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How Does a New Agent Learn How to Write a New Commercial Account?

Author: VU Faculty
Question“As I know more, I know less, as an independent insurance agent in Minnesota and moving from personal lines to commercial lines. How does a new agent learn how to 'write' a new commercial account? You can learn how to make a bomb on the internet, but to learn how to underwrite a 'dry cleaner,' 'dirt contractor,' 'electrician,' etc. is difficult. So, IIABA, National Alliance, etc., how is one to learn the specifics of risk underwriting for commercial accounts new to an agent?”
Answer?Great question. We have written about what a new personal lines producer might try, but the complexities and magnitude of moving cold into commercial lines is a daunting task. Some new commercial lines producers come from other industries and bring with them some niche knowledge about that industry that can get them started. So, we polled the VU faculty and got some ideas, as outlined below.
Faculty Response
I've heard advice given that we should not write exposures or coverages which we do not have experience writing.....but if that were sound advice, none of us would have ever written our first policy!
The better advice is to recognize what you truly know versus what you are not so clear on. If you are not so clear, then don't be afraid to ask for help...from your carrier's underwriter or from another experienced producer. There is too much to learn about the complexity of different exposures and how to best address coverage for them.
A helpful tool is a risk-specific checklist. A risk-specific checklist is designed to help uncover the exposures specific to a particular risk (such as a Lumber Yard, Bakery, Printing Shop) and offer suggestions for coverage. The biggest mistake is pretending that you know everything when you don't. It should never be considered a weakness to say "I don't know for sure, but I can find out."
Faculty Response
A good place to start is the A.M. Best Company’s
Best’s Underwriting Guide for Commercial Lines, which addresses the operations and issues involved with many different types of businesses. At one time they ranged from “abattoirs” to “zoos,” which I always found ironic, but that may not currently be the case.
Faculty Response
Get your CPCU, CIC, and other designations. Use risk management questionnaires to find out the exposures. Subscribe to all the insurance internet services like Virtual University, IRMI and others to keep abreast of current insurance issues. Yes, selling insurance is heavily dependent on knowledge. It takes a strong commitment to learning to properly insure clients. 
Faculty Response
This may be a darn good question without a good, comprehensive answer. One way to learn how to deal with a particular class of business is to see how the specialists in that particular class of business handle their package policies. After you have found the best three or four packages from companies that really know how to write this class of business, you will be 90% of the way there, because even the best carriers will leave important things out.
Beyond that, the “one size fits all” philosophy is a recipe for disaster, and it is important for an agent to be able to discover the unique risks that apply to each particular customer. Underwriting guides, such as A.M. Best, are good first steps in the discovery process. It is also good to get a complete supply of all the supplementary applications that carriers may use, and review all the questions to see not just what the underwriters ask, but to read between the lines to see what the questions are trying to expose about the risk.
As a new agent, it may be appropriate to be an order-taking agent for the first several years, until such time as you fully understand the business models and operations of the classes of business you intend to serve. Later, when you have developed a level of expertise with your selected classes of business, you can move towards being a trusted advisor with a “special relationship” (a “special relationship” is often defined in law) with your customers, and you might then start working on a fee basis, rather than on a commission basis.
Faculty Response
You develop a learning program with your bosses that includes in house training and outside training and education which might combine programs available in classrooms and online. If you agency focuses on “cheap and easy” online CE, find the good stuff and pay for it yourself.
Find out which of your agency insurance companies offer producer training classes. Some insurers sponsor producer training schools that immerse the students for a few weeks at a special campus. Some offer online classes or local classes throughout the year. Make sure you ask the people in the know and not others who say “Gee, I never heard of that.” Here is an example of ones you could find on the Internet.
Look for other educators in your geographical area, starting with your state Big “I” association. Unfortunately for some and good for others, many classes are online which allows them to reach more people but may not necessarily be the best training method.
Go to the agency owner and have him or her design an educational program to fulfill your personal needs as well as those of the agency so you could advance as you learn. That program should include outside classes, in-house hands-on training and mentoring with successful CSRs and producers in the agency. 
Faculty Response
Focus on risks and industries you know something about. Research those you don’t. Years ago in my old ISO days, I had to do an underwriting and loss control inspection on the Louisville steam plant with another staff member. I knew virtually nothing about steam plants, especially those covering several city blocks and supplying power to most of the downtown area, hospitals, etc. We spent a couple of weeks part time researching everything we could find out about their operation and exposures. Best’s Underwriting Guide (BUG) was a big help, along with some specialty resources. This was before the internet, so it would hopefully be easier today.
We spent several days with the plant manager and his crew and it was clear at the outset that they weren’t particularly thrilled with having to spend time on yet another insurance inspection. However, when my partner started asking questions that indicated he knew what he was talking about, they got excited. If you can convince the prospect that you know and understand their operations and exposures, you’re halfway to the sale. The hard part is actually obtaining that knowledge and doing the right thing to address their risks.
If you want to target a particular industry – restaurants, wineries, marinas, contractors, or whatever – learn all about them. Talk to people with years of experience. If the industry has one or more associations with associate memberships, join and attend their meetings. Try to get speaking gigs or write insurance or risk management articles for their publications. Get known as a knowledge source and problem solver. Network, network, network. Learn, learn, learn…and I don’t mean learning by taking the cheapest CE crap course available (like this).
Use risk and coverage questionnaires. The Big "I" Virtual Risk Consultant is very inexpensive for the resource you get. IRMI has good questionnaires. There are software products (e.g., Vertafore Producer Plus) that are excellent. Best’s Underwriting Guide. Rough Notes "Coverages Applicable." Comb your carriers for specialized information used by their underwriting and loss control people. Make use of the VU. I would strongly encourage subscribing to IRMI's reference materials.
And, remember, there’s nothing wrong with walking away from an account you don’t feel comfortable about. It’s in your best E&O interest and that of the prospect.
For more information, check out these VU articles:
Note: Do you have any recommendations for new commercial lines producers? If so, email and we’ll include your advice here.
Last Updated: February 2, 2015
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