Limited market selection. Less coverage for more premium. These are a few indicators that a hard market is upon us. For any commercial broker, it’s a tough conversation to have with any client.
And you're dreading that conversation—worried about how the client will react. They’ve been loyal for years, and you don’t want to lose them or find out they’re shopping around. Yet, you're repaying them by increasing premiums and offering less coverage.
It’s frustrating. Frustrating for you and frustrating for your clients because they may not understand why their premiums are going up, especially if they haven’t filed a claim. Even though clients realize their premiums won’t stay the same forever; if a competitor is offering lower premiums or more robust coverage right now, how can they resist?
Here’s a few tips on how to piece that tough conversation together and keep those clients happy, no matter what the circumstances are.
1. Tell your entire commercial lines team about potential hard market situations.
Imagine if a front-line worker like a CSR wasn't aware of potential hard market pricing and unintentionally told the client their policy should renew “as per expiry.” It’s a simple mistake that could put your entire commercial lines team in a sticky situation.
Like a slogan or motto, consistency in the messages you deliver to clients and prospects will lead to greater respect for your commercial lines team, especially during a hard market. When the messages your team sends to clients and prospects are simple, consistent and not wishy-washy, those messages are the ones that will stick.
2. Explain the reasons for a hard market.
There have been numerous stories in the news and on the Internet about premium increases, especially when it comes to renewing automobile insurance or obtaining flood coverage.
For example, I recently moved my automobile insurance to another broker because my former broker failed to explain why my renewal premium went up over $300.00. When I asked why, I received an email saying, “I understand your frustration. We approached other markets and the incumbent is still the best market for you. Please keep me updated on what you would like to do with your policy.”
I don’t believe they understood my frustration because they didn’t bother to tell me why my premium was going up. I may be one small client lost, but if 100 clients are feeling the same way, how does that ultimately affect the bottom line?
3. Encourage clients to reach out with questions or concerns.
Make sure your clients and prospects receive all the information they require. Reassure them that they can always reach out to anyone in your brokerage—including management—with any questions or concerns that arise when it comes to renewing their policies during a hard market.
It's critical that you handle potential problems produced by a hard market smoothly and realistically. Make it clear and be honest. It’s important to know that your clients understand the situation and are willing to stick with you through a hard market, no matter how long it lasts.
Commercial Lines Analytics Overview
Policy Works introduces the first out-of-the-box suite of commercial lines analytics that incorporates policy and workflow data.