KEY BENEFITS

Investing time into a comprehensive summary, proactive checklist, business cover letter and several supporting documents can significantly increase your strength and carrier positioning. 

While this is really the job of your consultant or agent, the truth is each agent has a different approach towards this, if any at all which can affect the outcome you receive..  

Just allowing agents to send carriers to your website for information is a huge mistake.  This does not allow the underwriters to learn much about your internal process, operational overview, loss history, business analyst, strengths, onboarding, safety items and much more.

You need to differentiate yourself to underwriters and demonstrate your true value and strength. 

This can vary significantly depending on which line of insurance we're discussing, the State of operations, carriers pricing potential, industry sector and even premium size,. All of which can impact the carriers ability and interest in adjusting the rates further.

Carriers pricing tool; known as scheduled credits/debits generally allows them to apply discounts or surcharges to each line of coverage. This can account for as much as 50% price adjustments off their standard rates in either direction. 

It's no surprise that carriers desire the best in class clients. While they assess different areas of your business,  the two primary factors for them are "Risk" & "Loss Ratio". Your loss ratio is the percentage of "paid in" premium, against "paid out" claims.  

While past claims can't be erased, the key is showing carriers that you are making progress, being proactive towards stopping future claims and learning from any previous incidents. Carriers can adjust their pricing credits to their fullest potential if they really want the business. 

The key is presenting and demonstrated to them why your deserving of their best rates and interest.  Just like a sports franchise really wanted a top athlete, they let the money to talk. "Carriers are no different" 

Insurance premiums cover several cost. The major areas are future claim cost, carrier operating expenses and agent commissions. 

The amount of commission your agent receives is important, as it should align with the value and service you receive from them throughout the year. 

While most lines as (property, liability, umbrella, auto, cyber) have an average commission of 10%-15% of your premium. Workers compensation ranges between 5%-9% for most carriers. Averaging your total program/policies at 10%-12% of your annual premiums.

Ask yourself:

Do I receive enough value, service or resources? 

Would I pay this amount for what I'm currently receiving?

If that's a NO, then maybe it's time to seek out a new agent/broker. Your paying the commission inside your premium, so why not get the most value for the money.

All licensed carriers file rates with the insurance department. Most lines (auto, property, Liability, etc) have the ability to apply credits or debits to the base rates. 

These pricing tools can adjust the final rates/premiums up or down as much as 25% in either direction, with workers compensation adjustments can go even higher.

So two different businesses can have similar coverage, while the premiums are 50% difference or more and this is just standard markets/carriers.  If were talking about excess or surplus lines coverage they can be any number they desire. 

While there are always certain situations, the majority of businesses should develop a plan around sending their policies "out to market" with other carriers. 

Many overlook that insurance carriers are for-profit companies and they track every submission and application that is submitted into them. To often and they see you as a price shopper only and loose interest. 

Carriers desire long term customers, so showing them a clear strategy will increase their interest in your account and they'll fight harder to earn your business. 

Maximize Your Application's Impact: To strengthen your application and improve your standing with insurers, it's essential to invest time in preparing a detailed summary, a proactive checklist, a professional business cover letter, and relevant supporting documents. This approach not only showcases your business in the best light but also significantly boosts your position in the eyes of carriers.

The Role of Your Agent: While ideally, this should be managed by your consultant or agent, it's important to note that agents vary in their methods and commitment to this process. This variance can greatly influence the results of your insurance application.

Why Direct Website Referrals Aren't Enough: Relying solely on agents directing carriers to your website for information is a strategy that falls short. Such an approach fails to provide underwriters with a comprehensive understanding of your business. Key aspects like your internal processes, operational insights, loss history, business analytics, strengths, onboarding practices, safety protocols, and more, remain underrepresented.

Stand Out to Underwriters: To truly stand out, it's crucial to demonstrate your unique value and strengths to underwriters. A thorough and well-prepared application is your opportunity to differentiate your business and highlight what sets you apart.

"Understanding how to reduce your insurance costs involves considering several key factors. The type of insurance you're interested in, the state where your business operates, the specific practices of your insurance carrier, your industry type, and the size of your premium all play a role.

Each of these elements can influence an insurance carrier's ability and willingness to modify their rates.

Insurance carriers use a tool known as 'scheduled credits/debits' to adjust pricing. This powerful tool enables them to offer discounts or apply additional charges on different types of coverage.

The impact of these adjustments can be significant, potentially altering standard rates by up to 50% in either direction. By understanding and navigating these factors, you can find effective ways to potentially lower your insurance costs."

Understanding what insurance carriers look for in clients is crucial for securing competitive rates. Essentially, carriers evaluate your business based on two main aspects: 'Risk' and 'Loss Ratio'. Your loss ratio reflects the balance between the premiums you've paid and the claims you've made.

While it's true that past claims are a part of your record, what really matters to carriers is how you handle and learn from these experiences. Demonstrating that you're actively working to reduce future claims and mitigate risks can significantly influence carriers' perception of your business.

The most effective strategy is to clearly showcase the steps you're taking to improve. Just as a sports team is willing to invest heavily in a top athlete, insurance carriers are ready to offer their best rates to clients who prove they're worth the investment.

Remember, if a carrier is genuinely interested in your business, they have the flexibility to offer attractive pricing options. It's all about convincing them that your business is deserving of their best offer and attention.

Understanding Insurance Agent Commissions

When you pay your insurance premiums, these funds are allocated to cover several key costs. These include anticipated costs for future claims, operational expenses of the insurance carrier, and, importantly, the commissions for your insurance agent.

What Does Your Agent's Commission Cover?

The commission earned by your agent is a critical aspect to consider. It reflects the value and service provided to you throughout the policy year. Typically, insurance lines such as property, liability, umbrella, auto, and cyber insurance see an average commission between 10%-15% of your premium. In contrast, workers' compensation policies generally attract a commission rate of 5%-9% from most carriers. On average, the total commission across all your policies might range between 10%-12% of your annual premiums.

Evaluating Your Agent's Value

It's important to regularly assess the value you're receiving from your agent. Consider these questions:

1. Value and Service: Are the services, support, and resources provided by your agent commensurate with the commission they receive?
2. Cost-Benefit Analysis: Does the level of service justify the commission cost embedded in your premium?

If you find yourself answering 'No' to these questions, it may be time to explore new options. Remember, the commission is a part of your premium; you deserve to get the maximum value for what you pay.

All licensed carriers file rates with the insurance department. Most lines (auto, property, Liability, etc) have the ability to apply credits or debits to the base rates. 

These pricing tools can adjust the final rates/premiums up or down as much as 25% in either direction, with workers compensation adjustments can go even higher.

So two different businesses can have similar coverage, while the premiums are 50% difference or more and this is just standard markets/carriers.  If were talking about excess or surplus lines coverage they can be any number they desire. 

Deciding when to explore new insurance options is key to getting the best value for your business. While specific circumstances vary, most businesses benefit from having a strategic plan for reviewing their policies and considering offers from other carriers.

It's important to remember that insurance carriers, as for-profit entities, pay close attention to every submission and application they receive. If a business shops around too frequently, it risks being perceived merely as a price shopper, which can diminish interest from carriers.

The ideal approach? Show carriers that you're interested in a long-term relationship. Carriers value stability and commitment. By demonstrating a clear, thoughtful strategy in how and when you shop your insurance, you increase their interest in your account. This approach can lead to carriers competing more vigorously for your business, often resulting in better terms and rates.

In essence, it's not just about when you shop for insurance, but how you do it. Let us guide you in crafting a plan that showcases your business as a valuable, long-term partner to insurance carriers, ultimately working to your advantage.