How To Get the Best Quote
submitted by Gary P. Alexander
In today's insurance marketplace, having competitively priced products seems to be the agent's best weapon in his fight to put new business on the books and to retain the accounts he is already writing.
While
an agent can't always control the quote on any particular risk, his contribution
to the underwriting process can help determine the price of the product
presented to the prospect or client. There are a number of contributions any
producer can make to the underwriting process that will help assure the best
quote.
Make
the underwriter comfortable with the risk. Give him a complete description of
the risk which you are asking him to write. Start at the front door of the risk.
Take him from there to the executive offices, through to the shipping dock.
Define all parts of the operation.
Provide
a web site address; don't make him search for it. If there is no web site,
provide photographs, brochures, marketing literature, resumes, financial
statement, loss control summary and any other information available to help
provide all the angles of the risk. Anticipate any questions and provide in
depth explanations. The more the underwriter knows and understands about what
he's quoting, the easier it is for him to make a decision about accepting the
risk.
Provide
full rating and coverage information. Such information usually consists of
payroll, receipts, values and coinsurance requirements. Since most buyers want
the broadest coverage available at the most competitive price, ask the
underwriter for quotes on coverages the insured may not currently be carrying
and solicit his suggestions on coverages you may have overlooked.
Make
sure your submission doesn't contradict itself. For example, if you answered
"yes" to "does the applicant check motor vehicle records of
employees?", be sure to provide MVRs - they should be available for the
asking (of course, you'll want to make sure you and the applicant are securing
the appropriate privacy statements in compliance with applicable statutes).
Provide
detailed loss experience. Don't just say "there were $20,000. in losses in
2001". Tell the underwriter what each particular loss was about and give
complete details. Understand that loss runs from previous carriers often are
hard to read, have codes which are not decipherable by the underwriter and often
do not indicate any text explaining what happened or the origin of the loss.
Again, make it easy for the underwriter to understand the risk and you will help
him become more comfortable with it.
Find
out who the previous carriers were and the price of the coverage. Along with the
name of the carrier, you should also provide the policy numbers, expiration
dates and renewal terms offered. This is one of the most misunderstood and
overlooked parts of the submission. The ability to explain the reason this
information is needed to your prospect is as important as securing the
information for your submission. Let's look at how you can help the applicant
understand why it is in his best interest to provide this information.
1.
Underwriters are deluged with submission from many producers, as the market
continues to harden. There are two primary reasons why applicants and producer
look to re-market their coverage; substantial increase in premium and
cancellation or non-renewal. It's sometimes dangerous to define
"substantial increase in premium" in terms of a percentage. For
example, last year the applicant paid $750. for his package policy and his
renewal offer was $1200. - an increase of 60%. If you know your carriers have
$1500. minimum premiums for packages, be prepared to deliver that news to your
prospect BEFORE shopping the risk.
2.
Many producers make the mistake of withholding renewal terms from prospective
carriers, in hopes of "beating" the expiring terms. If you think your
underwriter looks at the expiring premium to determine his price, you could be
right, but more than likely, the underwriter wants to use other offers as a
yardstick, to determine if he can compete or not. Seeing a renewal offer of
$4400 and knowing his starting price for similar risks is $10,000 saves everyone
a lot of tears. If your carrier or broker looks at the other guys price and cuts
$100. off of it to successfully write an account, you need to ask yourself how
good of an underwriter he really is.
There's
a loyalty and perception issue here that often is overlooked. Think of it this
way, you do business with who you have more success with. You choose your
carrier based on price, service and knowledge, not necessarily in that order.
All other things being alike, you pick the underwriter/market you're most
comfortable with. As they say "it doesn't take a salesman to give something
away". Try to bring a personal level of service to your client, by going
the extra mile and explaining the market and your relationships with the
underwriters to him. Chances are, your prospect will be more willing to pay a
few extra bucks for his policy, if you're sincere, honest and professional in
your dealings with him.
Consider
the use of deductibles and special rating techniques. In some cases significant
credits are given for various levels of deductibles, depending on the size and
type of risk. Retro programs, retentions and self insured retentions are useful
in making a more competitive presentation to your insured or prospect on larger
risks.
Be
honest with your underwriter. Lies and half truths take years for an underwriter
to overcome. He’ll always wonder if you're telling him the whole story about
the risk. Your relationship with the underwriter and credibility isn’t worth
risking. Provide all the information requested, even if it could adversely
affect the risk from an underwriting standpoint. If you don't know the answer to
a question, don't make something up - find out and get it to your underwriter as
soon as possible.
Don't
submit a half completed or illegible application with no supporting
documentation. Making the underwriter come up with a laundry list of questions
will ensure that your submission will go to the bottom of his stack. Fully
complete submissions will help you be more productive, have a better hit ratio
and ultimately help you out perform your competition. Don't be afraid to ask
your insured or prospect questions. If you have a legitimate entree to the risk,
they'll be happy to have you understand their business and its intricacies. If
the prospect or insured is indifferent to your inquiries, chances of writing the
account are slim anyway. Remember, people usually love to talk about their
business. Be a good listener and take detailed notes, that shows the applicant
that you're genuinely interested and want to do them a good job. The better you
understand the risk, the better you can explain it to your underwriter and the
better your proposal for coverage will be. You'll also be better equipped to
advise the applicant on his insurance needs. In other words, be more than a
salesman, be an advisor - sell more than price, outsell the other guy.
An insurance contract is a contract of good faith and the strength of that good faith is built on communication between insured, agent and underwriter. Be honest with your insured and your underwriter and enjoy the benefits of those excellent relationships, integrity and success.