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Renewing Relationships

A solid relationship between the insurer, broker and client is the foundation of a smooth renewal process

The renewal process can be an intimidating, complicated and sometimes stressful time for brokers, their clients and insurers. If handled incorrectly, the worst-case scenario can be the loss of the account. However, if each party works together and the process is started early, then renewals can become virtually hassle-free. It can be an opportunity to provide your clients with great service, advice and even a chance to save money.

“Renewals are about being transparent with markets [insurers] and clients, honest and delivering tough messages when required, as well as going to bat for your client when you feel it’s necessary,” says Patty McNeil, senior partner at Jones Brown.

She adds that knowing the client and being in constant contact with them helps because come renewal time, you will already have answers to many of the questions you might have about their business.

“It’s not a once a year phone call to talk about insurance,” McNeil says. “It’s about regularly checking up with them, tracking them and what’s going on [with their industry] in the media.”

Paul Lucarelli, director large commercial and specialty at RSA, says that being open and honest is necessary. “RSA has found that to be successful during the renewal process, it’s crucial to be transparent and have continuous communication with the broker, set expectations around the renewals approach well in advance and to continue developing strong relationships.”

At Travelers Insurance Canada, regional vice president Barry Normet says the company is proactive with renewals, letting broker partners know of any issues in advance. The company holds a collaborative review of larger commercial accounts prior to the renewal process and this involves getting advice from lines specialists, national leaders, risk control and claims personnel.

“This puts us in a better position to be able to proactively deal with the broker,” says Normet. “Usually from there the broker does his or her own due diligence.”

Steve Livingstone, director personal insurance at RSA agrees that communication is key. “We want to avoid the broker getting surprise phone calls from their client. If there has been a change to our pricing, we need to be proactive and make sure the broker is armed with the answers to the questions that their client will ask.”

Experts say that the renewal process for commercial lines begins about 90 days before renewal deadline, while the personal lines process begins about 45 days before renewal date. However, this time can be fraught with challenges.

According to McNeil, one major factor is time. “These days, it seems everyone wants things immediately, faster and quicker so they’re piling more onto the underwriter’s plate,” she says. “Sometimes there’s a challenge in getting timely quotations back, and having enough time to digest, review and negotiate before presenting proposals to clients.”

Peter Redmond, president at Purves Redmond agrees that time is an issue, but in his experience it’s gathering information from clients on time. This is especially critical if you’re approaching an insurer that is unfamiliar with the client, he says.

Redmond’s company overcomes this by starting the process early, mapping out when items are due and who is responsible for what. Purves Redmond has specific due dates for information before the renewal date, and Redmond says this helps his staff, as well as partnering underwriters and clients provide information in a timely manner.

“I find this is one of the flaws that brokers, underwriters and clients all tend to have because they focus primarily on the renewal date only,” he says. “If you’re too focused on the renewal date, then you’re not going to set aside the time for an early and full presentation of renewal terms and options. So we get people to look at and agree to the timelines instead.”

Beat the Directs

An ongoing threat to the independent broker channel is direct writers. Experts agree that the rates directs can offer on personal lines provides the industry with some competition and come renewal time, this competition is heightened.

“There are direct writers out there and they are spending oodles of money in the marketplace, trying to coerce consumers over to their model,” says Debra Ambrose, senior vice president, sales, marketing and broker operations at Aviva Canada.

Aviva aims to keep the broker top of mind with the consumer, and one way the company is doing this is by providing brokers the necessary tools to combat the directs. For example, the company offers broker partners access to a digital marketing hub, Aviva Partner. It includes over 300 pieces of marketing collateral for all lines of business that can be used for acquisitions, client welcome letters and renewals. Brokers simply log on to the system, download the form and can even brand each document with their company logo.

“Most brokers don’t have the bandwidth or money to invest in these types of marketing tactics,” says Ambrose.

Martha Turner, assistant vice president of marketing at Aviva adds the company has received feedback from brokers about rate increases.

“Their concern is can they compete against the direct writers out there. One of the things we’ve tried to focus on is where we know we’re competitively priced.”

Turner says the firm highlights this information in commercial and/or personal lines renewal lists, and provides this document to broker partners.

“We try to equip them [brokers] with the information that they need and make it as easy as possible for them to try to retain that customer,” says Turner.

RSA is also focused on making life easier for broker partners, according to Livingstone. EZ-Docs is one of the tools that can help brokers. It is an efficient and environmentally friendly tool that enables them to receive copies of personal insurance documents electronically instead of on paper, he says.

Another item that is currently in development and aimed for release later this year is a micro site retention tool by Aviva. Brokers can leverage this online website and use it to draw in customers by offering contests, and special discounts if they refer a friend.

“It allows brokers to customize the site for their brokerage and connect with their customer, whether for retention or renewal,” says Ambrose. “This is a great example of an enhancement for brokers to get out there and speak to their customers in a fun way.”

Redmond adds one area he feels insurers could improve upon is the quality of renewal applications by making them easier to complete.

“I know a lot of clients cringe at some of the applications that they have to fill out,” he says. “I think making applications user-friendly would be helpful for everyone involved.”

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Sticky Situations

These experts turned a renewal nightmare into a win-win for all.

Expert: Barry Normet, regional vice president, Travelers Insurance Canada
Renewal challenge: Exposure change
Winning solution: A client that was undergoing a 30% growth in business was unable to perform risk control site recommendations by the renewal date, which would have resulted in rate increases. The firm amended the renewal terms, increased the deductible and had the client agree they would perform all recommendations in an allotted time period. The client did this, the deductible was decreased and soon afterwards the company was even able to offer a rate deduction. In this situation, a motivated client and supportive broker helped the process.

Expert: Paul Lucarelli, director large commercial and specialty, RSA
Renewal challenge: Large losses on an account
Winning solution: A client of 10 years suffered three sizable losses–one fire and two thefts. A loss control inspection was performed, which confirmed good maintenance and quality. Due to the long term relationship and inspection report, RSA negotiated a rate increase and the addition of tracking devices on large equipment to help reduce thefts.

Expert: Peter Redmond, president, Purves Redmond
Renewal challenge: Time
Winning solution: Less than a week before the renewal date, the underwriter told the firm that due to a material change of the client’s risk profile, they could no longer insure the risk. A strong relationship with the underwriter was key. The underwriter agreed to give the brokerage an appropriate extension to find an alternate.

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Copyright 2011 Rogers Publishing Ltd. This article first appeared in the April 2011 edition of Canadian Insurance Top Broker magazine.

Transcontinental Media G.P.