The shortest distance between two points is not through the wholesaler.
I enjoyed readin all these posts, as I just got though them. JUST got through them, at 10:41pm EST. I have never worked with USLI directly, but I am not oblivious to them. Still I find it humorous how many posts there are about them between the hours of 9-5.
Don’t you people have jobs, customers, insureds to tend to? I know at my company we are bogged down with calls that there is hardly time to do any entertaining reading, let alone write comment in post chats.
I applaud USLI, not for what they have done to whoever feels kilted by this move, but for clearly trimming the fat of an unnecessary burden.
Learn your trade and get to work! if nothing else, your ramblings have proven how useless a good portion of this market truly is.
To quote Jeffrey Lebowski, “Get a job, sir!”
As a young underwriter working for Wholesaler/MGA in the south I was afforded the opportunity to attend several USLI sponsored classes. At one of those classes Tom Nerney described what he called the 100 year plan. He outlined how USLI would always be committed to the professional wholesaler distribution model. It seems now that this was all a lie and that Mr. Nerney’s word was only as good as the hard market cycle. I guess his 100 year plan was really only 100 dog years which seems to be about the same length as his tenure at USLI.
Maybee if USLI had not been sending underwriters to our office every month and foucused on creative product development we could have written more business. Seems like someone from USLI is in our office at least once a month.
I can’t even fathom what their travel expenses are.
1. Wholesalers no longer bring the same value to the business that USLI writes. Accounts are small, competitive, and generally uncomplicated. Wholesalers are over-estimating their importance to this market segment, and under-estimating the retailer’s competence. They are not selling big accounts, people! Wake up!
2. Nerney is intensely driven and extremely dedicated to his employees. They, in turn, are loyal warriors, and totally dedicated to him, with the talent to execute.
3. Nerney is a savvy visionary. USLI has invested in and developed superb technology that will enable them to rapidly leverage the retailers into using his products and services. Everyone knows the service delivered by their underwriters, adjusters, accouting people, etc, is unmatched, and that certainly will not change.
4. Wholesalers are lazy. OK, not all. But most. Their focus has been large accounts for years. Now that has dried up because of the shrinkage in the housing market, contracting business and generally suppressed pricing in the mid-market. They are unwilling to pull the business in, waiting complacently for the next hard market miracle. Keep waiting. There are few signs of the market turning soon. High fees on small accounts are hurting wholesalers. Talk about greed!
5. USLI is highly profitable. Their products are properly priced and crafted. They’ll continue to make a huge profit because unlike so many carriers, they are disciplined with smart, seasoned senior staff who understands how to compete with their niche business.
Wholesalers can be upset all the want, but it’s a waste of energy. Bottom line is, they should not look a gift horse in the mouth, and if USLI products sell, then it would be full-hearty for wholesalers not to sell them. Most will, as soon as their emotions are in check.
Of course the real beneficiary will be the policyholders, as more sellers of insurance have access to USLI’s products.
When it comes to an abrupt change in the marketplace it is amazing how quickly everyone chimes in with their 2 cents and dumps an entire group into one catergory (in this case the wholesaler) and points the finger. Now I have read some of these posts and I don’t agree with some of the comments made by the Professional Wholesaler in regards to the Professional Retail Agents inability to complete applications and write business, we all serve a valuable purpose within the insurance industry and deserve to be respected for our contributions. I think people are losing sight of what has happened. Regardless if the decision to go direct to the retail agent proves to be a positive or negative decision is besides the point, the fact remains the way in which USLI went about getting to this position really shows the lack of trust, ethics and integrity of the people at the top. Yes I agree they offer great products and provide great service……but can’t be trusted. That is a decision and a risk people will take when deciding to write with USLI in the future.
My father once told me, “Never bite the hand that feeds you.” This is a foolish decision by USLI. How many MGAs are going to remain committed to USLI and continue placing business with them? I know my own is NOT. Thanks for the memories, USLI. And good luck to you when your renewals start flying out the door and your loss ratios go up.
Correct it was the MGA community that made them- what Greed- I guess you can remove the body from Phly Ins Co- but not the Phly ins Mentality formthe body- I wonder if they will but their retailers too by eventually becoming a direct writer-what a black eye for the Buffett franchise
WOW! Talk about branding a name for yourself hearing those exact words for the last 15 years. Changing a brand/logo like that must be very hard for Mr. Nearny. Sort of like finding out the good old Gecko appearnce is only a costume and underneath lies a Snake.
I wonder how easy it will be to train those retail agents & will they be able to drink the Kool-Aid like so many others.
If the Berry family can only see. What a shame this will become a train wreck.
This will be a huge mistake. What this really says is they can’t compete or sell their product so they blame wholesale brokers for it and will try retail agents direct.
The graveyard of carriers who tried that. time to dig another plot!
Agreed on all counts! How are retailers going to sell products that numerous other carriers already write and that give contingencies for the business. They should focus on the products themselves and look in the mirror to place blame for a lack of production. The wholesalers can sell products so by dumping the distribution channels it will backfire.
They will probably start tanking, then the their market value will go down, they will get acqired and Warren will end up making his money back…. But Nerney is going to be eating his words.
A diappointing turn. Will USLI be able
to tolerate the many poor incomplete
submissions they’ll now have to handle
which the wholesaler was the first line of
defense by having the retailer obtain the correct information so the submission could be made. The USLI loss ratio will
increase substantially.
You nailed it. They have constantly blamed the brokers instead of listening to our feedback about the competition. I’m just glad we took them on retail visits and input retailer names into their system so that they have a good idea of who they want to target. (That’s sarcasm.)
I love how Nerney blames the wholesalers for the increased expense ratio. I guess the increased expenses have nothing to do with USLI executives flying privates jets and spending money on vanity projects like a bigger gym and cafeteria.
Only Nerney can look you in the eye and tell you he is not concenred about top line growth all the while working towards a direct distribution method behind the scenes.
USLI owns/controls three different wholesalers. At least hey are now admitting they are going direct.
USLI is a strong company with great products available. I feel it was a great decision to make this available to retailers. Most of what they sell is competitive against their standard writers and this business is not going to the e&s market.
It might have been a “great move” for retailers who want to access the product, but USLI is betraying their wholesale agent base that handed them $378 million premium. I think they are very self-centered to think they will not take a very large premium hit for this move.
It will be interesting to see if any retailers, who don’t like it when one of their carriers goes multi-channel, will support their wholesalers and refuse to go direct with USLI. Money talks and a 17% or 18% commission might sway some. But I bet some retailers will decline USLI’s offer and support their wholesale partners. Am I naive?
Currently they are in the process of bypassing the MGA’s and the retailers will love it (for a season). But this will only last until USLI becomes a more recognized “brand” (similar to GEICO)and changes to a B2B model via their online presence. At that point in time, USLI won’t need any of those pesky MGA’s or retailers.
I have no dog in this fight and am on the carrier side. We target niches that wholesalers write and if a retailer can work directly with a carrier they will work directly with the carrier 99 out of 100 times. Agents are no more loyal than USLI (or the ultimate client for that matter). Not sure why Wholesalers think USLI owes you so much. You will easily work with a new player you have to compete with USLI if you had the opportunity to get more commission. Sounds like you should look in the mirror. I am sure this post will fire some of you up…
It’s disappointing to see a company lack integrity and morals. They reassured MGA’s multiple times they would not go to direct agency appointments. And based on their new contract they are then trying to take the business that MGA’s have spent the time cultivating. What they are doing is legally acceptably but their actions are morally reprehensible. For a company to not belive in a soft market or recession, and based off of their email notification of the change they are also not aware of competition, good luck with the real world. The honeymoon is over and now you get the headache and hassle of dealing with retail agents. Luckily in the world of business there will be another carrier(s) who steps up to take the business and rewrite it.
