Tackling a Hard Market

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As insurance agencies fight through today’s hard market, success will depend on those that find creative ways to add more value and differentiate themselves from competitors.

And, make no mistake, your competitors are also looking for ways to level up. So, what are some ways to do that?

Note to the reader:

I’ve wanted to put something together on this for some time now. It’s been a busy time, but part of me hesitates to share my thoughts as an outsider looking in. While I haven’t worked in an agency myself for quite some time, I’ve supported the independent insurance agency channel in various roles for over a decade now.

And, the experiences that I have had in my career working for companies like Vertafore, US Bank, and others (even retail), have exposed me to a great deal of training and education on these matters. Including my own experience selling in recessions or turbulent times like COVID.

The advice I share here today comes from those experiences and what I’ve seen these companies do in both easy and difficult times to thrive.

While a hard market has unique challenges, I believe these strategies should always be a part of your business but are even more critical when economic times are difficult.

I’m curious what you, the reader, think about all of this and what I’m leaving out or missing the mark on. If you have thoughts and ideas, I would love to hear them. Thanks for reading!

Now back to it!…

Focus on what you can control, and let go of the rest

This adage has helped me greatly in difficult times. I think it’s a great mantra to keep in mind when the market is challenging our ability to sustain or grow our business.

So, with that in mind, let’s look at 3 goals that can help us focus on what we can control or influence within our business:

  • Keep retention as high as possible, knowing some attrition is more likely to happen when the market is not in our favor
  • Increase average customer value, which allows us to do more with less
  • And improve new business growth, to make up for any lost clients and continue momentum

Really, these are things that most of us are focused on regardless of a hard or soft market, but it may take extra creativity when the going gets tough.

Even doing one of these things can help you but combine them all together to really set your agency up for success!

As I share ideas that can help in pursuit of these goals, I’ll also include some examples on how services like ID Theft Protection and Recovery or Cyber Liability can play into your strategy.

Those that know me know I get really excited about these two types of products. Cyber risk is unavoidable personally and in business; people need a lot of help here. And, as far as the hard market goes, these two lines of business are less impacted.

Show people something new

There are a few ways to go about this but start with any new areas of risk that you haven’t discussed with a current client in the past.

Often, to not overload a new prospect, we’re not able to dive into everything during that initial engagement. It’s also easier to talk to a current customer about additional areas of risk they need to think about. This is also a great way to practice and fine tune the ways you may want to engage new prospects in similar discussions because you’ll learn a lot from these conversations.

Look for things you can teach that people may not be talking about elsewhere. You can do this by looking at hot trends that people may be thinking about or other related events and tie it back to your perspective as a risk advisor.

Consider questions that people should be asking about these trends and help shine light on something new to get a conversation going.

As you look for areas to educate insureds, pay particular attention to lines of business still going strong in today’s market like Cyber Liability and ID Theft Protection and Recovery Services. These still remain affordable and education around these risks can be a great way to get your foot in the door to talk about other areas your client or prospect may be worried about.

If you need some ideas of what to discuss, these are important and timely topics you can use:

Round out accounts

It’s not just you… your competitors are also looking for ways to show prospects something new.

If you’re not addressing other areas that could help protect your insureds or their business, you leave the door open for a competitor to do it instead.

Rounding accounts not only gives you something new to talk about, as mentioned above, but it also closes some of those doors that may be open for a competitor to swoop in.

Not only can it be cheaper to retain a current client compared to acquiring a new one, it makes for stickier clients and increases the value of each account.

If you’re not already looking to your management system or company resources to identify these opportunities in your current book of business, start to look for what types of reports or tools you have at your disposal to create a list of accounts to focus on.

You may have decent tools already at your disposal to do this.

For agencies that have budget to invest in this, there are some great tools out there to really dig into your book of business and analyze your data to uncover those opportunities. I’ve helped sell products like this and the cost is usually well justified by a strong ROI for those that want to unlock the mysteries within their own data.

