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A Makeover for the Insurance Industry

By Joshua Williams, SVP of Commercial Operations, Foundation Risk Partners

Joshua Williams, SVP of Commercial Operations, Foundation Risk Partners

There are many challenges to running an insurance agency in 2019. Those challenges vary from ongoing changes in the market place, to continually adapting coverage and forms, or the shifting economics of the insurance market as it begins to harden. The challenge of agency principles is to ensure we are providing the client with the best service, the best product while balancing their need for competitive pricing.

The insurance market has evolved over many years in the industry. There is now an increased focus on data analytics and the use of modelling in presenting, placing, and even tracking accounts. Brokers and carriers are now aware of more information about our clients than ever before. Additionally, our clients have more resources and information at their fingertips than ever before. Be it the use of GPS data tracks for auto insurance or the use of claims analytics projections brokers and clients are more educated than ever when it comes to the exposures and needs of clients. It is vital as a broker to ensure that we are taking the time to the give best advice to our clients on what analytics will best serve them from a Risk Management perspective, as well as improve their place in marketing. With the auto market in disarray and going through a period of tough pricing, more companies are willing to install driver safety program and GPS trackers in vehicles to help better position themselves to insurance carriers. We diligently research these options to ensure the best fit and the most exceptional results for our clients. As more and more artificial intelligence and data becomes available, it will be imperative to know what is of the best use for clients to instil control in their programs and best leverage the marketplace.

"In short, the key to running an insurance brokerage is focused on customer relationships. With competition from global powerhouses, to local agents, and even online do it yourself shops, the only way to be consistently successful is to build rapport with our clientele"

Over the last ten to twenty years, the insurance market has overhauled many forms and coverages available to the general public. Working in the commercial space, it is imperative we have experts tracking these changes and enhancements with carriers. For example, Cyber coverage continues to evolve and be an item of need for many if not all commercial clients. Being educated on what carriers are providing, on what the exposures of the client are, is extremely important to brokerage operations. There have been a lot of adaptations in the market place as well and knowing your local and national relationships can have a tremendous impact on the coverage and cost to your clients. Changes in Windstorm, Flood, and Terrorism coverage can vary based on the venue, loan or mortgage type, values of the property and many other factors. As the broker, we are not only responsible for knowing what the requirements for your agreements are and ensuring compliance, but also ensuring we get the most competitive price and broadest coverage. Having a dedicated broker who is up to date on what is currently ongoing in the marketplace and who can anticipate changes whether it be increased or reduced capacity of carriers, or coverage enhancements is crucial to the success of the broker relationship.

Lastly, understanding the insurance market cycle, and being able to set accurate expectations for clients is critical in today’s brokerage operations. In a hard insurance market, prices are up, and capacity is down, the key is to manage the expectations of clients realistically. Coming out of a soft market, many clients, don’t understand why their premiums are on the move upward and although all clients would like to assume, they are highly protected risks, the fact is many are not. As such, being in touch with clients and devising a plan early in their renewal process helps minimize the shock of potentially significant increases. It also allows the client to best plan economically for the costs, and engagement risk management & loss control to better control their own exposures. As I like to joke with my team and our Production staff, an informed client is a happy client. With so many options be it carriers or competing brokers our sole goal should be focused on being honest and having a great relationship with the client, and helping them understand the changes in the market place and how that impacts them now, an into the future is a large part of our job as educator and facilitator.

In short, the key to running an insurance brokerage is focused on customer relationships. With competition from global powerhouses, to local agents, and even online do it yourself shops, the only way to be consistently successful is to build rapport with our clientele. We add value with our knowledge, and imparting that to our clients, so we can best position them and their companies for long term sustainable success. A broker is only successful as long as clients are willing to place business with them. To do that we need to partner with them as if their businesses are our own, and ensure they are engaged not just in the placement, but the understanding of the insurance market as a whole.

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