Good Move. Probably got back to the company about the “big honk’n brokers fees” added on to the policies by wholesalers. Had a small account with USLI through a wholesaler, by the time he finished with the fees the price up 105%, and I made $60.00. Renewed it this year with one of the retailers USLI appointed, no fees, client is paying 1/2 what he did the year before.
Unfortunately we agents have to be able to sell something. The only person we must be loyal to is our customer and thats it. I am more than capable of writing a policy without a wholesaler. I dont see the need for them in certain situations and this would be one of them. In all my years as an agent, a wholesaler has proved to be more of a hindrance to writing business than actually a benefit.
USLI doesn’t owe brokers anything… nor do we owe USLI any future business. All I am stating is the fact: brokers will be just as happy to move all of their business to another carrier. And by the way… USLI is not the “major player” they might think they are/were in the E&S market.
Do any of you even live in the real world? USLI is a reputable company selling great products and providing impeccable service. Regardless of their decision to go direct, I will still work with them. The business world is competitive and times change and create different situations that make it inevitable to stay in one place without sinking. Good move, USLI. I commend you for making the decision while still staying committed to the wholesalers who gave you their business.
What a crock! We’ve been asking them for years if they intended to do this and they have vehemently denied it at every turn, referring back to their “commitment”. I’ve worked with retailers for over 20 years and USLI has no idea what’s in store for them. They thought we were bad?!? HAH!
Jerry, I commend you for your decision to continue doing business with USLI. That said, part of the benefit of writing surplus lines business is that one does not have to compete with retail appointments for the most part. Being an E&S MGA, these retail appointments decrease USLI’s value as a market to my firm.
Trust me, it has never been to my benefit as an agent to have to go through a wholesaler, never. And so far it hasnt been to my clients benefit either.
I totally understand where the wholesalers are coming from though.
It’s disappointing to see a company lack integrity and morals. They reassured MGA’s multiple times they would not go to direct agency appointments. And based on their new contract they are then trying to take the business that MGA’s have spent the time cultivating. What they are doing is legally acceptably but their actions are morally reprehensible. For a company to not belive in a soft market or recession, and based off of their email notification of the change they are also not aware of competition, good luck with the real world. The honeymoon is over and now you get the headache and hassle of dealing with retail agents. Luckily in the world of business there will be another carrier(s) who steps up to take the business and rewrite it.
USLI employs two dozen direct marketers. They have multiple wholesalers under their control, and they have opened up three branches in two years. Does anyone really believe this was a surprise?
I don’t think anyone will argue with you about it not being a surprise, the writing was all over the wall. I think what has created these unfavorable feelings & resentment is the way in which Mr.. Tom orchestrated the change. And the fact that the so called “Partnership” was anything but a “Partnership”, very deceitful. To look back and know every move, promise, etc. was precisely calculated and executed leaves you no choice but to feel used and betrayed. Only time will tell if the move was a wise business decision for USLI…….. In the meantime just as Tom has made it clear that business is business, the wholesalers will also make it clear that business is business.
The unfortunate truth is really the loss of specialization. As shared below, they will now be dealing with the retail agents who have traditionally used wholesalers for their niche expertise. Of course this is a generalization. But, the products that are actually targets for new appointments require more knowledge, training and depth of understanding which the wholesaler provides. Buffet’s up to his neck in it lately, isn’t he?
And I remember Mr Nerney telling us how he only wanted to deal with wholesalers because he had absolutely no interest in dealing with all those retailers that we had to vet, contract with, and account with. He said that was our job and he only wanted to deal with a relatively small number of wholeslaers.
Well that small number of wholesalers will hopefully start pulling their business away from USLI and he can have the nightmare of 10,000 or so retailers!
“In the meantime just as Tom has made it clear that business is business, the wholesalers will also make it clear that business is business.”
Indeed business is business, but there has to be something said about being a man. I’d rather sleep with myself peacefully at night knowing that I kept my word by staying “Committed to the Professional Wholesaler.” If Tom Nerney can sleep well at night knowing that he lied, used and broke his word to his loyal customers then good for him.
Numerous posters have raised the fact that USLI has received numerous Retail entity names through electronic means- others have raised suing them as a response. The identities of retail agents in probably in he public domain as all IsnuranceAgences advertise have websites and etc. However, if specific individuals were to be contacted- that is not public information.
Other issues are also triggered such as State & Federal Privacy laws. It only takes 3 to support the filing of a Class Action suit together with seeking an injunction. Please post your phone number and or email address and we will be happy to explore the opportunity.
Have always had doubts about their intentions even though they claimed they would never go direct. They have been collecting retailer data for years and contacting retailers direct via phone and promoting co-visits to “help the wholesaler”. Won’t be writing any more business with USLI.
Here we go again, another ignorant comment. I have worked with my fair share of mindless and inept retail agents(and worked with a fair number of mindless and inept wholesalers on the retail side) but I am smart enough to know there are far more competent, professional and valuable agents on both sides to not allow 1 rotten apple spoil the entire bunch. Each agent provides value and expertise within the sector of the industry they serve. I am not sure why this situation has turned into an “Us” vs. “Them”? Anyone?
Let me first say, I do not work in the insurance industry so I provide a truly “outside looking-in” perspective. With that said, I do clearly understand business, both the idea of business partnerships as well as the idea of customer service through my experiences teaching at a major business school. These comments make a couple things clear to me:
1. The angry wholesalers find themselves that way for one of two reasons…they feel threatened by USLI and fear impact to their bottom line or they feel as though USLI has “betrayed” their trust and partnership. Perhaps this move was a reaction to a betrayal by the wholesalers…ever give any thought to that? Who made it “business is business” first? I think the wholesalers need to ask themselves that question.
2. Those wholesalers that support the move and look to continue their relationship with USLI have confidence in their operations and their relationships with their retailers and as a result, do not see USLI as a threat, but rather as a complement to their business. If a smaller retailer may not be able to support paying a wholesaler fee in some cases, wouldn’t it make sense to offer them up to USLI direct in that case? That’s a true “business partnership” and in the long run, will generate the best loyalty among wholesalers and retailers. Think back to the movie the Miracle on 34th Street and the positive image that was formed when Gimbols was referrring it’s customers to Macys. It does works.
3. Finally, in this day and age of the Internet and the Information Age, it is foolish to think that a specialized company would not eventually go direct to client/retailers. Amazon, half.com, ebay, and other online retailers all made themselves overly successful by providing a direct view into their offerings and products. It was only a matter of time in a day and age that requires business to be lean and cut costs to remain competitive.
In the end, if wholesalers want to remain competitive, they will want to think twice about how quickly they cut their ties with a company they have relied on heavily in the past. In the end, “business is business” and it’s a matter of understanding the impact to your business model and customer base. Perhaps USLI is not the company being bold and foolish here…perhaps it is the wholesalers that have immediately jump ship that are being foolish.
Having worked with USLI for many years I’m disapppointed but not surprised. A few posters have touched on objective reasons why USLI would move this direction. One thing that has not been discussed is that broker base is not as loyal as USLI would like. While USLI offers a slam-dunk binding mechanism, some of USLI’s larger wholesalers have moved entire books of business (cough-cough: “Burns & Wilcox”) to in house facilities. While I can not grasp the economics of doing so, apparently some of the biggies think otherwise.
With large books at risk of being moved, USLI feels threatened and thinks they can win the hearts and minds of retailers. As other posters have indicated, wholesalers greed with over-feeing $1,500 policies has made Nerney’s decision easier. They see that money is being left on the table, if the wholesaler has no problem collecting $1,850 for a $1,500 policy.
As much as the wholesalers are complaining here, how many will really return their contract? Furthermore, since there are FEW markets to handle the low minimum premium accounts, will the wholesalers really move business to other markets at the risk of losing a market for the minimum premium accounts?
Time will tell if this will take place, but I don’t think it will be as bad as people think. Wholesalers are notorious for talking big, but when it comes to action, that’s another story.
