Endorsements matter!

As the business world tries to “commoditize” insurance, there are more and more opportunities to differentiate and stand out.  All risks are not created the same and you need to look a little deeper in those “contracts” you are selling (Yes, we are ultimately non-lawyers selling contracts).  Different industries have different exposures and what may be a “hot” issue for one class of business, may not be for another.

 

One of the industries we specialize in is the Records Storage Industry.  This class of business was a natural off shoot of our messenger and courier program since a number of the clients we write, are in both areas of the industry.  One of the unique exposures of the records storage industry is the potential amount of time it takes to “recover” from a significant loss (Keep in mind that specific to this industry is a pricing structure where storage facility makes so much per box stored).  Take the scenario of a records storage warehouse having a large fire.  It will take time to do the debris removal, set up and operate a temporary location and rebuild the warehouse.  All this is similar to other types of businesses.  What is different is that the 10,000 boxes of records you had stored (that were lost in the fire) do not “instantly” show up when the warehouse is rebuilt and ready to open.  In fact, it can take years to amass those 10,000 boxes of records and have the same “revenue stream” that you had prior to the fire.  Many carriers that will write record storage firms offer extended period of recovery of up to 18 months, which most of the time is insufficient to protect these type of firm and leave the insured in a precarious position.  Offering an option for longer extended period of recovery will help the client cover the deficit they will have till they accumulate more boxes of records.  We were able to negotiate an extended period of recover of 3 years in our program.

 

It never hurts to ask if an endorsement can be modified or deleted (bought back).  The worst thing the carrier can say is no.  If you are able to get that enhanced or modified endorsement are you then adding value to your services to the insured?  YES!!!  Helps you to keep accounts too when you can point out enhancements to the coverage when going up against competing quotes.  Many times it is worth taking the time to find out what the “pain” is in their current program and what keeps them up at night.

Time to read the ISO Manual again…

When I started in the insurance business some 30 years ago, I began as an underwriter.  This meant I needed to learn the “rules” and how to do rating if I was ever going to put out a quote.  As a wholesale broker I needed to figure out pricing, terms and how to sell the underwriter on accounts that were “submit”.  I always felt I needed to know a significant amount of information if I was going to have the “upper hand” with both carriers and clients.  This was my basis of eventually becoming a “coverage guy”.

Part of my initial training was reading and understanding specific sections of the ISO Commercial Lines Manual.  Without this, I wouldn’t have the necessary foundation of which to build on and understand the technicalities of this business.  I can’t tell you how many times I searched through the classification tables in order to find the most appropriate classification for an account.  There was not always one, so I needed to find the most appropriate one and then convince the underwriter to use that classification.  There were many times that there were additional “rules” associated with a classification and I needed to know how that impacted the account.

Some of the areas that were the most important were the following:

