Selling Insurance is like Golfing
I’m an avid golfer. I have loved it from my days as a youth. My father and I used to play in what we call the “dusk classic.” Every evening all summer, we would go down to our little nine hole golf course and play until it was dark, always finishing on a par 5 that played toward the lighter western sky. I love the game but golf can be hard. Selling insurance is hard task as well. There may be more similarities than you think.
Golf is not a game of perfect. Dr. Bob Rotella has written a book with that title. If you have ever played you know this to be true. Selling insurance is no different. How was the first call you ever made? I know mine completely lacked confidence, I didn’t know what to say, and what I did say I probably didn’t fully understand. The trifecta! It is hard to craft the perfect sales script but it’s not about being perfect. You just have to make mistakes and work through it, just like in golf.
The game of golf requires immense amounts of practice. There are so many different skills and techniques that are present in a golf swing. We haven’t even started to dive into the fact that there are about a million different ways to hit the same tee shot. Each player sees and executes the shot differently. Selling is that way as well. Some people like to apply a little pressure while others sit back and relax. It doesn’t matter your style, all ways can work. Find the style that best fits your personality. Whatever selling style you choose, just know that it will take a lot of calls and a lot of revisions along the way. Just as “iron sharpens iron,” calls sharpen sales skills.
Every golfer I know has finished a round and felt completely upset about it. If you have any desire to do well at all, this is just part of the game. The disappointment from a bad round that could have put you or your team over the top can wear on you. In sales, this can be a lost opportunity or a lead that slips through the cracks. It’s so easy to get down on yourself. What good does that do you though? As you get into insurance sales just know that there will be tough times but there will always be that one shot that brings you back if you just give it a chance.
Golf and insurance may seem like completely different subjects, but they really do have some similarities. Golf is hard and so is insurance sales. Sometimes rising above the noise can be difficult. I hope this article finds you in a good spot but if it doesn’t maybe it can help you propel through. If you would like to read more about me check out the blog at http://rackleyinsurancegroup.com/blog/list/ or look at my Linkedin profile.
August 29, 2017
While captives have many different facets and layers to them, one thing that is left up to the captive is choosing a lawyer for when situations arise. Here’s how that is different than a standard carrier.
Standard carriers provide counsel for you in the event of a claim. Technically the lawyer should be looking out for the best interest of the insured, but will they really do that? As they are hired by the insurance company, not by you, their incentive may be to appease the company more so than make the 100% correct moves. While there are tons of lawyers that this would not be a problem what so ever, there are some that this is a problem. Which lawyer do you think the insurance carrier is more likely to continue to hire?
With a captive, the member owners hire the lawyer and choose the person they think represents their interests best. You can guarantee that they will have your best interests at heart this way and not really be working for someone else. It’s easy to see how this can lead to more favorable results.
While this is just one thing that a captive gives companies an advantage on there are many more. You can learn more about them at http://rackleyinsurancegroup.com/blog/list/ or by reading more on my LinkedIn profile. https://www.linkedin.com/in/steven-mallow-74620788/
While a captive insurer is much different than a standard insurer, the role of the broker/producer should be about the same. There are some main areas of service that go with any insured/broker relationship and most of them apply.
Service should be done proactively. There’s nothing worse than sitting around waiting for things to happen to you. I personally can’t stand that. I always believe that if you hit a problem head on, the results will not only come to you faster but they will be better as well. Proactive service can be a ton of different things in the insurance world. Maybe midway through the policy you want to have an “automobile audit” where you go through and make sure that every auto is scheduled and there are no holes there. A “driver audit” would look very similar to the auto audit. The options are endless but the process is the same. Agree ahead of time to meet at a certain date and take care of something that is important to the insured.
A common service provided to insureds is making sure they are in the best market available. While this may apply to the property side of things (property isn’t always included in captives), this may not apply to the liability portion that is in the captive. Your broker should be looking for carriers with strong financial standings and that have unique coverage options or policy term lengths. Most likely you will love the captive so there will be no need to see what is out there in the standard market for the liability portion.
While it seems like not much to expect, these things are critical in your guidance of your insurance program. I technically only listed two things but the proactive services are a huge undertaking. That piece can and should be shaped to exactly what the insured needs. The peace of mind, of knowing when to expect the broker as well as what to expect from him or her can foster a relationship that can span a career.
July 27, 2017
If you have read my previous articles you would now know why or why not a captive is for your company. Having said that, not everyone qualifies. There are certain areas that a company must be strong, in order to be placed in a captive.
One of the biggest factors in qualifying for a captive would be premium volume. In most cases the worker’s compensation is the main policy that is placed in the captive. The other two that can often be placed in a captive are the auto liability and the general liability. The combined amount of premium needs to be in excess of $100,000. Some captives will even require higher premiums.
Another key factor in qualifying for a captive is having a solid loss history. Loss history doesn’t have to be perfect or completely without fault but it needs to be good. These are large corporations we are dealing with here, they are likely to have some claims but they need to be below the industry average. A company who has had above the industry average of claims for four of the last five years will most likely not be a good fit.