As much as I don’t like this decision, I’ll bet this won’t affect their DWP numbers as much as people think. And if they save commission to the MGA – they are ahead. Remember, USLI didn’t force the wholesalers to take on the USLI Marketing folks – we all did that ourselves. Thought it would bring you more business.
Final thought is this. If the RETAIL agent can get 15% commission on these renewal policies, will the MGA really have an oopportunity to move that business to another market? Retailers have proven themselves over time to be lazy and will gladly take the 15% commission from USLI by doing minimal work to renew these. The MGA has to sell the value to the retailer to shop the renewal, so we’ll see what really happens.
To everyone complaining, let’s see how upset you really are. Wil you return a contract or move large amounts of business to another market? Or, are you already over your disappointment and it’s time to mvoe on?
I think you will be surprised with what the wholesalers do and the actions they take…………Only time will tell if they are bluffing or fed up………Going to be interesting!
I have had 6 markets and 2 Lloyd’s brokers offer me a “better deal” so far to assume this business. Regardless of what my friends say, it did not make sense to put the business there before, and I will wait and see what happens with USLI before severing my ties. My family is in this business for the long run and I don’t want to be influenced by people on my side of the business who have already cashed out to national retailers and are pontificating about what is right. I have to decide what is right for me.
Apparently this person doesn’t have many friends in the industry. Otherwise, they would have already spoken to all of them and learned just how many have already begun the process of book roll overs. There are handfuls of companies contacting us right now asking for the business on same terms all the way around. There are millions of dollars being repositioned and shifted as we speak.
Think about it… USLI operates at a 90% combined goal and often beats it significantly. Which companies wouldn’t want a book of that business at the same terms or better, gladly? And who wouldn’t move it after feeling used, lied to, and cheated?
We can go round and round in circles but this all comes back to only one thing, and only one reason we are all ticked off. USLI’s slogan/motto was “We are fully committed to the Professional Wholesaler as our sole method of distribution.”
“committed to the wholesaler” is printed on every document. Every USLI employees swears they are dedicated to wholeslaers. USLI asked its partners to take them into the retailers (as partners with the wholesalers) . All lies. What goes around comes around. Will wholesalers send back their USLI contracts–hell no BUT will they help USLI succeed–hell no. Lie once–lie again. Sorry boys but you might be A++ with AM Best BUT you are F with anyone who has intgrity. You wasted years and a reputation. I blame Tom and if Buffett wasnt running a 50 billion dollar operation Tom’s little $375 million would show up on radar and he be gone in disgraces. By the way, all the USLI employees know its a baout face and they are not happy about it.
I think the market would be better off with fewer wholesalers, and it is starting to adjust. We already have Tri Cities and Crump, Colemont and Amwins and now Cooper Gay and Swett. There is simply too many wholesalers in the market, and the market (i.e. the invisible hand) is sorting this out naturally.
Is there a reason why these ignorant people keep placing the entire wholesale sector into one bad bunch? Trust me all industries have rotten apples but should they all be rotten because of one or two individuals ALLEGED wrong doing? To say yes would be ignorant (I would say this about any industry not just the wholesale industry)! When the whole AIG Marsh scandal broke we (the insurance industry) didn’t want to be viewed by the people unfavorably because of the wrong doing of a few peoples actions so why do we turn on each other within our own industry when ALLEGED wrong doings arise…….I am sure there is a lot more to the story than what has been released.
I have personally heard Tom Nerney address the concerns of USLI client MGAs that it looked like USLI was positioning itself to go direct.
“Trust us”, he said. “We won’t take your hard work to build our book and then steal your client base by going direct. Never.” It was a blood oath and I have heard him say it at least a dozen times. And he’s had to say it as the focus on small accounts and “retailer web quoting” smelled funny in it’s implementation.
And now, lo and behold, that is exactly what he had gone and done.
Warren Buffett is known for his integrity. I wonder what his thoughts are on his duplicitous President. Is he a co-conspirator or merely an enabler? If Nerney survives with his job, I think we will know the answer.
“A savvy visionary”? Uh, okay. I think that retail or direct is probably a better model for them. My objection is to the fact that they have been bald faced lying to their MGAs for years telling us that they would not do exactly this.
It is possible to be a savvy visionary and a lying sack of **** at the same time, you know.
As twisted as all of this is, Nerney is there until the end of the 150 year plan. Buffet’s “Laissez-Faire” style makes this assumption rather far fetched. Unfortunately, the punishment that will take place is a massive loss of premium to competitors through book roll-overs. Most of the wholesale base is already beginning the process simply based on principal alone.
It seems apparent to me that USLI is already anticipating this loss of revenue (on top of the $40 million book that Burns & Wilcox will be rolling into their new startup company)due to the fact that they are pushing for about 125 retail appointments by the end of 2010. They know they have to build this new base quickly and flood premium in to back fill.
USLI was a great resource and option for the wholesalers. This takes them back to square one where they will surely struggle to be as great for quite some time.
And another thing, the agents commenting on this post such as ‘PEN15’ and ‘Ben Dover’ will still be accessing USLI through a brokered arrangement whether it be a wholesaler or a retailer with a contract. I doubt they are the caliber targeted for appointments. They are also prime examples of what USLI has to look forward to! I wonder if they sign their apps “Ben Dover”?
The reason for the recent wholesale consolidation is because the majority of national wholesalers (with the obvious exception of Burns and Wilcox) are BROKE! AmWins, Colemont, Swett are failed business models. They have way too many Chiefs taking big salaries and adding nothing to the bottom line. They also over-payed mediocre producers more money than they deserved to bolster the top line that did not result in profits.
The independent local wholesalers who do not advertise in trade journals are alive and well. Let the “billion dollar” wholesalers go away and wholesale distribution improves.
Interesting article and situation…..great comments……..I am not in the insurance industry and don’t really know anything about the situation, except for what I have read here……….I sure hope this Nerney character is close to retirement? If not he may want to look into hiring a few body guards!
Anybody that continues to do business with these guys are no better than they are. Nerney and his kool aid boys have no integrity. I dont see how he can look himself in the mirror nor can I understand how anyone that continus to do business with them can look themselves in the mirror. All broker should not only move thier book at renewal but they should take it a step further and move it now. Carriers will offer short term policies and then USLI would have to RETURN premiums. STICK it to them like they have stuck it to us. No integrity. Down south, a mans word and handshake are worth more than anything else.
Nerney is a liar and so are most of his staff. However, some are good people and should move on out while they can. Now is a good reason to leave. Stick around and they would then be no better then uncle TOM
As mentioned many times previously, USLI will have their hands full dealing with 3x to 10x the customer base in going direct. There is a lot of packaging done by wholesalers to get business through the USLI “process.”
Conversely, it will be difficult for retailers to get used to the USLI “way.” Wholesalers that have been successful with USLI needed to learn “the box” and all the rules unique to USLI. I am guessing many retailers will get frustrated with declination ratios over 60%, the inability to backdate or bind with outstanding subjectivities. USLI has never been the easiest company to work with.
Things will all get back to normal soon enough. It will certainly be an interesting 18 months.
There have been a number of derogatory comments made about wholesalers and excessive fees being charged. There also appears to be some sentiment that wholesalers bring nothing of value to the business transaction.
I do not know what the posters consider excessive fees. I do know that without fees most wholesalers would lose money on USLI accounts because of the small amount of commission income(the Retailer gets paid on multiple lines of coverage not just a $1,500 policy). Policy fees are necessary to pay salaries and overhead. If you feel like a particular wholesaler is charging excessive fees, you should look for another wholesaler. The last I checked, retailers were not forced to work with just one wholesaler.
If wholesalers are not bringing any value to the retailer, they need to be replaced. There are times when an account does not belong with USLI even if they are the cheapest price. A good wholesaler recognizes these situations and provides a better alternative. Insurance is not a commodity item.
