Municipal insurance: A "buyer's" advice to sellers

Rough Notes, Sep 1998 by Zinobile, Joseph D

The incumbent's advantage

Make no mistake, if you want the champ's belt it usually takes a knockout! Many agents develop a good working relationship with clients over time. Familiarity, comfort and satisfaction count.

We have an unofficial rule-ofthumb: If coverages are essentially equal and service has been good, an incumbent's renewal price should be beaten by more than 10% to justify recommending a change. Among the reasons for this approach is the effort involved in procedural changes; the chance that there are errors in the new program's proposal; and the value of the relationship between client and insurer.

If you are satisfying your clients, you should be accumulating an intangible but important value in their minds. If you are not, a competitor might ask the right questions, convince the client that they will do better, and negate the incumbent's advantage.

Keep the buyer's perspective in mind when you prepare your proposals. They will probably fit the following profile:

(1) not an insurance expert

(2) busy

(3) capable of understanding properly explained insurance issues

(4) appreciative of concise thoroughness

(5) appreciative of an easy-tonavigate proposal

The municipal insurance market is larger in some states than in others but is generally large and profitable. Understanding and accommodating the needs and constraints of the municipal insurance buyer will improve your success in retaining or acquiring this business.

Joseph Zinoble is a senior consultant for The Zigmund Company, Ltd., Harrisburg, PA, a risk management consulting firm which specializes in serving municipal entities. He will receive the CPCU designation next month. He can be reached by phone at (717) 232-7551; fax (717) 232-7552; or e-mail zcl@paonline.com. Mr. Zinoble gratefully acknowledges the ideas, editing, and proofreading provided by his colleagues: Ruth A. Moraski, CPCU, ARM, AU; Mary Stager, AU; and Dawn Little, AU