Inside Insurance Podcast – Episode 2 – Value Added Agencies

In Episode 2 of the Inside Insurance Podcast, we talk with Aaron Schwartz, an Account Executive at Ruhl Insurance, about adding value to your insurance policies through comprehensive risk management solutions including, claims advocacy, audit support, loss control, coverage analysis and a consultative sales approach.  Together, these important components of an agent/client relationship can remove your insurance coverage from the commodity shelf and into the asset column.

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If you’re more of a reader, you can check out a summary of the main points of the podcast below. This summary focuses specifically on what differentiates Ruhl Insurance as a value-added agency and how value-added agencies tend to take a consultative approach to selling insurance.

What sort of clients does Ruhl Insurance generally serve?

Ruhl Insurance is a generalist and has clients across the board. We do have specialties in transportation risks, agribusiness risks, and in the vineyard and winery industry. These are some of the things we would consider to be our specialty, but we do handle clients across the board.

On the commercial side of things, Ruhl Insurance technically has two commercial departments – commercial insurance lines and farm insurance lines. A lot of agencies combine these into one department as a more generalist approach. Because Ruhl does have specialties in the farm insurance and agribusiness areas, it makes sense to separate them into two departments to handle that, especially given that we’re located in Lancaster County. We need to do that in order to better serve our clients.

Our clientele consists of all business sizes and revenues. We’ll handle clients anywhere from 40k per year to several million and more. The needs are different for different sizes of clientele and our consultative approach ensures we can successfully serve them all.

Is insurance a commodity, a necessary evil, or something different entirely?

You’re likely to get answers across the board. When it comes to the big box personal insurance lines, the marketing approach tends to try and make it as much of a commodity as possible. They want to make the focus all about price. Through their creative marketing and branding, they have certainly created that type of focus.

Insurance is Not a Commodity

From a commodity standpoint, you can’t be, and aren’t, a commodity when it comes to insurance. It’s not something you’re personally wearing or a product you’re physically using. Basically, when we sell insurance, we’re selling a promise.

It’s printed on a piece of paper, it is a legal binding contract, and, other than that, the paper side of it is truly “our word” and the insurance carrier’s word. It’s not a commodity and it’s definitely not something where you can go out and just look for the lowest price.

Lower Prices Usually Mean Less Insurance

In the insurance industry, generally speaking, if it’s a lower price, you’re also usually getting less coverage. As independent insurance agents, it’s up to us to inform and educate regarding coverage. That’s a little bit of where the consultative relationship side comes in.

Insurance is in the free market and the free market keeps companies in check along with their loss ratios. Without going into too much detail from the insurance side of things, a lot of times price doesn’t always equal value. You can sometimes get a cheaper price, but you may need to give up some coverage and self-insure by taking that risk on yourself. When it comes to price and the coverage you’re getting, you need to ask – is it actual savings or less insurance?

Insurance is Protection and Peace of Mind

Instead of a commodity or a necessary evil, think about insurance as the value of a good night’s sleep. From our perspective, if we can’t give someone the peace of mind that they can stay in business if the catastrophic happens and be made whole again, then that piece of paper isn’t worth a whole lot.

How does Ruhl Insurance provide good service in a quantifiable way?

From a value-added approach, the lingo you often hear is “good service”. You’re probably yet to hear an insurance company say that they don’t give good service or the “best” service. So, how do we quantify the quality of service? Is that in turnaround times, audits, meetings, etc., or something else?

Taking an Intentional Approach to Define and Deliver Good Service

It’s a really good question and one that most agencies should be talking about on a regular basis. If they’re not, they either don’t have great service or it’s just not a focus and they anticipate that their employees are giving good service. In some cases, this may work out, but simply anticipating that good service will be provided is not intentional enough.

At Ruhl Insurance, the way we approach quantifying “good service” starts with intentionally talking about it, defining what good service is, and what that means for our clients. We’re asking important questions. What do our clients expect? What is the expectation when we sign that paperwork and hand those policies over?

Good service is establishing and having those conversations with our clients on a regular basis. It’s being intentional with the types of conversations we’re having, how many times we’re having those conversations with our clients, and documenting those conversations on our end so that we can make sure we’re following up. A lot of people will say that they have good service. If you’re not talking about it internally and you’re not revisiting it on a regular basis, it’s really hard to establish what exactly that looks like for your agency and for your clients.

Good Communication is Essential

On our end, timely response is a big part of offering good service. Something as simple as getting back to people and setting the expectation of when and how we’re going to communicate with them makes a big difference. Communication is our focus – from the first contact we have with somebody, all the way through the sales process, and then continually servicing them, hopefully for years to come.

Ongoing Education and Access to Expertise

Insurance is a very complicated product and it’s something we need to continue to do a good job in both communication and education about it. There are so many insurance products out there. We hear about homeowners insurance and about auto insurance a lot because a huge portion of the population needs that.

But, when we get into some of the more specialized stuff, there’s a need to know what’s available so we’re not omitting a coverage. Whether it be in a quote or in that advice meeting where we’re telling people about the exposures they have and the coverage that’s needed, we need to know about all the products available, so we’re able to provide that information to the insured. Just staying updated on that product knowledge is a service we can provide to the insured.