There is little doubt the majority of USLI products are best positioned for the standard market. This is not the fault of the wholesaler. The USLI appetite was not always so narrow, and the wholesaler would much prefer to utilize USLI for many more risks. Instead wholesalers provide alternate solutions when it doesn’t fit USLI. Many retailers appreciate not having to work with multiple carriers on small premium business. The wholesaler does not mind doing the dirty work.
If your wholesaler does not make it easier for you to do business, they need to be replaced. Wholesalers are no different than the retail world or carrier side. There are great ones, there are terrible ones and there are way too many average ones. It’s your mission to find the great ones. Don’t settle for average.
Wholesalers have been making decisions for years on where to place business, and have used USLI when it makes sense for them, on their terms. Now they cry foul that USLI is not happy with that formula, and has raised their hand and said they are expanding how they distribute. I can understand why the wholesaler does not like it, because they want to have a say in how another company sells their product. It looks to me like they had their chance, and did not think it was worth it to support this company enough. Maybe they’ll support the balance of the wholesale-only companies better (not just when they can extort more commission when the chips are down).
I have not read any comments that USLI does not have the right to appoint retailers. In fact, it has been quite the opposite. Most people believe it makes good business sense for USLI to utilize a direct approach since their product offering is a better fit for the standard market.
I think the issues for most are quite simple:
1. As recently as last week, USLI was in their customers’ offices swearing they would NEVER go direct. People are upset about being lied too.
2. Wholesalers believe they were used. Over the last few years USLI has instituted a number of initiatives that put them directly in contact with the largest retailers of their wholesale customer base. USLI was able to generate a tremendous amount of retail information through the efforts of their wholesaler partners.
At the end of the day, you are only as good as your word. USLI has spoken loud and clear.
In this day and age, it looks like USLI will follow a business model similar to Lexington.
It will set aside a large number of underwriters to chase retail business, and it will designate some underwriters to go after business from wholesalers. This analogy makes sense. The fisherman with the most lines in the water is usually the most successful.
In the end, USLI delivers a great product and has a great management team. I’m sick of the wholesaler comments pissing and moaning about what might happen.
If the wholesalers could provide some value in this market, they could justify their existence. But, unfortunately, on the most part they cannot.
They will keep a renewal at any costs even if it means screwing their incumbent carrier.
with regard to the comment about brokers somehow going away,I disagree. The market will flip again-it always does and retail agent’s will be needing E&S again.
Actually, if any part of the distribution chain could be eliminated, the retail agent could. For the most part they are comprised of salesman who have no clue what is covered in a policy. As one of the folks here said, wait until USLI gets an oil & gas contractor classified as an “office”.
Please find a new policy attached, for slightly less premium (maybe), that will replace your USLI policy midterm. Although this option was available 6 months ago, I did not think it was in your best interest.
Based on increased commission and fees that I will collect, and the ability to protect my business, I now find it in your best interest to move this policy to an inferior rated carrier, and trust you understand my position. If you want to discuss, please feel free to contact me in February at the Boulders, July at the Breakers, October in Atlanta, November overseas on a cruise ship, etc.
Regards;
Your MGA
ps to retailer – let me know if you need help explaining this one.
The retailer should have an easy time explaining this once they get back from and Erie excursion to the bahamas or an Auto Owners trek to Vegas, etc.
Anyone who denies the effectiveness of incentives or the appreciation for them should promptly climb back into their hole. How many of your insured contractors receive promotions and kickbacks from their suppliers for volume/bulk purchase? How about your insured real estate agent?
What’s all of this I read about lies? Of those of you who write about lies, how many cheated on their spouse after swearing to eternal love, ’til death do you part?
Things change. Relationships change. Businesses change.
USLI’s has two responsibilities and only two: Profitability and Growth.
If wholesalers feel jilted, they should consider the same two goals. This is business, not romance.
“Part of being a winner is knowing when enough is enough. Sometimes you have to give up the fight and walk away, and move on to something that’s more productive.”
Donald Trump
How sad the east coast and Southwest must be if the wholesalers there are so greedy, lazy and fee based. Out west we have at least one wholesaler that is an expert in profesional liability, assists me in selling, does not charge fees in excess of 3-4% and keeps me for getting sued by advising me on coverage-so I can better inform my customers. USLI products are very good- but lack many coverage features many others have- at – least in working with my wholesaler- I can give my customer an informed choice of cheap or broad coverage. I won’t say who hey are-t but you all know them- they publish more how -to articles than anyone I know- and from what I ahve read here- evryone else should need them too…
As someone that was in the wholesale side for a short period of time and then back to the retail side I have several observations.
USLI’s intention has always been to compete with standard markets while being a non-admitted company. They constantly talked about being a product based company, which is true for an E&S market their product was comprehensive. However, compared to an Admitted carrier the product was inferior. This on top of the fact that they were just not competitive while spending tons of money on expenses instead of just looking at rate relief. One of the things that drove me crazy was being within a $100 of getting an account and not being able to meet or beat the competition to get the account.
I have talked to several retailers and there are going to be some major trust issues with how USLI. Personally, I would never work with USLI after they came to my office and talked about being a “partner” and then stuck it to us. I think it is funny that USLI employees on here are staunchly defending the decision and calling wholesalers lazy.
Also, retailers are not going to want to keep sending submissions when 90% of them are declined. Even though the USLI employees keep referring to wholesalers as lazy wait until they send declination after declination to these retailers. Retailers are going to get absolutely tired of sending business for them to look at and to keep getting shot down. Work smarter not harder.
It will be interesting to see how things play out. Game on.
I wonder what the sentiment will be in about 3 minutes when all of the employees are at their desks reading these comments. May be a voluntary reduction in staff coming soon and Nerney will have his expense ratio’s back where he wants them.
Fact: USLI is wildly profitable. 82% – 87% combined ratio is quite familiar to them over the past 6-8 years even in this soft market.
Why doesn’t a carrier that is truly wholesale exclusive & looking to break into one of USLI’s core business just simply file a “me too” filing and start moving books of business? Could argue this is a short-term solution as the retailer will eventually get a USLI appointment direct and move the business back, but I think that if you got started immediately a carrier could move a sizeable chunk of the easy-to-write, small biz and keep most of it for 3-5 years.
USLI does not believe in a “soft market”. It follows therefore that if you are not growing (which they are not), then you cannot blame the non-existent soft market cycle.
You could always blame yourself, you say? Pfff-shaw! USLI spends vast sums of money on marketing (they greatly admire their sister company GEICO that spends almost $1B per year on marketing), they give free marketing material out like it grows on trees and they have 15-20 people flying around the country and staying in hotels every day of the work week. So, obviously, it cannot be USLI’s fault that they are not growing.
So ….. it must be the wholesaler. Burns getting ready to move a large book aside, this is the psychology/mentality at USLI.
Maybe but while USLI’s low cost products may appeal to the retailer, they are a very difficult carrier to deal with.
I don’t think most retailers will continue to do business with them for very long. The commission won’t be worth the trouble on a book that isn’t large enough to ever learn the nuances of working with them.
Even at the wholesale level, we had a designated individual who worked their accounts only because they were so nit picky that “regular brokers” didn’t want to mess with them for the low income involved.
The only way to make using them user friendly for the retailer is to change their products to make them much clearer and more easily understood — in effect to dump their “products” and to write lines of business like everyone else. But that would entail and even bigger corporate shift than writing direct to the retailer — and with a presumably negative impact on their combined ratio.
I still have to ask this same question: If the wholesalers can’t trust them to not go direct to retailers, then how can retailers trust them to not go direct to insureds? Maybe they want to be a small commercial version of their sister company — Geico.
Way back in the days when the grass was still green ….
