The following blog post is adapted from an article I wrote in 2012 which, itself, was updated from an article I wrote in the mid ‘90s. IF the P&C insurance industry is really headed into a hard market, I think you’ll find this information invaluable. If not, the information should still be of value. If you’re not in sales, service or underwriting, please pass it along to someone who is. Enjoy!

P.S.  I just completed a residency at the Rockvale Writers’ Colony where I finished the last draft of my forthcoming book “The 7 Maxims of Time Management.” The book should be available on Amazon somewhere around the end of February. That explains why I have not been blogging much lately. Next week I should be resuming a fairly regular schedule of blogging, especially about insurance coverage and claims issues. See you then.


12 Tips for Selling in a Hard Market

Many people in the P&C industry, particularly agency CSR’s and a number of producers have not yet had the ‘pleasure’ of experiencing a hard market. Some pundits claim we are entering a hard market. That remains to be seen but, if true, a hard market presents a number of selling problems. On the other hand, it also presents opportunities. Below are 12 tips that might improve your sales results in a hard (or any) market.


What is a Hard Market?

The very first article I ever published was in the December 1981 CPCU Journal called The Underwriting Cycle and Investment Income.” If you want a ‘brilliant’ historical analysis of underwriting cycles, click the link to download a PDF of the article, then keep it at arm’s length on your bedroom nightstand…if you know what I mean. That being said, hardcore insurance nerds might actually find the article interesting, at least from an historical perspective.

Historically, a hard market is part of the cyclical nature of the insurance industry. Believe it or not, at one time, the P&C industry experienced fairly regular seven-year cycles of soft and hard markets, tempered or exacerbated, by investment results.  However, the last really significant hard market was probably in the mid-80’s.

A hard market is characterized by increasing rates and/or reduced industry capacity which leads to affordability and/or availability problems. In addition, both underwriting and claims adjusting usually become more stringent. In the current marketplace, these conditions are exacerbated by increased uncertainty about loss exposures from cyber to terrorism, etc.

A hard market presents problems and opportunities. The bad news is that competition could lead to lost accounts. The good news is that competition could lead to lost accounts! That is, it is probably not desirable to retain all existing accounts…more on this later.

And there is more potentially good news…since many carriers are in the same boat, the hard market could lead to new business. In addition, increased premiums means increased commissions (until or unless carriers start reducing them again)…you can use this increased revenue to improve and expand services in a way that differentiates you from the competition.

So, let’s take a look at 12 tips you can use to improve your sales performance during the hard market.


Sales Tip #1:  Know your buyer

Whether you’re selling BOP’s or Tupperware, you can really only sell four things: (1) price, (2) product, (3) service, and (4) relationship. When it comes to insurance, about 50% of customers are relationship buyers, 25% are price buyers, and 25% buy on the basis of product (10%) or value (15%). Everyone expects competent, if not outstanding, service. If you know where your prospect/insured falls, you can tailor your proposal to them.


Sales Tip #2:  Really know your buyer

  • Develop a client profile/rating sheet…include everything you know about that buyer down to their favorite TV show. I met with an accountant once and, during our meeting, he apologized that he had to take a call, but I could stay where I was. It was a customer of his and, just before picking up the phone, he brought the customer file up on his PC. Included in the customer’s profile was all kinds of personal information, from family member names and birthdays to hobbies and comments he noted from past meetings. By mentioning things like Little Bobby’s birthday coming up on a couple of weeks, he took the opportunity to strengthen the customer relationship on a personal “Wow, this guy remembered my kid’s birthday!” level.
  • Identify the real decision makers…you cannot sell insurance if you’re going through a gatekeeper.
  • Learn all you can about the buyer…talk to employees, business associates and others to learn what makes that person “tick.”
  • Stay in frequent contact…communicate with VIP, at-risk, and high potential customers frequently and rarely should the contact concern their insurance account. Avoiding the perception that the only reason you’re making contact is to sell something is important to building the relationship. Devote 20% of your time to relationship building.
  • Pay attention to the little things…Joe Girard, listed by the Guinness Book of World Records as the best car salesman in the world, said his secret was greeting cards…sending birthday, holiday and other greetings. So, keep in contact and do little things throughout the year for clients (e.g., email a magazine article on a subject you know they’re interested in) and do something really memorable shortly before renewal time that’s unrelated to their insurance account. Don’t use only your cell phone or email to communicate…getting personal snail mail and hand-written notes increasingly has impact.


