Insurance · Pricing Negotiation Call
Insurance Pricing Negotiation Script: Holding Your Number With a Claims Buyer After the Technical Win
The eval is done. The VP of Claims Operations back-tested your scoring against 18 months of closed files, the SIU Director confirmed it would have flagged eleven of the fourteen confirmed fraud files and only pulled forty clean ones with it, and the Head of Core Systems signed off that you're read-only against the claim record with no write-back to the PAS. Someone in that building has already told the Chief Claims Officer it's you. What's left is the number.
What makes carrier negotiations dangerous is that nobody raises their voice. The VP of Claims Ops who spent six weeks championing you will now, very pleasantly, tell you they budgeted about half, that a competitor quoted 40% less, that the chief actuary won't book cycle-time savings he can't put in a reserve review, that surplus is policyholder money because they're a mutual, and that cat season starts in April so maybe this lands in Q3 anyway. Each of those is true. None of them is a reason to move price by itself. And every one of them is delivered in the tone of a colleague helping you solve a shared problem — which is exactly why reps give away thirty points in a friendly forty minutes and get nothing back.
This script assumes you've won on merit and are now protecting margin. The posture: stop selling, move scope before you move price, trade every point for term, prepay, a dated signature, or a named case study, and make your concessions get smaller. A firm no delivered warmly gets respected in this industry. Claims leaders negotiate with reinsurers, defense counsel, and IA vendors during cat season for a living — they will not think less of you for holding a number. They'll think less of you for folding.
The pricing negotiation call script
Say it in your own words. The structure is the part that matters.
- 1
Before you dial — write these down
Ask: $295K annual, auto and property claims triage and SIU scoring, 90 adjuster seats. Target: $265K–$275K with a 24-month term and annual prepay. Floor: $255K with VP approval. Genuine walk: below $240K, because at that point the deployment team economics don't work through a cat surge and I'd rather lose it clean. Trade list — nothing leaves the left column without something from the right: Give: discount points, waived implementation, deferred start until after cat season, extra sandbox for the SIU back-test, 5% renewal uplift cap, quarterly executive review with our CTO. Get: 24- or 36-month term, annual prepay up front, signature by a named date, a named case study with a spokesperson and a date, two reference calls to peer carriers, MSA redlines dropped, intro to the commercial lines claims org. Also know: who actually signs (SVP Claims or the COO?), whether procurement runs a competitive bid threshold, when the planning cycle closes, and whether the board has an expense ratio target for next year that this has to sit under.
- 2
Opening — make them re-confirm the yes before they anchor
"Before we get into commercials — last week you told me the team's aligned that we're the pick, and that Dana on the SIU side was comfortable with the alert volume. Is that still where you are?" [Let them say yes out loud. It is much harder to threaten to walk twenty minutes after confirming you've won.] "Good. Then I'm not going to re-pitch you. Let's talk about what has to happen to get this signed."
- 3
Restate the case in their numbers, not yours
"Just so we're measuring the price against the right thing. From the back-test: your auto physical damage files are averaging 26 days FNOL to close against a 12-day target, and on the 4,000 files we scored, routing the straight-through-eligible ones out of the adjuster queue moved the median by nine days. On ALAE, you told me your ALAE per claim on the represented BI files runs around $1,900 — the leakage sample your team pulled put overpayment somewhere in the 2–5% band on paid losses, and you said your chief actuary uses 3%. The proposal is $295K. That's the shape of the deal. So — where are we?" [Then stop. Do not add 'and there's some flexibility.' That single sentence has cost more margin in this industry than every competitor quote combined.]
- 4
When they anchor low — ask, don't counter
"Help me understand how you got to $150K. Is that a line finance has already approved for this year, or is it what you'd like it to be?" [Wait. There's a real difference between 'I have $150K in the current plan and more in next year's' and 'I built that before we scoped the SIU module.'] If it's real money in a real line: "I can build you something at $150K. It won't be this. That's personal auto only, no property, no SIU scoring — so Dana's back-test doesn't come with it, and the subrogation identification piece drops out. Do you want me to price that version, or do we work together on how to fund the full scope?" When they push price, you move scope. Never move price alone.