  • Minimum state payrolls. Each state has their own minimum owner payroll and many carriers had modifications to that.  A mistake here could result in a mid-term endorsement increasing the payroll and the agent and insured would certainly NOT be happy.
  • Premium basis. Understanding what each type of premium basis is and what was included was important.  Knowing if it was “each”, per $100 or per $1,000 could make all the difference in rating up the account.  A mistake here could result in a premium 10 times too high or too low.  Carriers also had modification to this such as contractors where they might rate per employee instead of payroll.
  • Details of what was included in payroll. Should executive payroll be included?  Clerical payroll?  Salesmen payroll?  Overtime or holiday double time?  Other forms of remuneration?  Knowing the rules here could help significantly reduce the premium basis and subsequently the premium.  This could mean the difference between writing an account or just narrowly missing it.  Since carriers allow for up to three years to audit an account, you can go back that many years and possibly get significant return premiums by properly applying the rules.  Do not assume the auditor knows all the rules.  You may also want to “school” your client on these rules so they properly keep track of proper payroll and do not have any surprises at audit time.  Also make sure your carriers do not have any modifications to these rules.  Know what Rule 24 is?  A clue, it gives many of the important payroll rules.  When you get bored one day, do an internet search or e-mail me and I will send you a copy.
  • Square footage. There are a few quirks here too.  Sometimes carriers base their premium basis on “customer accessible” square footage.  Calculating this out can sometimes make a significant difference.  I have also found that relying on county property records can be an issue.  The county property records may not have included a recent addition or change and will be picked up when the carrier inspects the property.
  • Additional insured endorsements. In over 90 percent of requests we receive to add additional insured’s, we are NOT given the specific endorsement that should be added.  This begs the question, if the wrong one is used, whose fault is it?  All requests for additional insured status should give what endorsement form number to be used, when it is to be effective, the interest of the party looking to be added as additional insured and any other specifications that are needed.  Using the wrong additional insured could even cost your client a bid for a job if they catch this detail and reject their bid, no fault of their own.  Keep in mind that certain additional insured endorsements are “free” and some may incur a charge per additional insured.  Talk to your client up front about how many they expect so you know if you should pursue a blanket additional insured or not.
  • Rule 85 – Know what this is? This the rule that defines the criteria for a specific risk on if the fire rate will be specifically rated or class rated.  A good risk is eligible to be rated after ISO inspects it and takes into account all fire protections.  This can make a risk come in with a much lower rate than if it was class rated.  You need to check the effective date of the rating and check with your customer to see if any changes were made since that time that would improve the fire rating.
  • Debits or credits – The ISO manual defines what the potential credits are bases on certain criteria. Of course carriers may have their own criteria that supersede this criteria so also know the modifications your carriers make and your authority to use this debits or credits.
  • Package credits – Who doesn’t like credits. There is a wide range of package credits based on classification.  Your carriers may also have modifications to these.
  • Deductible credits – Does your client have a higher tolerance to retaining risk? If so, you can quickly figure out how much they might save by going to higher deductibles.
  • Construction definitions – Questions on masonry versus masonry non-combustible? Definitions are here so you can properly determine the proper construction class.
  • Changes – ISO goes out of their way to discuss changes being made to classifications, rules or forms. You need to read and understand the changes so then when your clients ask about them, you are on top of them.  This is especially true if there is a reduction in coverage.  Keep in mind that carriers do not immediately accept changes and you need to watch for their adoption date.
  • Exception pages. There are always exceptions.  Many do not apply to what you are doing, but you need to make sure if they do.

While reading the ISO manual may not be an exciting read, it could help you out in writing business.  Knowing the rules will help you to use them to your advantage and show your client that you understand the minutia of your business so they don’t have to.  How much would your client love you if you were able to get them a return premium from the policy they previous wrote with another agent?  Think helping them out would help solidify the new relationship?  Just like in golf, it is important to know the rules so you can use them to your advantage.   Happy reading….

Ken KukralKenneth Kukral, CIC – VP of Special Risks – That means, call me if you need help on placing a unique, difficult, large or more complex risk. Kennethkukral@intlxs.com  800-937-3497 ext 2079

Should Ohio Agents Be asking about their client’s workers compensation?

By Ken Kukral

Being a monopolistic state (no private carriers allowed to write in Ohio), most agents have completely ignored discussing workers compensation with their clients.  Is this wise?  I do not hear about any movement to take Ohio to a competitive workers compensation state, but that does not mean you should completely ignore this aspect of your clients risk profile.  Some things to think about:

 

  • Most likely you have discussed group rated workers compensation with your client and have placed them in one of these programs. Did you realize that not all group rated WC programs offer the same amount of discounts?  Have you researched other programs to see what might be best for them?
  • Did you know that high deductible programs are available within the Ohio Workers Compensation Program? If your client is looking to control losses and costs of coverage, this may be an option you want to explore.
  • Did you know that “retro” programs are available through the Ohio Bureau of Workers Compensation? A more sophisticated client may want to explore how this option can control their losses and costs over the long run.
  • If your client is over 500 employees, have you explores self-insuring for WC? (Including and excess WC policy). This is only for larger insured’s, but is a very viable option to control their WC cost for the long run.
  • Does your Ohio insured ever have employees that go outside Ohio? In the past an endorsement was offered by the OH BWC but a number of states may not be willing to accept this as “valid” coverage.  Here is a document that lists what states “recognize” this coverage:  http://www.ohiopia.com/Uploads/Documents/Advocacy/BWC_OSC_Reciporocal_Exempt_Statutes.pdf  Since March 1, 2016 you can now purchase “All other States coverage” through the OH BWC.  If they have locations in other states you would not need this, but just about every insured I know of does some traveling outside Ohio.
  • Do they have stop gap liability coverage? I am running into more accounts that do not have the coverage on their policy and have a significant coverage gap.  While exposure for intentional torts has lessened, there are still the other gaps (action over claims, compensatory damages and dual capacity claims) and clients need the coverage.
  • Does your client travel internationally on business? If so, then you should look at an international package which provides voluntary employers liability.  There are so many other lines of coverage provided in these policies that it is super cost effective and should be discussed with a client.
  • What about loss control and risk management in the workers compensation area? What difference does it make since you aren’t writing coverage in this area?   First of all if a client’s loss ratio goes up they could be dropped from their group rated WC program.  This can bring about a shocking premium increase.  Secondly, wouldn’t this help differentiate you from other agents?  If you or a trusted vendor could provide these services at a reasonable cost, wouldn’t this help tie you more to a client?  Also, isn’t WC a portion of your clients overall cost of risk (Premiums, deductible portions of losses and uncovered losses)?  It is still money going out of your clients pockets and anything you can do to help control those costs is ultimately helping your client.
  • Is your client less likely to go to another agent when they do expand outside Ohio? If you have been involved with the WC for your client, it is just natural they will contact you rather than looking for another agent in the new territory.
  • Can WC claims lead to EPLI claims? Getting an injured employee back to work is important and the risk of a separation of employment (wrongful termination) increases the longer they are out.
  • What about OSHA compliance? OSHA fines are not covered by insurance and could hurt your client’s bank account, not to mention their image and reputation.  Same with exposure to VSSR (Violation of Specific Safety Requirements) claims, which can be significant.

