Paul shares ideas on how to compete in this tough insurance market.
Begin the renewal process much earlier—six months prior to policy expiration. Tune in to the podcast to hear about the three-step renewal process.
Have constant communication with the client. Be sure to provide value at each interaction.
Conduct a thorough review with your clients every single year. During that review, highlight the ways you’ve created value.
If you are creating, reinforcing, delivering more value, it will be easier to push through that rate increase.
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How do I sell value when insurance premiums are on the rise?
(Transcribed from podcast)
On today’s episode, we are going to go to the website. Sueanne is going to ask us a question. Sueanne is in the insurance industry, and she wants to know, “How do we show our customers value in the face of increased insurance premiums?”
So here’s what’s happening right now. We are in a hard market. In insurance terms, that means premiums are on the rise. And this is happening for a number of reasons. Number one, you know the cost to rebuild is going up. There’s inflation going on—that’s certainly going to be part of it. Not only that, but there’s an increase in just the number of natural disasters and the intensity of it. So, what happens is insurance premiums are going to be on the rise. So what I’m going to do is share some ideas to help you compete in this tough market.
Before we get into that though, just a quick reminder, make sure you pick up your copy of Selling Through Tough Times. Selling Through Tough Times is your go-to guide for building mental resilience. In tough times, you know, customers are going to buy different, they think different. In the book, you are going to learn how to shape your presentation, how to tweak your message so that it resonates with the buyer, so that it will compel them to act. In fact, we have a complimentary chapter of the book available at Toughtimer.com. So I will put that link on this episode’s webpage. That way you’ve got all the details that you need.
As you sell through tough times, you also are going to experience more price objections. It’s that simple. What happens is that during tough times, customers are going to focus more on price. They’re going to become more price sensitive. They’re going to be cognizant of how they’re spending their money. This will create a challenging environment for you. So, if you’re going to prepare for this tough environment, you need to learn how to sell value. So we are having our public seminar in St. Louis at my training center. It’s going to be March 8th through the 9th. We’re going to have details on that program. It’s going to be limited to 15 people, so it’s going to sell out. If you’re interested in attending, please reach out to us. We’re going to have the links on this episode’s webpage as well.
All right. Well, let’s get back to that question: How are we going to sell insurance when premiums are on the rise? So let’s get to the core of the issue here. All right, so Sueanne, you are selling in an environment where the price to insure is increasing and there’s no ifs, ands, or buts about it. Every industry is facing this. We are in inflationary times, so every salesperson deals with this issue. The added element here in insurance is that you’re selling an intangible product or service that hopefully they don’t really need. Alright, so we’ve got to remember that insurance, it’s an intangible product that is protecting the customer in the case of a catastrophic event. And anyone out there who has had a claim or they’ve had to rely on their insurance provider to support them or make them whole again, they’ve seen and experienced firsthand just how critical insurance is. So, obviously, it plays a vital role in protecting our customers, protecting our assets. But most of the time, if we haven’t had a claim or we haven’t had any issues, we tend to forget about the value of insurance. So that’s the core challenge that we need to overcome, is we need to remind the customers of the value.
Here’s what I would encourage you to do, Sueanne. You need to begin the renewal process much earlier. I know it’s common for many insurance providers to begin the renewal process, maybe 60, 90 days, 30 days before the actual expiration of the current policy. I would encourage you to begin the renewal process six months before the expiration. Now, the renewal process is not simply calling up customers saying, “Hey, here’s your insurance. Here’s the new rate. Let’s get you signed up.” The renewal process must be a combination of creating more value, reinforcing your value, and then asking for that renewal. A three-step process, and I would begin it six months before the expiration.
So, here’s the first piece. Create more value. In Value-Added Selling, we call this tinkering. Tinkering is about looking for ways to enhance, improve, and create more value for your customers. In the insurance world, you can do this in several ways. Number one, have constant communication with your customers. Offer them tips and ideas on how they can reduce their liability, on how they can protect themselves from disasters. I’m talking about basic, simple things. All right, so, Sueanne, think about this. If you are providing your clients with suggestions on how to reduce their risk, how to make their life easier, how to better protect their assets, and you’re doing this six months before the renewal, you are creating value for your clients. You are creating value. Keep that in mind.
All right, now, the next element here is to reinforce the value that you’ve created. So, Sueanne, any of your clients that have had a claim over the past year, I would highlight the value that you created throughout that claims process. Ask yourself, “Okay, what did I do to make this as easy and as pain free as possible?” Then remind your customers of that. And you can do that by conducting a simple claims review: “Hey, let’s review how that process went.” And in that review, you can share some ideas and ways that you helped the customer. That’s a way for you to reinforce everything you did for the customer. Alright? And that way it’s fresh, it’s in their mind. Now that’s assuming that the claims process went well. Okay? So keep that piece in mind.
The other tool is to conduct a thorough review every year to see what has changed. I have a personal experience where I had an issue where our home was burglarized. And over a 10-year period, my wife and I amassed more items. You know, simple stuff: jewelry, different gold pieces, things like that. And our home was burglarized. All right? And I didn’t know that I shouldn’t store those things in my house. I didn’t know that insurance didn’t cover this piece, or I didn’t know insurance didn’t cover all of our jewelry. And so, I was, man, I was frustrated. And one of the reasons I was so frustrated is because whoever provided me insurance at the time, did not explain to me how I need to update my policy every year. We need to revisit and look for opportunities to improve and get better. I mean, that’s part of why you, as the insurance agent or broker are there to create value, to review business and deliver some insights and educate. So ensure that you are conducting a thorough review every single year.
Now, at this thorough review, you can highlight some of the ways you’ve created value. And whether that’s with your recommendations, whether that’s with helping them throughout the claims process, whether it’s looking for ways to save on premiums, such as bundling different packages together, so on and so forth. During that review, you can highlight, you can highlight some of the value that you create.
Now when we think other ways to reinforce value, actually, one insurance broker who I worked with, one thing he would do is he would sell different types of policies, one of which is cyber insurance to protect you from cyber threats and all that good stuff. And what he would do is when there is a company, let’s say you see it in the news too often, unfortunately, that so-and-so company was hacked, and here’s some issues and this and that. What he would do is send that article to his customers and say, “Hey, you probably saw this in the news. Don’t worry. We got you covered. This is why we have the insurance.” So, the broker is basically telling the customer, “Hey, this didn’t happen to you, but it could happen to someone. You can sleep easy knowing that you are taken care of.” That is reinforcing the value. Alright, so that’s the process.
Before we give the customer that new premium, or we’re asking for the renewal, we need to look for ways to create more value. And then we’ve got to reinforce the value that we have created. And if you do this on a regular basis, it’s easier for them to accept the higher premium because… you are delivering more value. The only reason why a customer will complain about premiums is because that customer doesn’t see the value of what you are offering. And if you can remind them of the value, if you can build more value, that’s going to help you push through that new rate increase. So, keep that in mind. I hope that helps Sueanne. And again, I would begin that process early. We talked about beginning that process early. That is going to be critical.
Make it a big day.