TCOR: Setting the Record Straight

It has been close to 15 years since C. R. Ekern & Company first introduced the concept of Total Cost of Risk (TCOR) to regional agents and brokers. We did not invent this concept, but adapted it to a meaningful tool for agents and brokers. We knew at the time, that eventually the concept of TCOR would become an acronym that was freely accepted into the Agency and Regional Brokerage sales vernacular. We are gratified to see that Total Cost of Risk (TCOR) is now an important part of many firms client and prospect dialogue. Other consultants have even claimed to invent it!

As many of you know, one of my favorite verses is from a Rudyard Kipling poem, it goes like this:

“They copied all that they could follow, but they couldn’t copy my mind, so I left ‘em a sweatin’ and a stealin’ a year and a half behind.”

It has been close to 15 years since C. R. Ekern & Company first introduced the concept of Total Cost of Risk (TCOR) to regional agents and brokers.  We did not invent this concept, but adapted it to a meaningful tool for agents and brokers.

We knew at the time, that eventually the concept of TCOR would become an acronym that was freely accepted into the Agency and Regional Brokerage sales vernacular.  We are gratified to see that Total Cost of Risk (TCOR) is now an important part of many firms client and prospect dialogue.  Other consultants have even claimed to invent it!

Having said that . . . The majority of the agents and broker’s who tout the concept of Total Cost of Risk (TCOR) do not know what it really means.  In fact, I have noticed several firms who actually have changed their names and slogans to feature Total Cost of Risk and TCOR.  Then, the rest of their material is about how they can deliver more effective insurance programs!

We are the consulting organization that introduced the concept of Total Cost of Risk to the Agency and Regional Brokerage system, it is important that I set the record straight.  By the way, this record setting is also based upon a number of years (25) as a top performing agent and broker.  Ready here goes:

  1. The insurance is the smallest part of a transaction with a buyer.  What we know is that the insurance is only 20% of a buyer’s true costs.  Therefore, when you use the concept of TCOR to sell insurance, you are going backwards.
  2. The power of TCOR is not to simply get an underwriter to present better terms in the future (see above).  While that may arise because a buyer’s TCOR reduced, it is not the main goal nor is it the main benefit.
  3. Total Cost of Risk is used by a successful Consultative Broker for one main purpose: to establish credibility.  It removes the buyer’s remorse and refocuses a client on the important matters such as cost.
  4. You can only impact TCOR through the delivery of resource capabilities.  I shudder when I see what some are calling a TCOR presentation.  It is an endless list of features. I recently saw an agent’s website that featured TCOR; it had close to 70 features listed under the banner of TCOR Reduction issues.
  5. If you can’t quantify TCOR, it is meaningless to a buyer.  Our firm is pleased to have developed the top Total Cost of Risk Calculator available inside the industry.  Not only does it identify benchmarks against sales, but also quantifies the impact inside a client’s business operation.

When we developed the Consultative Brokerage Methodology we told you that its main purpose was to position the client to deliver a Value Proposition.  At the time, we used Total Cost of Risk (TCOR) as the delivery mechanism (a concept we introduced 15 years ago).

Well, it is now time to move on.  Now that we and our clients have mastered the concept of quantifying and developing Total Cost of Risk.  We need to take you to the next level.  That is the concept and understanding of Business Risk. Total Cost of Risk is simply the vehicle: Business Risk is the attachment point.

So, stay tuned for our next Consultative Brokerage Briefing, we will show you how the most sophisticated agents and brokers are using Consultative Brokerage Techniques to create significant value.

Of course, once we shed light on Business Risk – “They will copy all that they can follow”.  But if it takes them another 15 years to copy and follow, we will be blazing another new trail!

- 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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