7 Keys to Creating Successful Vendor Relationships with Carriers
VP Claims Transformation, Property & Casualty Insurance
VP Sales, Property & Casualty Insurance
For many years, procurement was simply the department that bought and sold services. This outdated view ignored the fact that suppliers are critical to finding success in the market and attaining profitability. Today, they should be considered as a part of the overall business strategy that will give your company a competitive advantage.
During our tenure, which has spanned everything from claims to business outsourcing, we have had responsibilities that included vendor management. Not a day went by when someone wasn’t knocking on our door. However, what we were looking for often wasn’t what they were selling. Our biggest frustrations in these roles were vendors who tried to make our processes fit into their product rather than taking the proactive role of innovating their products to improve our processes.
Now we find myself on the other side of the business, selling services to carriers. To really understand what carriers are looking for, we decided to reach out and ask. In speaking with claims and procurement executives at a variety of leading national and international carriers, we can conclude that there are a few key things that make them tick.
The overarching theme is for carriers to have an ecosystem of reliable business partners with the ability to impact everything from indemnity and expenses to customer service and retention. This is driven by the following seven key areas.
- Industry specificity: Many vendors have interesting and innovative solutions, yet know nothing about the property and casualty space. Without this niche knowledge, it becomes very difficult for a vendor to adapt key solutions to your business.
- Experience: Rome wasn’t built in a day – and solutions aren’t either. A brand new, off the shelf product may be appealing in some business sectors, but less so in the more conservative insurance space. Rather, providing proven solutions without a history of litigation that require limited or no carrier IT resources are often well received.
- Delivery: Everyone likes to hear the answer they want to hear, even if it isn’t always the right one for their issue. Do not overpromise and under deliver. If a solution is going to take six months to implement, that timeline transparency is critical. If capacity has to be built, provide an accurate timeframe. Just as carriers staff to need, so too do vendors. Be up front about a need to grow to fit the new business. Not being forthright leads to false expectations and erodes trust in the carrier/vendor relationship.
- Testimonials and references: In a business focused on protecting dreams and restoring lives, having references to tout capabilities is paramount to building a long and trusting partnership. It is critical that a vendor’s past clients can attest to successful engagements, ease of doing business, timeliness of delivery and ability to work within a budget.
- Customer service: Just as carriers are focused on taking care of their customers, so too should vendors. It is not uncommon for a prospect to call a vendor’s customer service hotline to evaluate response times, attitudes of support staff and how completely questions were answered.
- Costs: Insurers are savvy and understand the time value of money. Sure, upfront costs are very important, but what is the total cost’s benefit to the bottom line. There is an old adage that you get what you pay for. A meaningful discussion on the actual costs, when all benefits are considered, can show a substantially larger yield than cheaply, commoditized products.
- Terms of the contract: Of all the contracts we have done over the years, it seems that sticking points come down to two primary issues: indemnification and limits of liability. There are many unrealistic asks, often by both sides. Finding a happy medium to protect both sides is always the key to success and the development of a longstanding relationship.
Chris Tidball is Vice President of Claims Transformation Strategy at EXL, a global leader in analytics, operations management and claims platform technology. His career has spanned 25 years in the P&C industry in a variety of roles including executive leadership and vendor management.
Sean Allen is Vice President of EXL and a leader with over 19 years of business development and strategy experience in the BPOI and ITO industries.
Reprinted with permission from the Jan/Feb. 2019 issue of Claims Magazine. ©2019 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.