Mar 15, 2021 • Podcast

How do I sell insurance in a hard market?

On this episode, Paul relays seven tips to help you protect and grow your insurance business, even as premiums increase.

“Remind the customer of the value that you’re delivering.”

Does your client understand the reason for the premium adjustment?

Maintain a strong personal relationship with the client.

Empathize with the client. Your premium was adjusted as well.

A hardening market provides one of the best prospecting opportunities you’re going to have. “Increase your prospecting efforts by ___%.”


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How do I sell insurance in a hard market?

(Transcribed from podcast)

Today, we have a question coming from the website, so make sure you visit the There, you can ask me a question and I will turn it into a future show.

So this question came from Sueanne and Sueanne is asking about insurance. So here’s what’s going on right now. She says, “Paul, in the insurance industry, we are noticing that our markets are hardening.” Now, just as a heads up, for those of you not in the insurance industry, when they say the market is hardening, that means premiums are going up. They’re going up in the entire industry. So, she says, “We are continuing to strengthen the fence around our existing book of business. However, the insurance costs for our clients are increasing. The markets are not easily accepting the news. And in terms of coverage, they’re getting more restrictive. So what suggestions do you have to help us maintain the perception of value in a rising cost environment?” So if I could summarize this scenario into one question, I would say, “How do you sell insurance in a hard market?” And that’s what we’re going to focus on in today’s show.

Before we get into that, though, a quick shout-out to our sponsor. Andrea, over at The Creative Impostor Studios is such a great resource and her company has been extremely helpful in launching the podcast, keeping it going and offering advice. So if you’re thinking of starting a podcast or you are in the process of doing it, or you have one already, reach out to Andrea and her team. They do a wonderful job. Again, we’re going to have a link to her website on this episode’s webpage.

Also, I have some exciting news, for the insurance industry and also for other industries facing tough times. In September of this year, I have my brand new book coming out. It’s called Selling Through Tough Times. I just sent it over to McGraw-Hill, our publisher, just last week. So we’re in the editing process, but I can’t wait to have more information for you as that book becomes available.

But in the meantime, Value-Added Selling remains your go-to guide for selling value. Pick up your copy. Some of the themes we’re going to talk about on today’s show are available in the book. So wherever you get your books—Amazon, Barnes& Noble—pick up your copy of Value-Added Selling today. We’re now in the fourth edition of the book.

So let’s get back to that question: How do I sell insurance in a hard market? We know that insurance in general is a tough sale. And I think about this, the first time I bought life insurance, the broker who I was working with, he said, “Paul, this is one of those things where hopefully you give me a lot of money and you get absolutely nothing in return.” [laughing] And you think about that—of course, right—when you think about life insurance or any form of insurance, the hope is you’re paying for a service, you’re paying for that peace of mind, and hopefully you never really need it. Hopefully, you don’t have a disaster; hopefully, you don’t have an accident with your car, whatever it might be. Just think about the purpose of insurance, it really gives you peace of mind. So the underlying challenge with all insurance is that you’re paying for something that hopefully you’ll never need.

Now the challenge in a hardening market is now a customer is having to pay more for something that they used to pay less for. And anytime you have a buyer that is having to buy insurance or buy any product and they’re paying more for something they used to pay less for, they’re going to have a problem with it. They’re going to question the value. They’re going to question what they receive. They’re going to look at other opportunities. So that’s the real challenge here.

What I’m going to do today is offer you seven tips—this for all my insurance peeps out there—seven tips to help you protect the business that you already have, your existing book of business, and then one final tip to help you grow.

So, first things first—tip number one: begin a value-reinforcement campaign. A value-reinforcement campaign simply means you have to remind the customer of the value that you’re delivering. And the reason we do this, as most people are unaware of the air they breathe, most customers are unaware of the value that they receive. So all of your clients out there, they forget about all the things that you do for them, that your company will do, the products and service provide them, the value that that brings. Especially if they’ve had a claim in the past. If they’ve had a claim and you can explain to them and talk about that experience and how the product they have brought real value, that is reminding them of the value that you deliver.

So there’s a couple of ways you can reinforce that value. Number one: just simple things—a thank you letter—sending them a thank you letter, highlighting all of the value of the product or service that you are providing. You can set up a courtesy call, maybe it’s once a month, maybe it’s every other month, where you’re just calling to check in and see if their needs have changed. And on that call, you can also thank them for their business, maybe you ask them for a testimonial. A testimonial is one way to reinforce value, because when the customer is writing out a testimonial for you, they are essentially putting on paper why they work with you. And in that letter, they’re going to put some positive remarks. The act of them writing down those positive remarks, that’s value reinforcement.

You can share relevant content with them. If you have some tips and ideas to help them with home maintenance, for example. If you’re talking about homeowner’s insurance or whatever type of insurance that may be, send them information on how they can focus on spring cleaning or things they can do to get their house ready to help mitigate some of that risk of, you know, let’s say the basement flooding, things like that. Send them relevant content that reminds them of the value that you’re delivering.

So again, to kick this off, tip number one: begin a value reinforcement campaign. The value reinforcement campaign, it’s going to remind the customer of the value that they do receive. And once they’re reminded of that value, it helps justify the premium that they are paying.

