Consultative Broker Briefing - V. IV, No. 14 - Year-End Renewal Strategies

The Consultative Broker™ Briefing
Volume IV, Number 14
A Free Publication of C.R. Ekern & Company
888.670.1177
www.crekern.com
Copyright, C. R. Ekern & Company, 2002

"Year-End Renewal Strategies"

If Spring turns a young man’s fancy to love, what does Autumn turn an insurance broker’s fancy to? The answer is simple... year-end renewals! Now that Labor Day has passed us by, we all know what is next. It is time to turn our attention to some of our largest renewals and new business opportunities.

But, let’s stop and think a minute about how a successful Consultative Broker should approach these annual events inside the current business climate. Here are some things you should know that will make this year’s renewal season particularly thorny:

The excess marketplace will continue to dramatically raise prices and/or restrict new submissions. Many of the excess markets have already exceeded their business plans for the entire year. In fact, some of them are reporting up to a 200% growth above plan.
The middle-market is expected to stabilize at a 20 to 30% rate of increase.
Accounts with a large auto fleet will continue to see large increases.
The large property and casualty market will continue to erode for the rest of the year.

With all this in mind, here is what your renewal strategy should be:

Get the buyer to your side of the table. Meet on a pre-renewal basis and discuss all of the options with your client. Show them the entire marketplace by carrier and discuss the appetites of each. This is critical so that they don’t place other brokers in the water. Set up a client meeting with the incumbent carrier in order to discuss expectations from both sides.
Use your client’s balance sheet to reduce costs. Our job is to help clients reduce and eliminate risk. During the soft marketplace insurance was the most cost effective technique. That may not be the case now. Take a look at their financial ability to accept additional risk through deductibles, cash flow plans, or retentions.
Don’t expect a miracle. This is not a buyer’s market. For this year and most of next, the “old rules” will probably not apply. Therefore, do not plan on an “eleventh hour” reprieve.
Stay client focused. Remember this is not a good time for them. Make sure they understand that you are doing everything possible to represent their best interests.
Get the primary program done early. With continued turmoil in the excess marketplace, finding and obtaining capacity will be difficult. Therefore, you should insist that your primary terms be delivered as soon as possible. You will need the extra time to let your wholesale broker find capacity at the best terms.

With Fall in the air, it’s time to get started on those key year-end accounts. The skill with which you handle these accounts will determine the quality of your Christmas Season. This year, why not spend it with your family around a blazing Yule log, rather than at your desk putting out smoldering fires!

Best regards to all Consultative Brokers,

Rob Ekern
President
C.R. Ekern & Company

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Thank you.
C.R. Ekern & Company