 

Think these issues are not important to your clients?  Think again.  Helping your client with their workers compensation exposure and coverage is of great importance to them.  Be ready and involved so that if the Ohio workers compensation market goes to a competitive market, then you are already involved and helping them out in this area.

Ken KukralKenneth Kukral, CIC – VP of Special Risks – That means, call me if you need help on placing a unique, difficult, large or more complex risk. Kennethkukral@intlxs.com  800-937-3497 ext 2079

Crazy Claims

By Cathy Thurber

Have you ever had a claim come through that just made you stop and stare?  You actually have to re-read the form just to make sure you read it correctly!  There have been a couple that I’ve read through the years that just made me laugh in disbelief.  Especially the claim regarding the drunk guy that fell off his friend’s balcony while he was relieving himself….he passed out during his ablutions and toppled right over the rail!

I was perusing the internet as I sometimes do and googled ridiculous insurance claims.  Here were a few of my favorites that came up:

  • A couple vacationing in southern France filed an insurance claim for the paint on their car after it got licked off by a herd of cows.
  • While vacationing in Malaysia a couple had their clothes stolen and scattered around the jungle by a thieving band of monkeys.
  • A woman in Sri Lanka was knocked out cold by a falling coconut as she sat reading under a palm tree. Apparently this incident isn’t uncommon and apparently every year about 150 people are killed by falling coconuts.
  • A farmer in Minnesota filed a claim on his iPhone when he lost it in the rear end of a cow when he was helping with calving in the middle of the night.
  • A couple made a claim on their camera after they lost it over the side of cruise ship trying to film themselves recreating that scene in Titanic.
  • A man on vacation in Australia put in a claim on his car after a wild camel supposedly kicked in the door.

Coconuts, the unexpected killer – who knew?!?  Perhaps on your next tropical vacation you should stay away from coconut trees.  And seeing as half the claims were animal related, you may want to think twice around them, too!

cathyCathy Thurber has over 10 years’ experience in the insurance industry and likes to think she’s learned a few things along the way, one of which being to not take herself too seriously.  She would love to say she has as many cool expertise’s as her fellow blogger, Ken Kukral, but she’s just not as old as him.  Cathy is a voracious reader and a total word nerd.  Most importantly, she’s been married to her favorite person for almost twenty years and has two kids that she actually likes.  However, the dog is her favorite child and she’s been wheedling for a cat for years.  Perhaps this is the lucky year?

 

6 Reasons Freight Brokers Need Insurance

Check out our handy infographic letting you know the top 6 reasons all Freight Brokers and Freight Forwarders need insurance. Feel free to save and pass along!

freight-broker-infographic

Should I be offering my clients professional liability or cyber liability?

In a perfect world, we know the answer is yes.  We should offer them every coverage available in order to cover our potential E&O exposure, but that is not reality.  So what should you do?

Well, there is not really a way to make your client’s insurance program “airtight”, so you should discuss the GAPS in their program and ask if they want to explore an option to fill them.  Does this mean getting more applications filled out and submitting for quotes? Thank goodness, no.  Otherwise, we might do a lot more “practice quoting” than we need to.  So what should be your plan of action?

