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With a new year upon us and the January blues setting in, you probably have many clients tightening their belts and trying to cut costs. Often, insurance is the first budget item to be closely scrutinised as clients start shopping around for cheaper cover.
As you know, cheaper doesn’t mean better when it comes to comprehensive insurance. Now is the time to remind clients about the pitfalls of opting for cheap insurance and the cost of being uninsured.
Here are four important points to highlight:
1. The value of insuring adequately
While many clients are cost sensitive in a tough economic climate, if asked what they value in insurance they will usually cite excellent value and great customer service. As insurance is an intangible product, it’s important to promote the value that your client will receive. This article gives great advice on explaining value vs. price but as an experienced intermediary you will know best which things will be most important to which clients. Some people care most about peace of mind; others about a smooth claims process or tailor-made cover.
Together, you can run through this checklist of what we think makes quality insurance.
2. The pitfalls of underinsurance
Underinsurance is a fact of life in South Africa. Every third South African home is underinsured by at least 30% and the South African commercial sector is also traditionally underinsured. In most cases the gap of underinsurance is highlighted at claims stage.
Cover for Commercial insurance can be complicated and is best navigated with the help of an expert intermediary. As an intermediary, you play a crucial role in properly evaluating prospective client’s insurance risk from all angles and helping them establish the correct value of items to be insured, as well as deciding if business interruption cover is required. You can walk them through the common pitfalls of underinsurance – get more information here.
3. How to proactively manage risk to reduce premiums
It’s important to remind business owners they play an important part in managing risk and avoid costly accidents before they happen. It will not only help to keep their doors open but also potentially result in lower premiums. This could mean installing a telematics system for a fleet, a sprinkler system to guard against fire risk or power surge protection equipment.
4. Working with an intermediary to reduce premiums
You might know that it doesn’t cost more to buy insurance from an intermediary but you’ll be surprised how many people believe the contrary. Therefore, it is important to explain your role to new prospects. You are not only saving them money – you are sharing your knowledge and risk management expertise with them. You will get to know their specific circumstances and offer discounts specific to them. For an intermediary, a client is a person or business with very specific needs – not just a policy number.
For more advice tailored to intermediaries, visit our blog for useful more articles.
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