Sales Tip #3:  Don’t give up on promising prospects

According to Guerilla Prospecting, many contacts with fewer customers is better than fewer contacts with many customers:

  • 1 sales contact =    2% of sales closed
  • 2 sales contacts =    3% of sales closed
  • 3 sales contacts =    4% of sales closed
  • 4 sales contacts =  10% of sales closed
  • 5 sales contacts =  81% of sales closed


Sales Tip #4:  Never, never give up on promising prospects

Industry consultant Chris Burand once told me that perhaps the #1 time waster for producers is the failure to qualify prospects. But, once you’ve identified quality prospects, don’t let initial pushbacks stop you.  According to the Darnell Corporation, 80% of sales are made by 20% of sales people. Over 50% of all of Avon’s sales come from 17% of their sales reps…those reps produce 10x the revenue of others. The reason for this is that most sales people quit after one or two initial contacts:

  • 48% quit after the first contact
  • 25% quit after the second contact
  • 12% quit after the third contact
  • 5% quit after the fourth contact
  • 10% quit after the fifth contact

As you can see from the Guerilla Prospecting figures above, 80% of sales require at least five contacts.


Sales Tip #5:  Recognize “No”

The following statements all mean “No.” However, as pointed out above, don’t take “No” for answer…it may take 4-5 “No’s” until you get a “Yes.”

  • “I’ll think it over.”
  • “We’ll discuss it and let you know.”
  • “I’m just looking at all my options.”
  • “The price is just too high.”
  • “I’ll have to get back to you.”
  • “Let me see how this fits our budget.”

Source: “Six Rules of Salesmanship to Clinch the Deal,” Home Office Computing, August 1995


Sales Tip #6:  Solution-Oriented Selling

If I said I could come into your agency or company and show you how to close over 90% of your sales leads, increase your retention rate to 99.9%, and more than double your book of business in less than a year, would you hire me as a sales consultant? You would?! That’s odd because notice that I’ve made no mention of what I’d charge you for this service. ! When you offer solutions – to create opportunities, solve problems, reduce risk, etc. – price is the last thing that will come up during the negotiations.

Let’s face it, most insurance is sold the same way…similar approaches, similar coverages (in the minds of the prospects), similar proposals, claims, promises, etc. All these things being (perceived as) equal, the ONLY differentiation is price. You must determine what is your “unique selling proposition,” what differentiates you from the masses.

Tim Wahl is an independent commercial lines agent in Missouri. He tells me how often a prospect such as a contractor comes into his office wanting him to “save me money.” Invariably, desirable prospects leave as customers paying MORE than they were paying before. One of the reasons for this is that Tim, as a coverage expert, is able to show the prospect all of the holes in his insurance program and how Tim can fill those holes for little additional premium. He’s selling value, not price.

Consider offering a package of solutions unlike anything offered by your competition. Consider free, discounted or in-house seminars, loss control services, or other perks…with increased commissions, you may be able to offer these perks essentially for free.


Sales Tip #7:  Painless Selling

With regard to acquiring accounts during the hard market, the best prospects are those experiencing problems with their current insurance program…and you can relieve their pain. If the person is a “product buyer,” you can also create pain by (like Tim Wahl above) showing coverage gaps compared to your products…be sure to use vivid examples. Demonstrate how your proposal positively affects their bottom line by reducing risk and providing that proverbial “quiet night’s sleep.”


Sales Tip #8:  Relationship Selling

My personal lines account has been with the same agency for 45 years. They don’t always offer the best “product” and I can likely get a better price elsewhere. If you read Tip #1, you know, then, that they probably retain my account based on our relationship.

My mother worked for this agency for a number of years until she became terminally ill and passed away 40 years ago. During her final year, she was only able to work a few weeks out of that year. At best, one could expect, given a decent insurance package, that she’d get 60% pay under a salary continuance or LTD program. However, the agency owner continued to issue her full paycheck every two weeks whether she was able to work or not.

