Large Accounts: Feeding the Bulldog

As fall approaches many of us turn our attention to planning for the next year. Frankly speaking, you are where you are. More than likely no new prospects will fall out of the sky and you essentially know what opportunities you will be working on for the rest of the year. So, let’s talk about the business environment that you will find yourself in as you approach your thought process of planning next year's production.

As fall approaches many of us turn our attention to planning for the next year.  Frankly speaking, you are where you are.  More than likely no new prospects will fall out of the sky and you essentially know what opportunities you will be working on for the rest of the year.

So, let’s talk about the business environment that you will find yourself in as you approach your thought process of planning next year's production:

  • You should expect the “soft” market to continue.  In many cases, the fat has been squeezed from the market.  There might be a few drippings left, but don’t expect huge rate decreases.  Also, don’t expect any increases either (unless you are working on deep water drillers).
  • Many of your clients and prospects are still hurting from the “Great Recession.”  They understand that business as usual does not provide them new solutions.  Truthfully, many of them are wrung out.
  • Your competitors will continue to be in a feeding frenzy.  Remember, there is less insurance premium available to all brokers.  This is the first time this has happened since WW II.
  • The insurance carriers will continue to support this feeding frenzy.  They will start 2011 with a speech about “holding the line” but by the end of the first quarter, all bets will be off.

As some of you know, I do have a little grey hair.  I started my production career in 1974.  This is the fourth cycle I have seen.  This one is unlike the others - it is taking place at the same time as a major recession.  So, as producers, you are getting hit with the double play: reducing rates and a reduction in rating basis.

So, with all this in mind, how should you approach your production planning for next year?

  • Recognize that Old Solutions don’t feed the bulldog.  The concept of using the insurance carriers pricing as your point of differentiation is now obsolete.  Why?  Because the blood has been squeezed from the turnip.
  • Understand that your prospects are still smarting from the “Great Recession.”  This means that you must approach them from a place of helping them reduce costs and improve their business model.
  • Like John Dillinger said: “Go where the money is.” The money is with accounts that have losses and are complex.  These are the accounts that are considered larger and have issues which do not revolve around insurance.  Also, these larger accounts have problems that are costing them six figures of financial leakage.
  • Focus on pinpointing financial leakage.  Many of these larger accounts are hemorrhaging money and don’t know it.  Why?  Because their broker has focused only on the insurance coverages and payment of claims.  Once you show this to them, they will move heaven and earth to obtain your solutions.
  • Offer a “Business Risk” Solution.  Plan on building a prospect list of firms who see you and your organization as offering business solutions.  You must be able to give the buyer what they want: productivity, profitability, competiveness and human capital retention.  Your insurance offerings are simply the hazard risk.
If you intend to stay in this business and be successful, you must understand Large Account Production techniques to help you feed your bulldog next year and beyond.
 
- Rob Ekern

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