Policy add ons and premium value in a brokerage, done properly

3 days ago
3 min read

Introduction

Commission on a core policy is largely determined by the insurer and the premium, neither of which a broker sets. Income per client is therefore driven by the completeness of the cover arranged rather than by the rate on any single line.

That is a legitimate and useful thing to work on. A client with a gap in their cover has a problem, and identifying it is the job. The failure mode — well documented and heavily penalised in most regulated markets — is selling additional cover that the client did not need and would not have chosen if it had been explained.

Regulation on suitability, disclosure, bundling and cancellation rights varies considerably by jurisdiction. Nothing here is compliance guidance; check your own regime.

1. Policy add ons and premium value both depend on identifying real gaps

The starting point is what the client is actually exposed to.

Ask what would not be covered

Walk through the realistic scenarios rather than the product list. A client who sees the gap asks for the cover themselves. That is a much better sale than a recommended one.

Use a consistent fact-find

The same set of questions every time surfaces the same gaps reliably. Ad hoc conversations miss them according to how busy the day was. Keep it to a single page.

2. Never bundle without explaining

Automatic inclusion is where brokers get into trouble.

Present each element separately, priced

The client should be able to see what each part costs and decline any of it. Opt-outs buried in a total are indefensible. Show the core premium and each addition as separate lines.

Say plainly what each add-on does and does not do

Legal expenses, breakdown, excess protection, key cover. Each has real limitations and stating them builds more trust than concealing them. Name one thing each will not cover.

3. Judge add-ons by whether they get claimed

A product nobody can use is a complaint waiting to happen.

Track claim outcomes by add-on

If a particular cover is consistently declined at claim stage, stop selling it whatever it pays. That is the single most useful review a brokerage can run. Ask your insurers for the decline reasons.

Drop the ones that fail clients

Short-term commission against long-term reputation is a poor trade in a business that runs on renewal.

4. Commercial clients carry the value

Commercial lines are where premium value and complexity both sit.

Review the whole risk annually

Business changes faster than policies do. New premises, staff, vehicles, equipment and activities all create uninsured exposure. Ask what changed since last year.

Ask about the things clients forget

Business interruption, cyber, employers' liability limits, goods in transit. Clients rarely volunteer these and frequently need them.

5. Renewal is the whole business

Broking income is a book, not a series of sales.

Contact before the renewal invitation lands

A client who receives an insurer's renewal price without hearing from you is shopping. Get there first. Two weeks ahead is usually enough.

Review rather than simply renew

A renewal conversation that checks what changed adds cover and retains the client. An automatic renewal does neither.

Conclusion

Identify real gaps by walking clients through what would not be covered rather than through a product list, and use the same fact-find every time so the gaps surface reliably instead of according to how busy the day was.

Present every element separately and priced so any of it can be declined, state plainly what each add-on does not do, track which add-ons actually pay out at claim stage and stop selling the ones that fail clients whatever the commission, review commercial risks annually because businesses change faster than policies, and contact every client before the insurer's renewal price arrives. Check your own regulatory position on bundling and disclosure first.