How Often to Bid

[E&S Man]

I have an agent locally that is required by the agency owner to market every account every year, to at least 4 different places. This particular retailer will not give anyone last look, even incumbents.

I wrote a risk that I lost and they told me someone else was cheaper, so they moved it. When I asked them why I didn't at least have the opportunity to revise the quote if needed, I was told that if I could have done it cheaper, I should have the first time.

The next year they sent it to me to look at again, and I saw red when I saw the expiring premium. It was a $10,000 account, and they moved it to another GA for a total of $12. TWELVE DOLLARS.

I already had a fairly low hit ratio with them anyway, so we non-renewed everything they had (just a few accounts), and no longer quote new business for them.

When you see a submission that has a different carrier each year for the last 5 years, run. You can't make any money on business like that.

Regarding the giving up commission, I offer that to my retail agents all the time. When I KNOW what I'm offering is superior coverage for about the same price as the competition they are trying to get me to beat, I tell them that I'm paying them X%. How much of that do they want to give up.

[tflood]

Scott- We chat again- interesting question....
For our firm, it's all about our "unique process." The "unique process" has nothing to do with insurance policies.
So what do we say and why?
"Mr client, as you know for our firm is all about "our unique process" and our intellectual capital. You even stated when we started with you with our unique process that you never saw anything like it." I understand you want to bid your account. As you know, the true value we bring is not so much bringing you the cheapest quote, but in the "unique process"

"We both will acknowledge that there can always be a carrier that is new, and there's always can be a lower price."

Should the other broker come in with a lower quote, and they also have a better "plan and unique process" we both agree that I will relinquish the account. However, if the other broker comes in with a lower quote, and our "plan and process" is superior to theirs, we both agree that you and I will agree to continue our relationship and we take over the lower quote on a broker of record.

I have had three large renewals this past week, all were shopped. My position was the same as above, and in all three cases, not one agent beat our "plan." In every case, the other brokers came in with the boiler plate proposals and went right to the price. In two cases, our renewal quote was higher, and they stayed with us because of our unique process. The quotes were insignificant when compared to the content of the "plan", price was rarely mentioned.

So what is your unique process? What differentiates you in the marketplace? What can you do that breaks you out of the commodity business and brings me to a "Blue Ocean" that eliminates all competition?

Once found, it's exciting!
Best- TF

[tflood]

The same customer/client then ask you
"What are the five compelling reasons why we should do business with you firm?"

You cannot answer with any of these:
1) we get our certificates out on time
2) we been in business over 20 years
3) we have an experienced staff
4) we're fully automated
5) we'll get you the lowest price
6) we know your business
7) we have 24/7/365 claims/cust service
we're on facebook and twitter

1-8 is what most will say and the client heard this all before. What is your 30 second commercial that will immediately differentiate you from other brokers?

[Tristan]

That's nice, be we are "insurance salespeople", which unfortunately is still seen by many as a closely related to used car salesmen. The answer we give is "We are constantly keeping our eye on the insurance marketplace and if a new opportunity comes up that might be a fit for you we will certainly look at it for you. Otherwise we will plan to do a full market of your account every 3 years. We'll let you know what markets we will be going to and certainly if another agent has a market unavailable to us, by all means see what they can do. If it's better coverage at a better price than we may even recommend that you take advantage of it. The only thing we ask is that if we have access to a market you let us get the quote for you." This is the agent actually looking out for the clients best interest, not their own. They generally pick up on this and we are able to develop a long term relationship. We have a very high retention rate (97%) and don't waste time on having to constantly compete to keep accounts.

This is a fantastic way to explain the process to the client. If we shrug our shoulders and say, "Whenever you feel it's needed," we are putting the control in the client's hands. If we say, "as long as you're with me you'll never have to shop around," the client becomes skeptical of our best interest. I think you've struck a great balance between the two. I always tell my clients that we regularly get quotes and keep up to date on how policies are evolving in order to get them the best coverage possible for the best price. Every time I meet with a client for their annual review, I run through a series of questions to make sure I'm still meeting their needs. While I don't want to under insure them, I don't want to over insure them, either. That leaves room for suspicion.