How can you become a trusted advisor to your clients providing them more value than you currently are? The answer is offering them alternative risk management strategies.
Won’t offering alternative strategies reduce my commissions? Maybe, but you could go from being a commodity salesperson who could be replaced by anyone with a lower renewal offer to a consultant who receives both commissions and consulting fees.
Say you write both the Property and Casualty Insurance as well as the Employee Benefits for a manufacturer with 200 employees and $45 million in annual revenue.
Sounds like a solid account!
But in 2020, you had to explain that there’s no payout for the $3 million in business income they lost when their plant was shut down due to Covid-19 because they didn’t have direct damage to the plant.
And then in 2021, their overall renewal is going to cost 25% more due to rate increases.
Suddenly, being the agent on their insurance account doesn’t make you feel quite as secure. Particularly when you find out that their investment advisor has been talking to them about captive insurance companies for a while.
When the denied claim happened, what if you had taken the opportunity to explain that a captive insurance company could write contingent business income? And would pay out if there wasn’t direct physical damage.
A captive insurance company can even cover extra expenses for a manufacturing business like replacement suppliers. So, when their manufacturer in China couldn’t get parts out due to the pandemic, they would have had coverage.
As the advisor, you should always give options to your client. It will show the client that you are more than just an average advisor. It will prove to them that you are a vital team member and that you have their best interest at heart.
Before your next call, what if you came to your client with a plan to increase deductibles on their commercial insurance policies, then covered those gaps through a captive insurance company? Or with a plan to help them insure a layer of their employee benefits themselves and protect against catastrophe with stop-loss which would allow for no increase at renewal?
Then with these new plans and a newly formed a captive insurance company, you can help them understand the new data available that results from the captive. This will create better loss control and coordinating renewals each year to maximize the benefits of a blended strategy as their risk consultant. Suddenly you’ve become a hero and vital team member instead of just another salesperson.