FlexibilityIn our last article we discussed the importance of carriers and agents establishing and working towards a common purpose. To achieve this feeling of common purpose, it is important for carriers to be perceived as flexible.

Specifically, the data shows that an agent’s perception of underwriting flexibility weighs heavily in their assessment of how easy it is to do business with a carrier.

This is particularly the case for agents that focus on writing commercial business.

“Notice how the stiffest tree is easily cracked while the bamboo survives
by bending with the wind” – Bruce Lee

Flexibility has a Sweet Spot

When we share this data with clients, some say, “Obviously, if you provide more coverage at a lower price and are willing to write anything the agent sends, then the agents will send you more business.”

It is true that carriers can be too flexible. Indeed, companies that enter a market this way do grow, but after a couple of years they inevitably experience large underwriting losses. Rarely do they remain a force in the marketplace over the long term.

At the opposite end of the flexibility spectrum are companies that are stubbornly inflexible. They proudly refuse to adapt to changing conditions. Instead, they hold firm to their traditional processes and guidelines rather than challenging and adapting them. They do not go out in a blaze of underwriting losses. Instead, they steadily become irrelevant.

Profitable Flexibility

Profitable flexibility is a balance between the two extremes discussed above. It allows a carrier to be flexible, but in a way that supports underwriting profit. It is worth your effort to seek it. Commercial Lines agents in particular indicate that underwriting flexibility is THE GREATEST OPPORTUNITY for the carriers they work with.

Four Steps to Achieve Profitable Flexibility

1. Know what you want and communicate it clearly

Your agents want to know the types of business you target and the risk characteristics that are acceptable to you. Problems arise when you are not clear what you want. Agents start guessing incorrectly. They spend time sending you things you don’t want, only to be denied. It’s frustrating and inefficient for you and for them.

Even if you remain selective in your underwriting, agents who know what you want and are typically successful when they bring it to you will consider you a flexible carrier.

2. Deliver on your promise

To agents, flexibility is not just about risk appetite. It is also about how successful they are in placing — and then keeping — business with a carrier.

Their perception of flexibility is impacted by things like:

  • Is the carrier reasonably competitive (price and terms) on the business they say they want to write, and
  • Does the carrier reliably renew the business without unexpected or dramatic changes in rates and terms.

PRO TIP: Avoid “Happy Talk.”  Most of us want to be liked— yes, even underwriters like me. We try to avoid giving people bad news. We certainly don’t enjoy telling people no.  Instead, we might try to push a difficult discussion down the road. Ironically, when we avoid difficult discussions, we actually cause others and ourselves more pain. It is much better to be the first carrier to say “no” than to be the last. If you are the underwriter that pushed off a difficult decision to the last minute, you will be the one whose “NO” is the most remembered.

Be positive and work to identify solutions, but also communicate honestly and responsively. Over-promising and under-delivering will not achieve profitable flexibility.

3. Listen to your agents

Listening helps develop trust, which is the basis of a healthy collaborative relationship.

When thinking of flexibility, agents typically make comments like:

“They stop and take the time to listen and have communication back and forth, to the point where when you get off the phone – even if the answer ends up no — you feel like you’re both in agreement and working for the same common goal”

Agents spend a lot of time and money to obtain viable prospects. Then they spend additional resources preparing the submission and/or quoting the account for their carriers. When they bring their business to you, they want you to hear them, acknowledge their effort and try to help them succeed.

4. Engage in problem-solving

Agents appreciate companies and underwriters who help them solve problems and, therefore, help them solve their clients’ problems.

Here is a representative quote from an agent:

“We value contact with underwriters that care and want to help their company and agencies write business”

In our next post, we will explore three key characteristics of skilled problem-solvers, and how carriers can help their underwriting teams nurture those characteristics.

Key Take-Away

Agents tell us that providing profitable underwriting flexibility is a key opportunity for carriers to create a competitive advantage.

Curious about how your organization ranks in terms of profitable underwriting flexibility? DCC’s Benchmark Analytics measures your agents’ perceptions of your flexibility compared to your competitors, providing independent data you can use to inspire team goals for improvement.

If you’d like to learn more, let’s talk.