- 5
When the competitor quote appears
"That's a real number and I believe you. Can you send me the quote? Not to match it — I want to see what's in it. Every time we've seen their pricing at a carrier your size it's the model license only. Implementation against the claim file, the historical back-test, and the SIU workflow land as a statement of work in month four, and it's usually their professional services rate against your IT. And the honest question: if they were free, would you still be buying them?" [Nine times out of ten you get a version of 'no, yours scored better on the closed files.' That answer is your leverage for the rest of the call. Never say 'they're cheaper because they're worse.' Say what isn't in the quote and what it will cost when it arrives.]
- 6
The chief actuary / bulletproof ROI push
"Fair — and I don't want to hand you an ROI model with my assumptions baked into it. Let's build it empty and you fill it in. Your paid losses on auto and property, your LAE ratio, your leakage estimate. Which number would your chief actuary actually book? Cycle-time reduction is hard to put in a reserve review, I'll grant that. Documented subrogation recovery isn't — that's a dollar in. Neither is a drop in ALAE per claim on the represented files. So let's write the pilot as a back-test against closed claims where the savings are measured against actual settlements, not projections, and let him pick the sample. That's a scoping conversation though, not a pricing one. It doesn't change what the platform costs."
- 7
The concession ladder — decreasing, traded, explained
First move: "I can get to 6% — $277,300 — on a 24-month term. Twelve months doesn't let me amortize the implementation team through a cat surge, and you'll want them there in April." Second move: "I can get to 9%, $268,450, if it's annual prepay up front rather than quarterly. That's the argument I take to my VP. If it's quarterly, I'm back at 6%." Final move: "10%. $265,500. That's tied to signature by the 27th and it's the last number I have. I'd rather tell you that now than surprise you in two weeks." 6 → 9 → 10. Decreasing increments tell them there's a floor. 10 → 15 → 20 tells them to keep asking.
- 8
When they go silent after naming a figure
You may not improve your own offer twice in a row. After they stop talking you have exactly two legal moves: say nothing, or ask a question. [Count to seven.] "...What's your reaction?" Or, if you have to speak, speak about process: "What's the approval path once we've agreed the number — does this go to the SVP, or does the COO sign anything over a threshold?" Never fill a carrier buyer's silence with a number. They use silence with defense counsel and reinsurance brokers. They will out-wait you.
- 9
The delay threat — solve the timing, not the price
"That's your call and I'll still be here. Practically though — you told me the Guidewire migration team is locked through Q2 and that your cycle time has already drifted since the project started. If this slips to Q3, you're implementing during hail season with the same queue that put 4,000 files in front of 400-a-week capacity last May. Does that work better or worse for you? If it's cash timing rather than the decision, I can solve that without touching the price. Sign this month at this number, first invoice 1 July, go-live after the storm window. You get the price on the table and the spend lands in the half you want it in." A deferred start costs you nothing. Ten points costs you the renewal baseline forever.
- 10
Pricing the case study properly
"I'd genuinely value that, so let's make it a real trade rather than a handshake. Two points off for a named case study — your logo, a quote attributed to you by title, and one recorded conversation within 120 days of go-live, written into the order form. Plus two reference calls to carriers your size. Who approves that on your side — is it comms, or does legal have to clear anything with your name on it? Because I've had mutuals tell me yes and then discover eight months later that nobody could get it through." If they can't put a name, a date, and an approval path on it, the two points come off — warmly. 'Happy to be a reference' is not payment.
- 11
Using escalation once, and only as a trade
"Twelve percent is outside what I can sign. I can take it to our VP, but I can't walk in with a request — I need to walk in with an argument. 36 months, prepaid annually, and the case study committed in the order form, and I've got one. Give me that and I'll go fight for it today." Go away. Come back once. Come back with a number that is visibly final and say why it's final. Do not use this card twice; the second use tells them there's a third number underneath.
- 12
Landing it — confirm out loud, in writing within the hour
"So let me say it back. $265,500 annual, 24-month term, annual prepay, auto and property triage plus SIU scoring across 90 seats, implementation waived, renewal uplift capped at 5%, deferred start with first invoice 1 July. From your side: signature by the 27th, case study with you as spokesperson inside 120 days of go-live, and two reference calls. Have I got that right? Who's the signer — does this go through the SVP or does your COO have to touch anything at this level? Is legal engaged, and is the security review closed? Any PO to raise? I'll have the revised order form to you within the hour and I'll hold fifteen minutes Thursday to confirm legal's clear. And to be straight with you — this number is tied to those terms and that date. If the 27th moves, I have to re-approve it. I'd rather tell you now than surprise you later."