What sort of documents or resources that benefit the insureds does Ruhl Insurance provide?

When we’re going out to visit with a client, we want to make sure we’re providing value and earning their trust. If it’s a standard meeting with a current client, it’s something coverage-based. We’re providing marketing materials to them, potentially about other products that are out there that could benefit them.

Comprehensive Risk Management

We are also doing what we would call “risk surveys” that we can provide to the client to let them know what exactly their risks are, which points to educating them on the coverage they have. We want to make sure our clients know what coverage they have, why they have them, and why their limits need to be what they are.

Those are the types of things we provide and that we want to provide. Moving forward, as we evaluate and re-evaluate our approach, we’ll continue to provide that sort of consultative service to our clients.

When you get into larger clientele who have additional needs, they may have an in-house risk manager. Part of the risk management process for that person can be insurance and part of it can be implementing practices to manage risk in-house. These would be things that, essentially, help avoid situations that would require the need to make an insurance claim in the first place.

We have third-party partners that we’re able to bring into conversations as needed who are specialists in that area and can work with the risk manager to benefit the client.

About the Risk Control Process

We specifically use a company called Keystone Risk Managers. We have a strong relationship with a local rep. The services they’ve been able to provide and the value they’ve been able to provide our clients has made a difference in the bottom line and provided good premium results. Not only can they assist with setting up a safety committee, but also ancillary services like setting up ongoing safety meetings, OSHA-related products they can offer our clients, etc.

Our relationship with them continues to grow and benefit our clients. The ongoing relations ensures that the premium our clients have saved from those services, from a bottom line standpoint, has been good. Also, from a loss control and loss prevention standpoint, they have really been a great resource to go to for current operations as well as new operations. It’s been good as a value-added service we can provide and they’ve done a really good job. Our clients have appreciated it and can continue to see the value.

How Risk Management Benefits an Insured

Specifically on the workers comp side of things, when you bring in a risk management firm like that, you can get the 5% safety committee credit for having a certified safety committee. There are parameters to this, like having it established for a certain number of months and if you have a certain number of employees, etc., but things like that help manage risk and make a difference.

On the backside of that, the savings of claim occurrences can affect your experience modification factor. You could get your mod factor down because you’re doing some best practices stuff to avoid claims and that could result in a credit. For example, if you get your mod factor down to a .75, you have a 25% credit there because of the things you’re doing now to avoid claims altogether. Without these kinds of resources available, those credits can get overlooked.

Why do you need a copy of my current insurance policy?

Oftentimes, when we get into a new customer or client opportunity, they’re reluctant to provide a copy of their current policy. For the most part, the pushback on why to not provide a current policy is from a pricing standpoint. It’s likely the client has experienced that sort of price play when shopping around where a company will come in just under their current premium instead of simply providing their best price.

To some extent, the insurance industry has done it to itself by playing that game. For the most part, it seems like that’s what people are thinking. As an independent agency, we’re not interested in playing price games as our goal is to get you the best prices for the coverage you need. Having a copy of the current insurance policy allows us to provide several important benefits to the insured:

Identify Coverage Gaps

One of them is that we need to be able to, in that consultative selling process, know what the coverage is to be able to determine any gaps. By seeing a copy of the current policy, we can also save people time. If you have excellent coverage, a price that we’re not going to be able to beat, and there are no current pain points, then we can save each other some time.

We’ll thank you for the opportunity and let you know we can’t beat your current coverage. On the other hand, if there are gaps in your current coverage and improvements that can be made, we can quickly identify those, make recommendations, and then move on to reaching out for pricing from various carriers.

Provide the Best Advice

Getting policy copies allows us to see your current coverage. We’re then able to break down what you currently have and get into the details to see see what’s included, or excluded from, that coverage and on those coverage forms. From there, we can determine how specifically the client’s coverage fits what they do. That’s the most important part.

Get Accurate Pricing

The goal for us is to earn your trust through a consultative approach, so you can trust that we’re doing our best. Being able to see the copy of your current policy with a total per line of business or a total as a comprehensive portfolio allows us to get the most accurate pricing for your coverage.

Underwriters will sometimes re-evaluate risks, which can change pricing. In order to get accurate pricing, it’s important to have a full understanding of the risks that need coverage. For the most part, we like our underwriters to give us their best effort and the best offer that they’re most comfortable with. That’s what we give to our client.

Knowing what’s included in the current policy is important for us to provide the best advice to you and also for the underwriter to know up-front what those coverages and premiums are so they can accurately evaluate if they are getting the premium to pay for the losses. That’s the biggest thing and why you pay for insurance. Our two favorite words when a client calls with a claim is “it’s covered” and that’s the point.

The biggest thing is trust and that goes both ways. We have underwriters we work with on a weekly, sometimes daily, basis. They need to trust that we are representing risks appropriately to get accurate pricing from them and we want to earn the trust of our clients as well. We’re in it for the long haul. This approach steers away from the generally-held idea that insurance is a piece of paper and a transaction because we do want to have that trust relationship and, if we have to take a little bit of time to build it, we’re willing to do that.

Disclaimer: Information and claims presented in this content are meant for informative, illustrative purposes and should not be considered legally binding.