Navigating the Storm: Winning Strategies in a Hard Insurance MarketMarch 2, 2023 Rebecca Shigley, CIC, TRA, FLMI, AIE, AIRC, ACS, CICSR
The insurance industry can be unpredictable and it's tough for independent insurance agencies to succeed in a hard market. A hard market typically occurs when there is a scarcity of insurance products, resulting in higher premiums, tighter underwriting requirements, and limited coverage options. As a result, independent agencies need to be strategic in their approach to win in a hard market.
Here are some strategies that independent insurance agencies can use to succeed in a hard insurance market:
Develop a Deep Understanding of the Market
To win in a hard insurance market, independent agencies need to have a thorough understanding of the market they are operating in. They should keep an eye on the trends and changes that are taking place in the market and make adjustments accordingly. For example, they should know which insurers are pulling out of the market, which risks are becoming more difficult to place, and which coverages are becoming more expensive.
Focus on Providing Excellent Customer Service
Providing excellent customer service can help independent agencies differentiate themselves in a hard market. When the competition is tight, customer service can be the deciding factor for clients. Independent agencies can set themselves apart by being responsive, knowledgeable, and proactive in providing advice and guidance to their clients. They can also go the extra mile by offering value-added services such as risk assessments, claims advocacy, and loss control.
Technology can help independent agencies streamline their operations, improve efficiency, and enhance customer service. Independent agencies should invest in technology solutions that can help them manage their workflows, automate routine tasks, and provide real-time access to information. For example, they can use customer relationship management (CRM) software to manage client interactions, marketing automation tools to nurture leads, and data analytics tools to gain insights into their business performance.
Build Strong Relationships with Insurers
Building strong relationships with insurers can help independent agencies access the products and services they need to serve their clients. Independent agencies should work on building strong partnerships with insurers by demonstrating their expertise, providing quality business, and maintaining open communication. They should also be willing to work with insurers to develop innovative solutions to address the challenges of a hard market.
Diversify Their Portfolio
Diversification is key to winning in a hard market. Independent agencies should look to expand their portfolio of products and services to mitigate the impact of a hard market. For example, they can explore new lines of business, develop niche markets, or expand their geographic footprint. Diversification can help independent agencies remain competitive, even when certain lines of business become more challenging.
Emphasize Risk Management
In a hard market, insurers are looking to minimize risk and reduce their exposure. Independent insurance agencies can stand out by emphasizing risk management to their clients. This means providing guidance on ways to reduce risk, such as installing security systems, maintaining buildings, or implementing safety protocols. By helping clients manage their risks, you can reduce the likelihood of claims and help keep premiums down.
Build Relationships with Underwriters
In a hard market, underwriters are more selective about the risks they take on. Independent insurance agencies can increase their chances of securing coverage for their clients by building strong relationships with underwriters. This means staying in touch regularly, providing accurate and detailed information about clients’ risks, and being transparent about any challenges. By building trust with underwriters, you can position yourself as a reliable partner and increase your chances of getting the coverage your clients need.
To sum it up, winning in a hard insurance market requires independent agencies to be strategic and innovative in their approach. By focusing on customer service, leveraging technology, building strong relationships with insurers/underwriters, diversifying their portfolio, and emphasizing risk management, independent agencies can overcome the challenges of a hard market and emerge as winners.