How the call actually sounds
Prospect on the left, the rep on the right.
Rep
Before commercials — last week you said the team's aligned and Dana was comfortable with the alert volume out of the back-test. Still where you are?
Buyer
Still where we are. Your scoring caught eleven of the fourteen confirmed SIU files and Dana can work the false positive volume, which is more than I can say for the last vendor we bought and turned off. That's not the issue. The issue is I took $295K to my SVP and he asked me what our combined ratio was last year. We're a mutual, Ryan. Surplus is policyholder money. There is no innovation budget line here the way there is at a stock carrier.
Rep
Understood, and I'd rather have that conversation as a combined ratio conversation than a tech spend one. But help me with the arithmetic first — where did the number you can approve come from? Is $150K a line finance has already committed, or is it where you'd like to land?
Buyer
It's what I put in the plan in September, before we scoped SIU in. But it's the number that's in the plan, and the board set an expense ratio target for next year that I'm not going to be the one to blow through.
Rep
That's a useful distinction — the plan number predates half the scope. So I can build you something at $150K. It won't be this. That's personal auto physical damage only. No property, so cat season doesn't get touched, and no SIU module, which means Dana's back-test doesn't come with it and the subrogation identification drops out. Do you want me to price that version, or do we work on funding the full scope?
Buyer
Don't price a stripped version at me, that's a negotiating move. Here's the real problem. Cornerstone quoted us $164K for what they say is the same thing, and my chief actuary won't book cycle-time savings anyway. He'll tell you nine days off FNOL-to-close is a nice story that doesn't land anywhere in a reserve review. So I'm being asked to pay double for a benefit our actuary won't recognize.
Rep
Two separate things, let me take them in order. Send me the Cornerstone quote — not to match it, I want to see what's in it. Every time we've seen their number at a carrier your size it's the model license only; the read-only integration against the claim file and the historical back-test come back as an SOW in month four at their PS rate, against the same IT team you've got locked in the Guidewire migration. And the honest question: if they were free, would you still be buying them?
Buyer
...No. Yours scored better on the closed files and Dana wants yours. That doesn't mean I'm paying $295K for it.
Rep
Noted, and I'm not asking you to. On your actuary — he's right that cycle time is hard to book, so let's not build the case on it. Two things do land in a reserve review: documented subrogation recovery, which is dollars in, and ALAE per claim on the represented BI files, which you told me runs about $1,900. Let him pick the closed-claim sample and let the pilot be measured against actual settlements rather than projections. That's a scoping conversation, though. It doesn't change what the platform costs.
Buyer
[pause] Everything's negotiable, Ryan.
Rep
[pause] ...What's your reaction to the shape of it?
Buyer
My reaction is that I need to be under $200K or I'm pushing the PO to after the rate filing and we're talking again in Q3.
Rep
That's your call and I'll still be here. Practically though — Q3 means you're implementing in the back half of hail season, with the queue that put 4,000 files against 400-a-week capacity last May, and you told me your days-to-close has already drifted since the migration started. Does that land better or worse for you? And if the problem is when the cash moves rather than whether you're buying, I can fix that for free. Sign this month, first invoice 1 July, go live after the storm window.
Buyer
Deferred start helps the timing. It doesn't help the number. And look — we'd be a good logo for you. Nobody your size has a mutual regional carrier on the SIU side. That's worth something.
Rep
It is, and I'll pay for it rather than take it as a handshake. Two points for a named case study — your logo, a quote attributed to you by title, one recorded conversation inside 120 days of go-live, written into the order form. Plus two reference calls to carriers your size. Who approves that? Is it comms, or does your legal team have to clear anything with the company name on it?
Buyer
Legal would have to look at it. I can't promise you a date on that.
Rep
Then let's leave it out for now rather than trade for something neither of us can deliver — I'd rather not have that conversation with you in eight months. Here's what I can do that's real. Six percent, $277,300, on a 24-month term, because twelve months doesn't let me keep an implementation team on you through a cat surge and you'll want them in April. If you can do annual prepay up front rather than quarterly, I can take 9% to my VP — $268,450 — and I'd go today. If it's quarterly, I'm at six.