  1. You might want to come up with the top 10 insurance gaps or shortfalls in most small business insurance programs. I would put, lack of cyber insurance (network security and privacy) on that list, and depending on what type of service they provide, professional liability insurance.  Of course add higher crime limits, business interruption insurance and insufficient property limits to that list.  Keep in mind this list will evolve over time and you need to stay up to date on changes going on in the industry.
  2. Learn the markets available to you for some of these coverages and get an idea on the minimum premiums for these coverages. Cyber liability can start at $260 a year and professional liability can start as low as $750.  I think your clients may have a much higher expectation of what these coverages cost and by opening their eyes you will them to move forward with taking a serious look at potentially filling these coverage gaps.
  3. Lean more about these coverage options, especially cyber liability. Many agents are not “techies” and do not have a comfort level getting into deep discussions about this coverage.  I took a 9 hour online course to give myself the “building blocks” I needed so that anything I learned would help deepen my knowledge of this type of coverage.  There have been a large number of trade journal articles on this subject in the last few months and they will help to build a comfort level too.
  4. By looking at carrier claim examples and industry loss scenarios, you can have material to discuss with your client.  Most clients do not think it can “ever happen to them” and have not played through loss scenarios, how they would react, how long they might be out of business or how they would recover.
  5. Quick indications. There are a number of markets who have online platforms that allow you to get a quick indication with a minimum amount of information.  You may not be able to get a firm quote, but you will have something more in depth to discuss with your client.
  6. Explore tools out there that help clients realize their actual exposure. There are even some testing services that will help clients realize how “open” they actually are to claims.  There are also tools that can show the actual costs associated with a data breach and how much it would cost them based on how many records where breached.
  7. Purchase it for your own agency. It is always easier to go in with confidence if you believe in the product and carry it in your own agency.  You may be surprised on how little it costs.
  8. Don’t rely on “throw in” coverages that are in many carriers’ enhancement endorsements. A $25,000 limit will be woefully inadequate in the event of a loss.
  9. Ask more questions. Like how much data do they have on their phone, on their laptop or on jump drives?  Do they collect “personally identifiable information”?  Are they subject to specific regulatory or privacy requirements such as HIPAA or red flag rules?
  10. Start to think that these coverages should be an essential part of the client’s complete insurance program and not just an “optional coverage”. Just stating things in this manner may get your clients to start thinking more like you do and head the advice you are giving them.

 

You have to start somewhere.  You may surprise at how easy this coverage is to sell and how much clients really want and need the coverage.  One of my favorite TV shows now is CSI Cyber.  It alerts me to new and evolving exposures out there and how much the world is connected.  It surprised me that people would want to hack or destroy data but it is just a part of life any more.  Learn a little bit more about these evolving exposures every day and you will build confidence in suggesting this coverage to your clients and properly protecting them.

A list we compiled of all the professional liability exposures out there can be found at:  http://www.intlxs.com/intlxs/assets/pdfs/errors-and-omissions.pdf  Over 400 classifications!

Ken Kukral

Kenneth Kukral, CIC – VP of Special Risks – That means, call me if you need help on placing a unique, difficult, large or more complex risk. Kennethkukral@intlxs.com  800-937-3497 ext 2079

Do 12/31’s and 1/1’s (Renewals) still work?

By Ken Kukral

Anyone who has worked December 31st or January 1st renewals knows they are a struggle.  You have to work the accounts like they are a December 15th account or risk struggling to get them done with underwriters out of the office and difficulty getting a hold of the insured.  So why do it?

With many clients working on a calendar year accounting basis it makes it only natural that they would want their insurance to run consistent with their accounting year.  A lot of this has to do with the premium basis being gathered on a calendar year basis. But is it the right thing to do?

Pros:

  • Policy year and calendar accounting year are in alignment
  • With 12/31 accounts they may be just under the wire if reinsurance prices are about to go up 1/1 and could possibly save money till the next renewal.
  • Carriers like to finish a year off or start a year “with a bang” so you may get better pricing by having one of these two renewal dates.
  • With good planning with your underwriter you can get quotes done early and get things wrapped up long before the renewal. Nothing better than having the account “done” before the holidays and either finishing or starting the year off well.
  • If you are competing on an account, this is a chance to shine if you work the account right and get things done early. Also if the competing agent “stumbles” you can show off how you just “get the job done”.
  • It is usually more work for the insured to “move” an account so they are more likely to renew with their current agent due to year end time constraints. This helps with account retention.

