Three Tips to Strengthen Your Negotiation Skills For Your Next Insurance Renewal

Regardless of whether or not you’ve had favorable loss experience this past year, insurance renewals are likely to be challenging again this year. Even with some encouraging reports that certain segments of the commercial insurance market may be flattening, another year of substantial losses from natural disasters and unrelenting cyber-related claims is causing insurers to be especially diligent in their underwriting practices. Thus, risk managers need to be well-prepared for their renewal discussions with insurers this year. 

Here are three tips to help swing negotiations in your favor.  

1. Know your numbers.

Of course, be fully aware of the premiums, limits, losses, ratios, and history for each of your policies and related coverage lines. While it’s best to maintain all this information in your own risk management information system with ready access to data whenever you need it, you can also try to get specific policy details from your broker or through portals offered by your insurers. 

Underwriters also want the latest information on your company, including how you’ve managed exposures throughout the COVID-19 pandemic and whether or not your business model and risk profile have evolved. You should also share your process for assessing and managing risk on a daily basis throughout your enterprise. 

When you’re ready to meet with your insurers, be sure to update them on the status of any newly launched or ongoing risk management initiatives, including formalized programs such as enterprise risk management (ERM) or governance, risk, and compliance (GRC) efforts. Of course, remember to be prepared to highlight any recent risk management successes.

We may be biased, but new technology solutions (like LineSlip) give you the opportunity to digitize the information from your existing and past policies, so you can spot trends and evaluate your relationships with different insurers on your program before meeting with them.

2. A picture is worth 1,000 words.

Never underestimate the power of clear, concise and accurate visualizations. Use charts and images that tell your story, including loss history, trends, current status and target future state outcomes of your risk management initiatives. 

Include graphics that show the future state targets for costs, including premiums, loss costs, and other expenses, as part of the presentation. This not only demonstrates the value you place on your partnership with individual insurers and commitment to maintain or improve your risk profile, but it also can give them direction and insights on how they can continue to help meet your goals.

3. Remember: Negotiations are about Relationships.

Asking questions and actively listening are two of the top-suggested tips for negotiating, but what underlies that advice is the fact that negotiations are all about relationships. Coming to the table with a top-notch presentation is only part of the equation; you also must understand the history of your company’s relationship with your insurer (and your relationship with your rep). 

Maintaining these relationships requires a confident approach that isn’t too tough or too nice. Small talk should be welcomed (in moderation) and communication should be confident and direct. Above all, remember that the person you’re negotiating with has their own set of pressures, and the better you understand their position, the better equipped you are to create a win-win situation.

The bottom line: Prepare.

As you can see, a little extra preparation on your part might make the difference in your renewal outcomes. By sharpening your focus on key elements of your program, loss history, risk profile and current developments, as well as building more graphics into your presentation, and taking care to understand the relationships in play, this year’s renewal negotiations can go more smoothly, and potentially favorably, despite the challenging insurance environment. 

Further Reading:
9 Negotiation Tips for People who Hate Negotiating (Business Insider)
The Importance of a Relationship in Negotiation (Harvard Law School)
How to Negotiate: 5 Tips for Negotiating Better (Masterclass)