Focused Insights: The Great Differentiator: Being A Trusted Advisor Vol IV, Issue 3
For insurance brokerages, growth is the key vehicle that helps drive earnings, provides reinvestment capital, allows for expanded service offerings, captures market share and ensures long-term sustainability. The past ten years have seen this industry grow and consolidate at incredible rates. But as growth and consolidation continue to shape strategic initiatives across the insurance distribution system, differentiation has become critically important.
Many top firms believe they have differentiation and will point to their double-digit organic growth during this hard market stretch as proof. Perhaps they believe they stand out because of their service offerings, their specialties, or their geographies. But do they really know whether those qualities are contributing to their outsized growth? More importantly, do they know whether those qualities are enough to ensure that their elevated growth will continue when market conditions shift?
While insurance distributors have been riding this hard market wave for the past ten years, the reality of a softening market may be starting to hit home.
Rate increases have slowed across nearly all commercial insurance lines, with workers’ compensation premiums actually declining. In 2025, overall organic growth rates for insurance brokers have started to see cracks. After a record year in 2024 where top performing firms’ organic growth rates reached 20.3% – data through Q2 2025 shows a potential plateau, perhaps even a decline, for all firms’ organic growth.
So, the question now becomes – how can firms continue to grow and compete without the tailwinds of hard market rate increases and exposure growth? True differentiation is now the name of the game, and becoming a trusted advisor is the great differentiator.
Becoming a trusted advisor by selling on value
For some, a softening rate environment is not something to be feared but rather embraced as an opportunity to differentiate and lead organizational revenue and earnings enhancement. It means that the marketplace is becoming a more level playing field, which will help those firms with a regimented differentiation pitch and a repeatable, process-driven approach to be well positioned to capture greater market share. After all, a receding hard rate tide usually reveals who’s been swimming naked.
The most successful brokers have taken on the role of “trusted advisor” to their clients – using a differentiated value-added service platform. Rather than merely selling insurance or simply providing clients with a list of everything the brokerage offers, these brokers help clients reduce current risk exposure and the severity of claims, using a suite of services and tools to design a comprehensive risk prevention program.
Every day, relationships between brokers and insureds are being broken based on service, not just price. When price no longer becomes a priority for clients, top brokers will use their “trusted advisor” status and value-added service platform to their advantage to gain new business and increase retention. Their process-driven method is supported by:
- A structured value-added service timeline that keeps the entire program on track.
- A compliance audit management system that holds the staff of the brokerage accountable to their clients.
- A stewardship report to let the client know when promises have been delivered.
To reach “trusted advisor” status, firms must first understand how to design the value-added service platform, execute the program, and reinforce the process.
Designing the platform
Many brokers have spent truckloads of money designing what they believe to be a differentiated, service intensive, value-added platform, which includes a litany of insured promises. However, few can communicate it systematically to clients and prospects, and even fewer have spent a dollar building a process to ensure that promises made are promises kept.
Designing a differentiated value-added services platform starts with four key steps:
- Identify capabilities. A brokerage needs to identify, define and document all the capabilities the firm offers to their clients. Depending upon internal capabilities and client account size, the differentiation strategy will vary. In addition, it is important that those value-added services be categorized by specialty (i.e., energy, trucking, or construction) and/or by line of business (i.e., general standards, P&C, benefits, etc.), as most likely not all value-add services apply to all clients.
- Establish pricing. All these value-added service capabilities that the firm offers have different levels of skillsets and timeframes to complete. It’s important to accurately estimate the time, resources needed and cost of delivering each solution. A firm can use a dollar amount, time allocation, a point system, or another way to rank these services.
- Categorize clients. The next step is to group clients into buckets based on account size or profitability. When analyzing each account relative to the cost/time for services provided, a firm will have a much clearer understanding of the resources needed to efficiently dedicate to a particular account.
- Conduct a “needs assessment.” It is critical to conduct a “needs assessment” with each client (or new prospect), to determine the custom-tailored risk management services that would be most beneficial for their specific organization and then explain the value-added services the brokerage offers that address those needs. Brokers should not waste time and resources delivering a service that a client never asked for nor wants.