1. Direct bill
2. Automated/online quoting system
3. Direct marketing force (field and home office)
4. Collection of retailer data (obtained both from wholesalers as well as through direct market research and copied off the applications submitted)
5. Opening regional offices in CA (2) and TX (more are soon to come)
6. Placing USLI employees in their wholesalers offices as “catalysts” for 6 months to 2 years to “learn about what our wholesalers see” (you know wholesalers see? business from retailers)
7. Testing out the marketing of USLI products directly to retailers via the “50/50” program where USLI split the cost of a person with their wholesaler to market just USLI’s products/online quoting system.
8. Having Berkshire Hathaway buy wholesalers which are then operated by USLI (Gateway (MO), Apogee, Gateway Specialty (PA). Gateway (MO)’s president = former AVP at USLI).
Many of these things began over 5 years ago. It seems relatively obvious to me that there was a plan. I just wonder was it a diabolical master plan from the beginning or were these originally ideas to help their wholesalers, but just happen to have easy application to retailers as well? Hard to say.
I can say this with 100% certainty. In the summer of 2008, the second in command at USLI was having conversations about what a “soft landing” would look like in going direct to retailers; i.e. how they would do this without causing a huge storm with their wholesalers. I’m thinking they never quite figured that out ;)
A direct appointment makes me an agent… which means no broker fees. These types of MP policies are not profitable without a significant broker fee that is well above the extra 5-7 percent USLI will be offering. I will stick by my wholesalers on this one.
A direct appointment makes me an agent… which means no broker fees. These types of MP policies are not profitable without a significant broker fee that is well above the extra 5-7 percent USLI will be offering. I will stick by my wholesalers on this one.
I would explain it to the retailer this way: “Here is a policy from a Carrier that will not Exclude everything that could ever result in a claim.” Firearms exclusions, A&B exclusions, participant exclusions, Injury to independent Contractor exclusions.
It’s easy to have a great Combined Ratio when you never have to pay a claim.
Those of you wholesalers who think you’re going to just move your USLI business to another carrier in retaliation for USLI abandoning you ought to read your contract with USLI a little more closely. You think you’re a broker representing the insured, but USLI’s agreement is more like an agency contract than a brokerage agreement. You aren’t allowed to simply move a USLI renewal. The contract gives USLI a lot more control of their renewals than any other carrier in the business has over its renewals placed via brokers. Now, if you’re an MGA, that’s a different story, as MGAs typically have an AGENCY agreement with their carriers, so USLI’s agreement wouldn’t be out of the ordinary. But if you’re a wholesale BROKER, you might be surprised to learn that you signed what is in effect an agency contract, not a brokerage agreement. So good luck moving that business without USLI taking legal action for breach of contract.
Idea Squasher: I think you missed the key point of my idea.
Another carrier, not a wholesaler. I doubt Burns would have much success moving books of business from their direct competitors. That is the key. Burns moving their book to themselves is a great idea in my opinion, but not the idea I’m talking about.
Ideally, someone that is wholesale exclusive currently. Admittedly, the USLI service proposition is difficult to match and I doubt there is anyone with their level of sophistication when it comes to tech systems. BUT … the books you would be looking at are incredibly profitable and don’t require a lot of underwriting as they tend to not have a lot of moving parts. If you were a carrier trying to build a profitable book in a certain line, USLI’s business could provide a good, profitable base to start from.
When I found out about the action USLI was making I was very upset. Up unti a few weeks ago I was going out on agency visits with USLI Reps. At these visits the USLI rep would mention to to the agent that going to the whole saler would be the only way of getting a quote. PLus the mentionof them being loyal to there wholesalers. Another notion that I though about was a few months ago USLI started a program were they would call the agent on the wholesalers behalf and set up appointments. USLI was at that time finding out how much business the agency had. What products they see most. This was all planned and to think that us wholesalers trusted USLI as we did. I do beleive that USLI had burned a bridge without really thinking about the outcome. Who is to say that in the future USLI will lie to brokers/agents and go directly to the insureds. I have really lost my confidence and trust with USLI.
Agree completely with Carrier Perspective. All those poor wholesalers are going to do is find another market to use and abuse…and in the current environment, that’s not going to take long at all.
Not sure how this evolved into bashing E&S brokers or retail agents. It is our job to provide our retail agent customers with incredible service, professional knowledge, multiple quotes when prudent, and to conduct ourselves with honesty and integrity. We value our retail agent customer’s ability to produce business, inform clients, and sell quotes.
Each E&S shop will handle this USLI setback in their own way, but should always consider what is best for their customer, the retail agent. That is why we initially began writing with USLI in the first place. The business will end up where it should be placed, usually the broadest coverage for the best price.
Now, get back to work and write some business!
….all the happy retailers posting herein get a dose of the “rubber hose treatment” meted out by the marketing boys at USLI. And I do mean “boys”. You will be repeatedly queried on “what can we do to help you write more business”? They will insinuate that you have NO clue as to what you’re doing (in spite of the fact that they will admit they haven’t been in the business long enough to have experienced a “soft cycle”). They will insist (if you want to keep your appointment) that they be allowed direct access to your clientele and then, when you think you’ve met all of their demands, they will steal your customers from you. I never placed any business with USLI but I had to sit through these unproductive meetings. You retailers are the same bunch who act surprised when your new wife (who you dated while she was married to someone else) is caught cheating on you. Get me some popcorn. I’m looking forward to this drama.
Has anyone had a chance to review your “new contract” sent out by USLI? Basically, it gives them the right to cancel your contract at any given moment and TAKE the business direct.
Opinions?
Wednesday, November 11, 2009 | Author: Tom Nerney |
Our Committment to the Professional Wholesaler
Dear Valued Customer:
While some people may simply define commitment as a pledge to do what they say they will do, that definition is not enough by our standards. We see commitment not just as a pledge to do what we say we will do, but also as a statement of the actions that we are willing to take to assist our customer in being the best at what they do — selling insurance!
Some of you have said that you believe that our company intends to cut out the professional wholesaler and go direct to the retailer in the future. This type of rumor can be harmful to our valued relationship, which is why I feel that it is important to address our commitment to you again in this letter. In some instances, I can understand why this type of rumor may exist. However, the irony is that I cannot think of another insurance company that is doing as much to support the professional wholesaler as United States Liability Insurance Group. Many of the things we are doing to support the professional wholesaler are the very things that may be causing you concern. In the past several years, we have brought you many positive initiatives to assist you in what you do and to further develop the relationship we have built between us.
When one reflects on these things, hopefully the reaction is not fear, but rather trust that we are merely trying to grow our company and strengthen the current relationships we enjoy with our only customer – the professional wholesaler. While we may be different in some of our approaches from other companies, different is not always bad. We believe strongly in what you can do and feel that there is much more we can do together in years to come. We are excited about working with you and your team during the remainder of 2009. Thank you for your continued support and business.
Warm Regards,
Note From Thomas P. Nerney, Chairman, President & CEO
United States Liability Insurance Group is a proud member of Berkshire Hathaway. Our group consists of three insurance companies, United States Liability, Mount Vernon Fire and U.S. Underwriters Insurance Company. All three companies are rated A++, the highest rating available to any insurance entity by A.M. Best, the premier analyst of insurance companies. Our three companies give us the ability to offer admitted or non-admitted insurance policies in all 50 states and the District of Columbia.
Committed to Making a Difference
Our business philosophy is built on five fundamental principles:
• We are a specialty products company delivering innovative and stable products
• Committed exclusively to one method of distribution – the professional wholesaler
• Underwriting competency and discipline is our company heartbeat, the entire organization works to help strengthen this effort
• Create a community environment where our people know they are our #1 asset
• Consistency of five community goals – these goals do not change year-to-year
1. Combined ratio of 90% or less
2. Get what we want and have our Customers love giving it to us
3. Be the # 1 service company in the insurance industry
4. Make our people feel # 1
5. Keep it simple, give 100% effort, win and have fun doing it
These five principles and five community goals have assisted us greatly with our efforts to have our people understand clearly who we are and what we are trying to do. This clarity of purpose enables each person to focus on how their contribution works toward our ultimate goal which is to be the best insurance company at underwriting and servicing small premium accounts.
