Too Many Cooks in the Kitchen
Staffing Insurance Renewals
Planning to involve multiple brokers in your upcoming insurance renewal? You may want to rethink that strategy. Your broker isn’t just a conduit to obtain competing quotes from insurance carriers; he or she acts as a spokesperson for your business to the insurance carriers, as well as the quarterback managing all the services that surround your insurance program. Here are some potential pitfalls that can occur when engaging multiple brokers at one time:
Multiple Submissions to the Same Carrier
Without a tightly controlled process to determine which broker is going to approach which insurance carrier on your behalf, insurance carriers could end up receiving a submission for your business from multiple brokers, however, they can only work on the submission with one broker. This is the broker that gets their submission in first, short of you signing a broker of record letter authorizing another broker to supersede that initial assignment.
Individual underwriters can receive hundreds of submissions a month and choose to devote their time to the submissions they feel they have the best opportunity of writing. They look to the broker to let them know what’s critical to include in the program, the targeted pricing and what their likelihood is of successfully writing the account.
When they receive the same submission from multiple sources, they know that with another broker involved, there’s likely a broad marketing effort taking place – and even if they meet the expectations the broker has set for the quote, they may not be working with the right partner that will end up with the client.
Right Insurance Carrier, Wrong Submission
Without assigning to each broker the insurance carriers they’re authorized to approach, the broker with the first submission into the carrier is the one that the insurance carrier is required to work with. Not all submissions are created equal, and oftentimes, the broker that’s out the quickest may be the one who put the least time and effort into their submission. For an underwriter, there’s no comparison between a barebones submission of ACORD applications and loss runs to a comprehensive submission with detailed information about your risk management program or explanation of prior loss results and corrective actions.
Even when markets are assigned up front, the ideal insurance carrier for you may wind up being unable to put together a competitive program if the broker involved has failed to provide the information needed to justify their pricing to management or gain a comfort level with the coverages and limits they’d be extending on your behalf.
Analyzing the Options
When multiple brokers are presenting quotes, you’re missing out on an independent advisor that can help you comprehensively analyze the insurance carrier options that are on the table. With each broker pushing their best option, how can you independently evaluate in detail the programs beyond the price?
Perhaps one insurance carrier has a lower price, but a problematic exclusion or poor claims handling track record. Your broker is the expert you should be relying on to evaluate and compare coverage in detail and provide feedback on an insurance carrier’s track record with their other clients.
Servicing Once the Program Is in Place
Even if a broker brings you the best insurance program in terms of both coverage and price, that broker may not be the best provider of service after the program is bound. While your insurance carrier provides the coverage, your broker is responsible for all of your day-to-day needs such as providing certificates of insurance, reviewing contracts, advising of appropriate class codes, pushing for coverage in a claims scenario, resolving billing issues, disputing audits, etc. Even the best insurance program can be a problem if your broker can’t effectively service it.
In most cases, we recommend selecting one broker to handle your insurance renewal. When evaluating which broker is best for you, consider the following qualities:
- Expertise in your industry and access to the insurance carriers that specialize in insuring it
- Submission quality and standards and how the broker builds a compelling case for your business
- Capabilities in terms of day-to-day services, safety support and claims advocacy
Questions? Contact our 'A' Team experts.
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