Avoid Flooding The Market!
Avoid flooding the market with enquiries when conducting an insurance review and carefully consider the broker you choose to work with.
If for whatever reason you choose to conduct a market review of your insurances (it may be that your existing broker relationship has waned or you have experienced a sudden price hike) it is important that you carefully consider the brokers you approach! Appointing half a dozen plus brokers at your renewal in a “Dutch Auction” style approach can be counterproductive and in fact can lead to harder pricing if insurers feel that client retention is unlikely, not to mention an adverse reputation.
Why is this the case?
When numerous brokers throw their hat in to the ring, it can often lead to ‘market flooding’ where insurers are receiving the same enquiry multiple times from different brokers. This illustrates to the market that there is an over focus on price, with generally less attention to risk prevention and cover. Ultimately, if you have a tendency to regularly tender your insurances, then this can also lead to insurer/broker apathy were they deem a lack of commitment and loyalty present in the prospective client. In other words, you’re put to the bottom of the pile.
Brokers don’t generally charge for quoting so if they find that they are chasing a piece of business amongst numerous prospecting agents and brokers, they quite often will walk away. They may also even decline to quote in the future if they see a reoccurring enquiry.
So what should you do?
If you are not satisfied with your existing provider’s recommendation of terms and decide to market your renewal, then it is important that you first understand why. If it doesn’t make sense to you, then ask them why? Have they made an error, have your circumstances changed, have they changed their strategic position or maybe you’ve just overlooked a previous claim or post sale adjustment. It may just be down to service level or a periodic check of their competence. Whatever the reason, it is helpful to identify what is important to you so that you can convey this to any alternative broker.
Ideally, no more than two alternative brokers should be instructed when marketing terms to ensure that you can devote the time to give them the full information they require, and so they can thoroughly understand your needs and requirements. A couple of constructive conversations are far more beneficial and productive than showering the insurance market with multiple generic circulated enquiries which may attract aggressive selling salesmen with less attention to policy coverage.
Before instructing brokers to quote you should research them and look out for some of the following:
- Do they have a website, with clear contact details, address and Director/Staff details? You can gage a lot from a broker’s website.
- Are they FCA authorised and registered. All Insurance Brokers based in the U.K must be!
- Check if they can quote what you need.
- Do they specialise in your area.
- Are they members of a recognised Trade Body, Association or Industry Network?
- How big are they? A smaller firm will usually be able to provide a more personal service.
- How easy are they to get hold of and the speed of their initial response.
- Engage with them, ask them how they can help you and gage their willingness to quote.
- Are they independent or bound to one or a limited panel of insurers?
- Ask them what added value they can provide? (E.g. after sales service, claims service and risk prevention advice etc.).
- How long have they been established?
- Are they reputable? Recommendations and reviews are always valuable.
Building a lasting relationship with a broker that you can trust and will have your best interests in mind is vital to achieving good value cover.
At John Whippy Insurance Brokers we believe that providing buyers of insurance with adequate information allows them to make informed decisions about the value of their purchase which generates mutual success and long-term, strong relationships.
Price is important but so is effective communication and dialogue with attention to the client needs!