Help reduce risk to avoid claims and additional costs for your clients

If clients are paying a higher premium, an expensive claim is going to sting even more. Use this as a chance to help your clients control their costs and improve your loss ratio.

Look for ways to help them learn more about what’s attributing to their risks and ways to reduce it.

This also goes back to the first point in this post, to talk about something new. You can use risk mitigation tips around new or evolving risks to both help reduce the chance of a loss and to start a conversation that may lead to rounding out an account.

Some of the next items in this article will help you come up with ways to do this. I also share a ton of content and ideas related to cyber risks that you can share.

Get creative to add more value without increasing cost

What’s something high value to an insured, and low or no cost to you to deliver?

This is where your customer service and relationship building skills can shine.

If competition has access to the same markets as you, it’s the ‘icing on top’ that’s going to make the difference in that final decision.

One cool tip I’ve learned to come up with creative ways to build more value, is to start thinking of things your client could need before, during, and after working with you. Each challenge you can think of them running into is an area where you can possibly help by knowing a 3rd party that can help, sharing a tip, resource, guide, etc.

Here are just a few examples, for personal auto:

  • Before:
    • Someone might be shopping for a car, what might they need to consider early on about insurance to make sure they get the right vehicle?
    • Do you have tips or resources you can share to educate them on what to buy?
    • Do you have other clients or relationships that are dealers you can refer them to
  • During:
    • What kinds of resources and content do you have to help them learn how best to seek out and purchase insurance?
    • Do you have tips for insureds on how to navigate the hard market?
  • After:
    • Now that they’re insured, what kinds of tips and resources can help them avoid accidents?
    • Are there relationships you have with any garages or related groups that can help your clients get discounts? Maybe they just need recommendations for trusted providers.
    • Look for joint marketing opportunities with anyone you can create a relationship with: their knowledge could create some valuable resources for your clients, and you could do the same for them. Create a referral partnership to send business back and forth.

While these are just a few ideas, continuing to brainstorm in a similar manner for other lines of business will give you a wealth of ideas and ways to add more valuable engagements for your clients.

With each point you can come up with, look for multiple ways to present that information: blog posts, guides, checklists, videos, webinars, etc.

That means, for each bullet listed above, you could have 3-4 modes of delivering that content. For just this one example, that’s enough to post content daily for a full month.

You can source ideas from brainstorming sessions like I used here or pull from common questions you get today.

One technique I’ve used often is to look at common objections I would get and create content that can help my prospect navigate through a difficult decision. Given the topic at hand, I’d recommend creating something that can help people in the hard market.

Would you have tips to share in an article of your own on “how to navigate insurance options when premiums are going up?” (Seems like something a lot of people may be trying to figure out right now…)

Leverage external resources and educational content

You don’t have to re-invent the wheel; look for content from your companies you can use.

You may not need to create anything yourself. Many companies are going to have resources you can repurpose and share, so get familiar with your carrier tools.

If you do need to create but have little time, consider where you can use ChatGPT and other tools to start creating educational content and blogs.

If you haven’t dabbled with AI yet, this is a great way to get introduced to it. The trick is in writing a good prompt and setting the tone for what you’re creating. There are tons of resources out there that can help you learn how to do this effectively, but I recommend just playing around a little bit to see what it can do.

Chances are that people on your team have great anecdotes, stories, or educational explanations they have used for years with clients. Work with them to capture these and put it into shareable content you can use.

And look externally to referral partners or other types of affiliates that may have content you can use.

Establish yourself publicly as a trusted advisor

As you start creating content to help add more value for current clients, use that same content to grow new business.

Be strategic in where you place the content to make sure it’s getting in front of your ideal client. With the right strategy, there have been many businesses that have seen great success with a digital marketing strategy.

Don’t wait for it to be perfect, just start creating and sharing. Practice and consistency are key here. You learn a lot just by dabbling in this area. The first video or content you create is the hardest but it’s one of those things where it gets easier as you go,

There are a lot of great resources and companies out there that are focused on helping agents create content-led sales strategies.
Build a stronger relationship beyond insurance through your network
If the cost of insurance is increasing for your client, they may be even more interested in looking at ways to drive more profit and cut costs across other areas of their business.

