Dodge the Torpedoes!

As many of you know, I was considered a successful working broker back in the bad old days of the last soft market. In fact, I was also fortunate enough to earn the top production award from my mega-broker employer. So, aside from now being a consultant, it does qualify me to give you some insights from close to 37 years of production experience and 4 cycles.

As many of you know, I was considered a successful working broker back in the bad old days of the last soft market.  In fact, I was also fortunate enough to earn the top production award from my mega-broker employer.  So, aside from now being a consultant, it does qualify me to give you some insights from close to 37 years of production experience and 4 cycles.

First of all, nothing changes.  I heard the first complaints about the marketplace in 1975.  The words are the same.  “Dog gone those insurance companies!  They don’t know what they are doing.  They are putting us out of business by constantly lowering their premiums.”

Or this one:  “My clients just keep beating me up over premiums.  Each year they tell me that I need to sharpen my pencil.”

Here is the one I really like:  “My insurance company gives me two prices.  The one they give me on renewals, and the one they give my competitor on new business.”

Here is another beauty:  “I talked to my underwriter today and they gave me the premium for your renewal.  But, they told me that they did not want to lose your business and I can probably get you another 7%.”

What do all of these have in common?  They are statements from agents and brokers who constantly live in fear.  They are afraid of their competitors, carriers, and in many cases their own clients.  Why is this?  Because in most cases they do not have any semblance of broker control.  They consider themselves simply messengers who feel lucky when a client blesses them with a renewal or an underwriter coughs up a price.

So, it is time to stop the bleeding and stand on your feet.  Dodge the Torpedoes!  Of course the water is filled with danger, but it will not stop you if

  1. Make certain your client knows what your value is.  That entails that you speak with them regularly about all the “little things” that you and your firm do for them.
  2. You must do Value Reports™ (Stewardship Reports).This shows your client the quantifiable impact that you make inside of their business.  It goes well beyond the pricing of insurance.
  3. Don’t live in fear. Clients can smell this. I have seen many occasions when a broker created their own competition by “running scared.”
  4. Keep prospecting tougher deals. Here is what most seasoned brokers know; there is less competition at the top than the bottom.  The bigger the deal, the less number of brokers.
  5. Prospect your commodity competitors.  Now that the marketplace is beyond free fall, some of your competitors will have no place to stand.  They cannot make up the difference by simply price

As a working broker in the depths of the last soft market, here is what I know.  Successful brokers grow their business no matter the marketplace conditions.  Once every decade or so, they get an artificial boost from the “hard market”.  But they do not wait for it!  They find prospects that have problems and these problems have nothing to do with the insurance marketplace.

So, Dodge the Torpedoes!  Get with it and understand that the marketplace conditions are the same for everyone.  Stop looking for the easy price deals, they don’t exist.  Everyone is in a feeding frenzy and the successful brokers will then be the ones who practice the ability to differentiate themselves by deployment of resources and the reduction of a client’s cost.

- 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!

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