Strategies and tips for a hard insurance market

The current hard market insurance landscape is among the biggest challenges facing agents into 2024. Read the following tips to help navigate it successfully.

Hard market insurance in a hard insurance market

The current “hard market” insurance landscape is one of the biggest challenges facing agents right now and will likely continue into 2024. Now is the time to prepare and adjust strategies for short and long-term growth. 

According to the Risk Management Institute, a hard market, sometimes called a seller’s market, is the “upswing in the insurance market cycle. It happens when premiums increase, coverage terms are restricted, and capacity for most types of insurance decreases.” 

Fact: With these conditions, carriers will continue to pull out of certain markets or offer limited products, making it difficult to find commercial coverage. For agents, this hard insurance market means more work to remarket and retain customers. And for the small and medium-sized business (SMB) customers that agents serve, insurance will be more expensive and harder to obtain.

During hard market insurance conditions, remarketing is overwhelming and time-consuming, so streamlining processes will be key to driving growth. An agent’s workflow should be simple and efficient in order to free up time to focus on how to individualize client support and advise them on the right coverage. 

Tech systems such as raters, agency management systems, and marketing automation software will bolster backend processes in order to realize higher quote yields and agency growth.

Additionally, these software tools can yield data insights for an agency and strengthen its understanding of clients’ needs. A concise data dashboard will help agents make better business decisions regarding the “how” (and the “why”) their resources are spent in a hard insurance market.

Eight strategies to successfully navigate hard market insurance conditions

Let’s dive in for some tips on how to leverage Bold Penguin’s integrated product suite with your existing systems, to help navigate this challenging hard market insurance industry phase:

Increase market access

With these hard market insurance conditions, remarketing will require exploring additional coverage options. With carriers shifting and pulling out of markets, an individual agent may find it difficult to keep up with the available options, and in many cases, they will not have direct access to needed carriers or products. Agents need confidence that they are finding the right coverage for their customers, and their customers need confidence that their investments will be protected. Agents can accomplish both of those things and more with the Bold Penguin Terminal, a leading commercial quoting platform that brings carriers and agents together, identifying and solving for appetite gaps. 

With the Terminal, agents can go deeper with current carriers, add new admitted carriers through sub-appointments, or expand into the non-admitted space. Agents can also obtain real-time quotes from multiple carriers, and if an agent’s typical carrier is now out of appetite, they have a new quote ready to go. With Bold Penguin’s diverse carrier panel, agents can find alternative market options to fill these gaps during a hard market. 

Also, given these hard insurance market conditions, one might consider finding reliable access to the E&S market with the Terminal, which has E&S built into the existing workflow. The Terminal can pre-fill ACORD forms so if all admitted markets are declined, there is a seamless next step with completed paperwork for the E&S market. This solution can markedly reduce the number of dead ends and improve the bound premium. 

Rely on strong carrier relationships during a hard insurance market

Having a strong relationship with an underwriter and carrier team under hard market insurance conditions will allow agents to get ahead of upcoming carrier changes. This way, agents can help guide customers through the changes and minimize surprises. Having these strong carrier relationships provides excellent customer service and also saves steps in the remarketing workflow. 

Additionally, top carriers provide training and materials to understand their core products better, as well as the requirements to help process a quick and clean review of accounts. 

Simplify the quote and bind process

Not only does Bold Penguin’s Terminal help quote new business more efficiently, it also saves time when re-quoting existing customers. In a few minutes (not hours or days), the Terminal can provide accurate, up-to-date information to prove that, despite what could be a 20% increase on the renewal, the agent is still pursuing the best option. An insurance agent is the business owner’s trusted advisor. Quoting in the Terminal gives all parties the needed confidence that investments are protected. A simplified quote and bind process makes this workflow quicker and more accurate, therefore, more profitable for agents.

Lean on data for better business decisions

It’s mission critical to step back and truly understand who an agent’s customers are and what products they need. Analyze the composition of the book of business proactively to be prepared for renewals as carrier offerings evolve. 

The Reports tool within the Terminal can help accomplish the above. It is a state-of-the-art quotes and commissions dashboard that helps track performance and make strategic, data-driven decisions. A hard insurance market is the time to hone in on what you are good at and become an expert at it. If agents can lean on data to have a strong analysis of their clients’ needs, they’ll be able to anticipate solutions in a changing market and provide better customer service, which will, in turn, drive long-term business growth. 

Pick a focus area

Once an agent has a better view of their clients’ current and potential needs through the Terminal Reports tool, it will be easier to find common threads in terms of coverage types or regions. During hard market insurance conditions, focus on becoming an expert within those common threads. This will strengthen an agent’s position as a trusted advisor, now having the ability and confidence to offer the best available products and coverage options.

Agents might need to work with several carriers within a focus area, which is possible because of the Terminal’s additional market access, but at least the agent knows which carrier options they have for routing new business. 

Monetize out-of-appetite risks

During a hard insurance market, it’s time to rethink revenue streams and lead generation. The Bold Penguin Exchange can help accomplish both things. The Exchange is the largest prospect marketplace for small commercial insurance to grow business and unlock new revenue opportunities from out-of-appetite risks. 

If an agent has exhausted all the quoting options and still can’t address the prospect’s needs, the Exchange can help monetize that prospect that the agent worked so hard to get through the door. And the small and mid-sized business (SMB) customers will still have the opportunity to protect their investments.

And remember, now that the agent has picked a coverage type or region to focus on, they can pick up new prospects from the Exchange as well, using customized filters to make sure the prescreened prospect is the right fit. 

Build a digital home

Customers are used to a digital experience for everything, including shopping for insurance. During hard market insurance conditions, SMBs will likely be shopping for new or renewal insurance coverage online. The Bold Penguin Storefront Pro allows agents to build a digital online storefront quickly and easily, with no tech resources. 

Storefront Pro builds a digital storefront for an agency and is a low-cost tool that provides SMBs with a digital application for small business insurance quotes. This drives agency growth by putting a straight-through quote-to-bind digital application at customers’ fingertips with optional agent interaction. It also increases conversion by directly connecting agencies with their appointed carriers in the Terminal to receive a bindable quote in real-time.

Don’t panic

It is easy to be overwhelmed in this type of challenging market landscape. By taking the time now to understand clients’ needs for hard market insurance and how to leverage technology to address those needs, agents will be better prepared for the continued hard market in 2024 and emerge even stronger than before.

Bold Penguin beyond hard market insurance

New to Bold Penguin? We serve agents, carriers, networks, and channel partners through four products, including the Terminal, Exchange, Storefront, and Analytics.

As insurtech industry leaders, Bold Penguin frequently shares news and insights. Stay tuned to the News page for updates like these recent articles and releases:

Contact Bold Penguin with questions about hard market insurance and/or how we could work together.

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