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.

Top 8 Reasons We Can’t Quote Your Submission

Every day we receive new business submissions from agents.  We love seeing new accounts come across that we can delve into!  Some agents really know their stuff and get us fully completed apps with all the extra bells and whistles needed for that spectacular submission.  But many times we, as brokers, find the submissions fall short and we have to go back and forth to get all the necessary information that wasn’t provided. Perhaps you have to do that, too, with your insureds.  We know how tough it can be!   It ends up being time consuming for all involved.

So, in order to form a more perfect union between us, here’s a list of reasons we normally find we can’t quote your submission:

  1. There is no Insured name on the application. Trust me, knowing the name of the insured you are going to write insurance for is important.  I know sometimes it seems we are mind readers but our clairvoyance doesn’t always extend to Insureds.
  2. The address is missing. Do they not have any address at all?  Are they living and working in their parent’s basement and are afraid to tell anyone? If that’s true, we still need their parent’s address.  I promise we won’t call their mom.
  3. Sales or receipts information is absent or just a guesstimate. It’s kind of important to give us that information so the account can be rated properly.  Also, there’s a big difference between $100,000 and $1,000,000 in receipts.  That extra zero can do a lot.
  4. The class codes are non-existent on the application. Yet another important piece of the rating puzzle.  Those codes give our carriers a better understanding of what the liability exposure is.  It also helps them determine the premium and any necessary exclusions.
  5. There is a bad explanation of the risk. Or no explanation of the risk.  We really do want to know what the insured is doing!  Plus sometimes the explanation helps solidify the class code to use, as there may be something that’s outside the norm.  If the company has a website that’s the most helpful – make sure you put that down!
  6. Property apps don’t have any pertinent information. You can’t just write down the address and hope for the best.  We have to know the year built and when the last updates were on ALL things (plumbing, electrical, roofing, etc.).  Is it a single home or a duplex?  A vacant building or a warehouse?  These are the questions that keep us up late at night.
  7. The loss history hasn’t been included. I would LOVE to just take the insured’s word that they have never had a loss.  Unfortunately, we need proof in this business. And please, please, send loss runs that have just been run within the last 30-60 days.  We can’t hope that those loss runs you received in 2014 are still the same today.
  8. Expiring and Target premium hasn’t been advised. Nobody likes to spin their wheels, getting nowhere after a lot of hard work.  If we know the insured’s expiring premium and what number we need to work at being at or under, then we have a better chance of getting you a quote that your insured will like.

When it comes down to it, we’re here to help you give your insured the best coverage for the best price.  I know it may seem like we’re grumbling about these submissions, but it’s only so we can offer you our best.  We want you and your insured to be happy!

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?

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

Tips for Quicker Insurance Quote Turnaround

Let us help you get quicker turnaround for your new business submissions! Take a look at some of our hints below:


“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

Questions to ask prospective clients

Are there questions we should be asking prospective clients that we aren’t that would help us to better understand what they want?

Are there questions we are afraid to ask prospective clients?

Are there questions we should be asking that would help us to “qualify” prospective accounts?

I have a feeling that the answer to all three of the above questions is yes.  In fact I KNOW the answer is YES!  I do a post mortem on accounts I lost, didn’t write or spent significant time on and wondered if there were questions I should have asked that would have helped me to do a better job.  Questions such as:

