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Your clients are calling me. I too, work for an insurance broker.  If you’re reading this you might also.  Recently, a new strategy has emerged for retaining business that seems to work well for the broker, but irks the buyer.  That strategy is locking out every available market five or six months prior to renewal.  Sure, this strategy works well for the people on the selling side to prevent competition from quoting an account, but how is it going to work out for you in 2011?  In the last 3 weeks, I’ve met with several of “your” clients to discuss their construction insurance and risk management programs.  If the meeting went well, we would discuss marketing the account when their renewal got closer.  However, several of these accounts had already been heavily marketed (6-7 markets by the incumbent broker) many months prior to said renewal.  Not sure if the brokers and agents responsible for this extremely are aware that this tactic does not sit well with their clients.  Just yesterday, I got a phone call from a prospect that I haven’t spoken with in over a year and he offered me every market except the incumbent.  Because these types of calls don’t happen very often, I inquired why he wanted to go this route, and he responded very matter of factly that “he is sick of his agent blocking every market so far in advance that no one else has an opportunity to improve his insurance situation”.  At this point, I could have been greedy and asked for every market we represent, but didn’t.  Being a specialty contractor, there are only so many markets that understand and offer a product for the type of work his company performs.  I have a feeling that a lot of agents send in half assed submissions to every carrier just so they can make their client feel that they went above and beyond, when in reality half of the carriers they supposedly sent submissions to flat out denied it just because of the type of work the insured does.  But that isn’t the message portrayed by the agent at proposal time.  They will try to spin their marketing efforts into a story about how much work went into marketing the account solely based on how many carriers they approached.  This approach works right now because contractors have too much to deal with just bidding work that they don’t have time to send rescinding BORs to carriers.

Here’s how we(my brokerage) differ.  We don’t market every account we have to every carrier we represent every year.  Instead, we spend our time making our clients safer and more profitable.  Instead of leaving the fate of our client’s insurance pricing in the hands of our carriers, we work PROACTIVELY to prevent and minimize claims and market the accounts strategically to carriers that have experience with and have designed special programs for contractors that address the risks specific to their industry or trade.  Two reasons why we do this:

1. If the underwriter is experienced in construction, he or she can price the account more accurately, preventing large price swings year to year.

2. If an underwriter sees the same account every year and never has a realistic chance of winning the business, they become less and less interested in spending time reviewing the account(assuming they don’t flat out deny quoting it because of all their time the agent has wasted in the past)

If you’re an agent using the market saturation technique, it has probably worked for a few years now and will work for most of your fall and winter renewals.  However, I’m not calling your clients begging to quote.  YOUR clients are calling me because they don’t like how you’re handling the marketing of their account.

If you want to learn more about our strategies for making contractors more profitable, check out our website at Construction Risk Advisors.com