What ways can I drive down the cost of my business insurance?
The process of obtaining quotes is all about how your company is presented to an insurance company. The insurance company reviews what information they can about your business. Then they calculate an insurance premium they feel covers the risk they’re agreeing to assume.
Traditional Approach: Market like crazy
Many companies feel the need to "keep the insurers in check." To do this they bring in a handful of brokers, share bid specs, and see what the insurance companies come back with.
But what happens with your information? Typically, brokers take it back to the office, put together insurance applications, and tell underwriters "how good the opportunity is." With this information, the insurance company has to decide whether you're a superior, average, or less than desirable risk and price accordingly.
Have you ever stopped and wondered WHAT messages the brokers are saying to insurance companies about you? After all, by telling your story, they're establishing your reputation. Do you care about safety? Claims management? What's the future of the business? What specific ways are you striving to stay ahead of your peers? What are the circumstances around historical claims and what has been done to prevent them from happening again in the future?
These are critical issues and often times they can get lost in the narrative.
Innovative: Tell a better story
If you knew how many claims you were going to have in the future, pricing insurance would be easy. The cost of goods sold for an insurance company is really future claims they have to pay. If you have no claims, then you paid too much. If you've had more claims than premium, then you haven't paid enough. But this isn't known for 5 or 6 years, after all the claims have been settled out.
This makes pricing insurance effectively a wild guess. And it's your reputation and what brokers do with your story which means the difference between an insurance company getting aggressive on price or lumping you in with everyone else in your industry.
Our role is to tell your story in a way that not only talks about how you’ve performed in the past, but why you’ll be a better risk in the future. This gives insurance carriers greater comfort and more flexibility in crafting a program that is unique to you. The process includes:
- Clearly summarizing your past losses
- Using current information to predict future losses
- Outline a plan of what actions will make you a better risk in years to come
- Narrative of the business that explains what is unique about you
- Leverage key insurer relationships