New year, new you… right? Many business owners that I speak with on a daily basis whether clients or potential clients are looking for ways to lower their insurance premiums or obtain additional coverage to secure contracts BUT as the Einstein quote goes “Insanity is doing the same thing over and over again and expecting different results.”. This year are you going to do the same thing on your business insurance renewals yet expect a different result than you’ve had in recent years or are you going to try different approaches to get the results you want? That is up to you as a business owner but I want to help educate as much as possible so business owners can have the steps to get different results if they are willing to put their focuses in the right places.
- Realize that competition on the Commercial Insurance side of the industry is not best created first on the Insurance Company but rather hiring the right broker to run a strategy for your business to achieve the maximum leverage to the marketplace.
- Commercial Insurance Companies only allow one Broker to quote on your behalf so whomever submits the quote first have full control of that company regardless of whether another broker has a better relationship or would be better served to get a more competitive pricing and coverage option for you. If multiple brokers submit to the same companies underwriters see the account is being shopped with multiple brokers and the likelihood of them winning the deal is drastically decreased so you WILL NOT get the best coverage forms or pricing if multiple brokers are shopping for you to the same companies and it will hurt your reputation and name with that insurance company if they see a submission year after year but never write your account.
- The best way to maximum your leverage in the Marketplace is to go through a Broker Selection Process and Hire ONE BROKER just like you would a CPA, Financial Advisor or Attorney based on the criteria that you decide would be the best for your business.
- Alright… now that that is out of the way let’s get to ways that you can help yourself achieve better results on your renewals. (I will be going into this further in coming newsletters so stay tuned as this is the #1 mistake I see businesses make on their insurance buying process. It hurts them in the marketplace and wastes a massive amount of time that should be spent on running their business not “insurance quoting”)
Once your broker is selected starting early preparation so you and your broker can maximum your leverage and give yourself time if you need to remarket to another company that your broker can negotiate better terms. Starting early also allows you identify potential gaps in coverage, plan for upcoming contracts that may require different coverage than you currently have and not be scrambling last-minute to get your policies renewed.
- Review Current Policies Early: Take a detailed look at your current coverage so you are familiar with what type of coverage that you have in place and that you are not missing buildings, autos, equipment, drivers, etc.
- Engage Early with Your Broker: Build an ongoing dialogue with your broker. They can help you navigate marketplace based on your current risk profile and upcoming needs. Not all insurance companies are a fit for a business for 10 years, many are a fit for right now but having conversations with your broker early allows a strategy to approach your current company and/or the marketplace to see if there are better terms that fit your business for the upcoming year. If your broker learns of major changes close to renewal without time to adequately create leverage through negotiations it will drastically limit your options for competitive rates.
- Conduct a Risk Assessment & Gather Accurate Data Prior to your Renewal Window: Consider changes to your operations, staff, new security in your properties/autos/equipment or contracts that you are working to obtain to be sure that your risk profile is up to date. Ensuring your records are up to date including payroll and revenue will streamline the negotiations for your Broker so they can paint a picture in planting seeds with underwriting when beginning the work to secure the best terms for your business at renewal.
- Strategize with your Broker to have them Begin Creating Leverage for you: If they don’t have the updated data to your Broker it is much harder to ping underwriters to say things like “Hey, I have a GC that is going from $5M in Revenue to $10M but is looking for a carrier that allows them to do XYZ. Think this would be one you would be interested in taking a look at?” or “Hey, I have an apartment complex that recently updated all electrical, put a new roof on all 5 buildings and they are with XYZ that is projecting a 25% increase. Would this be something you can look at to get them a flat renewal?” prior to even being in the renewal time period for submissions or remarketing.
- Stay in Communication and Ask for a Full Marketing Summary form your Broker: Many times businessowners trust that the Broker is doing their job but they get a list of 5-10 companies that show they submitted to them but are lacking any context, feedback or reasonings why that carrier was not the right fit or declined. A strategic broker will provide a Marketing Summary with the reasons why each was not a fit or why they declined. Having this information is one of the most important data points that a businessowner can gain during the renewal process to see a gauge on their business in the market. Often times in those summaries you will see "Declined - Not a Marketing for Tract Home Building", "$XXX Premium Higher - Due to Lack of Security System we cannot offer premium credits", "If they were to not do XYZ anymore we would be about to provide a proposal and be very competitive" but as a business owners if you aren't doing Tract Homes anymore, don't make any money off a certain exposure so if it saves premium you don't need to do it anymore or you recently put in a full Centrally Monitored System without that information you may be missing out on an entire market through a decline or not having strong rates proposed by underwriting.
Don’t wait until you hear from your broker on renewal—schedule a renewal strategy meeting with your today to build your 2025 renewal strategy. Together, with the right broker and a strategy for your renewals you WILL see different results than every year when the process is confusing, frustrating and something most business owners just don’t want to deal with.
Thanks for reading this edition of The Broker’s Edge on Insurance!
I’m Trevor Elliott, a Commercial Insurance Broker with over a decade of experience helping business owners protect their operations. My goal is to provide actionable insights and strategies to help you navigate the insurance landscape with confidence.
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