Number two: offer advice on how they can lower their risk. When they’re able to lower their risk, that also can translate into lower premiums. For example, if a customer is appearing price sensitive, if they’re price sensitive about the premium or the rate adjustment, offer suggestions on how they can lower their premium. Maybe it’s raising their deductible, maybe it’s changing the package of the insurance. Maybe it’s able to package in more insurance. If there’s an option to bundle in additional insurance to help save on premiums, take advantage of that. Send them ideas on how they can mitigate risk. Maybe it’s offering additional training to their employees. Maybe it’s creating a safer work environment. And by doing these things, you reduce the likelihood of them having to take a claim, which is going to at least keep that premium from going up even further. So number two, offer advice on how they can lower their risk.

Number three: be able to explain the reason that the premium is going up. In fact, I would also encourage you to use a different word than increase or going up. Call it an adjustment. “There is a reason, Mr. Customer, for this adjustment.” Use that word “adjustment” and then provide some details. Be able to explain why there is an adjustment. And you might develop, I don’t know, four or five— Whatever the actual reasoning is behind the adjustment, highlight that in some bullet points and just to be able to explain to the customer.

And the key is here with explaining the adjustment, we want the buyer to know that it’s equitable. And that’s primarily why buyers object on price. They just don’t think it’s fair. They don’t think that what you’re charging them is fair for the value that they receive. So if you can make them aware of what’s going on, what’s driving the adjustment, it’s going to help lessen the blow. It’s going to help them understand it. It’s going to seem fair. So that’s the goal there is we want to make sure we explain the adjustment.

Tip number four. Continue building that personal relationship with the buyer. People buy from people. And one thing I’ve noticed about the most successful insurance sellers, they build a strong personal relationship with their clients. They do this in several ways. One way is just acts of consideration—doing nice things for your clients. If you know their child graduates from college, send them a note: “Hey, congratulations. Congratulations on this milestone.” They’ll send them a small gift. For example, I was talking to one seller who noticed that their client mentioned that they love this particular wine. They took their client out to dinner or whatever, and the client just raved about this wine. So the seller went above and beyond and found a way to buy that bottle of wine—which was hard to find—and sent it to their client. Just an act of consideration.

Those simple things go a long way. You get to know your clients on a personal level and let them get to know you. Let them get to know your family. And I know that, you know, this might sound a little cheesy, but one insurance agent, I noticed that he would send out calendars, things like that, but he would put his family picture in the calendar. And I kind of know what he’s doing. Think about this. If you’re looking at that, and let’s say you’re an existing client, let’s say that they’re considering switching insurance providers. They’re going to cancel your policy and go somewhere else. They’re not just canceling the policy, they’re canceling you as the seller. And it’s a whole heck of a lot harder to cancel someone when you know that they’re providing for their family. When you see them as a person, not just a premium. So get to know your customers on a personal level. Let them get to know you on a personal level. So that’s, that’s tip number four.

Number five: it’s okay to invoke a little empathy. When you’re selling insurance in a hardening market, you also are an insurance customer. I mean, you have homeowner’s insurance, you have auto insurance. If you’re a small business owner, you’ve got that liability insurance. You’ve got all of these different forms of insurance. Let the customer know, “Hey, I know this is not ideal. We certainly have experienced this as well. You know, I’m not just an agent or a broker. I’m also a customer. I have insurance and I’m facing those premiums as well.” Remind the customer of that. And also, along that same note, think about how you felt when that insurance premium was going up. Put yourself in the position of your customer. So it’s okay to invoke a little empathy from your client, but also put yourself in your client’s position.

Tip number six: demonstrate your personal value. The insurance industry, it’s a service-type industry. You’re not selling a tangible product. You’re selling a policy. It’s invisible. Yeah, they can hold a piece of paper in their hand, but it’s not a “real” product. That means it’s sometimes harder for the buyer to grasp the value of that product because it’s not tangible. So where are they associate most of the value is going to be with you as the salesperson.

In our research on top-achieving salespeople, we created a list of ten characteristics that top-achieving salespeople possess. And I’ll give you a couple of examples.

  1. They’re knowledgeable. Knowledge is absolutely critical. And so be able to demonstrate your knowledgeable expertise for your customer. That’s going to be critical.
  2. They follow through.
  3. They’re professional.
  4. They operate with integrity.
  5. They solve problems.

These are all examples of the personal value that you bring. Remind the customer of that personal value. Share examples of how you’ve helped other clients. And while you’re doing this, it’s going to help set you apart from some of the other options that they’re considering. You, as that agent or broker, you bring at least 25 percent of the value to the equation. So make sure that you’re reminding the customer of the personal value that you bring.

And tip number seven—and this is a big one—ramp up your prospecting effort. In a hardening market, premiums are going up. For any client, including your competitors’, they’re going to start questioning the value that they receive. They’re going to start to question, “Why is our premium going up?” This is probably one of your best prospecting opportunities you’re going to have. Because your competitors’ clients are starting to wonder if they could get a better option somewhere else. They’re going to wonder if they should make a switch. They’re now open to the idea of meeting with you, sitting down, reviewing their business. So ramp up your prospecting effort. You may never get an opportunity like this again.

So make sure that you are increasing your prospecting effort by at least 25 percent—at least 25 percent. Take your normal volume of what you’re doing every single week, whether it’s making a hundred prospecting calls – make 125. If it’s having ten face-to-face meetings, bump that up to 13. Increase your effort by at least 25 percent.

Make it a big day.

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