Cons:

  • Difficult time period to work on accounts. The last two weeks of the year are a “wildcard” and you never know what you get.  In other words, there are a lot of distractions.
  • If you are looking to budget for the next year, you may not know pricing until the last minute so it may cause last minute adjustments to already approved budgets.
  • Many carriers close out their yearly production a few days or a couple weeks early so product may not go into the year just finishing and will not be “booked” until the following year. Knowing this, carriers may not be willing to give pricing breaks because of this.
  • The insured is usually busy on their own “year-end” stuff and insurance renewals just add to that stack. If you are competing to take an account away, it limits your time with the insured to try and sell the account.
  • Year end “results” will not usually be available for another month or two. So you end up with only estimates of the premium basis instead of actual solid numbers.
  • In reality, you can calculate out the premium allocation per year and don’t need a calendar year policy to do this.
  • How would you rather spend the holidays? Working or enjoying life?

So what do you do?  Talk to your insureds or prospective insured and see what they are ultimately trying to accomplish.  Go over the pros and cons and make sure they are making an “informed choice”.  It is their decision, but you can help enlighten them to make sure they are making the best decision for their operation.  Just because they have done something a certain way in the past, doesn’t make the way they should do it in the future.  Many carriers will write a longer than 12 month policy (like a 15 or 18 month policy) which means you have a longer period to NOT have to do a renewal on it!

Just another chance to have your client step back, take a fresh look at their insurance program and do what is best for themselves going forward.  Helping them make good decisions is what it is all about.

Ken Kukral

Kenneth Kukral, CIC – VP of Special Risks – That means, call me if you need help on placing a unique, difficult, large or more complex risk. Kennethkukral@intlxs.com  800-937-3497 ext 2079

 

 

When is it time to “fire” a customer or just let them go? When is “enough”, enough?

Man Hand writing Goodbye with marker on transparent wipe board. Business, internet, technology concept. Stock Photo

By Ken Kukral

This question can conger up all sorts of images, but the one I am interested in is when is it time to “fire” a customer or just let them go?  Sometimes it is in your best interests to let a customer know you cannot satisfy their demands or expectations and they might be better served by going to another agent.  Although this may be an agonizing decision it can be a healthy one for your agency.

First of all, why would you want to “fire” a customer?  There can be many reasons, but some are:

  • Loss ratio – There are those customers who see the “value” in insurance IF they get back MORE than they paid in premiums. They don’t see insurance as a “catastrophic” type of backstop, but see it as a reimbursement type of contract.  I paid this much in premium and I should be able to get that much back in loss payments.
  • They do not look to improve their risk exposures and are not willing to do systematic updates to their property to prevent future losses. They see an aging roof as an opportunity to have a roof loss so they can get a new one, rather than scheduling periodic updates and scheduling of repairs or upgrades.  You can see the handwriting on the wall, knowing the next big storm is going to get them the repair they have been putting off.
  • Payment issues – You only make money if they pay their premium. If you have to follow up for payments or have cancel/rewrite issues, are you doing yourself a favor by retaining these customers.  The chronic late pay clients will be the first one pushing to maximize their loss settlement and get paid quickly.  Just when you thought direct bill would solve all the payment issues you were wrong and they still crop up.
  • Accounts that use all of your time. Ultimately you need to make money on an account.  If they take considerable “hand holding” and they do not value your time, can you afford to keep them?  Even worse, they ask for your advice and then ignore it!!  It still needs to be a cost/benefit decisions and needs to make dollars and cents sense.
  • What about accounts that refuse to deal with other members of your firm (especially customer service personnel and claims personnel) and will only deal with you? If they are your largest account, then “maybe” they are worth it.  Tough decisions but something to discuss with your office staff and your client of they aren’t “getting it”.  Even worse if they are rude or obnoxious with the others at your office.  The rest of your team will start losing respect for you if you don’t nip it in the bud and set them straight.
  • I previously mentioned the issue of clients not taking your advice. There are times that you have to stand your ground and let them know that if they chose not to take your advice, you can no longer be their agent.  If they get so “cheap” with their insurance program, that IF they were to have a loss they would have major coverage issues, then you may want to let them move on.  Those  “savings” are not worth the future hassles, lawsuits and potential for that business to not survive in the event of a major loss.