Our people are committed to working each and every day toward this goal. Our love for the industry, our pride in its significant contributions to our national economy, and our desire to be the very best we can be drives us to do our part to add true value in what we do. We understand that we can make a difference in service, education of our people, technical knowledge, claims expertise and financial stability.
We invite you to learn more about our company. We also invite you to learn more about the fantastic opportunities which are available to you within the insurance industry whether as an agent, wholesaler or working within an insurance company. The industry needs good people who care and who want to make a meaningful difference!
Thanks for visiting our website and I wish you all the best!
It is unfortunate that you think all of the wholesalers/MGA’s out there are inventing the fact that Tom Nerney made promises over and over again to his customers that he had no intention on going direct to the retail agent and he was 100% committed and dedicated to his wholesale partners? People wouldn’t be as furious and upset as they are had just left the statement alone and never said it. But Mr Nerney repeatedly (ever chance he got) promised the wholesalers/MGA’s he was committed and dedicated to his only partners/customers (the Professional Wholesalers).
Trust is the single most important factor in any business relationship. One can not turn and look the other way in a situation like this. Nor should others be naive to think it won’t happen again in the very near future.
#1: It IS all about the breaking of a promise made literally hundreds of times to the wholesalers/MGAs. Many of these same wholesalers use carriers that already do business with retailers. The difference? The many promises and reassurances made by USLI to these wholesalers that USLI would always support them. Not only that, but USLI used this promise in order to gather market data on the wholesalers’ retailers, in order to go visit their wholesalers’ top retailers, in order to place USLI employees in the wholesalers’ office as temporary “brokers”. If you cannot see how this would enrage the wholesalers, I really don’t know what else to say.
#2: I cannot argue with the profitable part of your comment. Dead on there. Efficient? A few comments about what this might mean. Great technology to support processing business (I say processing because it’s not underwriting)? Sure. Paying your employees 25-40% less than market value? Yep. Requiring your employees on marketing trips to only fly before 9am or after 5pm. Yes, again. Requiring all meetings take place and end prior to 9am or start after 5pm? Yep. Is this efficiency? Could be, but … I would not want to work for a company that is this type of efficient.
#3: It is not foolish to think that this move did not have Warren’s blessing. Do you think Warren came up with or signed off on the GEICO gecko? I doubt it, but GEICO spends about $750M a year on that little reptile – about twice what USLI is worth. Buffet’s MO is not NOT sign off on or “bless” decisions by the managers running his company. That’s why he bought them — they were successful.
I agree that in the long term it’s anyone’s guess what the outcome will be, but in order to be successful marketing and selling their products to 10,000 retail agents versus 200 wholesale agents, USLI is going to have to change.
This does not suprise me, Corporate America is ruining our business! USLI had no problem with the wholesale industry until the corporate Bullies came along.
Wholesalers just can’t win. We are not to bright if we “put all our eggs in one basket”, yet we are not loyal if we don’t give the companies all our business.
1) I honestly don’t believe this is about Nerney breaking his promise (that is if he promised never to use a retailer, did he???), but that the wholesalers believe their revenue stream wont be as it was through USLI. Let’s face it, if adding retailers meant in some skewed way that wholesalers would make more cash, what would they care? They couldn’t be that thin skinned over what they claim is principle causing them to stick their customers with less solid insurers, could they?
2) USLI will likely emerge as a much stronger company at the end of the day. Might there initially be some erosion from their book from wholesalers looking to exact retribution? Probably. But this much is also clear….They are one of the most efficiently run and profitable insurers in the industry.
3) Clearly USLI is Nerney’s company and all decisions are his to make but it would be foolish to think that this move and the PR behind it would not have been made without Buffet’s blessing. If Buffet thought otherwise, Nerney likely would not have pulled the trigger. It takes guts to make tough decisions for the company that you are placed at the helm. One thing about Buffet is that his organization is seen as pristine and if he felt this would tarnish it long term, regardless of USLI’s size, he would have shot it down. Even after a tough 2008 and questions concerning his purchase of BNSF, BH remains the class organizations of all in the U.S. With a lesser/different owner, this move may have been riskier but Buffet is a visionary and has great senior management in his companies, including USLI, otherwise he would not have them as a part of his stable.
The effects of this can’t be measured in months or maybe in the first couple of years. Long term, however, USLI will likely emerge as a company that will profitably grow in ways in which their prior model did not allow them to. This one will be interesting to see how everything plays out.
We might debate the quality of coverage; Admitted vs. Non-admitted; and we might take a veteran industry perspective…but the truth is, this move is designed to meet the long term reality of consumer demand and decreased retailer professionalism.
As more retail agents compete only on price – not even understanding coverages much less explaining them – “quality” ceases to have value.
There are multiple causes for this societal shift…suffice it to say, futurists see this trend. Us wholesalers are heavily invested in and dependent on the salesmanship and professional integrity of independent agents who in turn are struggling to meet the demands of an ever-declining business IQ among their customer base.
Just think about the meta-message inherent in the Progressive ads where a dingbat salesclerk pulls your product off a shelf.
USLI and more specifically, Tom Nerney advocate the importance of offering a “company story.” The purpose of this “company story” is to construct a consistent message about USLI’s core values and generate TRUST amongst its customers.
I had the pleasure of listening to Tom’s eloquent delivery of USLI’s company story twice, and both times he was consistent in his delivery. His message was that of “being committed to the Professional Wholesaler.”
In light of recent events, Tom Nerney’s company story has changed, the TRUST is gone, and what plays out in the end I feel will be like a bad lifetime movie with alternate endings.
I wish you the best of luck USLI in what plays out in the months to come, and for the sake of your employees, I hope the ending is a “happy” one. My heart goes out to all of you who have worked so hard to develop great relationships with your wholesalers over the years. It seems as though Tom has little appreciation for all your life’s work.
Good luck to you all, and let me know if you want any help with your resume.
Your approach works well in theory but some posting here have already complained of (greedy) wholesaler fees regardless of the commission. If your retailer can’t sell fees, your approach falls apart. I submit that USLI will fail because their approach is shrill and retailers won’t put up with it. Larger agencies MIGHT but what do THEY need with another BOP market? Smaller entrepreneurial agencies will never tolerate a carrier “in their face” demanding business. Most smaller agents have hooked up with some kind of networked arrangement to get access to the markets they are not directly appointed with and don’t need, again, any more BOP markets. The business USLI writes is a loss leader for most agents. You can’t spend time adding value and squeeze any profit from a $500.00 policy premium. USLI is the next GEICO. How else can this drama end?
Many have commented that USLI is going to become the next GEICO and have drawn several comparisons. Definitely a possibility.
Here’s another thought: Philadelphia Insurance Company — you may remember that USLI’s new ploy is strikingly similar to what Philly did several years ago (then they tried to go back to the wholesalers, then they cut most of them loose again).
First, as another motivating factor (market forces, B&W etc) don’t underestimate how much the sale of PIC to Tokio Marine for over $3B had on Tom Nerney. He used to be the president at Philly, he left, they went direct to retailers (for the most part) and then were sold for a large fortune. Many have spoken of “greed” as a factor in USLI’s move. I’m not 100% sure about that, but if it is, then the Philly sale as to factor in heavily.
Second, and here’s the prediction, USLI will not end up turning into a GEICO. They are really not geared up with the infrastructure to deal with retailers — only three regional offices currently. Even with a good technology platform, it would take some time to get rid of people who currently have the title of “underwriter” and replace them with sales, marketing & IT staff to run a tech-based operation.
I predict that long before USLI goes direct to the consumer, they will be purchased by Tokio Marine and folded into Philadelphia Insurance Company. Yes, lots of personal history to overcome with Tom, the MaGuire’s etc. But I think it’s going to happen. Call me crazy!
