Navigating the Hard Market: How Proactive Communications Are Essential to Retaining and Building Business Today

By Steve Tombarelli | November 21, 2022

Across all lines, the insurance industry is experiencing macro-hard markets, with large rate and premium increases, as well as re-underwritten renewals as the U.S. deals with broader economic uncertainty.

Agents are also navigating renewal season with clients while managing changing capacity and increased premiums resulting from the hard market. In times such as these, agents often struggle to properly communicate with their clients.

How you convey raising rates and premiums matters, and taking the right steps to discuss current market conditions with clients is essential to client retention. Customer service is the backbone of the industry, particularly as we navigate an increasingly online world, and agents need to know how to communicate all news, good or bad, with their clients.

While a hard market is not ideal, a well-prepared agent will find there are valuable opportunities for growth available. The process starts with a thorough approach to education.

Prioritizing Education

We know the industry is in a hard market, but that means very little to clients who aren’t familiar with the nuance of the insurance industry. Business owners simply aren’t interested; they want to hear from their insurance partners about how inflation is impacting their bottom line, and they are looking for guidance and a strategy to insulate them, where possible, from future increases. Agents looking to grow their business need to take a proactive and aggressive approach with this mindset as a central organizing point for every interaction with clients.

Fortunately, we’ve seen internal education among agents and brokers become a greater priority at successful agencies.

To properly communicate with clients, account managers and coordinators need a thorough understanding of market conditions and how business owners feel. They should be able to comprehensively answer questions about the state of the industry and why costs are rising.

Some basic steps for education can include reaching out to carrier partners to get their read on the market, seeking out data and market trends that will help address possible client concerns, and checking in with other agents to see how they have been impacted by the market. Following industry trade media helps, as well.

An Aggressive Approach

Once educated, agents should take an aggressive approach to client outreach.

Business owners will want a comprehensive review of why costs are changing. Agents who have put in the upfront work can help connect the dots to help clients understand why they may have to allocate more of their budget to securing coverage, along with the pros and cons involved in any related decision making.

Email conversations are not enough. The hard market has kept agents across the industry busy but making time for regular face-to-face communication is important.

In recent years, our industry has implemented new technologies designed to improve efficiency and handle potential schedule clogging tasks.

Embracing digital capabilities and offloading some of these projects can help create time for regular phone calls and in-person meetings with clients, which is critical when trying to properly convey rate and premium increases.

Ongoing communication that keeps clients informed is the best means of eliminating surprises and frustrating clients. This outreach should begin well in advance of renewals.

Business owners need time for financial planning. Reaching out early will help agents identify what their clients’ major concerns are and where they may have an opportunity to help strategize and address these concerns in advance.

Agents should take this same approach with their prospect lists. There are bound to be businesses that haven’t heard enough from their insurance partners and may be uncomfortable with an unexpected rise in rates. An agent armed with comprehensive knowledge about the hard market can take advantage of others’ missed opportunities to build out their book of business.

A hard market may seem like bad news, but with the right communication tactics in place, agents can often retain their clients and position themselves for growth.

A proactive education and outreach strategy will make the rate and premium increase conversation much easier for agents and help create opportunities to grow their book of business.

Topics Pricing Trends Market

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Insurance Journal West November 21, 2022
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