So what are you to do?

  1. Be straight forward with your clients. Be willing to “walk” if they cannot make responsible decisions based on your advice.  You are looking to put together an insurance program that best fits their needs and not accepting your recommendations can seriously jeopardize their coverage.
  2. Simplify the issue/coverage/decision/problem and walk them through the pitfalls. They need to know that you know what you are doing, what the consequences are of their decisions and how they could inadequately be protecting their assets.
  3. Have a system for addressing problem accounts and putting them on the path to “recovery” if that is even possible. There will be those “unethical” clients along the way and remember you are judged by the company you keep.

The accounts you lose sleep over….  Might be the ones….

The account you tend to shake your head as you hang up the phone with… might the ones….

Sometimes it is “addition by subtraction”…..

I am not saying just go out there and start firing your customers…. Just ask the question, is this a client I should be firing?  Do something about it….  Get them on track or move on….  Your time is too valuable!

Ken KukralKenneth Kukral, CIC – VP of Special Risks – That means, call me if you need help on placing a unique, difficult, large or more complex risk. Kennethkukral@intlxs.com  800-937-3497 ext 2079

“Standing out in a Crowd”… what does that mean in the Insurance Business?

One happy smiling egg amongst sad angry and envious crowd of eggs isolated on white background

With the prospect of Google getting into the insurance business, I am forced to stand back and take another look at our ever changing insurance business.  Google has changed how we do business, seek out information and helped to increase the speed of transactions.  If our business doesn’t change (like so many others have) then we may get “left in the dust”.

If we act like we are all the same and our business gets “commoditized”, then Google has great prospects in our business.  If they can change how people shop and buy insurance then we may get left behind.  Most of the internet activity on insurance has been to “shop” for insurance, but the number of actual sales is lagging.  If Google can get over that hump, then they are on to something.

So if we want to succeed, then what do we need to do in order to differentiate ourselves?  How will we increase the “value” to our customers and make them realize this is not just a “price” transaction?

Let’s first look at the business model online insurance agents are using and see what “advantages” they have:

  • Speed – Many online agents have rating engines that help potential customers get an immediate online quote. So when they get their auto insurance bill and the rate just went up, they can go online and get a competing price quote immediately.
  • Lower price? Not having gone online myself to get a quote, I am being told that the pricing can be less since they take out most of the agent commission and the ultimate cost of the sale (acquisition cost) goes down.
  • Multiple Options – It is easy with automation to give multiple options so people can pick and choose what they want.
  • Efficiency of transaction – They can get a quote, bind, have the policy issued and pay for it all right there online. They can come to their computer, and 30 minutes later have a policy in hand and ID cards ready.

Those sound like pretty good advantages and could make it tough to compete, so we should just give up, right?   Not so fast.  Let’s look at how we can combat these advantage and determine what advantages independent agents have:

Three of the four advantages above are also available for agents.  We can quickly get a quote with just a few pieces of information, so as long as we respond quickly, there is no real advantage from a speed standpoint.  Multiple options?  Sure we can show multiple options, but having too many options can be confusing.  We can ask a few questions up front and come to a few options that fit what they are looking for.  Much like going to a restaurant and looking over a six page menu and having difficulty deciding what to order. Wouldn’t you rather have a one or two page menu that gives you enough options and allows you to make a quicker decisions.  We can also do efficient transactions.  The technology is there and we can do very much the same thing that the online agents can do, so this advantage can be downplayed.

What about our advantages?

