In mid-2019, insurance professionals began to see signs of a hardening market. Spurred by a pandemic upheaval, high-dollar jury verdicts, and escalating claims, the hard market is nowhere with a vengeance. With no sign of abating, this environment will be a stiff test of professionalism for insurance agents. The challenge is here, and it demands your focus on practical measures.
Start Early With Renewals
Informing clients that their renewals will likely mean higher premiums, larger deductibles, and lower limits for many coverages is not a happy prospect. This conversation is even more difficult if your customer boasts years of spotless claim records. Nonetheless, in business, bad news early is better than bad news late. By starting the renewal process early and building a detailed submission, you improve your clients’ chances of winning favorable underwriting decisions. With the unpleasant tidings delivered, you can offer a bit of good news: Your clients’ claim reduction and risk mitigation efforts can measurably restrain premium increases.
Up Your Risk Mitigation Game
Whoever said “Don’t sweat the small stuff” never tried to retain clients through a hard insurance market. Risk mitigation is all about the details, and your team’s advice has never been more valuable to your clients. After implementation, your clients must thoroughly document their actions. This process is undeniably tedious for your business customers, so you will need to stress the value of the effort. As with renewals, removing question marks for the underwriter nudges the process in your client’s favor.
Rocketing cyber liability claims are a prime driver of this hard market. Ransomware payouts are the culprit, and your clients with cybersecurity coverage are likely looking at substantially lower sub-limits with their renewals. With these businesses, hard-nosed ransomware mitigation efforts are now essential. Your recommendations can include:
- Implement a robust backup strategy with both local and cloud storage.
- Close inactive accounts.
- Tighten Remote Desktop Protocol access.
- Require two-factor identification for all users.
- Restrict administrative access to vetted IT staff.
Take Advantage of Surplus Lines
As you look over your books, you are likely spotting several clients with needs that will be difficult to place in the current market. If your agency is not partnering with a managing general agent skilled in excess and surplus lines, now is the time to apply. As the hard market has advanced, E&S providers have stepped in to provide coverage for businesses facing a shutout by standard carriers. New players have rushed into the surplus space, so choose your MGA partner with care.
Hard markets are inevitable in an insurance career. During this period, your clients will compare their experience with clients from other agencies. Therein lies your opportunity. If you and your team measure up, this time of challenge will bring new clients to your agency.
About Cochrane and Company
For more than six decades, Cochrane & Company has been proudly at the forefront of the insurance industry. Our experience has enabled us to innovate in powerful ways, reimagining the E&S market, and providing technology solutions that make it easy to do business with us. Licensed in all 50 states, we proudly serve clients across the nation, providing personalized and powerful solutions to help you become an even better partner for your clients. Speak to one of our experienced professionals today by calling (509) 462-1148.