Over the course of the past 20 years, Broker of Record Letter (BOR) appointments have become the preferred method of attracting new clients. There are several reasons for this:
- Improved Brokerage Resources – Many firms have evolved beyond simply representing the placement of insurance. Therefore, they are providing buyers with the ability to choose a broker who can deliver many other important services (e.g. Claims, Risk Control, Financial Assessments, etc.)
- Reduced Number of Carriers – While many in the industry have never known a “hard market”, the last one in the early 2000’s decimated the insurance carrier marketplace. That particular hard market took out many of the “names” who offered capacity to the middle and upper-middle market (just ask any industry veteran about by-gone carriers like Kemper, Aetna, Reliance, St. Paul, INA or Continental.) So, you are now left with fewer carriers that are represented by many agents.
- Elevated Buyer Expectations – It used to be that coverages and costs were a mystery to many buyers. They depended solely upon their broker to decipher complicated coverages and negotiate favorable terms. Buyers are now much more astute and judge brokers based upon completely different financial metrics and KPI’s.
Selling is what it has always been: Showing a buyer how you will improve their situation. On larger accounts it is important that you focus your BOR strategy on how the buyer will benefit financially and what it will mean to their most important business goals.
As a broker, you are being told by most sales consultancies, “don’t quote insurance.” But, if you really want to be successful, here is something that you should know: Just because you want and ask for a Broker of Record Letter, the chances of success are very small unless you follow all the steps below…
- On your first call, don’t make it about the insurance coverage. Now that may be the toughest thing that many of you will ever do. The first time. After that it will become second nature to you. Remember, once you go down the road of coverages, carriers and prices, the buyer’s head is turned the wrong direction.
- Change your language to be about Financial Outcomes. That is the purpose of everything you do in the beginning of the relationship. The more you drive your messaging to focus on improving business results, the closer you are to what the buyer really wants.
- Understand how to touch the buyer’s sense of urgency. This is done by understanding the buyer’s KPI’s, analytics and business metrics. Larger firms spend their entire business day focusing on these key objectives and metrics.
- Now, here is the IMPORTANT PART – Use analytics on your buyer’s current cost structure to demonstrate the impact on their KPI’s. Show the buyer how much Financial Leakage they are currently suffering and how it is affecting their successful business operations. This is the proof of your discussion around Financial Outcomes.
When you follow these steps, your BOR hit ratio will soar. As an astute business person, the buyer will have little choice but to appoint you. If they fail to do so, they will sacrifice your improved business results.