The Consultative Broker™ Briefing
Volume IV, Number 13
A Free Publication of C.R. Ekern & Company
888.670.1177
www.crekern.com
Copyright, C. R. Ekern & Company, 2007

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"Winners Manage The Conditions"

As a young man I played competitive golf on a college golf team in North Dakota (in those days I had a decent game.)  There were some spring days that were not conducive to low scores or an enjoyable round.  These were the “40/40” days (40 degrees with a 40 mph wind!)  As we complained to our coach about the conditions, he had one standard reply; “The conditions are the same for everyone, boys,” he growled, “it’s how you manage the conditions that determines the winners.”  

Every brokerage firm and broker now faces the same major issue, and they are all looking for the answer to the question:  How do we continue to serve our clients and create new revenues in this uncertain time of carrier capacity, pricing, and restricting appetites (the “40/40” days!)

The answer is simple.  You should do the best possible job of managing the conditions.  After all, they are the same for everyone.

Of course the reality of this can be very difficult.  You have a number of factors working against you.  The truth is that somebody in the transaction will manage it if you don’t.  The other managers will be the carriers, your client/prospect, or another broker.  In any case, you will have let the conditions defeat you.

Consultative Brokers understand that they must continue to manage the process throughout the marketplace deterioration.  If they don’t, it will manage them and ultimately lead to unacceptable results.  Here are some techniques that successful firms are currently using:

1. Client Pre-Renewal Meetings.  Prior to approaching the marketplace, these firms have a formal meeting with the client and discuss all the options in the marketplace.  These meetings allow the client to stay in a comfort zone without getting other brokers involved.

2. Introduce the Client and Underwriter.  At these meetings the client and underwriters get the chance to build a relationship, and each of the parties becomes real.  This makes the renewal negotiations much smoother.

3. Require Letters of Authority.  Prior to approaching the marketplace on behalf of a client/prospect, these firms require Letters of Authority.  This cuts down on the turmoil, shows the carriers Broker Control, and forces the client/prospect to work with you as a consultant representing their best interests.

4. Continually Demonstrate Your Impact on TCOR.  While you have no control over a carrier’s difficulties, you can still impact your client’s Total Cost of Risk.  (TCOR.)  Use this method of creating value in the minds of your buyers.

5. Detach From Difficult Situations.  There is a difference between a business decision and an emotional one.  Unfortunately, many of the marketplace horror stories revolve around emotions that have been touched off by a business decision (fear, anger, rejection, etc.)  Consultative Brokers know that it is not about them and that they cannot control someone else’s business decision, only their reaction to it.

You can expect the marketplace to continue to deteriorate throughout the remainder of this year.  It will be like those “40/40” golf days in North Dakota.  The winners will be those who manage conditions the most effectively, as they are the same for everyone.

Best regards to all Consultative Brokers,

Rob Ekern
President
C.R. Ekern & Company

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Consultative Brokerage® Techniques are utilized by agents and brokers across North America in the development and retention of upper middle market revenues.  The Consultative Broker Briefing is delivered electronically free of charge to selected agents, brokers, and other insurance professionals across North America.  To subscribe to The Consultative Broker Briefing, please click here.

Copyright 2007 C.R. Ekern & Company