Dear Texan: The reason wholesalers still exist is because non-admitted companies don’t have the enormous infrastructure to deal with retail production sources, nor do they want to. Having worked both retail and wholesale, I can attest to my experience in agencies that hire the cheapest employees to populate their offices with the thinking that “a monkey could process the paperwork”. Surplus lines carriers actually underwrite business. They don’t just find a rate in a manual or online and “process” a quote. As such, they do not wish to do business with “monkeys”. I would guess that you’ve never done business with a professional wholesale partner and you allow your clients to treat you as nothing more than another business commodity.
I do not charge high fees. If the insured does not want to accept a fair $100 to $200 fee on a policy then they can feel free to play russian roulette with their insurance.
Most retailers are not intelligent. I am sorry but it is true. They could not tell you why its not a good idea to add an additional insured on a policy if they are doing business with them, and they would not understand what a financial institutions exclusion on a appraiser policy would mean for their insured. Nor would they have the relationships or expertise necessary to get something done if a carrier is treating any specific insured badly.
My value is simple. I am the insured’s advocate. I trigger policies, I allow my retailers to write more business because since I do all the work, and I make sure the insured is properly covered. If any retailer cannot understand that and appreciate the fee — well then quite frankly they can go it on their own and when the claim is not covered they pay more for their own professional liability policy.
Fees in other industries are common. Airlines charge baggage fees. Hospitals charge documentation fees. Car dealers charge delivery fees. Mortgage brokers charge so many fees that it is impossible to name them all. The average american consumer gets NOTHING for most fees they pay.
I provide real value in the form of making sure that the average insured does not get screwed because their retailer does not know the difference between a retroactive date and a continuity date.
If any of my retailers made a comment like the one Texan made, I would cut them off.
The average american retailer should be scared stiff of the idea that one day us wholesalers might just decide it is a good idea to become retailers ourselves.
Good wholesalers know that we do not need retailers. It’s the other way around. Without us claims get denied and premiums go up.
USLI does not scare me. If they want to be the Walmart of the insurance industry, let them. They have a bad policy form, and their underwriters do not underwrite.
Every retailer should be scared stiff of dealing with USLI. USLI will has no problem excluding something that needs to be covered because their bottom line is profitability at any cost.
And for a retailer that probably spends most of their time on items like GL and workers comp… I say good luck getting it done on your own.
I personally know my customers would rather make an extra buck in the form of more commission from me and take solice in the idea that I have made my career in making them more efficent and productive organizations that sell policies that produce when the claims arrive.
Retailers are not intelligent? Really, Drew? Sorry, but only an idiot would make such a statement.
Here’s the deal… Retailers (as a group) are no more or less intelligent than wholesalers. Or company people. Or plumbers. It’s about training — not intelligence — and about the extent to which an individual is or is not sufficiently motivated to secure the training needed to meet the highest professional standards.
I’ve been a retailer, a company person and, for the past 20 years, a wholesaler. And I will tell you that one of the wholesaler’s most important jobs is finding retail production sources that are sufficiently trained, honest, motivated and organized that they can be trusted to be consistently professional. If the retailer is professional, then the wholesaler can make the most effective use of his or her time — instead of having to spend twice the time on each submission for half the hit ratio.
Sorry Drew but my experience has been that poor wholesalers tend to attract poor retailers. And strong wholesalers tend to attract strong retailers. If the agents who are drawn to you are “not intelligent”, then perhaps you should ask yourself why that is — and what you have to do to attract a better quality retailer.
As respects fees, sometimes they are justified and sometimes they are not. A wholesaler is supposed to add value to the transaction. If they don’t, then their fees are probably not justified. If they do, then they are worth every penny. The same holds true, by the way, for retailers.
I think that USLI is going to have a tough go of this.
~ Their wholesaler “partners” will abandon ship as soon as they can find carriers willing to say “me too” and do a book rollover. It’s about trust and trust has been irretrievably shattered.
~ The drop off in business will result in some pretty hefty layoffs; USLI is going to lose some key talent. I cannot imagine that a lot of the good people, people who have taken great pride in their corporate image and pledge, are not already out there interviewing. Perhaps with a carrier who is in the process of gearing up to say, “me too”.
~ As I’ve said before, if wholesalers can’t trust USLI to not go direct to retailers, then how can retailers trust USLI to not go direct to customers? I just don’t think that retailers are going to rush to line up for this appointment.
~ Retailers tend to assign small accounts to their least trained individuals and they are going to struggle to do business the USLI way. Indeed, I think that USLI will have to change the way that they do business — abandoning their “product approach” — and its focus on minutia — and going to a very simplified line of business approach.
Finally, as respects whether or not Buffett gave advance approval of this move, I’d guess not. He doesn’t tend to inject himself into the companies that he manages, but he does field phone calls from his Presidents and he acts as a sounding board when asked.
This is or should have been a matter that Nerney sought him out about — whether he did or not, I can’t say.
But I would be very hard pressed to think that Buffett would have ever approved this kind of betrayal. I’m a bit of a Buffettologist and his number one guiding principal has always been to act with integrity.
The Buffett that I “know” would have much rather written off the loss of a $40 million book than to have gone back on his word — especially in such a public way. I still think that Nerney will lose his job over this.
Parting thought… Nerney has nobody but himself to blame for his current troubles. I mean what the hell was he appointing large national MGAs for in the first place? The only way those folks can make money on small accounts is to go after the underwriting profit too. That they would eventually do so is entirely predictable. And Nerne’s failure to anticipate that, and/or his decision to appointed them anyway, is his own mistake.
While there are a lot of high end retailers out there I would agree with this comment 100%. Most retailers are “ham n’ eggers” that put little to no effort into furthering themselves in this industry to help their clients.
Being in FL we have a $35 cap on fees and you don’t know how many times I have gone back and forth assisting an agent on a $500 policy. By the time it was said and done I actually lost money on the damn thing because of the time and effort I put into it.
I can only add, once trust is broken, it’s hard to regain. Even with the back peddling of saying they are only going to appoint 150 retail agents nationwide — how can we trust them on that?
I, personally, feel EXTREMELY betrayed — I bought the USLI line hook line and sinker — I did customer’s customers visits, etc. As little as THREE WEEKS ago (two weeks before the announcement) they were in visiting my agents with me – -I absolutely and unequivocally do not believe they didn’t know at the time — the employees who came out may not have, but Drew and those at the top most certainly did! I just wonder how long — they’ve been doing customer’s customer visits with me a long time.
I feel like a girl the morning after she realizes the guy said “oh honey, I’ll love you forever if you just sleep with me” and then realizes it was a line. Only, this is WAY worse — I wouldn’t be stupid enough to buy that. I thought USLI and their employees had more ethics and professionalism! I feel dirty and cheated on!
And I completely agree- if they do this to wholesalers like has that have a million or more in business, I hope the retailers who may not even hit $500k with them don’t think they can trust them!!!
Shades of Philly all over again — but at least with Philly you know they are the “player” of our industry and go into it with full foresight that they might stab you in the back!
If this is your experience, I suggest you find new wholesalers! There are wholesalers out here that DO value loyalty and partnerships. I grew 20% with USLI last year. I am extremely loyal to my markets — I try and discourage retailers from shopping existing accounts for a variety of reasons, however sometimes as wholesalers we’re forced to. When that occurs, I ALWAYS give the current carrier last look/last opportunity and those quoting against are told that and they appreciate it because they know if it’s their renewal they are getting last look.
If you have disloyal wholesalers, find new business partners!
You do understand in MANY instances we only get that or WAY less — in the majority of instances most of us pass 50% or better on to you. We have overhead and costs as well we aren’t charities any more than you are!
On many of my USLI accounts I pay 15% to 18% to agents. We NEVER charge fees on admitted USLI DESPITE the work it takes to write these tiny accounts — we barely break even on them but they are an accommodation for our business partners.