  • What kind of premium or rate are you expecting or the insured is expecting? While they may not know, many times they do.  I have saved a lot of time and effort by just relaying minimum premiums for certain classes of business and found out they were expecting something significantly less.  That way the agent is able to move on to the next account and not spin their wheels that they aren’t going to write.
  • Why do you want to fire your current agent? Using a word like FIRE puts a touch of reality to the situation and many times the client will tell you what is important to them that the other agent is not providing.  If they say “they aren’t sure they want to fire their current agent”, then you have your work cut out for you.  Most likely they are just price shopping and you will have to work to differentiate yourself if you are going to have a chance to write account.
  • When do you need the quote by? Simple question, but I am surprise on how few it is asked.  It is essential if you want a clue as to what your prospective client is expecting.  Isn’t selling all about meeting or exceeding expectations?  If we don’t know the clients expectations, how do we have a chance to meet them?
  • What kind of premium are you currently paying? How many times have you worked an account, didn’t write it and found out the premiums they were currently paying after the fact?   If you knew up front you might have decided to not waste your time since they already had a great deal!  If they won’t tell you, that is a signal they are price shopping.  Do they think if you know what they are currently paying you will come in just barely under it?
  • If they don’t currently have coverage, why are they looking for it now? I know a number of carriers that don’t like accounts that do NOT have current coverage.  They found when they did “look backs” on the accounts that experienced losses, that the loss ratio for accounts that did not have coverage directly before them, experienced more losses.  I think the answer to this question, tells a lot about the potential client.  If they cancelled previously for non-pay, is this potential client going to be a payment nightmare or more susceptible to losses?  Are they only looking for coverage now since someone else is requiring it?  This is not necessarily a bad thing, but is important to know.
  • If they move coverage to different carriers over the last few years, why? They are most likely driven by price, don’t have any loyalty and don’t understand the true “cost” of switching carrier often.
  • Do we ask about their website? I can’t tell you how many times I do some internet research on a prospective account and the agent is unaware of what I found.  Many underwriters do the same thing and I hate to be “caught with my pants down” and unaware of what the insured’s website says or what is available on the internet about them.
  • How did you hear about us or come to call us? Did someone suggest us to you?  This give you some information on where your business is coming from and what is working.  If they were sent to you by another client, it lets you know who you should thank!
  • What is your biggest concern or what keeps you up at night about your insurance program? Again, it helps you to better know your client and find out what their “hot buttons” are.  Besides, if you don’t ask questions like this, how will you ever know?
  • Tell me about how you got started…. People love to talk about themselves and tell “their story”.  Knowing more about their “passion” and what makes them successful will help you to protect that commercial client.
  • What is their tolerance to risk? You will most likely get a confused look when you ask this question.  Ultimately you are there to properly protect their assets and they need to know more about what risk those assets take.  This is an opportune moment to help educate your potential client and help them understand what you are looking to do.

Finally…. Ask the prospective client if there are any questions you haven’t asked that they think you should?  This lets you know where you stand and how close you are to being on the same page.  Another expectation assessment moment.  If you are having to extract information and they are not very forthcoming, it will be hard for you to do your best job for them.  If it is a “need to know” type of environment, you have not built the trust element enough and are in for a bumpy road ahead and a reduced chance to write the account.

Keep in mind, you are there to learn about the account and portray them in the best possible light to the carrier to get them the best terms, most appropriate coverage and meet or exceed their expectations.  So ask away!

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

The art of “pre-qualifying” an account

Checklist on whiteboard with businessman hand drawing win-win an

Over the years one of the most important thing I have learned is you CAN’T quote every account that comes in the door.  As much as you would like to you just can’t.  The logic that you have to quote an account in order to write it is flawed.  If things worked this way, your hit ratio would be down in the low single digits.

So what do I mean by pre-qualifying an account?  Ultimately I mean getting enough information about the account and the prospects expectations in order to determine the odds of quoting and writing the account.  Since we don’t make money quoting, just writing an account, we would love to work on fewer accounts and write more of them.  Sounds easy, right? It doesn’t seem to work out that way.

A couple of years ago we took a look at our “hit ratio” (the number accounts we logged into our system and the number we ended up writing).  When we compared one year against the following year we found a significant jump in our “hit ratio”.  So much so that we tilted our head (like a dog would when it hears a high pitched sound) and wondered what happened.  In discussing this we found out that we spent more time qualifying an account UP FRONT to determine if we had a significant opportunity to write the account.  If we didn’t feel we had a decent chance to write it, we relayed that information on to the producer and DIDN’T log the account in (to our agency management system).  (By relaying information to the producer I meant we either declined the account, gave them a “ballpark indication” or let them know what minimum premiums we might be up against)  If the producer didn’t think we were going to be competitive or wanted to go back to the prospect to run the potential premium range by them, we stored the submission and went on to the next one.  When our industry (E&S) usually has hit ratios of 5% to 15%, getting a hit ratio over 20% was HUGE!

