Most businesses want to shop the insurance marketplace at renewal time to make sure they’re getting the most competitive terms & conditions. But are you actually doing more harm than good by shopping in the traditional model? We addressed this topic in a recent blog post (read it here) and explained why regular shopping may do more harm than good.
Let’s define the traditional model as having your incumbent broker and two outside brokers review your current coverage and obtain quotes from the carriers.
Here are a few questions to think about:
How is your company’s brand managed to the insurance underwriters?
Are you aware of what is being told to the underwriters?
How aware are you of the marketing process of your account and the implications of improper solicitation year-after-year to underwriters?
You don’t have to take our word for this … we surveyed underwriters from several of our carriers to see what the real effects are when owners shop their insurance in the traditional model. Here are the questions we asked, and the answers:
Q: How often do you receive outdated or incorrect information on submissions? How does this impact your feeling of the submission?
A: In total about a third of the time. Depends on the complexity of the account.
A: Relatively often. If information is missing I will try to work subject to it, but will hold back some so I can account for potential issues. We also tend to assume things are not as favorable if that information is unavailable.
A: I question the opportunity when a submission is not complete. I’d say maybe 10% give me what I need.
A: Rarely. Receiving outdated or incorrect information appears it may not be a good opportunity to pursue.
A: At least 50% of the time. It is assumed the apps are being submitted to block the market or test our interest.
Q: Does a complete submission get more of your attention than an incomplete submission?
A: Yes, incomplete is an indicator of your chance for a ‘win’
A: yes we are able to move it through rating to completion without having to set aside and request rating info
A: 100% yes
A: Absolutely Yes
A: Definitely yes
A: Yes. I would prioritize that
Q: What red flags do you look for that indicate a submission might not be worth pursuing?
A: Incomplete information. Submissions each year from multiple agents. Loss runs from several different carriers
A: Incomplete info; no response from agent on memo requesting more info; cover note that doesn’t explain opportunity, providing premiums (expiring or targets), without much explanation or description of risk.
A: Poor loss performance, marketed every single year
A: When it looks as if it’s just being sent for market blocking purposes
A: If they are out to market every year. Price shopping and no real pain points with the current carrier
A: Quoting for the past several years and not obtaining business.
Submission from more than two agents.
Incomplete submission. Lack of agent’s knowledge about the account.
A: Mass e-mail sent to many carriers that I am included on–submissions that I get year after year–no loss runs etc.
A: Account is “shopped” every year. The producer has a limited relationship with the insured
Q: How do you feel about a submission you receive from multiple agents?
A: Multiple submissions for some risk indicates the opportunity is out to all markets, and will end up being won by lowest price most likely; maybe the agent doesn’t have a relationship with the client – overall not the best opportunity.
A: Not optimistic
A: Most likely not going to be viable
A: Not good, probably price shopping and submitted to a number of markets.
A: Question the opportunity – loyalty of insured
The conclusion is this: think very carefully about how your account is being handled and by whom. As you can see by the answers above, shopping your coverage can actually have the opposite effect of what you intended. It’s vital to understand this process considering it will determine how well your insurance program is priced. Please contact Consolidated to discuss the most effective ways to reduce your costs.