The Insurance Process: Reading, Writing, and “Risk”metic

by | Jul 29, 2021 | Beyond Insuring. Ensuring, Business Risk, Insurance Cost, Quotes, Risk Management

Beyond Quotes

The clients who have built relationships with me over my 20 years in the industry understand that the totality of an insurance professional is more than getting “quotes.” Being a professional in this industry involves learning about my clients and their industries, planning, collaborating, educating, mitigating, challenging decision-makers to help provide clarity to risk decisions, advocating, and simplifying. Yes, simplifying: simplifying the insurance process, the risk reduction process, and cutting through the red-tape and confusion that exists within the insurance industry. 

Even still, after talking with an executive committee or group of decision-makers about selecting a broker vs selecting an insurance program from multiple brokers, and why the shop and quote process isn’t “keeping anyone honest” or “creating competition,” I’m often met with:Broker Selection

“So, when will I see a quote?”

I ultimately understand this response. I’ve responded to it many times, “Pricing is important. Anyone who tells you otherwise probably doesn’t understand the finance aspect of risk management. However, pricing is not controlled by quoting.” 

The insurance industry is a math-centric industry – assessing risk, mitigating danger, and negotiating rates that quantify it all. An insurance professional who takes their work seriously understands a business owner’s concern with price but, must convey that the true path to pricing stability is through strategic collaboration, adequate and appropriate policy language and coverage, and comprehensive risk management. You can impact the numbers on one side of the equation to get a better solution with this strategy. 

I’ll reduce my experience with the “shop and quote” process to three of the most basic topics:

Reading, Writing, “Risk”metic

Let’s assume you have decided to explore new insurance and risk options for your business. This would be a wise decision as rates are rising, new risks are emerging, and you want to be sure you are adequately protected and your insurance dollars are being spent effectively and efficiently. If you consider the standard process of selecting four agents to compete for your business, what does this leave you with?

  • Reading: This process puts the responsibility for insurance expertise on the businesses. This puts you and your team in the position to read the proposals, the coverage forms, the endorsements, the exclusions, and then make a decision in the ever-changing world of insurance and risk. You and your team are operating a successful business in your industry day in and day out – that is your area of expertise.  In this situation, the professional most equipped to address risk concerns and coverages is an insurance agent who deeply understands your business. However, in the shop and quote model not all agents are created equal. They may not have access to the best coverage, policy forms, or carriers. If that is the case, they will sell you on the product that is the best of their choices. Not the best for your business.


  • Writing: Let’s step back and consider the process to get a proposal. The four agents you selected will go “out to market” to see what they can secure for your business. What is the timeframe of this process? 90 days? 60 days? Consider that these agents understand they have to deliver fast and competitive results, however, they don’t control the rating structure of the carriers. They are instead competing on getting to the best market the fastest when speed to market is not the most effective approach. These agents will have to complete applications, effectively writing “the story of your business, so that the underwriters can determine just how to rate your policy. How confident are you that when all of this information is submitted to the carriers that it is done so with your best interest in mind and not with the idea of being first to the table with a proposal?


  • “Risk”metic: Okay, forgive the poetic liberties with the category but let’s do some math. Remember the scene from Good Will Hunting when Matt Damon solves the equation on the chalkboard? We aren’t talking that kind of math but, never the less, let’s talk odds. Your goal at the start was to position your business and your team in the best position for success. Of course, this includes the traditional cost of insurance but, also the cost of inefficiencies, uncovered claims, self-insured gaps, and time spent with claims and insurance. To achieve this, you’ll need the agent that is best suited to collaborate with you to achieve your goals combined with the insurance carrier that is the best fit for your business, industry, and needs. The odds of that happening are less than 11%. You could quite possibly end up with a price you are happy with but, not the strategies you need to truly control your cost of risk from the agent with the best strategies from getting you the best coverage and making the most use of your premium dollars. 

Consider those three fundamentals when thinking about risk and insurance. Consider that, instead of choosing from a stack of proposals, choose the agency and agent that is the best fit for your business. What strategies do they bring to the table? What success have their clients had as a result of the strategies they employ? What levels of support and collaboration will they provide?

These aren’t just selling points – or “value-added” services. This approach matters and the level of engagement is in direct correlation to the efficiency and effectiveness of your insurance spend. In my experience, this is the only way for a business to gain a competitive advantage in the insurance marketplace and to control costs. With a hardening insurance marketplace a conversation about different strategies and new options certainly can’t hurt.

Hey Matt Damon, “How about them apples?”


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