Companies need to be in an industry that is not susceptible to extremely high amounts of risk. If you are a firework wholesaler or a gun manufacturer then you may find it hard to be placed in a captive. Since members of the captive get to vote on who is let in and they all share in the profitability of the captive it isn’t always in their best interest to accept high risk companies. This particular qualification is not set in stone and members can vote to approve any company they want. The higher risk companies are still less likely to get approved.
Collateral is also important. Since captives place some of the risk on the insureds they need to be able to withstand some hits. A company that is not in good financial standing could cause the other members of the captive to have to pick up some of the slack. So naturally this can be a disqualifier for some businesses. Each captive will have a collateral requirement that each member has to post to help the captive stay financially stable as well as ensuring the member is financially stable.
The reasons listed above are some of the main factors in whether or not a company would fit in a captive. There has to be a high enough premium volume, low loss ratios, be in the right industry, and have the financial backing to qualify for a captive insurer. If you are wanting to learn more about captives check out the blog at www.therackleygroup.com or check my other articles on LinkedIn.
July 24, 2017
Steven Mallow - Captive Division Leader for The Rackley Group
Captives are unlike the standard market in several ways. Some of those ways may be good and some may be bad, depending on your situation. The following are three reason why a captive is not for you.
If you are a risk adverse person or company then you don’t want to be in a captive. As the member-owner of the captive you take on the first layer of your losses. The very first dollar of the loss is coming out of your pocket, not the insurance company’s. By being in a captive, the amount of financial risk that you take on is higher. Standard market carriers take on the first dollar of liability losses in most cases which equates to less risk for the insured.
Company culture plays a big role in a company's success. It also plays a role in how the employees behave. That brings us to workplace safety. If you haven’t invested in company culture and loss prevention, then a captive is most likely not the place for you. Since you are more likely to have losses on your worker’s compensation policy as well as your general liability policy you wouldn’t want to be the one footing the bill. Since captive premiums are based off of your company’s actual losses and not everyone else’s, the potential for rate increases is high.
The third reason you don’t want to be in a captive is that some industries aren’t the best fit for one. As we all know certain industries are more prone to losses than others. If you are not afraid of the risk and you are dedicated to loss prevention but you still see high loss ratios then stay away from captive insurers. Why pay the first portion of losses if you already know there will be a high amount of them?
These are three reasons that a company might stay away from a captive. If these don’t describe you or your company and you want to learn more about captives and their benefits, check out the blog at www.therackleygroup.com or look at my other articles on Linkedin.
By Steven Mallow - Commercial producing agent for The Rackley Group
Captive insurers can be the absolute best plan for your company for a multitude of reasons. Here are my top four reasons why:
Underwriting profit is returned to the members of the captive. Unlike the standard market, normally within three to five years all premium, other than administrative costs and paid losses, is returned to the members. Think about the huge amounts of money spent in insurance premiums never to return. The underwriting profit, in those cases, stays with the insurance company. Each member of a captive is basically an owner of an insurance company, so the profit stays with them.
Members of captives have control over their insurance programs. Each member has a vote and all members, no matter the premium size, have the same number of votes. The biggest company, by premium, will not have the most weight, they will have the same weight. Voting members can decide who is accepted into the captive and can even decide if it’s time for a new claims administrator.
Which brings me to my third reason, third party claims administrators. The company or person that works on the claims doesn’t work for the insurance carrier like in the standard market. They work both for the member and the captive as a whole. In which scenario would be more favorable for you? When the other side is paying the person who makes the decision and you have no say in it or when you do have a say?
The final reason a captive could be for you is this, future premiums are based off of each member’s own independent loss history. It doesn’t matter if the member is a hotel operation and the industry has seen huge losses or not. If the insured has done a good job with risk management and loss control, in the long run they will be rewarded.
I believe these to be four of the most important reasons to be in a captive. Stay tuned for more on captives here or check out the blog on www.therackleygroup.com
July 7, 2017
By Steven Mallow - Commercial Producing agent for The Rackley Group
According to Captive.com, “a captive insurer is generally defined as an insurance company that is wholly owned and controlled by its insureds; its primary purpose is to insure the risks of its owners, and its insureds benefit from the captive insurer’s underwriting profits.”
Being wholly owned and controlled by its insureds means each member has voting rights. The members can vote on who is accepted into the captive as well as on operational items, which is nothing like the standard insurance market. When is the last time your current insurance company asked you how you would like them to proceed?
Captives include a layer of self-insurance. If you are risk adverse ,you will want to shy away from any form of captive. Each captive would have a set retention applied to the losses they incur. On top of the retention is a layer of reinsurance and getting coverage beyond that would bring the need for umbrella insurance.
Premiums are based off of member’s individual loss history, regardless of the market or industry experience. As loss ratios go down, underwriting profits go up. Now comes the best news of all. As a member, these underwriting profits are returned to you, instead of staying with the insurance company.
Is a captive for you?