Buyer
Prepay I can probably do; it's actually cleaner for us. Get me to $250K and I'll have it signed before month end.
Rep
I can't sign $250K. I can go ask for it if you give me an argument to walk in with — 36 months instead of 24, prepaid, and the case study committed in the order form once legal's cleared it. Without that I'm at $268,450 and that's honest. Which of those can you give me?
Buyer
Thirty-six months is a hard sell mid-migration. Twenty-four and prepay, and I'll get you the case study language into procurement's paper if legal clears it.
Rep
Then here's my last number: 10%, $265,500, 24 months, annual prepay, implementation waived, uplift capped at 5% at renewal, first invoice 1 July. Tied to signature by the 27th. What's the path from here — does your SVP sign at this level, or does it touch the COO?
Buyer
SVP signs. Procurement will want ten days with the MSA and security review's already closed. The 27th is tight but it's doable if you get me paper today.
Rep
Revised order form in the next hour, and I'll hold fifteen minutes Thursday to confirm legal's clear. One thing straight, so it's not a surprise later — $265,500 is tied to those terms and that date. If the 27th moves, I have to re-approve it.
Objections you will hear
What they say, and what you say back.
| Objection | How to answer it |
|---|---|
| “"We're a mutual. Surplus is policyholder money — we don't have a technology budget line like a stock carrier."” | Don't argue the premise, reframe the ledger. "Then let's not treat it as a tech spend. Every point of loss ratio and every point of expense ratio comes out of the same surplus. Slow claims cost you in complaint handling, in the DOI file, and in agents moving the book at renewal. What's the board's expense ratio target for next year, and when does the planning cycle close?" Then size phase one under whatever threshold doesn't need board approval, and put the rest in the option year. Note that this is a scoping answer, not a discount — you're solving how they buy, not what it costs. |
| “"Cornerstone quoted us 40% less for the same capability."” | Assume it's real and assume it isn't the same. "Send me the quote — not to match it, I want to see what's in it. When we've seen their pricing at carriers your size it's the model license only; the read-only integration against the claim file and the historical back-test come back as an SOW in month four at their PS rate, and your IT team is already committed to the migration." Then: "If they were free, would you still be buying them?" The answer is almost always no, and that answer is your leverage for the rest of the call. Never disparage the competitor's model — they may have run the same back-test you did. |
| “"Cycle time is a nice story. My chief actuary won't book it, so the ROI isn't bulletproof."” | Concede the point and move to what does book. "He's right that days-to-close is hard to put in a reserve review. So don't build the case on it. Two things do land: documented subrogation recovery, which is dollars in, and ALAE per claim on the represented BI files. Let him pick the closed-claim sample and measure against actual settlements rather than projections." Bring the model empty and let them fill in their paid losses, LAE ratio, and their own leakage estimate — most carriers will admit to 2–5% of paid losses and their actuary will have a working number. Then bring it back to price: measurement scope is a scoping conversation, not a discount. |
| “"We'd be a strong logo for you — first mutual on the SIU side. Take something off for that."” | Treat it as real currency and price it explicitly. "I'd value that, so let's make it a trade rather than a handshake. Two points for a named case study — your logo, a quote attributed to you by title, one recorded conversation within 120 days of go-live, written into the order form, plus two reference calls to peer carriers." Then ask the killer question: who approves it — comms, or does legal have to clear the company name? Carriers frequently can't get it past legal, and when they say so, take the two points off warmly. A discount traded for a case study that never appears is a permanent discount. |
| “"We're mid-migration on the core, IT has no bandwidth, so let's revisit after go-live."” | Separate the deployment calendar from the commercial one. "That's exactly why I scoped this to sit outside the migration path — read-only against the claim file, flat file or message queue, no schema change, nothing that touches check issuance or the statutory extracts. It doesn't compete for the same integration team and the claims org owns the pilot." Then make the cost of delay concrete rather than paying for it: "What's your FNOL-to-close done since the project started?" And if the real issue is when cash moves, solve it structurally — sign now, defer the first invoice past the migration milestone. That costs nothing. Ten points costs you the renewal baseline forever. |
| “"I'll route the final number through our innovation team and procurement — should be fine."” | The innovation team is where claims vendors go to die, and at this stage it's usually a soft way of saying the SVP hasn't actually said yes. Test it politely: "Happy to — before I do, who signs at $265K, your SVP or the COO? And has anyone told the Chief Claims Officer a number yet, or is this the first time he sees it?" If the signer hasn't seen the figure, you don't have a technical win, you have a champion with homework. Get on a call with the signer and the person who owns the cycle time number before you concede another point. |
| “"Push the PO into next quarter and we can revisit the number then."” | Don't buy the quarter with margin. "That's your call and I'll still be here." Then make them do the math out loud: Q3 means implementing in the back half of hail season, with the queue that put 4,000 files against 400-a-week capacity last year, and the IA spend at 2–3x internal cost that follows. Then offer the structural fix: sign this month at this number, first invoice on a later date, go-live after the storm window. That solves cash timing at zero cost to you, and it holds the price and the signature date together. |
Questions reps ask about this call
- How much discount is normal on a claims technology deal with a carrier?
