Thinking Outside the Insurance Box: Why Operating in an Absolute Environment Will Get You Nowhere — Fast

Chris Garrison

Senior Vice President, Sales & Marketing

January 13, 2021

From a global pandemic to climate change and a hard insurance market, the state of the world means that insurance professionals need to be proactive and flexible, and not go into 2021 with a business as usual mindset. For brokers that continue to operate in an absolute environment – where they act in a fixed, standard or non-variable manner regardless of what is going on in the market – will find it difficult to write and retain more business. Here, we’ll look at different perspectives for how brokers should be approaching industry challenges, so they don’t miss opportunities to put more business on their books.

Be Ready to Provide Proactive Solutions
In a hard insurance market, it’s not unusual for underwriters to examine accounts more closely by carefully reviewing losses, financials and safety records. It’s also not uncommon for carriers to increase rates while at the same time imposing stricter underwriting guidelines such as lower limits, higher deductibles and the removal of specific endorsements. These changes can be a big pill for existing insureds to swallow come renewal time — especially for accounts that haven’t filed claim losses in the last policy term. In this market, it’s important that brokers be prepared not only to answer hard questions from clients as to why rates have increased or coverages have changed, but they must also be ready to proactively propose possible solutions that may not be offered by the competition. It also means reaching out to clients early in the renewal process so that a) they have the opportunity to have a conversation before renewals are sent out and b) they have more time to shop the market for a better rate and/or coverage.

Get Submissions in Even Earlier
With the flood of new submissions and renewals pouring in from brokers who are heavily marketing accounts, carriers and underwriters are getting overwhelmed with processing. Therefore, it’s important to get full and complete submissions in at least 90 days in advance (longer, if possible) so underwriters have enough time to properly review an account. In addition, brokers should expect that because of this extra time requirement, they are likely to see quotes being released from underwriters and carriers at the last minute due to rapidly changing reinsurance issues. Because insurance has the highest customer acquisition costs of any industry, brokers need to give their renewals a fighting chance. This includes providing underwriting with a longer lead time to review submissions and to reach a place where they feel comfortable offering coverage at a competitive rate.

Sell Underwriters on Submissions
Simply submitting required Acord forms and loss runs won’t cut it in this competitive market. Today, brokers will need to sell underwriters on why they need to write a new risk or stay on a current one. Along with the application, they should include a narrative that explains what the business does, its management style, and its enterprise wide commitment to its product line, service and safety. It also means being an advocate for clients by having conversations with underwriters and carriers early in the process and taking the extra steps to help them better understand a risk and not take submissions at face value. This can include showcasing the attributes of an account, such as explaining a client’s financial viability and any new risk management programs that have been implemented. For new submissions or renewals where there have been claims or substantial losses, having a conversation with underwriting as to what the business is proactively doing to mitigate the potential for future risks can go a long way toward helping them understand the submission.

As the industry works through a tough market, insurance professionals will need to think a bit differently and be prepared to work even harder to write and retain policies, while building and maintaining long-lasting relationships with their clients. It may not be easy, but it’s a challenge that’s worth taking on. For more information about this topic, please contact Chris Garrison at or 775-351-9494.

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