Writing Hard-To-Place Risks

Writing Hard-to-Place Risks Starts with a Good Relationship with Your Excess & Surplus Carrier—
and Your Underwriter
By: Michael Miller, Smart Choice® State Director

Most insurance agents can write auto and home policies in their sleep, and many understand commercial insurance like the back of their hands. But sometimes, clients throw us curve balls. They might have had multiple losses that make finding a policy difficult. Others might be in an industry so unusual or risky that standard carriers won’t cover them. In these cases, relationships with excess and surplus (E&S) lines carriers can be the difference between making the sale and turning a potential client away.

A look at what E&S lines carriers can do for you

E&S lines carriers are insurance companies that write policies for unusual or specialty businesses that standard carriers consider too risky. Sometimes, this is due to a history of loss. But more frequently, standard carriers simply do not have the experience writing these businesses to be able to offer a policy that comprehensively and appropriately covers the risk.

Many E&S lines carriers are licensed in a single state but can do business in other states. But they don’t have to be based in the United States. In fact, the largest E&S carrier in the United States is Lloyd’s of London, a British company. At Smart Choice®, we have partnerships with several E&S carriers, including Burns & Wilcox and Willis.

Your relationship with your E&S underwriter

The E&S lines market operates slightly differently from the standard commercial lines market. Usually, you must try to write the policy with one or more standard carriers before shopping the policy on the E&S market. Doing so requires a relationship with an E&S carrier.

It’s important to maintain your working relationships with the E&S carriers you have appointments with. That starts with your E&S carrier underwriter. If you invest a little time in your relationships with your underwriters, it’ll pay off in the long run.

Underwriters are in a tough position. They have to answer to their employers, the carriers, who reward them for writing high volume of policies with “good” risk. But they also need to please their agents, who bring in the business but often make requests that are riskier than their carriers prefer.

To write a good policy, your underwriter has to trust your judgment on the customer’s risk. And since most E&S policies do not have standard clauses regarding binding authority, back dating, and do not give advance notice of changes to policy, it’s important for you to understand how your E&S carrier underwriter operates and stay on top of each customer policy.

If you make it clear to your underwriter that you understand what “good” risk is, the more likely he or she will be willing to work with you on your more complicated policy requests. Give your underwriters the professional courtesy of asking thoughtful questions and submitting a clean request that has all the information they’ll need to feel comfortable writing it. Make your requests complete, clear, and timely.

If you take the time to get to know your underwriters and their carriers, you’ll learn certain carriers will never write particular policies, while others are eager to take on your riskier requests. But you’ll only know this if you invest some time and effort to understand how and why your underwriters write what they do. Take a moment to get to know them better. It’ll pay off for your agency in the long run.

Customers requiring E&S policies may not come through your door every day, but being proficient in writing this type of business can create real opportunities for your agency. You could become the resource for niche industries who can’t be insured through their current agent’s standard carriers. Imagine writing all the car dealerships or pizza delivery businesses in your metro area. What impact could that have on your agency’s profitability over the next five years?

Common Hard-to-Place Risks

  • Engineering Companies
  • General Contractors
  • Implement Dealerships
  • Motorcycle Dealerships
  • Large Habitational Risks
  • Trucking Companies
  • Used Car Lots with Inventory of 30 or Fewer Units
  • Vacant Buildings

[Sources]

Insurance Journal

Claims Journal

Property Casualty 360

 

Top 5 Sales Tips For Insurance Advisors

Top 5 Sales Tips For Insurance Advisors
By: Ashley Wingate, Vice President, Personal Lines

Selling in the insurance industry is not the same as sales in many other industries. Unlike most commodities being sold and advertised, insurance isn’t a choice in most cases, it’s a necessity. Many customers don’t view insurance as something they want to spend money on, but rather something they HAVE to spend money on. So, you’re really trying to counsel your customer into meeting their own coverage needs, even when they don’t want to spend the money. YOU have to be able to flip the conversation into a positive one so they feel like they’re walking away with something tangible, and not just spending their money on a “have to.” After many years working in this industry, here are my top 5 sales tips for insurance advisors:

  1. Listen to your clients and their needs. It’s tempting to just sit down and begin explaining all the benefits of your insurance policies and plans that your agency offers. My suggestion is let the prospect lead the discussion and they will tell you everything you need to know to close the sale. Instead of pitching your product, ask the person you are speaking with about their life and their family or their concerns for the future. They will tell you everything you need to know and then you become an insurance consultant and not just another salesperson.
  1. Don’t just be an order taker. Too many agents fall into this trap. If you follow the first tip and listen to your client and their needs, then you can develop a consultative approach for your client and offer them Insurance solutions for their needs. Also, don’t be afraid to ask them for their business.
  1. Make sure your clients know what they are buying from you. Stop to go over the carrier you have placed them with and highlight the benefits and features that their policy offers them. Most people don’t understand insurance and this is the time to help them understand what they have just bought from your agency. It’s a time for you to shine and a time for you to educate the customer on why they’re better off with proper coverage.
  1. Ask for referrals. Referrals are an awesome way to grow your business and these customers are much easier to close. Think about a referral program for your agency and reward the customers that send you new customers. Independent agents should rely heavily on referrals, because they have the ability to really shop for their clients and customize coverage. You have the chance to foster a more personal relationship with your clients, and therefore a better chance at gaining referrals.
  2. Network, network, network.  Take advantage of the opportunity to attend trade shows, work with real estate agents, work with the local PTA, and network with other insurance professionals in your field. These are all great places to make connections and learn from industry leaders and stay up to date on what’s going on in the insurance industry.