Some hints for pre-qualifying accounts:

  • Don’t be afraid to ask the prospect if you are the first agent to be working on getting them a quote. It is OK if they have another agent working on it, especially if they haven’t heard back from that agent in a long time.  That opens the door to “look great” in their eyes if you can get something quickly.  Ask who, since it may let you know what markets have already been approached.
  • Ask them if they have a premium range they are expecting. I just worked on a quote that came in originally at $5,000 and a second quote came in at $2,500.  I was sure we would write it!  I failed to ask up front what premium they were expecting and found out after I quoted it that they expected it to come in under $1,000.  Had I known that I would have come back to them that my best potential quote would START at $2,500 and would have not spent the time working that particular account.
  • Find out current carrier and premium. Some prospects may be reluctant to give you this information and just ask you to come in with “your best numbers”.  At this point you have to ask if the account is worth spending your time.  A prospect who does not want to give you this information does not yet “trust” you enough or you have not yet built enough of a relationship with them.  This type of transaction hinges on pure price.  Those are the type of customers that will also leave you on price.  Also they don’t value your time since it will take you time to put together a competitive quote and your chances or writing it is low.  Many times we ask this question and are told a “standard market” is on the account and they are NOT non-renewing. (just an FYI… the very first question I look at on an ACORD application is the one asking if they are being non-renewed.  Second question is the expiring carrier).  If the current carrier is willing to renew, then we ask why you are coming to the E&S market with the submission.  We do very few “standard market” accounts and would have to have a good reason to try and work an account that is and have any chance of writing it.
  • Learn minimum premiums for certain coverage lines. By this I mean many products liability markets start at $5,000 minimum premium.  So if the insured has only $25,000 in expected sales first year, can they afford a $5,000 premium?  Many times the sticker shock will sent the prospect moving on and you can spend your time working accounts you actually have a chance to write.
  • Find out how quickly they need a quote. I have accounts that I worked on and turned around a fabulous quote, only to find out they needed one within 24 hours and I lost my chance to write it.  Not to say something cannot be quoted quickly, but you need to know that up front so you can make the decision if you are going to drop what you are doing and pull out all the stops to get them something.
  • Last of all if they currently have a quote (or renewal quote) ask them why they want to move their business to your agency. Their answer will be a great determining factor on how serious they are and will help you to pre-qualify the account.

The “holy grail” is to work fewer accounts and write them all (or a higher percentage of them).  The only way you ever stand a chance of making that happen is to pre-qualify accounts that come in the door so you work fewer of them and write more of them.  New producers will tend to work EVERY account they happen across and they need to be trained to be more discerning and work on only the ones they stand a chance of writing.  The quicker they learn this the more successful they will be.  This is a great New Years’ Resolution to make and keep in 2015.  I know I am working on this one daily and after 29 years in the business still have a lot to learn.

Ken KukralWith over 25 years of experience in the insurance industry, Ken Kukral has developed expertise in: Complex and larger accounts, Casualty Insurance, Property Insurance, Inland Marine Insurance, Professional Liability Insurance, Directors & Officers Liability Insurance, Employment Practices Liability Insurance, Products Liability Insurance, Product recall Insurance, Insurance Program Development, Surplus Lines Regulation, Coverage Analysis, Difficult Insurance Placements, Excess and Umbrella Insurance, Carrier Contract Acquisition, Unique or “one of a kind” insurance solutions, Association Leadership and Association Management, Insurance Sales and Marketing. For questions about this topic, or to have an exposure looked at, contact Ken directly at kennethkukral@intlxs.com