Bank Insurance Renewal Ruminations

Since 2000 I have built a consulting practice of managing and buying insurance for banks around the US. Arguably, I am involved in the purchase of more bank insurance than any other person on the buyer’s side of the table.

I help bankers buy and manage their insurance policies. I find and fix overage gaps and overlaps. I never sell insurance and never accept fees or commissions from insurance agents or insurance companies. I don’t accept gifts, meals, or favors from insurance agents or insurance companies. When we meet for coffee, I buy the coffee.

Here are some ideas that might help you better manage your next renewal.


1 – Start Thinking About the Renewal Early

Start thinking about your renewal six-months before your insurance expires. The single most common cause of renewal complications is lack of time. Considering your options six-months before the renewal is not too soon. Talk with your agent about your current insurance, claims you have had, the insurance marketplace, coverages you don’t have that you should consider, changes that are taking place at your bank.


2 – The Agent Decision

After your conversation with your agent, consider the idea of getting a new agent. Are you getting value from the current relationship? Is the staff responsive to your requests? Does your agent bring ideas to you on ways to improve your insurance and reduce your risks?

With my tongue only a little in my cheek, I often say, “Eighty percent of my banker clients have an incestuous relationship with their insurance agent.” Perhaps you feel you must do business with your current agent. Maybe she is a stockholder or board member. I have a bank client where the insurance agent it the wife of the bank President. Perhaps your insurance agent is a subsidiary of the bank.

If you can’t change agents, then the issue becomes, how do we ensure the most value from our agent. Maybe everything is just as you want it. Perhaps it’s time for, as my dad used to say, “A come-to-Jesus meeting.”


3 – Will You Get Other Quotes?

Is this the year to consider insurers other than your current insurers?

If you had other insurer’s quote in the past two years, have your agent get a premium indication from your insurer sixty days before renewal. You don’t need firm quotes. You want an idea of what is going to happen. “We will hold rates constant.” is sufficient. So is, “We expect a rate increase of 2% to 5%.” If the insurer’s response is acceptable, you don’t need to get outside quotes.

If it has been three to five years since getting competitive quotes, consider your comfort with your premium and insurer. Here again, get a premium indication from your current insurer sixty days before renewal. If the insurer’s response is acceptable, you don’t need to get outside quotes.

There are times I take the above approach even if it has been more than five years since the last “bid” process. The agent might have a great relationship with the insurer. Perhaps there have been some claims that were well managed by the insurance company. Maybe I feel that the insurer and the bank are a good fit.

Your agent and insurer should always deliver firm renewal quotes thirty days before expiration. Failure in this simple time-requirement is the single cause of anxiety in the renewal process. It can lead to bad decisions too.


4- Submit Applications and Information Promptly

If you are going to demand quotes a month before renewal, you have to get your applications back to the insurer quickly. If you get applications to your agent or insurer less than sixty days before expiration, you cannot be pushy on the quote date. Of course, your insurer has to get you the list of information they will need so you have time to complete the tasks. You should have applications and information requests in your hands ninety days before expiration.


5 – Set Expectations

Share this timeline with your agent. Consider it the ideal bank insurance renewal process:

6 Months from Renewal – Start thinking about the renewal.
5 Months from Renewal – Schedule a pre-renewal meeting with your agent.
4 Months from Renewal – Info requests and applications to the bank.
3 Months from Renewal – Applications and info requests completed and sent to insurers.
2 Months from Renewal – Premium/rate indications delivered to the bank.
1 Month from Renewal – Quote delivered to the bank with options.


Need Some Help?

Sometimes we need someone to stand in front of us and say, “Follow me. I know the way.” I have renewed thousands of insurance policies. I have built systems and strategies that give you the best chance for a great outcome. Give me a call or send me an email to set up a call. We can talk about your situation. I’ll probably make some suggestions. Perhaps I can help. We should at least talk.

Scott Simmonds, CPCU, ARM
Fee-Only Insurance Assurance Consulting


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