Managing insurance communications in a hard market
Here's how to best serve your clients, improve retention, and even grow your business in this complex landscape.
It’s the $1.5 trillion question: When will the hard market finally come to an end?
Historical cycles indicate that there will be a softening at some point. But the reality is that no one knows exactly when it will occur. And then there’s another reality: A recent survey from Trusted Choice found that nearly 70% of Americans are currently reviewing their policies, and 45% are doing so due to rate increases.
So, in this complex landscape, how do you best serve your clients, improve retention and even grow your business?
Effective communication is essential to each of those objectives. With that in mind, below are communication tips and strategies to help you, and your customers, successfully navigate this hard market.
What is a hard market, anyway?
Explain the hard market environment clearly, concisely — and with empathy.
The Insurance Risk Management Institute defines a hard market as, “the upswing in the insurance market cycle, when premiums increase, coverage terms are restricted, and capacity for most types of insurance decreases.”
Even more simply put, a hard market is a period of time when insurance costs are high, and policy terms and conditions are restrictive.
Clear and upfront communication of this goes a long way in helping your clients understand the current landscape that all agents and policyholders are facing. And beyond that, it also goes a long way in cultivating an agent-policyholder relationship in which your customer knows, trusts and appreciates that you are there for them, and are there to help them navigate through this hard market.
Not to mention, in this digital age, personalized phone calls remain invaluable. As Michelle O’Connor, president of O’Connor Insurance Associates, says, “Our process includes a checklist to thoroughly review the [potential] policy including all eligible discounts, claims history, optional products that could add a discount… and then a personal phone call from a member of my team to discuss our findings with our client. The goal is to make sure our client has the very best price we can offer and to discuss the value our team provides. The calls have been very well received and appreciated by our clients.”
In your client communications, be sure to communicate with empathy. And since E&O claims tend to increase during a hard market, also be sure to document all coverage recommendation declinations. Also, of course, do not make any promises you can’t keep.
Be proactive about renewals, relationships and reputation.
So, just how long prior to a policy expiration should you start the renewal process with your client? While the answer to that question will vary depending on the insurance type, 90 days is a good rule of thumb — and even 120, 150 or 180 days is prudent for more complicated policies.
In a soft market, you have more runway when managing renewals. However, a hard market amplifies the need to be proactive. And that need to be proactive doesn’t just apply to your client relationships, but also to your relationships with underwriters, carriers and new business prospects.
On relationships with underwriters specifically, Coverlink President Matt Simon says, “Work to deepen the relationships you have with your underwriters. As difficult as this market has been for independent agents, it’s often just as tough for underwriters. They’re doing their best to navigate their corporate objectives from an underwriting and pricing perspective while striving to present a reasonable solution to their agents. Remembering that they’re human too, and having candid conversations about what they need on a specific account, can go a long way in securing a favorable renewal.”
From sprucing up your LinkedIn and social media presence to attending industry conferences to seeking opportunities for media commentary, there’s no shortage of ways to strengthen your relationships, expand your network and build your reputation. By investing in those areas — your relationships, your network and your reputation — you invest in yourself, and in your ability to be resilient, find pipelines of new business and ultimately maneuver successfully regardless of the market headwinds.
Go the extra mile in your messaging preparation.
How long will the hard market last? Why are my rates going up? Can you help me find a cheaper plan?
Like your answer to “What is a hard market?” your answers to the above types of questions must be clear and concise, as well as empathetic, transparent and consistent. Taking the extra effort as you craft your messaging that addresses common and expected questions — over the phone, via email, on your website and on social media — and then continuously revising, refining and rehearsing is crucial to differentiating yourself, your services and your value.
“What options do I have to minimize this rate increase?” is the most common question Simon says he gets asked by clients. Responding effectively, he says, often involves being prepared to discuss risk management strategies such as telematics, driver safety training and upgraded fire suppression systems, or suggesting the insured consider assuming a greater share of potential losses via higher deductibles.
Furthering this point, being equipped and able to effectively answer your clients’ tough questions will set you apart as a trusted advisor not only when you sell a policy, but also throughout the year when life, business and property changes impact your insureds’ assets, lifestyles and needs.
As you level up your customer service, also consider: What aspects of your approach seem to be working for you? What aspects are not? What needs revision? That honest self-reflection and adaptation, with follow-through, is how you — and elite professionals in any industry — pave a path to success.
By following these principles and investing in yourself, your communication strategies and your customer and industry relationships, you set yourself up to not only merely survive the hard market, but to come out on the other side of it stronger, more skilled and more resilient than ever.
Nancy Germond, MA, ARM, AIC, ITP, SPHR, SHRM-SCP, is executive director, Risk Management and Education, for the Independent Insurance Agents & Brokers of America. A second-generation insurance professionals, Nancy has written scores of risk-management related articles and is a frequent conference presenter on topics ranging from surviving the claims audit to managing emerging talent risks. She is the author of, “Workers’ Compensation in Two Hours: The Business Owner’s Guide to an Exceptional Workers’ Compensation Program.”
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