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Letter of Credit (LOC)
Issued by a banker to a person to whom credit is given with draft authorization on the issuing bank up to a certain sum, with a guarantee to accept the drafts provided they are appropriately made.
Insurance Industry News from ProgramBusiness.comGo Upstream
As I visit with Brokers across North America, there is one consistent message that I believe is critical to impart. If you dont hear anything else, please get this…You must go upstream! By upstream, I mean go after the larger and more complicated accounts. Go where the competition isnt.
I was speaking last week with a broker who relayed an interesting observation from one of his clients. This particular client had migrated from being the CFO of a large company to a smaller one. “Whats wrong with you insurance guys?” he chided. “When I was the CFO of a larger company, I rarely heard from brokers soliciting my business. Now I get calls daily from someone who wants to work on our insurance program!”
As a successful broker myself, let me tell you one of the best-kept secrets… There is less competition at the top than at the bottom! Why? Because there are less brokers that are confident enough to talk with a sophisticated CFO. Successful Consultative Brokers know this and regularly feast at the table of less competition. Here is how they get a leg up:
They are willing to become better business people. They recognize that a sophisticated client wants to deal with other sophisticated business people. They have taken the time and effort to sharpen their business skills. See our prior Briefing, “Be a Businessperson First” for more on this subject. They talk in the language of their buyer. When having a client discussion or client presentation they make certain that they can relate the data directly to the clients sales or business model. They believe in the value of their organization. They understand that a sophisticated buyer does business with organizations and firms. This is the B to B (business to business) model. When bringing in their organization, they are institutionalizing their firm. They understand Enterprise Risk. These brokers know that risk to a CFO goes well beyond the traditional property/casualty hazard risks. In fact, to many CFOs, the hazard risk is the smallest part of their worry. These brokers are able to discuss such things as brand risk, currency fluctuation, trade credit risk and other issues that keep CFOs awake at night. They strongly communicate a clear Value Proposition. Not only can they communicate it, they believe it! They are very knowledgeable regarding the TCOR (Total Cost of Risk) formula and can demonstrate it in many ways. They are committed to bring value to their clients. As the marketplace continues to flatten and eventually soften, the ability to go upstream will be the salvation of successful brokers and the firms they represent. The smart players are making plans for this transition right now. They are not willing to wait until the bottom falls out of the insurance commodity… leaving them high and dry!
Oh, one more thing. July marks the 6th anniversary of C.R. Ekern & Company. On July 1 of 1998, I left the mega-brokerage world. It was my belief that regional brokerages could benefit from a consultancy and training firm dedicated entirely to large account production techniques. A very special thanks to all of our Private Clients, friends and readers across North America. As we enter our 7th year together, the best is yet to come!
For more information on the services and products provided by Rob Ekern, visit his website at http://www.crekern.com.
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