3 reasons Property and Casualty agents should cross-sell surety bonds
If you’re an insurance agent in the commercial property and casualty insurance (P&C) space, you already know the importance of maintaining long-term relationships with your clients. But did you know that cross-selling surety bonds can help you build them?
Many agents and agencies sometimes shy away from selling surety bonds due to their perceived complexity, but they offer a big opportunity for agents willing to go the extra mile for their clients. Surety bonds are an essential part of business for many companies — from the contractors who construct a building to the janitorial crews who keep it clean — you can serve more of your clients’ needs by offering surety bonds.
If you’re thinking about cross-selling surety bonds at your P&C insurance practice, here are three reasons to make the jump.
1. Surety bonds can build your clientele
Because of their wide range of uses, surety bonds can help you get your foot in the door with new clients and solidify your relationship with existing ones.
As a refresher, a surety bond is a contract that expresses one party’s promise to answer for another party’s failure to follow through. They’re commonly used in the construction industry to ensure contractors and subcontractors meet obligations and complete work on a project, but surety bonds are also found wherever payment or performance need to be guaranteed in a variety of industries.
Once companies find a bond carrier that meets their needs, they tend to stick with that provider. That means a small, one-time bond could turn into a much larger piece of business for you as that company grows.
Likewise, many companies prefer to consolidate their insurance and financial needs with a small number of trusted firms. If you begin a business relationship with surety bonds, there’s a good chance additional P&C insurance work may follow.
2. Cross-selling surety bonds isn’t scary
Yes, surety bonds are fundamentally different than traditional P&C insurance. And they do require some extra knowledge and time to sell. But don’t let that scare you off. If you’ve been helping a client with insurance for a while, you likely already understand their industry and many of the risks they’re facing, which will serve you well as you begin cross-selling surety bonds.The application process for a surety bond can require extra documentation, at least compared to a P&C insurance policy. You may already have some of the extra documents, and a surety bond client will likely be glad to get you the documents you’ll need. Some of that paperwork includes:
- Current and historical financial statements.
- Loan agreements.
- Job schedules.
- Certificates of insurance.
- A completed company questionnaire.
If you don’t feel like you can “talk the talk” when it comes to surety bonds, there are many great continuing education opportunities in the industry to help you become more comfortable. Check out groups such as the National Association of Surety Bond Producers (NASBP) and the Construction Financial Management Association (CFMA) to start learning more about the world of surety bonding.
3. Cross-selling surety bonds can be profitable
It may take a bit of time to prepare a surety bond application for a client, but the rewards can be great, too.
Sometimes, surety sales commissions can be higher than P&C alone. And some carriers allow written surety premiums to be included in an agency’s total, helping trigger larger financial incentives.
A customer in need of a surety bond often takes on multiple projects during a year, creating more surety bond opportunities for an agent than the once-a-year renewal of a P&C policy by itself.
With more than 70 years of surety experience and licenses in all 50 states, UFG Surety knows the power surety bonds have in building strong client relationships. Plus, agents who turn to UFG Surety have access to the ufgQuick platform, which provides a simplified application and indemnity process for infrequent bond users that can be completed entirely online, and generate a response within 24 hours.
Reach out to UFG bond experts today to learn more.
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