Be cautioned – when pitching a prospect or client on the firm’s capabilities, service offerings, and the client’s potential needs, the conversation should not be centered on the cost of each service. Remember, most clients have been trained to buy on price. Instead, the presentation should be focused on how such services can help reduce the client’s loss ratio, hidden costs related to claims, the perception of the risk profile by the underwriters and subsequently the client’s long-term premium dollars.
Executing the program
Within the structure of a value-added service platform, is the value-added service timeline. This is the roadmap that keeps the entire program on track. It is the “when” and “how” those promised services are deployed over the course of the client relationship – ensuring consistency and strategic execution.
Executing a value-added services timeline includes three key elements:
- Commitment. The most critical step in successfully executing a value-added service timeline is securing a commitment by both the internal organization and the client to participate in such a program.
Internally, brokers must be committed to expending the resources necessary to fully leverage a value-added service timeline. Such resources include buying or building the technology to administer the initiatives, training personnel, overseeing the process, and holding people accountable. Once the resources are in place, many firms need to ensure producers are not spending excess time servicing accounts and taking away from new business activities. Firms must be committed to allowing the account executives (relationship driven, technical professionals who may not be great hunters or closers but are excellent at managing accounts on behalf of producers with large books) to manage the client service process.
Externally, it is essential to secure client commitment in implementing such a program. The harsh reality is that the process is often broken from the start because the clients themselves have not committed to participating in the program. To help establish mutual accountability, the formal service timeline should be presented to the client and signed by both parties via a service covenant or commitment contract. This provides the client buy-in to the service timeline and gives each party confidence that program execution is a joint responsibility. - Compliance audit. With the services, pricing and pitch identified, it is essential that producers and service personnel be consistent with the agreed upon approach for this program. Many brokers have tried to implement a value-added service program but haven’t reaped the expected benefits of increased production or enhanced retention. That’s because, quite often, the services that are pitched or promised are not delivered in a consistent way (or delivered at all).
One way to oversee consistent delivery is to use the value-added service timeline to break down what services will be provided, target dates for delivery, and who is responsible for deployment. This will serve to hold the brokerage accountable and provide a system for the process to be managed internally by a sales manager and/or other executives to ensure that “promises made are promises kept.”
In top performing brokerages, management teams will run a compliance audit exception report at any time to proactively track which promised services are upcoming, which have been completed by the target date, and which are behind schedule. By reviewing such exception reports, brokers can be proactive in the service delivery. - Communication. A value-added service program is useless if the business is not delivering a formal stewardship report to the clients. A stewardship report is an extension of the value-added service timeline, but includes activity completion dates, notes and the firm’s compliance audit score.
It is imperative that the client knows when services (and promises) have been delivered. Just as compliance audits are meant to hold internal staff accountable for executing services promised to the client, the stewardship report holds the brokerage accountable for communicating delivery.
Top brokers periodically meet with clients to review the service timeline, track progress (whether completed on time or not) and discuss next steps. There is risk in approaching a client and stating that a defined target date was missed or that they received a low compliance audit score. Most clients will be understanding of the honesty about what has not been completed and why. Most importantly, it is essential to communicate how any shortcoming will be corrected in the future as you strive for customer service perfection.
Reinforcing the process
Making promises that may not be kept is a very real fear and drawback of offering a value-added service platform. Differentiation doesn’t come easy. But as the saying goes, “if it were easy, everyone would be doing it.”
Another thing that isn’t easy is “change.” Most are resistant to change. But for most firms, building a value-added service platform, and successfully executing the program, will require changes within the organization to ensure the process is followed. Here are the key areas that will most likely need to change:
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Compensation strategies. Since account executives will ultimately be responsible for executing the value-added service timelines for clients, and producers will focus on new business production – firms need to tie compensation and bonuses to the fulfillment of service promises.
The following is a three-step process through which management can encourage producers to sell, and account executives to manage, service delivery while maximizing the propensity for organic growth.
