To be pitch perfect, a broker needs to detail the new scheme they want the insurer to invest in.
You've had an idea in your head for some months now about the potential for a new scheme. Let's say you're based in a rural area with several farm shops and delicatessens. You already have a number of these firms as customers and you think you can build a successful scheme from your existing knowledge and your close ties with businesses in the area. After some research and a few phone calls to local farm shops, you think you know enough to persuade your insurance partner to invest in your new scheme.
Before making a formal approach to your insurer, you should consider the detail of your proposed scheme. Brokers, even those with other well-established schemes, sometimes struggle pitching speculative schemes to insurers. Remember insurers will be more cautious with speculative ventures, so they need to be persuaded as to the feasibility and viability of any new scheme. That is why a detailed proposition is essential.
So, how do you make sure you have the best chance of securing the support of your insurance provider?
Match your speculative scheme proposal to what the insurer can realistically insure
There are some businesses that simply don't fit with the insurer's risk appetite or their ethical profile. For example, gambling or tobacco companies may not be the kinds of business the insurer wants to be associated with. So look at schemes that the insurer is already supporting and get to know the insurer's business personality.
Demonstrate that you know your speculative scheme market
This is a broad area but basically, it's about asking yourself whether you truly understand the customers you'll be serving and their core needs. What do you know about this market? How saturated is the market in terms of schemes operated by other brokers? How will you distinguish your scheme from all the others? Ultimately, your insurance partner wants to understand the detail of how you're going to access the market and how you're going to stand out in order to grow and sustain your new scheme.
Play to your strengths
Some brokers that have successfully launched schemes have done so because they have a personal interest in and passion for the work of their schemes' customers. Having a passion for a particular sector not only makes launching the scheme easier but, more importantly, it gives you access to people you may already know through shared interests. This could include having access to networking groups that will help you reach new customers.
Have a marketing plan
A broker may feel really strongly about a speculative scheme idea but be unsure about how to reach the target market. That's why a strong marketing plan is a must when putting a proposal to your insurance partner. A robust plan will prompt important questions around how you're going to reach your market, your proposition and the timeframe for creating a long-term, viable scheme. Leverage the experience you already have with existing, successful schemes so that you can demonstrate a track record. If you can demonstrate traction to the insurer, then your marketing plan will be all the more attractive.
Quiz your insurer
You've done the hard work, now you need to ensure that your insurer can work with you to support your scheme. You need an insurer with the right underwriting skills, claims expertise, product development expertise and the ability to provide delegated authority and to run well-governed, compliant schemes. Don't be afraid to ask how they will support you in growing your scheme. The key to success is a strong, mutually beneficial partnership.
We believe that as many as 70% of brokers have an interest in launching and running a scheme. While it may feel daunting to start your own scheme, opportunities do exist, even in today's crowded market. Do your market research, choose an insurance provider that will support you and your scheme and remember that the biggest schemes in the market today started from small beginnings.
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