Insight: Creating the right pitch will benefit both insurer and broker

Schemes are a win-win for insurer and broker alike. They help insurers to access new markets and distribution as well as tapping into brokers’ market- and segment-specific expertise. Schemes allow brokers to demonstrate their deeper expertise with a sector and offer a proposition tailored to meet client needs – all at a time when options for cover can be more expensive and limited.

All of that begins with the right pitch. Brokers set themselves up for success by researching their idea from multiple angles, presenting it professionally, and anticipating challenges.

We love to see that the brokers have done their homework. They should know about the sector, the size and value of the market, how many companies there are and by size, what changes are happening in the sector, and the budget they have for marketing and development.

Expertise

Insurers want to partner with experts and brokers that have built up some experience in the sector or who plan to invest in it, for example, by bringing in new staff who have the necessary knowledge and capabilities.

The best pitches will support those elements with realistic figures. Ideally, brokers should have their own numbers or prospective numbers about a scheme’s performance and market potential – and be able to provide commentary about why performance is what it is. Trade associations, marketing experts and other specialists can provide additional data, as well as the context about a scheme’s position and potential in the market.

Schemes also draw on the strengths of the partners involved, so a schemes pitch should identify how an insurer can provide support. It helps when brokers can understand what they’re seeking in an insurance product and then mention any unique coverages that should be included.

That requires research upfront, so starting the process early is important. If a broker is serious about either moving a scheme or developing a new idea, they should approach an insurer six to eight months in advance so that they will have time to engage with a few insurers. This gives us reassurance that the broker is looking for a provider it can work with over a period of time.

Bright ideas

Scheme ideas fall into three categories – existing schemes, portfolio consolidations and new schemes. Knowing the nuances of each can help a broker prepare a more focused pitch.

An existing scheme has typically been with another carrier for several years, but, for example, the broker now wants to move it to a new carrier. A range of scenarios could trigger the desire to move: a decline in profitability, differences of opinion about the future of the scheme, poor service from the carrier or an increase in insurance prices.

Because moving and setting up a scheme with a new insurer can be costly, a broker should be prepared to discuss how having a new carrier would improve their situation. It’s important to be open and honest about what is making you leave your insurer, and demonstrate why you believe this new partnership would be the best
way forward.

A portfolio consolidation scheme presents an opportunity to expand a strong but small book of business within a sector. Perhaps a broker with 30 clients in the auto repair business will want to triple their number of client shops. They may already have an account executive who has a lot of expertise about the sector, so they understand the market, and now they want to recruit an additional person and become part of a trade association. Finding a new carrier can help support their desired growth.

Finding the right fit

Finally, a broker may approach an insurer with a new scheme idea. Here, it’s important for the broker to paint a realistic picture of the prospects for the scheme. Presenting related historical data helps, but even in the absence of it, a broker can consult experts and trade associations to better understand the viability of the idea. Without that due diligence, a broker may underestimate the costs of developing an idea and overestimate the likely market response – a red flag for an insurer screening a new concept.

The best schemes will elevate the complementary strengths of those who are involved. Therefore, while this will help the broker to have a clear and well-researched end result in mind for their scheme, it’s also important to be willing to be flexible about its implementation. The stronger the pitch, the more willing an insurer will be to volunteer its resources to fine-tune a promising concept.

We have expertise here at Travelers Europe to help support and shape the plan with the broker. That includes reviewing the wordings, designing the product, identifying the right coverages, and talking about marketing. By being open to that, the broker gives us an indication that they want to invest in a long-term partnership – and that is good for everyone involved.

 

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