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An insurance lesson for distributors from the Notre-Dame fire

May 3, 2019

Even the most cherished institutions are vulnerable to catastrophe, underscoring the value of risk management reviews for your clients’ and prospects’ businesses.

Bart Shachnow

Sales Performance Director

As Sales Performance Director, Bart, with the help of his team, develops and delivers a broad range... About this expert

Notre Dame

The fire at Notre-Dame Cathedral in April was catastrophic but fortunately resulted in no loss of life. Moreover, Reuters has reported that 90% of the relics and artworks may have been saved. All good news.

Notre-Dame is a building of huge historical importance, with visitors numbering up to 13 million per year. It’s safe to assume that the various guardians of the building have extensive access to the resources and expertise necessary to protect and, ultimately, restore it.

Which raises a timely question: Where does that leave everybody else? That is, the thousands of businesses that do not have the kind of resources available to the administrators, managers and guardians of Notre-Dame.

The typical business faces loss exposures that can range from serious to potentially catastrophic. Our job is to help our customers identify, prioritize and manage risk so that they can pursue their business objectives.

So what I’m proposing is that, in discussions with your clients and prospects, you offer a second opinion on their risk management programs, with a slight twist (because I know many of you probably give second opinions already). This version of the second-opinion pitch can be a “win-win” situation for everybody. You and your agency get a chance to demonstrate your knowledge and experience as it pertains to the unique risk profile of the client, and their business can benefit from your assessment.

It could be that your analysis confirms that the prospect’s risk management strategy does indeed meet the needs of the business. Fine. That can be reassuring to the stakeholder. I would, however, follow up that conclusion with a request to keep the door open to pursue future referrals.

The conversation might sound like this:

You: Morgan, thank you for giving us the opportunity to review your current risk management and insurance plan. It’s our opinion that it is currently well designed and managed. We can’t add meaningful value that would warrant our further involvement at this point. But we would like to keep the door open and conduct this review again in the future, perhaps a year from now. Would that be acceptable?

Morgan: I don’t see why not.

You: Did you find value in this exercise? Was it worthwhile?

Morgan: Sure. I feel I might be able to sleep a little better knowing our current strategy seems to make sense.

You: Great. I’d like to ask another question. Do you know of any other companies that you deal with — say, your suppliers or customers — who could benefit from this type of analysis?

Prospect: Yes, there might be a couple…

At the same time, a common objection to the second-opinion request might play out like this, along with what can be an effective rebuttal:

Morgan: I really don’t want you to go through this process. That could be a lot of time and work on your part for nothing. We’re happy with our [broker, carrier, adviser, etc.] right now and I think the odds of us making any changes at this time are slim to none.  

You: I understand that. We get that reaction from a majority of prospects we offer this service to. But our success rate is high enough to more than justify the time, effort and resources we’ll need to put in. Plus, in addition to the benefit of another point of view, you’ll also get to know us better. So from our standpoint, the effort is entirely cost-justified.

Of course, your second opinion analysis might reveal serious gaps that can justify your involvement and intervention. Whether the business chooses to adopt your recommendations is, of course, up to them. You still come out ahead, having helpfully identified coverage and risk management gaps and receiving potential referrals and the opportunity to revisit the prospect’s situation in the future.

So, again, the strategy and benefits of selling a second opinion are numerous:

  • No one has a monopoly on good ideas. Catastrophic loss can happen anywhere, at any time, to even the most expert, experienced and well-resourced organizations. Don’t be afraid to invoke such examples (like Notre-Dame) to help sell the second-opinion opportunity.
  • A second opinion is a win-win for all parties concerned:
    — You demonstrate your experience and acumen and could win a potential piece of new business and/or you create another opportunity in the future. You may also come away with quality referrals.
    — The business has the benefit of a second opinion that can reinforce the soundness of their existing strategy and/or can comfortably revisit the situation in the future. They also have the opportunity to take immediate action to remedy a problematic situation (with your help).
  • Your second opinion can be narrow (relevant to a specific loss exposure or policy) or broad (like an organization’s safety training or enterprise risk management program). Try to do whatever you can to get your foot in the door.

Second-opinion prospecting gives you an opportunity to practice and test your approach and value proposition across a broad range of clients. This can also help you fine-tune your approach.

As always, I would love to hear from you. Email me your comments and suggestions.

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