Set your own three numbers before the call rather than working from a market average: your ask (what's on the quote), your target (typically 5–12% off list depending on your discount norms), and two floors — the one that needs VP approval and the one where you genuinely walk. If you don't set the floor before you dial, the floor becomes wherever the VP of Claims Operations stops pushing. What matters more than the percentage is that every point is traded for term, annual prepay, a dated signature, or a committed case study, and that your concessions get smaller each time. 6% then 9% then 10% signals a floor. 10% then 15% then 20% tells them to ask a fourth time.
- What do I do when a carrier buyer says they budgeted half and then goes silent?
Ask how they built the number, then stop talking. "Is that a line finance has already approved, or is it where you'd like to land?" is the highest-leverage question on the call — at carriers the plan number was usually set in the prior planning cycle, before the SIU module or the property line was scoped in. On the silence itself: you may not improve your own offer twice in a row. After they go quiet you have exactly two moves, say nothing or ask a question. "What's your reaction?" or "What's the approval path once we've agreed the number?" Claims leaders negotiate with defense counsel and reinsurance brokers for a living. They will out-wait you if you let them.
- How should I handle a competitor's quote in an insurance pricing negotiation?
Assume it's real and assume it isn't scoped the same way. Ask them to send it — explicitly not to match it, but to see what's in it. Competing fraud and triage vendors frequently quote the model license only, with the read-only integration against the claim file, the historical back-test, and the SIU workflow arriving as a change order at professional services rates the following quarter. Then ask the disarming question: "If they were free, would you still be buying them?" A buyer who is genuinely walking talks about the other vendor's precision and false positive rate. A buyer who is negotiating talks only about their price.
- They're mid-core-migration and want to push the PO to next quarter. Do I discount to hold the date?
No — solve the timing, not the price. Mid-migration delay threats in claims are usually cash-timing or IT-bandwidth problems, and both have structural answers that cost you nothing: sign now with a deferred start and a first invoice dated into the next fiscal period, and scope the deployment so it sits outside the migration path — read-only, no schema change, nothing touching check issuance or statutory extracts, owned by the claims org rather than the integration team. Make the cost of delay concrete first: ask what their FNOL-to-close has done since the migration started, and whether they want to be implementing in the back half of cat season.
- The buyer offered a case study and a logo in exchange for a discount. Is that worth taking?
It's real currency, but only if you price it and paper it. Name the trade — a specific number of points for a named spokesperson by title, a company quote, a recorded conversation within a set number of days after go-live, and a defined number of reference calls, all written into the order form. Then ask who approves it on their side: comms, or legal? Carriers and mutuals in particular often discover months later that legal will never clear their name on a fraud-detection case study. If they can't commit to a name, a date, and an approval path, take the points back off — warmly. Otherwise you've made the discount permanent and gotten nothing.
- How do I use manager approval without giving away that there's more room below?
Use it once, and only to buy a specific trade. "That's outside what I can sign. I can take it to my VP, but I can't walk in with a request — I need an argument. 36 months, prepaid, case study committed in the order form, and I've got one." The escalation makes the discount conditional and makes the refusal someone else's decision, which is what lets you say no without being the person saying no. Go away once, come back with a number that is visibly final, and say why it's final. Coming back with a better number having asked for nothing burns the card and confirms there's another number underneath it.