The Key to Taking Control of Your Insurance Process

As an insurance brokerage, Fred C. Church is proud to have long-lasting relationships with many of our clients across a wide variety of industries. While each client and collaboration is always unique, there is one common theme across these partnerships; our clients know they can count on our brokers to be educated about their industry, thoughtful about how we manage their plan, and diligent about reducing exposures and managing risk.

However, not every business owner we meet is initially clear on how essential a strong client/broker relationship is. We often hear common frustrations concerning the lack of transparency in the insurance process and even the misconception that making a change in their broker of record is just too time-consuming and expensive to consider. After we’ve listened to a potential client’s grievances about the process, we take our time to explain how a relationship with the right partner can eliminate a lot of anxiety and save them time and, yes, even some money.

The following dialog is a real-life exchange that Mike Lucas, a 19-year veteran Broker and Risk Management Consultant at Fred C. Church, had early on his career with a prospective client. We hope that Mike’s recounting of this spirited conversation sheds more light on what can often feel like a mysterious insurance buying process.

The Whole Insurance Buying Process is “a riddle, wrapped in a mystery, inside an enigma; but perhaps there is a key…” – Winston Churchill

One snowy evening, it seems not so long ago, I had the pleasure of enjoying a dinner meeting with a prospective client, the CFO of a company that was interested in possibly hiring Fred C. Church to be their insurance broker.

Opportunities like these – to have an unhurried lunch or a leisurely dinner with a client or prospect – have always been some of the most enjoyable aspects of my job. In my experience, there is something about sharing a meal that not only puts people at ease but also often stimulates a very lively and productive conversation.

That evening proved to be no different, except in providing me as a young insurance broker an invaluable education on a particular frustration for many of our clients, the insurance buying process.

My dinner guest said to me:

“As the CFO of a large organization, I have to make buying decisions all the time. And I have to tell you, there is nothing more frustrating than buying insurance.”

After a pause to sip her wine, she continued:

“Don’t take this the wrong way; you’re a nice guy and your firm has a great reputation, but the insurance buying process is exasperating and exhausting!”

I learned early on in my career that being an insurance broker requires some counseling skills, and so I was ready to reply with an empathetic question, “Why don’t you tell me what it is that you find most frustrating?”

She bounced with ease over that inquiry like she was skiing the black diamond moguls at Jay Peak, and launched into round two of her comments.

“Did you know that our second and third largest expenses besides payroll are our employee benefits and business insurance premiums?”

I was about to answer in the affirmative when I realized this was rhetorical, and only the introduction to a much deeper commentary on my industry.

“And let me ask you this…why is it that insurance is the one service we buy, that we don’t fully understand what we are buying, how much we should buy, who even is the right vendor to buy it from, and whether or not we’re getting a fair deal?”

By this point, my Irish, fueled by a second glass of wine, got the better of me and I quipped – “well I beg to differ, what about software…”

She blew past that like a gate in the giant slalom.

“It’s a total expense in which we have virtually no control and receive nothing for our money unless we have claims and then our costs go up the next year.”

She paused, took a breath, and then added, “I apologize for venting like this…”

I was thinking about changing careers, but I realized this CFO had given me an opportunity to solve her biggest frustration about insurance…no control.

As the meal continued, we both took a minute to gather our thoughts. I realized that I was standing at the top of the slope with my skis pointed downhill, and it was time for me to propel myself forward, so I said…“I understand your frustration, and I have the beginnings of a solution for you…are you interested?”

I was relieved at her positive response,

“Yes, please. As you can tell, I certainly don’t have any answers.”

I began with, “You used three terms that caught my attention: vendor, expense and control. It’s actually quite ironic that the insurance industry is one of the few industries in which the client has total control over the most important aspect of the buying process.”

“That is quite a statement…what do you mean?”

I continued, “When you choose an attorney to advise your organization, are you choosing a vendor or a consultant?”

“A consultant of course, and one who is well-versed in our industry and committed to our organization.”

She was dead right. “Yes, this is exactly how you should be choosing your insurance broker, and the process should begin with a discussion of your risks before insurance is even mentioned. When you evaluate and hire your broker on the merits of their knowledge and experience as a risk management consultant to your industry and commitment to your organization, then your insurance premiums turn from a ‘total expense over which you have no control’ to an investment in enterprise risk management. Allowing you to gain control over how you mitigate and transfer your risks.”

“Ok, this is a different lens than I have historically looked through. But changing brokers is a complete pain involving months of my time and fraught with the risk of changing my entire insurance program.”

On this, she was wrong. “That’s a common misconception, and only true if you use the traditional bid process.”

The truth that many clients are not aware of is that you can change your broker without changing your insurance program. It’s done with a simple “Broker of Record” change of authority letter that is a common, best practice in the insurance industry.

This method allows you to choose the right risk management consulting broker without having to change any policies in your insurance program. A client can make this change at virtually any time, though practically mid-policy year is usually best. And if you are not satisfied with your new broker, you can change at any time. It’s is a cost neutral, risk-free method that every client has available to them.

My how time flies…my client, Cindy, took control, signed the Broker of Record letters and made the change to Fred C. Church…15 years and countless dinners ago.

Perhaps these insights into what an effective client/broker relationship should look like have you thinking that you don’t currently have this type of partnership with your broker of record. Mike and the entire Fred C. Church team would welcome the opportunity to meet with you and take you through our strategy for understanding and mitigating business risk. As Mike’s memorable meeting demonstrated, the key to taking control of your insurance buying process is less of a mystery than you think.

Our new client process starts with identifying your exposures, assessing the level of risk for each, and recommending ways to address the concerns that rise to the surface. Only after that thorough analysis will we review your current policies to determine whether you have the proper coverage in place.

This consultative style is a distinct difference that we offer clients, but certainly not the only characteristic that sets our team apart. For more information about the Fred C. Church Education or Outdoor + Adventure Practice and our Risk Advisory approach, please contact us or call Mike Lucas at 978-322-7211.

About the Author

Mike Lucas, a 19-year veteran of Fred C. Church, is a Broker and Risk Management Consultant in the Outdoor + Adventure, Education and ESOP practice groups. He has 30+ years holding the following positions: Industrial Engineer, Fire Protection Consultant, National Account Manager, Products Liability Consultant, Workers’ Compensation Safety Consultant, Risk Control Manager, and Commercial Broker. In addition to his insurance industry expertise, Mike has experience as a woolen textiles dyer and weaver; semi-conductor engineer; lumber yard fork truck driver; youth basketball and soccer coach and Special Olympics volunteer. He loves the outdoor recreation the four seasons in New England has to offer, including skiing!