Five Risk Management Tips for Brokers and Agents
Apr 04, 2022
Insurance brokers and agents are deeply involved in risk management. But their daily existence is centered around trying to generate new business, routine transactions with customers and carriers, and running the “back room” of their company. With the sole exception of pressing issues, the risk management priorities of customers may not be today’s top priority.
The irony is that by smartly addressing the big-picture risk management needs of customers and prospects, the broker or agent can generate more business, strengthen relationships and realize meaningful efficiency and productivity gains. But how does one achieve this exemplary state? Here are some pointers.
- Help customers assess risk holistically. Buyers are often fixated on their largest risk-related line items or a recent disruptive event. Yet many significant opportunities to mitigate risk are neither triggered by a must-respond situation nor by an obvious superficial review.
The better approach is to consider the company’s entire spectrum of risk exposures and perform an orderly assessment or virtual audit of priorities. Surely the largest recurring costs, or the most frequent sources of risk, deserve a place on a shortlist, but so do the things that may be out of the traditional realm of the risk manager’s purview. Yet these items can be disruptive to the business or accumulate cost over a duration of time and become outright existential threats to the business itself. Most organizations aren’t staffed to consider risk from this perspective, let alone are they ready to take appropriate action. The agent or broker can be the trusted resource to guide to opening their perspective.
- Help customers automate. The small-to-midsize business probably doesn’t deploy all the technologies that would be beneficial and effective, and there’s probably no clear path for them to reach this state without hands-on guidance. They are missing out on significant cost management and productivity improvement opportunities at the very time that risk management talent is scarce and expensive.
Keeping in mind that perfection must not be the standard or goal, the broker or agent is well suited to bridge this gap. This doesn’t require a complex boutique design for each customer, rather the identification and evangelization of technologies that can be deployed on a repeatable basis across multiple customer verticals, employee size, and revenue goals not to mention that are feasible to learn and deploy without years of experience, and accommodate multiple lines of coverage.
- Be the analytic backbone. Although virtually all customers are pursuing growth, there is likely a lag between business growth and new in-house risk management capabilities. The organizational risk management practice is likely to be in a perpetual state of catch-up relative to the organization’s exposures and needs, and velocity of growth.
This again presents an opportunity for the broker or agent. By providing an analytic backbone for their customers, the broker simultaneously differentiates itself in the eyes of the buyer, insulates itself from market-driven price competition, and is able to present its customers to insurance underwriters in the best possible light. Far from being a daunting new task with prohibitive cost and talent implications, the best tools can make this process a time-saver for both the insured as well as the broker. Automated dashboards can greatly assist in regular check-in with insured, and act as a touchpoint for the health of a broker’s book of business.
- Adopt a consultative, not transactional, mindset. The agent or broker who competes solely on price is doomed to be replaced and inciting an unhealthy short-term price-driven buying perspective.
The small and midsize commercial buyer needs help adjusting their mindset to address the things that matter most. This includes taking a longer-term perspective regarding risk and its total cost. Regardless of customer size, circumstances or superficial expertise, every customer in the agent or broker’s portfolio is experiencing a meaningful deficiency in its in-house risk management capabilities and resources. Only some of them are aware of how significant this gap may be.
- Pursue multi-purpose technology. Just as circuses can’t afford to haul one-trick ponies from town to town, risk managers can’t afford to support siloed single-purpose SaaS insurance solutions. Investments of time, energy and money in risk management resources must address a broad spectrum of needs and exposures. The best systems will be coverage-agnostic, adaptable to changing circumstances (such as employee system access and multi-location businesses) and be applicable to both pre-loss and post-loss risk and incident information management.
Aclaimant’s insight-driven workflow solutions can be the backbone of the agent or broker’s program to address all of these critical priorities and more. We invite you to contact us to learn more about how Aclaimant has helped other agents and brokers to provide a new level of service and productivity.