- Step 1: Circulate producer performance vs. goal. Internal public posting is meant to drive peak performance, NOT to demean or embarrass individuals. It affords everyone in the firm the opportunity to proactively offer assistance to producers so that producers can focus their time prospecting and closing.
- Step 2: Tie non-production staff bonuses to producers’ goals. Based upon the team-based concept of driving growth, the firm can create a system to tie all non-production staff bonuses to new business production and activities that enhance retention.
- Step 3: Modify non-production staff bonuses based on individual compliance scores. An exception report for service people should track how many client service activities were actually completed on time relative to how many were assigned. Every firm should have its own threshold for success in determining how scores factor into determining bonuses.
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Sales culture. In conjunction with a value-added service program, brokerages need to capitalize on a total firm sales culture. One mechanism for doing this is to change the account executive or customer service representative (CSR) perception of their personal roles and responsibilities.
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Client acquisition vs. retention strategies. Most brokerages invest a large amount of time, money and resources into new business sales to generate growth (i.e., planning meetings, sales meetings, hiring, training, advertising, marketing, technology, travel and entertainment, sales coaching, etc.). While these growth investments are sound when properly implemented, brokers must also consider how much time and money is allocated toward retaining current customer dollars.
The retention strategies for most firms usually fall into hiring service personnel, entertaining current clients, and marketing reinforcement. However, most don’t create a budget and solid business plan to retain customers, so in the end the retention activity becomes a reactive activity versus a planned one.
MarshBerry believes that the number one reason clients leave is because there is no defined customer contact strategy. Account retention can be maximized through two main vehicles:
- Retention should be monitored and managed through an internal early warning compliance audit process to ensure that promises made are promises kept.
- Differentiation should enhance hit ratios, and in turn, reduce wasted submission activities. Reducing wasted submission activity will then increase the amount of time available for service staff to focus on service timelines and stewardship processes.
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Career paths. The first step in developing career paths for employees revolves around defining the various functions of personnel. Many high-growth brokers are moving toward a four-tiered system of production and retention. The four tiers are as follows: Producer, account executive, customer service representative (CSR) and tech support.
Once roles and responsibilities are defined and compensation plans are implemented to reward desired behaviors, career pathing can take shape. Through a value-added service program, career pathing should:
- Reinforce roles and responsibilities associated with organic growth and value-added service timelines.
- Establish goal setting for divisions, teams and/or individuals that can be tracked through the value-added service program.
- Provide a training mechanism for compliance practices, procedures and accountability to satisfy service covenants.
- Incorporate value-added service delivery into annual review.
- Begin the culture-shift process of outlining how non-production staff can advance from reactive internal service to proactive external client service management.
Why isn’t every broker using a value-added service platform?
The successful design, execution and reinforcement of a value-added service platform provides a firm with distinct competitive advantages, including:
- Elevating the firm to the highest level of trusted advisor status with clients.
- Virtually eliminating the ability of a competitor to use superior customer service to displace accounts.
- Establishing a system to “measure success” as determined by the organization.
- Formalizing a process to solicit client feedback and ask for referrals.
- Enhancing the ability of the firm to attract and retain high performing producers.
- Improving employee retention and in turn client retention.
The largest brokers, public and private, have been utilizing value-added service programs for years. But for most mid-sized to smaller insurance brokerages, the value-added service concept is often revolutionary or even repulsive. For some, the entire concept is pushed aside, based on the belief that it’s an unnecessary business practice that does nothing to augment a relationship-based partnership. For others, they may not realize that their larger competitors are focused on these activities and will use them to steal business.
What mid-sized to smaller brokers need to keep in mind is that market share is becoming the name of the game. With the shifting economic environment and the potential for a softening market, organic growth rates will not be what they previously were. For some brokers, the last ten years of hard market conditions is all they know. But for larger broker, a softening market in an opportunity to use their established value-added services to target smaller accounts that they previously would not have targeted. They are in search of capturing more market share by profitably expanding their desired target account sizes.
Value-added services are no longer the wave of the future. They are a current reality.
Market differentiation will come to those insurance distributors that can proactively establish an institutionalized process to both sell the value of services provided and deliver on promises made.