Winning an insurer agency: top 10 tips

“In the eighties, to win an agency a broker simply had to write a nice letter to the insurer,” says Craig Burton, broking director of broker network Momentum Solutions. Today, circumstances could hardly be more different – especially for start-ups, which lack track records.

As the sector struggles with a lingering soft market and an increasingly stringent regulatory environment, insurers are becoming picky about whom they grant agencies to. The experts say, though, that with the right strategy, brokers can secure the agencies they want. Here, we bring you their 10 top tips.

1. Get your house in order

Start by ensuring your compliance is correct and that your accounts are up-to-date and registered with Companies House. Paul Muir, managing director of 1 Answer Network, says: “This is the golden rule, as it’s the first thing insurers look at.”

2. Go for quality, not quantity

Do not just add agencies for the sake of it. Stuart Randall, chief executive of broker group Ataraxia, says: “Most brokers have too many agencies – the average medium-sized players have at least 120 – and they can’t possibly support them all.” If the insurer sees you are not putting through significant volumes of business, you risk being categorised as less of a priority and hence receiving a lower standard of service.

Randall says: “Brokers do cull agencies, although there is less danger of this these days as they need all the business they can get. What they will do if they are not seeing volume, though, is shunt them off to call centres.”

3. Read up and ask around

Research your target insurers and develop innovative ways to meet their requirements, says Muir. “Different insurers have different needs. They all have pet schemes and they love anyone who can come up with entrepreneurial ways to give them a new route to market.”

4. Reconsider your bid

Ask whether you really need a particular agency. If you are seeking to meet a niche request from a handful of clients you are unlikely to deliver the volume the insurer wants, so try accessing the insurer through wholesalers, secondary markets or specialist schemes instead of an agency.

5. Write a business plan …

Insurers want to see your firm has a convincing growth strategy. Burton says: “Your business plan must be ambitious, but realistic. Explain how much you are going to grow over six months, a year, two years and so on, but do not just pull figures out the air.”

Your plan must be informed with market research. For example, find out how many potential customers are within a radius of, say, 20 miles, then prove how you going to win them. “State in the business plan that you know some of them and you will network with the rest at your local golf club, for instance.”

6. … then write several business plans

Tailor the plan for different types of insurer. If you operate in several markets, says Burton of Momentum Solutions, “mention them all in your business plan. But the version you send to Ecclesiastical should go into most detail about your independent schools business, while the one you send to Fusion should talk mostly about your work with medium-sized businesses, and so on”.

7. Show how you vet clients

Insurers also want to see that you know your customers and assess them properly. “You need to prove that you do credit checks and confirm that what your customers tell you is accurate,” says Muir of 1 Answer Network.

8. Do some PR

“Having a good website, public relations and marketing strategy is really important,” says Burton. “Insurers like to see you are providing a good shop window for their products and doing all you can to promote them. Broker websites range hugely in quality from excellent, modern and interactive ones, to some that are just a picture and a name, which is awful.”

9. Join a network

Thanks to its economy of scale, a network is likely to have an existing relationship with your target insurer. Scott Bennett, sales director of Broker Network, says: “We can liaise on your behalf with the insurer, and being a member shows the insurer that your business is in good shape because we have vetted you.”

Ataraxia’s Randall, who is the former chief executive of network Brokerbility, says: “Insurers are wary of start-ups, so they really should be in a network.”

10. Remain credible

Bennett adds that once you have won the agency, you should work hard to maintain it. “You must fulfill your promises. If you said you would deliver £50,000 worth of business a year, do everything you can to make that happen – otherwise the insurer will place your book of business in a run-off.”