Consultative Broker Briefing - V. IV, No. 1 - Hard Market Survey Results

The Consultative Broker™ Briefing
Volume IV, Number 1
A Free Publication of C.R. Ekern & Company
888.670.1177
www.crekern.com
Copyright, C. R. Ekern & Company, 2002

"Hard Market Survey Results"

Happy New Year to all Consultative Brokers. I know that last year was an extremely difficult time for most of you. So here is the bad news…most pundits believe 2002 will be even more difficult. The good News? Those of you who practice and learn Consultative Brokerage principles and techniques will continue to prosper like never before!

So, lets roll up our sleeves and get started for 2002.

As you will recall we ended last year with a survey of our readership. Here are some of the results and our interpretation. Please keep in mind that we are not a research organization and our view of things is strictly from a revenue production standpoint. If it doesn't help you create and retain clients, then it doesn't matter to us.

The vast majority of you (67%) experienced January 1 rate increases of 21% to 40%. Our advice is to establish benchmarks on accounts you have written for a period of time. These benchmarks may reflect a lower rate per $1,000 of client revenues when compared to earlier years (e.g. If your client's revenues have increased a total of 60% over five years, and your insurance premiums have gone up 40%, isn't the rate actually lower?)
Most of you feel that the ability to deploy resources and develop relationships is much more important than price and coverage in the development and retention of clients. Our readers said that resources and relationships were twice as important as price and coverage for new business opportunities. For retention opportunities, the figure skyrocketed to eight times as important. This underscores the importance of practicing and learning Consultative Brokerage principles. You have verified what we have been saying; "The Client of today has a set of expectations outside of the commodity."
Over 85% of you believe there are less than four potential carriers for every deal. To go one step further, 45% believes there are less than two carriers available. This really underscores the futility of working in the old marketplace selection process of client competition. There simply are not enough carriers to go around! For instance, if there are only two viable carriers, and three brokers are invited to work on the account, somebody will be left at the altar!

This last point requires further discussion. During the coming year, you must develop new accounts and retain current ones by solely working the "Brokerage Selection Process." Clients need to be educated about this way of doing business after 25 years of expecting firms to compete with the carriers. It is a losing proposition for all parties.

Unfortunately, the biggest hurdle a broker faces is convincing a client/prospect to use this form of competition. If they only knew! Therefore, we will give the information to them in the next edition of the Consultative Broker Briefing. Watch for it, as it will be very suitable for prospects and clients that utter those fateful words..."Which three carriers would you like to use?"

For the complete results of our survey, please visit our Readership Survey Results page.

Best regards to all Consultative Brokers,

Rob Ekern
President
C.R. Ekern & Company

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Consultative Brokerage® Techniques are utilized by agents and brokers across North America in the development and retention of upper middle market revenues. The Consultative Broker Briefing is delivered electronically free of charge to selected agents, brokers, and other insurance professionals across North America. To subscribe to The Consultative Broker Briefing, please click here.

Thank you.
C.R. Ekern & Company