Selling Recommendations

Managing risk is centered on two functions, risk control and risk financing.  This purpose of this article is to discuss how risk control techniques can be presented to insured business leaders that prompt action to reduce the frequency or severity of loss.  

Loss Prevention and Loss Reduction are two common techniques that are often the subject of recommendations following a loss control survey.  But these techniques often come with a price tag that business owners sometimes rebuff or outright ignore believing a loss, as you describe the potential, has never occurred at their business.  Convincing the business leader to take action or to make an investment requires you to have an effective proposal strategy. 

Beginning your closing conference by summarizing the business operations and what was learned from the loss control survey opens rapport with the business leader.  Summarizing the insured’s operations before the recommendation discussion provides an opportunity to clarify any items and confirms the information obtained as part of the Risk Assessment.  

Central to the Risk Assessment process is identifying and analyzing loss exposures.  The purpose of which is to assist the organization in meeting its business objectives by preventing or controlling losses. 

Asking the right questions to understand the impact a certain type of loss would have on the business puts the recommendation into a business context, enhancing the credibility of the recommendation.  For example, could the business foresee losing customers or market share if they were unable to operate for a period of time? Could erecting a fire wall or otherwise creating fire divisions to stop the spread of fire, limit the impact of such an event on the operations or functioning of the business? Containing a loss to a small area likely would enable the business to continue or quickly restore operations.

Customizing the recommendation or the loss scenario discussion to the insured’s unique needs, to the extent possible, furthers the business context discussion.  Referencing similar losses at similar business entities will lend an element of credibility to the recommendation.  Discussing the impact the loss had on the entity paints a picture of what could happen if the loss exposure is not controlled.  Using the word “imagine” is a technique for prompting the business leader to see “in the minds eye” what could happen at their business.  

Confirm any agreements reached on the recommendations and next steps.  Provide any support information needed and who is going to do what by when.  Follow up when you said you would.  

By working together with the insured and discussing recommendations in a business context will further your success in recommendation implementation which will reduce unnecessary losses for both insured and insurance carrier.

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