Negotiate Lower Rates By Showing Claims Prevention Strategies
Daryl Henry
Frederick County Businesses and Social Services Organizations Seeking a Trusted Insurance Advisor: Addiction Treatment, Child Care, Schools, IDD Service Providers, Home Healthcare, Mission Sending Organizations
One of the most important keys to negotiating lower rates for a client is creating interest in the account with underwriters.? It’s not dissimilar from being a real estate broker getting new buyers to tour a home.? Except in this situation, the underwriter is the family with a new kid wondering if the back yard is big enough.
“But did you check out that kitchen?? Isn’t it beautiful?”? I would appeal.
“Yes… but that back yard looks pretty small.? What if we want a dog next year?
When I am marketing an account with underwriters, I’m giving the underwriter a tour of business and their business practices.? And in their mind, they’re thinking one thing:
“Will this account be profitable?”
The best way to demonstrate that your account will be profitable is to show that you understand the claims that are likely to happen to your business, then have plans in place to prevent them.
For example, if you are a business with a lot of vehicles, you would want to demonstrate the following:
1.????? You have a vehicle maintenance plan.? The vehicles will be well cared for according to a detailed plan.? There will not be any accidents because an old tire blew out on the highway.
2.????? You have a hiring process for hiring good drivers
3.????? You have a training process that shows those new drivers how to safely operate your vehicles.
4.????? You have technology systems in place that will help you monitor their behavior when they are operating the vehicles.
5.????? You have a management system for how you will react if employees use the vehicles improperly.
Here’s what will happen in the underwriter’s mind: They will know that for your business, the primary risk factors for claims will be related to the operations of vehicles.? However, since you have excellent business practices around this part of your operation, you are far less likely than your peers to have claims.? Assuming that you have a business type they like to insure, and they believe they have a chance to win your account, you have now become a very interesting prospect in their mind.? They want your business in their portfolio.
Now, let’s say you’re running an insurance procurement process with one broker.? And that one broker knows there are 3-4 companies that would be equally interested in insuring your operation.? They can give those underwriters the same tour of your operations.
“Look at this meticulous maintenance plan.? Did you see the hiring practices on these guys?”
“Wow… Yes… Amazing…” the underwriters say.
Now there are 3 underwriters that are envisioning your business as part of their portfolio.? They’ve envisioned the Christmas gifts they can buy because your business has been so profitable, and they will be receiving bonuses.? All they need to do is win your account and the glory will be theirs.
This is when you win as a business owner.
“Will this get me a discount?” Many business owners will ask me.
Strictly speaking… No.? But that’s not the name of the game.
With commercial insurance, we impact the bottom line of the operation in two ways:
1.????? Preventing losses in the organization, because those are money losers.
2.????? Creating leverage with underwriters, because that reduces the cost of the insurance program.
Know the most likely claims in your operation, then have detailed strategies to prevent them.? The results will come.
Thank you for reading! For more content like this, try some of the other content I've created:
Commercial Insurance is Cheaper when you Pick One Broker (Video) --
The Craftsmanship of an Insurance Agent (Article)
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1 周Great analogy that many business owners miss when “buying insurance” is the sale to the underwriters of why they are a good risk. Your quote of “the underwriter is the family with a new kid wondering if the back yard is big enough” absolutely nailed it!
Commercial P&C Insurance Professional
2 周I like the language shift to "claims prevention." It packs more of a punch than "loss control" and even "risk management." I would also like to add that the above procedures should be in written format. Fleet maintenence program, driver acceptability/training/protocol, property maintenence, employee handbook etc. Underwriters will ask for them.