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Grand Finale:
"First let's review the three accounts that are due 1/1. We have yet to hear back from the underwriter, the client is getting fidgety, and there is competition."
Commitment received to get right on it and look into it immediately.
You go on to say that the new products are not incredibly different from others available, the rate must be competitive, and the underwriting team must do a better job of turning submissions around, understanding the accounts, and responding in a timely fashion.
You challenge them to decrease their production expectations, increase their commissions, and open their appetite a bit wider to accommodate business that you know will be placed with them if they do so. Beefing up your position, you site some accounts that could have been written but weren't and vaguely indicate that a few big ones, perhaps even a book roll, are in the offing if they become more cooperative.
You then provide a more realistic number for them to consider, a negotiation begins, they come down, you move up, and a deal is struck - - kind of.
Encore:
Hands are shaken with warm embraces. There is talk of the great year to come, how great it will be to work together, another brief reminder of the trip, and an escort to the door. The carrier leaves thinking they have a deal and you get back to work, bracing for the next meeting with the next carrier.
In the parking lot, the production underwriter is warned to "stay on top of this one" and they are off to their next show.
And so it goes, year after year after year. The same show resulting in the same outcomes. The only thing missing are the elephants that would make this annual circus complete. Notice, we have the clowns, ring-leader, and the high-wire act. It really is time to stop the show, end the charade, and get back to the business of being in business. This is not to suggest that we don't need joint planning between partners, quite the contrary, we simply need to make it real and useful. Here are my suggestions for doing so:
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Cut off the generalized "over-all growth" discussion immediately and get down to brass facts. |
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Imagine if every agency every where abided by every commitment to grow with every carrier every year. Imagine if every carrier, every where, business planned with the assumption that every agency will abide by every commitment made every year. The industry would grow so astronomically each year that we would permanently solve any unemployment problem. Not only is this not likely to happen, it will never happen. So, why are our joint business planning discussions often based on this erroneous assumption? I have no idea. I only know that it is a ridiculous charade that, in the end, leads to false hope, disappointment, and accusations of poor performance. It is also the major cause for adversarial carrier/agency relationships and our "we-they" approach to business. The good news is that you can fix it. The better news is that in so doing, you and they will become true partners.
You will first need to determine where each carrier fits within your plans for growth and your core business segments. Go beyond identifying just the segment or channel markets by taking the time to divide each into targeted premium ranges and lines of business. Then, you have a matrix or spreadsheet of sorts that you can use to plug in your "go-to" markets for each specifically defined segment of your business. If you want to really pretty the thing up, you can select secondary and third-string carriers for each segment and assign your producers by name to each one as well. Armed with this spreadsheet, you can quickly define for each carrier where they fit in your agency, what the expected growth rate will be for their assigned segment, and who their key contact will be. Then go on to ascertain the support services that you will need, and the production, retention, submission, close ratio, and profitability targets that you can agree to. Now, my friends, we have a plan. |
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