December 1, 2016
The Power of Risk Management and Insurance Education
By Tim Davis
I still remember exactly how I won my first large commercial insurance account … and how I lost it the same way. Honestly, it’s the way most of us end up landing large accounts – I found a weakness with the existing policy (and agent) and made sure the client knew how badly their company was being hurt because of the agent’s lack of knowledge. The knowledge is power adage couldn’t be more accurate than it is in insurance.
I jumped into the insurance industry in 2009 after a short-lived career as a journalist. I was eager, ambitious and loved the industry from almost the first moment. Our agency sells commercial property & casualty insurance, so I didn’t think learning the product line would be a major challenge. Workers Compensation was the first line of coverage I learned and since at the time it was about 85% of the policies our agency wrote, I was confident … if not cocky about my knowledge for those policies.
I had been producing at The Insurance Shop for only a few months before I got my first large opportunity … it was a large steel erection risk that had been with a local agent and placed with a local insurance carrier. The carrier did a mid-term audit on the policy and ruled that the agent had used the wrong class codes, so the carrier switched the majority of the payroll into the higher rated code and sent the client a bill for $99,895 and gave them 30 days to pay it. No payment plan, no exceptions they told the insured. That prompted the call to my office and I was ready to pounce.
What made this one even easier for me was this particular client was right and the carrier was wrong! The insured had their employees classified correctly and the auditor for the local carrier misread the NCCI Scopes Manual.
I was able to get my carrier to do a physical inspection prior to quoting to confirm the class codes they thought were appropriate (the client and I were right). Not only did we find the client a better solution, but I was able to work with their former carrier to get the audit revised and the client received a check back from the carrier for the full $99,895 they had overpaid!
Client for life right there! Except that I then made the same mistake the previous agent did. So excited about my ability to save their problems with workers’ compensation, the client asked me to take over all of their other lines of insurance. Well, I was great on comp knowledge … but I’d never bothered to spend my time really focusing on understanding risk management for general liability, property and commercial auto insurance. I muddled through the apps, documents and everything else needed to present and offer quotes to the client that at least matched the pricing and coverage limits they currently had. Unfortunately, I didn’t have a good understanding on how the carrier would handle and service the account. The policy I had written didn’t provide any coverage for rented equipment … which was a big problem for a company that will frequently rent/use a 60-foot crane. In their year on that policy, the insured paid around $25,000 for additional coverage on those rented cranes.
While I was trying to sort through the problems and figure out a solution, a brand new agent walked into the office. As I found out later, he had just graduated college with a degree in risk management, worked for Lockton Companies (the largest agency in the world) and it didn’t take long for him to not only identify with the client’s problems, but present a wonderful report to highlight the issues and a package policy to solve all those problems.
Simply put, I got schooled by someone who was way more educated … even though he’d been in the industry for only a few weeks. It served as a great reminder to me that I was still grossly under-educated for insurance and I needed to learn the ins and outs of all lines of coverage if I was going to be competitive. It also reconfirmed to me how valuable an education in risk management and insurance can be if you are stepping into this industry.
I was a part of the “fake it until you make it” school, but being able to understand, articulate and educate a client on their insurance options is the biggest advantage an agent has when managing large accounts.
Tim Davis, Sales Manager
Tim Davis is the Sales Manager for General Liability Shop.com. Tim started as a producer at The Insurance Shop in 2009 and moved into the sales manager role in 2010. He personally manages insurance decisions for small business owners with no employees, up to clients with over $40,000,000 in annual payroll. Tim is passionate about the insurance industry and finding the best insurance solutions for small business owners, which has evolved into a direct expertise in workers’ compensation and cyber liability coverage.
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