The lost art of consultation or “why quote apples to apples?”
It’s a frequent practice in our industry to simply quote “apples to apples.” Underwriters basically quote coverage based on the agent’s application. An agent’s will usually provide a quote based on what was on the expiring policy. Typically, the only things that will change from one renewal to the next are the values or rating exposures. So what we have are insurance programs that are not designed or critically evaluated for gaps or effectiveness from one year to the next. That problem is multiplied as time goes on.
As a multiline underwriter for over 30 years, I have seen this practice create situations where the insured is buying coverage they may not need and even more importantly have significant coverage gaps. In one instance, an insured of mine was paying $25,000 for an extra policy that was already covered by my policy. This practice went on for over 10 years until I asked the agent why they were purchasing the coverage because it was already included in my program. If you do the math, that error carried forward each year was at least a $250,000 mistake. For some reason, I think the words “E&O claim” comes to mind, but in this situation the client was so happy that a skilled individual was performing that critical evaluation and it served to cement the relationship that the agent and I had with the client.
When you think about it, underwriters and agents do not really set the price. The reality is that the market and actuarial science combine to set the price. Also, the coverage is basically the same from one carrier to the next. There may be some bells and whistles added, but it’s basically the same. So what are we really selling?
The answer is quality service and expertise. Our clients are turning to us for guidance. In my opinion, the very best way that we can demonstrate that quality is to throw away that old worn out practice of quoting apples to apples and go to a practice where we look at our prospects as individuals who need our undivided attention and expertise. This practice has worked for me for over 30 years and allowed me to differentiate myself from the throngs of competing underwriters.
What are your thoughts?