As many veterans of the insurance industry know, a soft market can lead to swift declines in prices as carriers compete for premium growth. Prices will fall as the excess of supply over demand increases.
So what can you do today to start winning in this soft market?
How Insurance Agents Can Win in a Soft Market- Part 1
As many veterans of the insurance industry know, a soft market can lead to swift declines in prices as carriers compete for premium growth. Prices will fall as the excess of supply over demand increases. For example, assume that 40 commercial buildings are put up for sale and 35 possible buyers enter the market. Five of these properties will not be sold assuming each buyer purchases one property. This forces the 40 property owners to compete on price in order to attract a buyer. As a result, this type of real estate market would be called soft.
In a soft market, targeted selling requires excellent customer service, good insurance carrier ratings, and a reputable agency to back up the agent. Also, as you are likely aware, in a soft market cycle insurance providers typically have a lot of excess capital and are willing, and even competing, to underwrite most businesses. Alternatively, in a hard market cycle, while some business are paying higher prices for less comprehensive coverage, other businesses find it difficult to obtain insurance at all. These businesses typically end up in the program business or specialty side of the supply chain.
So what can you do today to start winning in this soft market? Investing in a telemarketing campaign is the clearest answer. Telemarketing is one of the biggest tools available to Insurance Agencies, Wholesalers and Program Administrators. Besides investing in acquisitions, using outbound calling to attract new business is the most cost effective marketing medium to increase market share. The most successful and profitable agencies are implementing this marketing strategy over a long term basis.
These agencies are the ones that will see immediate growth as the hard market approaches. The best part about the telemarketing efforts in a soft market is that building a bank of qualified expirations dates gives these agencies a competitive advantage over their competitors. Telemarketing also allows the sales force to be proactive in reaching out to the business owner 60 to 90 days prior to the renewal.
At Neilson Marketing Services, we understand that you don’t have the time or resources to waste on these outbound calls. This is especially true for agencies that write policies for hard-to-place business classes such as aviation, drycleaner insurance, hotel and restaurants, salons, and numerous other niche markets. We also understand how hard it is to reach a decision maker in these sectors; which is why we’ll do it for you!
In part 2 of this post, we’ll explore additional benefits to insurance telemarketing in a soft market, as well as how email marketing can effectively supplement your telemarketing campaign efforts. In the meantime if you have any questions or would like to explore the Insurance Telemarketing services we have in place, please contact us at 1.800.836.9741.