  • Knowledge and skill – Do customers know what they want? Know what they need?  Asking a few questions and help guiding them is worth its weight in gold.  Very few customers have an extensive knowledge of insurance and are “flying blind” when they approach internet based transactions.  The confidence you can instill when helping them to determine the coverage and terms they need will be seen as a strong advantage on the agent’s part.  One size does not fit all and they need to be consulted on what they might need or want.
  • A better claim experience – Although agents have been “removed” from many claim transactions with their carriers, they can help guide a client through the process. Helping to understand what to expect, timing and getting satisfaction can make all the difference between a happy or unhappy client.  Preparing them prior to claim (letting them know the steps they will need to take and what they are responsible for) and answering their questions will keep them coming back.  Knowing they are being “taken care of” and are not just being “processed” will build loyalty and satisfaction.  This is especially true on a large loss.  There will be “twists and turns” along the way and how you deal with them will be the difference between having a long term client or not.  Things such as working with their accountant on a business income loss will help to speed up the process and get their claim paid faster.
  • Personal touch – Here is where we can make all the difference. A thank you for their business can go a long way.  Helping them to control losses or managing risk can pay dividends and help make them be better risk.  Helping them know the gaps in their coverage and if or how those gaps can be covered or managed will help them to not be surprised when a loss does happen.  Discussing what to expect next such as a “reservation of rights letter”, which in and of itself can seem like there is nothing that is covered by their policy.  Also “just being there” when something does happen will help give them reassurance at a difficult time.
  • Ability to help them find solutions to their risk problems. – One of the disadvantages of online agents is that they are looking for things to fit nicely “inside the box”. So they become “box underwriting” companies and if it fits, great, if not, go somewhere else.  We can help by working with clients who do not fit squarely into the underwriting box.  It doesn’t make them a bad client, just different.  How we deal with them and how we help them solve their insurance problem will build significant loyalty and satisfaction.  As I said before, one size does not fit all and we can’t treat clients like that.

So, obviously, we need to find a way to stand out from the crowd.  Not be like every other agent.  Provide a higher perceived value than other agents or online agents.  So how?

  1. Know your product, know your client. Spending the time to learn about your insurance products and how they can be properly tailored to each client will give you a distinct advantage.  Knowing as much as you can about that client will help you to properly protect their assets and meet their needs.
  2. Market in a different manner and build your “brand” – If you want to be distinct, you need to be unique. Doing the “same old thing” will get you the same old results.  Don’t be afraid to fail.  Be consistent though in order to build your brand.  A great brand will pay off in the long run.
  3. If you build a specialty, become an “expert” in that area. If you choose to specialize in hospitality risks, learn everything you can about that business so you can speak their language.  You will also be able to see how their industry is changing and help them to deal with and insure their operation better.
  4. Build a team behind you. When clients have multiple points of contact with your agency, they are building relationships with your whole agency.  The more they feel they have the team of XYZ Insurance Agency behind them, the more they value their coverage and agent.
  5. Continuous improvement. Look to improve every area of your operation over time so you find new ways to stand out and be “above the crowd”.

Half the battle is just realizing you need to stand out, then the next step is how to make it happen.  Keep looking around you when you do business with other firms as to WHY you deal with them.  What makes them different?  A recent example is what got me thinking, when I had to have some body work done on my car.  Figured it was just an average transaction that would come and go and be forgotten a couple weeks from now.  Wrong.  What they did do it detail my car to a point that the interior of my car looks like it just came off the showroom floor.  Every time I have stepped into my car since I got it back, I have smiled.  I even feel a little guilty I haven’t taken the time to go on and do an online review and praise them for their service.  A raving fan now?  Think I would ever consider taking my care elsewhere if I needed body work done again?  Not a chance…  Find a way to make that happen for your agency.

Ken KukralKenneth Kukral, CIC – VP of Special Risks – That means, call me if you need help on placing a unique, difficult, large or more complex risk. Kennethkukral@intlxs.com  800-937-3497 ext 2079

What is surplus lines insurance?

asktheexpert

Simple answer, it is the non-standard or specialty lines section of the insurance business.  “Standard carriers” need to file their rates and forms with state insurance departments and have them approved.  Surplus lines carriers operate outside that restriction and can tailor their policies to fit the needs of a particular risk.  It is this freedom of rate and form that allow these specialty insurance carriers to provide innovated risk solutions or provide coverage to risks that be deemed “uninsurable”.

The surplus lines insurance industry also provides solutions to new and emerging exposures that may be deemed to new or too risky for standard lines carriers.  Many new coverages start in the surplus lines arena and eventually work their way to the standard carriers as they become more familiar and comfortable with the coverage and exposures.  Some examples of this would be employment practices liability and cyber liability.

Standard carriers are regulated at the state level and pay state premium taxes based on where the premium is written.  Surplus lines carriers are exempt from premium taxes and surplus lines brokers collect state surplus lines taxes in order for states to make this revenue back.  Surplus lines carriers are exempt from state guaranty funds also.  Surplus lines carriers are regulated in their home state and not by all insurance departments.

Ken KukralOn behalf of IEC University, Ken Kukral breaks down all things insurance. Stay tuned for more!