If someone’s premium is going up drastically, it’s helpful that they understand the reasons, but it doesn’t change their financial challenges. Imagine how grateful they would be if you can help them figure out a way to recover the increased cost.

Maybe your relationships can open a door for them to get more referrals. Could their business benefit your other clients?

Get to know what their other goals are and see if there’s someone in your network that can help them or use their business.

They may need to cut costs in other areas to make up for the increase. Could there be answers in your network that can help them save money through efficiency gains or other cost reductions?

I’ve found a lot of success overcoming budget challenges when I could help my clients find solutions to those challenges and work with them as a true partner. Sometimes it just takes some creativity and working side by side to figure it out together.

Improve your agency’s costs and drive efficiency

Just like for your clients, maybe there are other ways to tighten up your own agency’s costs and operations to hedge against the hard market.

It may be time to look internally and see how you can leverage new tools like AI or even technology you already use to do better.

You may have tools already at your fingertips that just need a little more time and attention to help you drive efficiency or profit – don’t wait to do this as it may help with these other items on this list. Dig deep into the tools you currently have to make sure you’re really firing on all cylinders. There may be features you forgot about or new ones you missed that could really help you optimize your agency’s processes.

If you do seek changes, consider how change management, disruption, and learning curves play into this. A positive change to your business can fail without the right plan and execution.

  • Check out a past series of articles I have on “The Buyer’s Challenge” for some considerations when shopping for solutions

In addition to making smart purchases, I’d encourage getting help with change management through a consultant to optimize your adoption.

If times are getting tough, reassessing your business may provide some answers. Taking one step back may give you the opportunity and edge to take two steps forward.

Outwork and outclass the competition

The biggest differentiator for your business is likely YOU.

If your competitors are focusing on many of these same tactics to thrive in this market, you’re going to have to level up to beat them and protect your book of business. And, when they really have many of the same resources available to them, it’s going to come down to what you put into it: these are personal attributes like skill, execution, technique, grit, personality, etc.

In difficult economic times, I’ve seen this make or break companies. I know ‘hustle-culture’ is a bit of a dirty word or phrase these days, but you can still hustle and be a go-getter – just be mindful not to burn yourself out. The point being that your work ethic and skills may be a critical piece of your strategy to set yourself apart and thrive in turbulent times.

I can’t recall the source of this idea, but I once heard that, just like how businesses need to meet or exceed the growth rate of the economy, individuals should consider a similar mindset around personal growth.

Most people rack up skills, knowledge and experience just going through the motions and working in their field over time. If you add extra means for growth, you’ll surpass the majority.

Look for ways to not just keep up with others but to go beyond what others are willing to do for self-betterment. Read, take courses, get coaching, improve your health, improve your mindset, confront your fears, free yourself from bad habits – whatever it is you want to work on, there’s no time like the present to start sharpening your axe.

Level up your skills and outclass the competition.

Put it all together

I’m sure for many of you reading this, some or all of these are a part of what you’re already doing. Hopefully I have given you some fresh ideas to consider as you push forward in today’s market.

Here’s that list for quick reference:

  • Show people something new
  • Round out accounts
  • Help reduce risk to avoid claims and additional costs for your client
  • Get creative to add more value without increasing cost
  • Leverage external resources and educational content
  • Establish yourself publicly as a trusted advisor
  • Build a stronger relationship beyond insurance through your network
  • Improve your agency’s costs and drive efficiency
  • Outwork and outclass the competition

If you have something I left out that you think really deserves to be in this list, let me know!

And reach out if you’re looking for ways to leverage cyber or ID theft to differentiate yourself or create a unique engagement for clients.

RLS Consulting and defend-id have a lot of great free resources that can help you in many of the areas listed above, and we love helping insurance agencies succeed!

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