Explaining an insurance premium increase before the client shops

3 days ago
3 min read

Updated: 2 days ago

Introduction

A renewal invitation lands with a higher figure on it and the client's first action is to check whether somebody else is cheaper. At that moment the broker has done nothing wrong and is nonetheless in a competitive tender they did not know had started.

The increase itself is usually explicable. Claims inflation, reinsurance costs, changes in the client's own risk, an unrelated claim on the account, or simply an insurer repricing a book. What loses the client is finding out from a document rather than from you.

Getting in front of it is the whole exercise, and it is a diary task rather than a sales one. The diary is what makes it happen reliably.

1. Explaining an insurance premium increase means contacting the client first

Timing decides the outcome.

Speak to them before the invitation arrives

Two to three weeks ahead. A client who has heard from you is a client having a conversation rather than running a comparison. Put every renewal date in a diary a month out.

Say the direction before you have the final figure

Even an early warning that the market has hardened prepares them. Surprises are what trigger shopping. A holding call is better than silence.

2. Explain the specific reason

General explanations sound like excuses.

Name what actually moved

Claims experience on their own account, a market-wide hardening in that class, increased sums insured, changes to their own operations. Specific reasons are accepted. Vague ones invite a quote from elsewhere.

Separate their own risk from the market

A client whose own claims caused the rise deserves to know. One paying for a market movement deserves to know that too. Clients can tell the difference.

3. Show that you tested the market

This is what the client is paying you for.

Say how many insurers you approached

And what the alternatives came back at. A client shown three worse quotes understands the recommendation. Name the insurers if you can.

Explain why you did not move them

Cover differences, claims service, policy wordings, a mid-term exposure. Cheaper is not always better and that is your professional judgement. Say which wording matters and why.

4. Offer the levers that exist

There is usually something to adjust.

Discuss excess, cover levels and payment terms

A higher excess, a reviewed sum insured, monthly payment. Explain what each one costs them elsewhere. Options give the client agency rather than a take-it-or-leave-it figure. Price two variants for them.

Be honest where nothing can be done

Sometimes the market has moved and there is no lever. Saying so plainly is better than implying effort that did not exist. Clients respect the honesty and remember it.

5. Use the renewal to review the risk

The conversation is worth more than the transaction.

Ask what changed in the business

New premises, vehicles, staff, activities, turnover. Frequently there is uninsured exposure nobody mentioned. Ask the question every year.

Record the conversation

What was discussed and what was agreed. It protects both sides and it informs next year's approach. Note it on the file the same day.

Conclusion

Contact the client two or three weeks before the renewal invitation arrives, even before you have the final figure, because a client who hears the direction from you is having a conversation and one who reads it in a document is running a comparison.

Name the specific reason and separate their own claims experience from a market-wide movement. Say how many insurers you approached and what the alternatives returned, and explain why you did not move them if you recommend staying. Offer the levers that genuinely exist — excess, sums insured, payment terms — and say plainly when none do. Then use the conversation to ask what changed in the business, because that is usually where uninsured exposure sits.