The cost of managing risk

Increasing price at renewal time

Is there value in providing a predictable cost of risk transfer? This is a question value sellers must answer if they are going to be confident in overcoming initial price objections.

In many industries, companies will initially low ball the price of their product in order to get a foot in the door. Once they are in, there is a systematic effort to increase pricing during renewals. In times of significant market disruption, these increases can easily exceed 30 to 40 percent.

Most companies utilize a budget process with the expectation that they can accurately estimate their expenses and then build a revenue model that facilitates meeting expenses and making a profit. The predictable cost of risk transfer, coupled with value-driven claims and risk control services is the most assured way of accurately pegging the cost of managing risk.

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The cost of managing risk

Increasing price at renewal time

Art Seifert, Glatfelter Insurance Group

DISCLAIMER