Why Total Cost of Risk Wins in a Softening Market – Part 1, Shoptalk #207

In this episode of Power Producer Shoptalk, host David Carothers kicks off the new year with a deep dive into the shifting dynamics of the reinsurance market and what producers need to do to prepare for a softening market. He emphasizes that the “bad news” hard market—where price shopping is rampant—is giving way to a “good news” soft market, where incumbents are harder to displace. David also outlines his aggressive goal to write $1 million in new business revenue in 2026, promising to “show, not tell” by documenting every step of the process. The core of this episode focuses on the Total Cost of Risk (TCOR) sales conversation: how to have it, why it works best in the $100k-$250k premium space, and why getting a Letter of Engagement before going to market is non-negotiable for serious producers.

Key Highlights:

The Shift from Hard to Soft Market

David discusses the recent reinsurance renewals and the early signs of a softening market. He warns producers that the strategies used during the hard market (competing on price when incumbents deliver bad news) will no longer work. In a soft market, incumbents deliver rate decreases, making it harder to get appointments. Now is the time to “sew your seeds” and pivot your messaging.

The “Show, Don’t Tell” 2026 Challenge

David announces his personal goal to write $1 million in new business revenue in 2026. He commits to documenting the entire journey—prospecting, meetings, and closing—in real-time, shifting his content focus back to the trenches of Florida Risk Partners to prove that his methods work in today’s environment.

Mastering the Total Cost of Risk (TCOR) Conversation

This episode is a masterclass on the TCOR sales process. David explains why he never goes to market without a signed Letter of Engagement on middle-market accounts. He breaks down the ideal premium sweet spot ($100k-$250k) where this conversation is most effective, noting that accounts in this range are often hearing about TCOR and broker selection for the first time.

Qualifying the Decision Maker

David shares a critical soft-skill tactic for identifying the true decision maker without offending your point of contact. Instead of bluntly asking “Are you the decision maker?”, he suggests asking: “Is there anyone else who is typically part of the decision-making process that we should include in our next meeting?” This question preserves relationships while ensuring you aren’t wasting time pitching to someone who can’t sign the check.

Stop “Quoting and Hoping”

The episode challenges the traditional “quote and hope” strategy of waiting 90 days out to shop a renewal. David argues that this method commoditizes the producer. Instead, he advocates for a consultative approach that secures the client’s commitment before doing the work, using a Letter of Engagement to validate the relationship and take control of the market.

Connect with:

• David Carothers LinkedIn
• Kyle Houck LinkedIn

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