02 Jul New Business vs. Renewals – Which Is the Higher Priority?
Would you agree that you have finite resources at the end of the day? So, take the scenario of being asked to work on some nice new business opportunities. They will take some time to handle properly. Could the time needed for the new business impact your ability to ensure that some renewal accounts get the attention they need? Which takes the priority?
This is probably an age-old question that is tough to answer, so when you ask your boss which is more important, is the response “they both are?” I am pretty confident that your producer is going to push to get the new business handled. For most agencies, new business is a key metric that can heavily determine whether the agency hits its year-end revenue goals. So, obviously, new business is very important.
The E&O Plus agencies I am honored to work with seem to be doing a very good job managing this dilemma, especially if there is sufficient time to work on the new business opportunity. The situation gets sticky when the new business opportunity comes days before the x-date. Maybe the conversation goes like this: “he just got his quote from his current agent, and if we can save him money, we can land this account.” It doesn’t sound like a done deal – what if you can’t save him some money? Are you being used as a barometer for the client to see if his current agent is doing a decent job for him?
There could be multiple scenarios, so maybe the best approach is to “vet” the new business opportunity to see if it is worth pursuing. Is this prospect in an industry you have expertise in? How fast can you put the apps together, and what is the turnaround time from the carriers/wholesalers you would be looking to use?
Regarding the upcoming renewals, are they in undamaged shape? Are any renewals in jeopardy of leaving the agency? I have seen some situations where the agencies were so focused on bringing on new business that a number of renewals were totally missed and expired with no replacement coverage put into effect. That is definitely not a good scenario!
Agencies should have a strong focus on renewal tracking, and if the account needs to go to market, the remarketing should be handled in sufficient time to secure some replacement options. This begs the question – is it clear who has the responsibility to track renewals from beginning to end? If the account is scheduled to be renewed in five days and a renewal proposal has not been provided, does someone know about it, and are they making sure the necessary people know about it?
Some of the issues cited in this blog might be appropriate to raise in an upcoming staff meeting to see if everyone is on the same page. Hopefully, this is not an issue of concern.