How to thrive in a hard insurance market

Since 2017, the insurance market has been changing making it harder to place risks without insurers having a comprehensive understanding of the insured risk. This means reduced capacity for some insurers and more detailed risk information being required for insurers to underwrite certain risks. It’s an opportunity for brokers and Authorised Representatives (ARs) to take a proactive attitude towards risk, show the value of their service and build strong relationships.

In 2022, the insurance market continues to be one of the hardest to place a risk. But it’s also an incredible opportunity for brokers and ARs to show the value of their expert advice and service. See how you can make sure your business thrives during the ups and downs of the insurance cycle.

What makes this a hard market?

A hard insurance market is indicated by the reduced capacity for insurers to underwrite certain types of risks and an increase in premiums. Whereas previously insurers would be able to take on 100% of a risk, they may now only be able to insure a small portion for the same price – with multiple underwriters working on the same business.

This is a trend that began long before COVID, believes QBE Senior Partnerships Manager Justin Boyes. He has worked in insurance for 22 years and says this is the hardest market he’s ever seen.

The benefit of a strong relationship with your insurer is “immeasurable”

With a market focused on capacity, having strong relationships with your insurer is “more important than ever”, says Boyes.

“In a soft market, the only thing we’re talking about is price. But when capacity is the consideration, that’s when a strong relationship with an underwriter is essential,” adds Boyes.

John Schroder, National Partnerships Manager at QBE agrees, “The benefits are immeasurable. If you can pick up the phone and talk to your Partnerships Manager or underwriter, you have an inside track on what the risk appetite is – and whether you can even place that risk with your insurer.

Ways you can stay in touch with your insurer include:

• Reading regular communications such as Q nect news
• Attending live or virtual events
• Joining e-learning programs
• Doing training such as Q Academy
• Keeping up with risk insights
• Talking to your Partnerships Manager

Keep a line of communication open with your customers at all times

Maintaining a strong relationship with your insurer flows into how you communicate with your customers as well. This is key in a hard market, where you must be able to have conversations with your customers about how to best protect their assets.

“In a hard market you are seen as more of an expert than ever,” says Boyes. “Because you must have discussions about why risk mitigation factors such as smoke alarms or sprinklers are so important.”

Communication with your customer shouldn’t just happen at renewal time, says Schroder. In a hard market, it’s about constantly keeping in contact, so you know what’s happening in their business.

“There’s a heightened appetite for information,” he says. “And you need to be able to talk to your customer about why there is a need for more information. Make sure you discuss even seemingly inconsequential changes. Explain why their premiums may go up even if they’ve never had a claim.”

While having an in-person conversation with your customer would always be preferable, sometimes a simple check-in text or email can help keep that line of communication open. At the end of the day, it’s about showing that you’re there for them.

Related article: 7 ways to better understand your customer

Your time and service become the most important thing you offer

Ultimately, whether the market is hard or soft, you should not change your approach: to understand your customer and their risk and be able to offer them the protection that they deserve.

“It’s incredibly difficult to do what I’m about to suggest,” says Schroder, “but it really is about spending time with your customer. For them to understand that the service you are providing them is in their best interest and the products are the best possible options.”

The best thing you can do to ensure your business thrives is to keep doing what you do best. In a hard market, the value of that work is more important than ever.

To learn more about the market, talk to your QBE Partnerships Manager today.