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By Paul Martin, CPCU • March 15, 2018

Knowing When It’s Smart to Play Dumb in the Insurance World

Being a successful insurance agent requires sales skills and knowledge. But these two things couldn’t be more different. One is a soft skill and important to customer engagement. The other is crucial to avoiding mistakes and long-term success.

Sales skills are all those things agents do to connect and communicate with customers to build a trust relationship. These skills come naturally for some and are improved over years of trial and error but can also be learned through deliberate practice if they don’t come naturally. The development of sales skills leads to confidence, better listening skills and improved relationships.

The knowledge of an agent is what he or she knows about companies, insurance policies, coverage details, underwriting requirements, key people, etc. While some people are born with many sales skills that lead to success, the knowledge required to succeed in insurance must be learned and that takes time, a lot of time. 

Because the process of learning the technical aspects of insurance coverage takes so long, younger or less experienced agents may sometimes try a “fake it ‘til you make it” attitude when talking to customers and underwriters about coverage, limits, valuation, and exclusions. While this brave approach can work in some cases, there are many situations where a lack of knowledge can be dangerous from an errors or omissions perspective, or counterproductive to the agent’s success. Sometimes it’s smarter to admit what you don’t know.

When less experienced agents are talking to customers about coverage, a common technique is to use vague language, and promise to get back to them with an answer to more pointed questions. Not a bad approach.  When discussing an account with a company or broker underwriter however, another approach is often more helpful. 

Underwriters gauge an agent’s experience quickly. It shows in the completeness of their applications and the quality of information they supply. If applications are incomplete, the underwriter will make assumptions. Either the agent is sending the bare minimum of information to block them as a market, or they don’t have enough information to be a serious contender, or they’re lazy, or they don’t know what they’re doing. All of these are bad for the agent in getting help from the underwriter and adding to their arsenal of knowledge. Young or inexperienced agents (or agents inexperienced in just this type of risk) can combat this. First, admit it. Underwriters had to start somewhere, and they remember what is was like at the beginning. Most want to be helpful and will take the time to explain things. Don’t fake it. Let them know where you’re weak or inexperienced.

Other situations where the agent should admit their inexperience include: placement of flood insurance, submissions to boiler and machinery underwriters, applications of odd inland marine risks, and crime insurance. Each of these types of insurance are uniquely quirky. Everyone who’s been around the industry knows it. Except for the inexperienced agent who doesn’t know any better. 

Flood insurance is particularly littered with odd and unknowable lingo (to those who don’t write it often) and questions many agents don’t thoroughly understand. A flood “Write Your Own” underwriter once said, “Don’t screw it up. Call us, let us screw it up.” Don’t guess on flood application questions. Let someone who does it every day guide you. It's better than facing an E&O lawsuit because the agent was guessing.

Inland Marine coverage placements are similar. Inland Marine underwriters are often proud of their regulatory flexibility and knowledge of obscure policy provisions. Use them. Ask questions. They typically don’t see the agent’s cluelessness as a weakness, but instead, as an opportunity to show their expertise, experience and helpfulness. They can be terrific teachers of their corner of the insurance world. Let them.

Boiler and machinery insurance is its own world. It’s a coverage that has roots over 100 years old, and traditions that go back that far. Talk to these specialists about what the insured needs. Admit what you don’t understand and lean on their expertise. They can do wonders to protect an insured from events that they, and you, can’t imagine. If you have the time, ask them to explain coverages that may be fuzzy. You may be surprised how educational the conversation can be. It may lead to more business when your customer has good reviews of working with you and being knowledgeable in an area where others weren’t able to help.

And crime Insurance, what a different world. Full of options and small details. For a new agent, completing a crime application can seem like a mystery. The truth is, applying for crime insurance is something only a crime insurance underwriter can get right. And that’s okay. Let them guide you. Ask tons of questions. You can save your customers serious money on the premium and save their bacon should a bad loss occur.

The moral – in most cases, leaving your pride at the door is in your best interest. You don’t have to debase yourself with every underwriter, but a little humility in the areas above could add to your success. 

Sales skills may come easy but building insurance knowledge that serves your customers well is a journey. Knowing the technical details of coverage is a grinding years-long chore. Sorry, but you can’t short cut it. In the meantime, admit what you don’t know, ask questions, and lean on those that have already put in those long years in a particular specialty. Your career and your perspective will benefit from it.