When the call came from the hospital that she had only hours to live, I raced there at 2:00 a.m., just before she passed away. At 3:00 a.m., the agency owner and his wife showed up at the hospital to offer any help they could. I’ve never forgotten what they did for my family and, for that reason, I’ve never considered moving my account to save a few bucks. If you want to read more about this story, check out my blog post entitled How do You Create Customer Loyalty? Why Do Consumers Stay with a Particular Agent or Carrier for Years?

Relationships create loyalty. Strong relationships based on genuine interest, empathy and compassion create fierce, almost fanatical, loyalty. If you treat your customers like family and, when the need arises, you go beyond the call of duty, no coverage perks or pricing discounts can approach the effectiveness of such relationships.


Sales Tip #9:  Use testimonials

Include testimonials of long-term clients in your marketing materials. Every time you’re involved in a claim “victory” for an insured, ask for a testimonial. Every time you exceed the service expectations of a customer, ask for a testimonial. Target these testimonials so that recipients of your materials know the persons if possible. Flaunt the fact that so-and-so chose your agency or company over that of other competitors. If needed, ask a respected client to make a personal call to a customer on the fence…prospects will appreciate your personal interest and value the opinions of a peer.


Sales Tip #10:  Multiple closes

There are dozens of closing techniques that you can use and you can learn all about them if you attend a formal sales training program. You can incorporate more than one technique in an attempt to close the account. For example:

  • Direct close…simply ask for the account.
  • Time-driven close…rates are going up next week, so buy now.
  • Relationship close…as indicated above, this is a foolproof method.
  • Deal/concession close…but wait, there’s more! At each balk, up the ante by adding freebies like discounted seminars, loss control services, etc.


Sales Tip #11:  World class service

Provide consistent, personalized, responsive, reliable, accurate and professional customer service. Do the unexpected to dazzle them with your commitment to service excellence. For a good article on this, check out my blog post Puttin’ on the Ritz…Building a Customer Service Culture.” Also check out the book The Southwest Airlines Way: Using the Power of Relationships to Build High Performance.” I myself have numerous customer service anecdotes about Southwest, including this short blog post I called Krulak’s Law.”


Sales Tip #12:  Overcoming objections

Entire books and seminars have been devoted to this subject. Some objections are real and must be addressed while others may mask hidden agendas. Objections, in and of themselves, are not bad. According to Learning International, you are 20% more likely to close a sale that includes objections than if the prospect or insured raised none at all.

To minimize objections, sell the benefits, not the product…focus on emotional (e.g., security/risk concerns) or financial (e.g., cost reductions) benefits. Focus on why they should buy, not their objections. Anticipate and be prepared for objections.

Avoid bringing up objections that the prospect would not have raised…e.g., don’t start out the proposal with, “I know the price is a lot higher than last year, but…[add excuses here].” Avoid the discussion of price until after you’ve demonstrated the superiority of your proposal and never make excuses.

The Prayer of Alcoholics Anonymous says, “Lord, give me the courage to change the things which can and ought to be changed, the serenity to accept the things which cannot be changed, and the wisdom to know the difference.” This prayer could apply to three major types of objections:

  • Sincere objections…you can negotiate around these.
  • Hopeless objections…you got to know when to hold ’em, and fold ’em.
  • “Smoke screen” objections…as pointed out above, these have nothing to do with the product, but rather mask a hidden agenda…fix that problem and you’ve got the account.

One other thing to keep in mind, particularly if you further your learning by attending a sales training program, is to remember that you’re often selling to a sales person. In many cases, they’ve seen all the canned sales tactics.

In closing (no pun intended), view a hard market not as an impediment to sales success, but as an opportunity to acquire accounts from people who have not read this article. 😊


For a link to an IRMI LinkedIn discussion on the insurance and risk management implications of a hard market, CLICK HERE.

And here’s a hard market video from Amber Wuollet: 

Note: As always, you are free to reprint any of my blog posts. All I ask is that you include an attribution of author and source and my copyright notice, in this case “Copyright 2020 by Reprinted with permission.”

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Bill Wilson

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One of the premier insurance educators in America on form, coverage, and technical issues; Founder and director of the Big “I” Virtual University; Retired Assoc. VP of Education and Research from Independent Insurance Agents & Brokers of America. Reprint Request Information