By Sam Feldman
Let’s have an honest conversation…
What would you say if someone came into your business and told you that ‘everything that you are doing is completely average’? Obviously, you don’t believe that you, your employees, your product, and your business are average. If you did believe this, how would you ever compete in your industry?
But my guess is that you are being discretely told that your business is average by your current insurance broker. Let me explain why I believe this.
We need to get technical for a moment…
Insurance is an industry that uses large loss data to price the likelihood of future events. The stages of the creation of insurance policies, in simplified form, is something like:
First, actuaries and statisticians’ study historical loss information and develop rate books, indicating a range of how much needs to be charged to provide protection for a particular asset or circumstance. This is simple math on the surface but gets very complicated as insurers look for competitive advantages.
Next, underwriters apply the rates to potential clients that are presented to them by brokers, based on the perceived risk at hand. Underwriters will first establish what rate group the potential client fits into, and then they modify the base rate up (by adding loadings) or down (by adding discounts) base don how they believe the operations compare to the standard business in the specific rate group. For example, if two nearly identical properties are presented, but one has a sprinkler system and the other doesn’t, the underwriter would apply a rate discount for the property with a sprinkler system.
From here a good broker will review the details, pricing, and fine print of each option and select the best option for the client’s individual needs.
On the surface, this looks like a simple process, but in practice this process has many nuances that can complicate each step, and it also requires a lot of delicate negotiation.
So, let’s get back to average…
Your broker asks you some questions, submits your business profile to the underwriter, and waits for answers. If your broker has not supplied enough information and has not taken the time and attention to truly understand your business, you will get exactly average rates. The underwriter will simply lump you in with the base rate and try to get your file off their desk as quickly as possible. So the most important thing for us to understand is how your business is different from your competitors. When we explain this and tell your story, you escape average.
Every day we are contacted by businesses looking to obtain insurance. As we look to build the business profile for them, it is so common that we learn that they are doing amazing risk mitigation, but their current underwriter has no clue about it, so they are not rewarded in their insurance rates. Things like COR Compliance, GPS on their vehicles, security systems, management protocols, additional drivetraining, and anything you are doing to mitigate risk is important for us to know, which is why we seek to be your partner in the process.
Building an attractive business profile that underwriters will drool over is a bit like speed-dating: First impressions are everything. Remember Fiddler on the Roof? Remember the famous ‘Matchmaker, matchmaker, make me a match’? The matchmaker needs a detailed understanding of the suiters on both sides. Without this understanding, the matches would not be very good.
Our process is much more in-depth. When we build a relationship with a business, we look to understand what makes that business special, why that business should be considered a superior risk. This requires a lot of time and effort, but the reward is worth it.
Wilson M. Beck Insurance Services (Alberta) is eager to make you a match. You deserve better than average – let us tell your story.
Call us today at (403) 209-4137, wmbeck.com.
Sam Feldman is the President and Managing Director of Wilson M. Beck Insurance Services (Alberta) Inc.