Insurance Consultants Of Maine Newsletter

Insurance Consultants of Maine Newsletter
Scott Simmonds, CPCU, ARM
November, 2005

Unbiased Insurance Info & Advice
www.endwimpyinsurance.com

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Feel free to forward this newsletter to your colleagues. Comments, questions and suggestions are always welcome. Email: scott@icofmaine.com. You're getting this publication as you subscribed, downloaded one of my reports, or gave me permission to add you to the list.

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Controlling Premium, Renewal Quotes, and Service

The Insurance Marketplace Is Rip-Roaring Hot! At least in the Northeast. I expected renewal premiums to start increasing this month - the hurricanes, insurance company scuttlebutt, etc. I was right. My client's current insurers came out with renewal quotes averaging a 5% increase.

Until they heard there was competition! Then prices dropped!

I had competing insurer’s quotes from 15% to 50% off the expiring premiums on my October and November renewals.

The insurance buyers who did not get competitive bids saw their premiums inch up in recent renewals.

Here is my prediction for those who are looking at December and January renewals: If you get competitive quotes from multiple agents and insurers you will see your premiums and/or rates drop (other than workers comp which will vary by state). If you don't inject competition into the process your renewal will be up by at least 5%.

The approach I outlined above goes against my advice for the past five years. I have been recommending broker selection and a more sedate process. It doesn’t seem to be working in the current market.

Competition among insurers is what will control your premiums! You'll get better coverage too.

Example: Client paying $170,000 for coverage in the 2004 to 2005 policy year.

--Renewal quote: $185,000.
--Revised renewal quote (When they heard there was competition): $180,000.
--Competition (with coverage the current insurer wouldn’t offer and higher umbrella limits): $136,000.

I know I'm going to get calls and letters from agents saying that all I’m doing is stomping on premiums. I'll hear that price isn't the only thing. Service is what’s important!

Horse Hockey!

In every case where I moved coverage the winner was a fine agent with a fine agency. We made the decision on the basis of price, coverage, and service.

Agents, your clients expect that you will provide exceptional service. Part of that service is to make sure that the insurers you represent are competitive with the marketplace. If you can't be competitive you are not providing exceptional service.

Do you need to get quotes every year? Maybe. Industry tradition is every three years. That’s great when the insurer agrees to follow the marketplace in the years where no bids are obtained. Too often I see insurers taking advantage of renewals where there is no competition.

Here is what the past two months of renewals have taught me. If you want to control your premium make sure your current insurer knows that there is competition. If you don’t want other agents involved, get your current agent to get quotes from several insurers. All quotes should be presented to you so you see the work done.

I have long said that the most important part of the insurance transaction is your relationship with your agent. A good agent will make all the difference. Tell your agent what you expect for service – claims service, loss control service, policy administration, and renewals.

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Visit My Insurance Blog – My general thoughts about the world of insurance - http://insurancebuzzer.blogspot.com/.

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Special Reports Available - Order My Special Reports - Guaranteed To Help You Save Premium Dollars.

SR #1 - Premium Saving Insurance Basics For Small Business - For info see: http://www.icofmaine.com/SR1save.html

SR#2 - Buying and Bidding Your Insurance – For info see: http://www.icofmaine.com/SR2%20Bid%20Buy.html.

SR #3 - How To Save Money On Your Workers Compensation Insurance - For info see: http://www.icofmaine.com/SR3WC.html

Take a look at all my reports and teleseminars CDs - http://www.icofmaine.com/store.html

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Life In Maine And Other Stuff - The days are getting cool. Nights are getting cold. It still is beautiful, even with the leaves off the trees. Last week my wife and I took a ferry ride to an island off Portland for a dinner overlooking Casco Bay. Great views even at night!

The screens are all off the windows and the deck furniture has been put away. The leaves are raked. The bird bath put away. We are ready for winter.

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Biggest Insurance Mistakes White Papers - Get my white papers covering the biggest business and personal insurance mistakes. Send a blank email to bizmistakes@icofmaine.com for a copy of the business mistakes paper. Email to personal@icofmaine.com for the personal insurance version. No cost.

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Your Privacy - I will never sell or distribute your email address to any other person or organization.

Do You Have The Right Insurance? Contact me to discuss an unbiased review of your insurance program. Do you have the right coverage? Can your policies be fine-tuned to improve the protection? Can changes be made to ease the administrative burden insurance causes? Are you getting the service you should from your broker? I can help. Call 207.284.0085 or email me at scott@icofmaine.com. Remember, I don't sell insurance so I'm unbiased.

Need A Speaker? I'm pleased to speak to trade, business or service associations about insurance topics. Call 207.284.0085 or email me at scott@icofmaine.com. Also check out my speaker's page at www.icofmaine.com/ispeaker.html.

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Scott Simmonds, CIC, CPCU, ARM
Insurance Consultants of Maine, Inc.
20 Sofia Road
Saco, ME 04072-9017
Phone 207 284-0085
Fax 801 991-4027
scott@icofmaine.com
http://www.endwimpyinsurance.com

Unbiased Insurance Solutions

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Insurance Consultants of Maine, Inc. is an unbiased, fee-only insurance and risk management advisory firm. We don't sell insurance and never accept fees or commissions from insurance companies or agents.

Comments regarding insurance policies or products in this newsletter are for information purposes only and do not constitute an endorsement. I accept no fees or payments of any kind from any insurance organization or any company mentioned in this newsletter.