flip side?

Until last week, the soft market seemed to be a demon with no end in sight.  We have been speaking to you about the importance of using Total Cost of Risk as a measure of your value, other than simply a cheaper price.  Those of you who embraced our teachings are reporting a tremendous growth of new revenue.  In fact, just this week, we heard from 2 of our clients that had just been appointed as brokers based upon their value proposition and our Total Cost of Risk Value Report™ (Stewardship Report) (each with about $25k of income).

But...what about the flip side?  What if the recent Japanese earthquake, tsunami, and nuclear accident take the capacity out of the marketplace?  Right now it is predicted to reach about $35 billion of insured loss.  My guess is that it will go much, much higher (this figure does not include the tsunami or the nuclear event).  At the beginning of the year, one industry expert stated that for the market to turn there needed to be a $50 billion disaster.  In the first 2 months we have exceeded that between Japan, the Middle East, and New Zealand.

Of course this is a tragedy of epic proportions and we share the global concern over the tremendous loss of human life in Japan. As you know, we are brokers, not insurance company actuaries, so I will save my predictions for private discussion.  However, the impact of these global events cannot be overlooked. What if the marketplace should suddenly harden?

Consultative Brokers™ who understand and practice Total Cost of Risk will be able to demonstrate all the ways they have helped their clients reduce costs, even when the price of insurance goes up.  The uninitiated brokers will be sitting ducks as buyers consider alternatives to simply paying the freight for global disasters.

So, if you think the soft marketplace is here forever, then you need to use Total Cost of Risk as a way to create new revenue based upon your value proposition.  Also, if you think the soft market will never end, then you need to show your clients all the ways you have been reducing their costs.

Now, let’s presume the worst (after all, we are in the insurance business).  Let’s just say that the Japanese disaster is the tipping point or close to it.  Here is what you should be doing right now:

  1. You must get very proficient with TCOR.  As each cycle nears the end, buyers become more sophisticated.  There is a whole new generation of buyers who were not in charge during the end of the last cycle in 2001.  They are smarter now, and less-patient based upon the difficult economic times.
  2. Log and value your projects.  At some point you will be required to demonstrate how your projects and resources helped clients reduce their costs.  You must be very clear on the value of the project, the impact on costs and how it improved the client’s business operation.  A list of features and timelines don’t feed that bulldog.
  3. Begin playing defense.  Your clients and buyers are not in vacuums.  In the event the marketplace changes radically, you need to be the bearer of the bad news…IN ADVANCE.  This entails keeping them informed using articles and web site information.  They can hear it from you, or others, take your pick.
  4. Begin playing offense.  Those of you who are Consultative Brokers and really understand TCOR should aggressively call on prospects that have simply been buying insurance from the “price sellers.”  These price sellers would be at a big disadvantage because they have been a one trick pony.
  5. Never use your income as a negotiation.  Some brokers decrease their incomes in the hard marketplace in order to soften the blow to the buyer.  These amateurs do it because they can’t prove what their value is.  So, they use their income to negotiate credits from underwriters in order to reduce premiums.  If they understood TCOR or could create a Value Report they would be able to stand their ground.

OK, now I admit to presuming some things as regards to the marketplace.  I can’t say that this is the tipping point.  Only the actuaries, reinsurance, and insurance carriers can determine that.  But, one thing is for sure: the excess capacity of this marketplace is being sucked out in one quick hurry.

So, as Consultative Brokers, your job is to anticipate marketplace conditions rather than react to commodity pricing fluctuations.  It is only through the adoption of Total Cost of Risk and the delivery of Value Reports that you can outrun marketplace change.  

- Rob Ekern

For more information on how to quantify TCOR, manage projects, build a value proposition, and consistently deliver stewardship reports and new business presentations to your customers, check out the Major Account Development System (MADS), an on-line consultative broker's toolkit. Available now!

Ready to learn more about Consultative Brokerage Sales Training? Visit the Consultative Brokerage Academy.

To learn more about C.R. Ekern & Company, please visit our website

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