Believe me, if we could pay 20%, we would.
The only way we can is to charge HUGE fees and then where would that leave you when your client goes down the street with a BOR not charging those fees and paying a little less commission? Your competition is going to accuse you of being unethical for charging all the fees and taking all the commissions.
Remember, 99% of the time we are making the same as or less than retailers.
I love how retailers assume we get like 50% commissions or something. Would be nice!
There are a slew of companies that can compete on USLI pricing and programs.
Being on the West Coast the markets I’m aware of that can compete would be:
Scottsdale/Western Heritage
Nautlius
Catlin
Max Specialty
Penn America
Montpelier
Markel/Essex
Capital Indemnity
Century Surety
First Financial/Burlington
You can’t just send your contract back and roll a book overnight lady – You get real! I would venture a guess many Wholesalers/MGA’s are talking with other markets and are in the process of moving their books and giving USLI the finger.
And I say if obtaining an appointment with USLI makes sense for the agency you work for more power to you (I could care less if they burn you in the end)……….So best of luck to you!
But let me ask you this and any other retail agent who wants to chime in…………have you ever contacted your wholesaler to try to negotiate a higher commission rate & suggest if they offer higher commission they could bump up the policy fee…….of course all in the best interest of your clinet, the insured?
USLI has been planning this for some time. Do you really think that it was a decision made overnight? They have no ethical standards. Those (agents-MGA’s) that say they understand are disconnected. How can you partner with a company that does this. How can you trust or have any respect for any of thier employees? For those employees still working at USLI, you have no integrity. You hang around dogs that have fleas, you get them. You career will be tainted and you will be looked upon as part of an unethical group of individuals who’s greed overcame you. Nearney makes all the money with a handfull of others being paid fairly well. The rest of the employees are mid level talent acting as a flunky. They get paid nothing comparred to the industry and are being used daily by the greedy one at the top. Nearney will use his cult tactics to get you to believe daily that you are doing the right thing but I can gaurantee you in the end, he will turn his back on you for his own personal gain. USLI is a joke in the industry. Other companies laugh at thier leader and their employees. Other MGA”s always talk about the Kool Aid boys and what a joke they are. NO RESPECT..I wonder what Buffet thinks of all of this? My take is that he will NEVER go anywhere near this one as he would be ashamed. In the end, Buffet will ALWAYS have this in the back of his mind when he is speaking to Nearney. As far as moving forward, only the second tier MGA’s will continue to support these people because they have few options. No operation with any integrity will support these people moving forward and NO RETIAL agent from the top tier will support them either. USLI has really made a bad decision. The greedy leader is responsible for messing up what was a pretty good company. Too bad…they could have been a “Contender”
Boy, Drew’s original post on this says it all. Being from another side of the business risk transfer but having dealt with Warren and his companies for years, Tom and he are yuking it up on this under the delusion that they can get to the insureds and carve out “wasteful” distribution they don’t literally own. Reatilers would exteremely naive and foolish to not see what is next. As I write this Tom Petty croons on the radio “this will be the last time you’re going to hurt me”. Retailers be VERY AFRAID.
I stand by my comments. Maybe 70% of retailers are complete morons. I have some very good retailers, and those are the ones I choose to partner with on a day to day basis.
You can complain and moan about the my comments all you want.
At the end of the day, though, it remains:
IF RETAILERS WERE NOT STUPID, THE PROFESSIONAL WHOLESALER WOULD NOT EXIST.
There I said it. You people need us, because you are and will always be lazy, incompetent, and most of the time — Both.
I have been in this industry for 35 years as captive agent, claims adjuster, agency owner, company commercial underwriter. I find your comments about USLI very interesting and really, very informative.
I have to agree, that trust makes this business go round (or did…sometimes I wonder).
So here is my question: Many of you have used Phly as another example of company going around the backs of its producers. Then why do you still do business with them? Please note that this is a legitimate question for which I would really like to know the answer.
Drew, wholesalers don’t exist because retailers are lacking intelligence. They exist for a variety of reasons, including:
1. Some retailers, and on small accounts, especially their assistants, are not adequately trained (not, “not intelligent”) in specialty lines, generally.
2. It is cheaper for binding authority carriers to use MGAs to serve as their “regional offices” than it is to set up and maintain their own regional offices.
3. We are far better at marketing to the small town agents, and to small to medium sized agents generally, than they are. We don’t just add value to the transaction — we add transactions.
4. Few agents write enough of certain lines of insurance that it is fiscally responsible to develop either their knowledge of every specialty or their knowledge of the marketplace for all specialties. It’s not that they are not smart enough. It’s that they don’t have the need.
Basically, we are consultants and you seem mighty full of yourself in that role. It might be wise to be a little more humble. Remember what they say about consultants… A consultant is a man who knows 120 different sexual positions — but who doesn’t know any women.
My point is twofold.
First, you don’t have to sell to the public — they do. You have the easier job. You can pontificate all you want on your intelligence, but they know the women and you should respect that.
In fact, it is clear that you need to respect your customers a whole lot more than you do. If you are not able to do that, I suggest you find a new line of work.
Second, and I repeat, if 70% of your agents are “complete morons”, then you have attracted those at the bottom of the barrel and you might consider why that is — and what changes you need to make in you that will improve your attractiveness to those at the top of the barrel. Because until you make some changes yourself, you are always going to attract the “morons”.
All of these coments from wholesalers, are you trying to convince yourselves all of these posts are true? No one else is buying it. Retailer will do what’s easiest and best for their insureds. How is my wholesaler who has pushed USLI for years going to now try to tell me they are all of a sudden inferior because they are increasing their appointments? Sounds like you are all just trying to make yourselves feel better!
Yes I agree that retail agents are going to do what ever is easier to get the business and help insureds. But who is to say that USLI will not turn there backs on the retailers as well. Then Wholesalers can say we told you so. Retailers are going to do what they want to do simple as that.
As to USLI I beleive the trust is gone. How can the USLI reps go back out to these retail agents and tell them they want to write direct with them after I am sure they were there before with a wholesaler stating that our only way of distrabution is through the wholesaler. We stand by our wholesaler…..
Now they are going to go back out and tell the retail they can come direct.
Hmmm just come right out and say you lied.
We will have see what happends . But my advice to other wholesalers do not put all your eggs in one basket.
And to retail agents- dont burn the bridge with your wholesaler. You never know when you will need a quote right away and USLI can not write.
It’s comical to think that the griping wholesalers do so because they feel burned and in their quest to stick it to USLI are trying to warn us retailers that we need to feel scared in that one day, they will turn their back on us too so don’t trust them. I’m a retailer and simply put am not scared. I’m here to serve my insureds and if it makes good sense to use USLI, I will. Beyond that, USLI simply does not currently have the infrastructure to grow into, as has been suggested, a GEICO. When will that happen folks? 50 years from now? Do you really think a company that writes 400M will spend 1 Bil on advertising as the big boys do? Beyond that, USLI has not abandoned their wholesalers but only have added retailers like us to grow their business. Get real people, all of the wholesalers are not leaving because many have concluded that it is good for their business to stay with USLI. For those that don’t, put it elsewhere as I will gladly do what I can to write through them if if helps my insureds.
In closing, I like the comment by Cassandra from earlier today. If USLI is now being compared with Phly that goes around the backs of its producers, why still do business with them?
Wholesalers, please accept the change in the landscape and let us retailers celebrate the chance to write direct without the complications you cause many of us.
I thought the post had to do with USLI? As I read through the comments I noticed a lot of posts debating who provides more value the retail agent or the Wholesaler/MGA. The roles are too disimilar to compare, not comparing apples to apples. While some retail agents perception of the GA’s role is simily to prepare a submission to present to the Company, wait for a quote & forward on to the retail agent for review and consideration (basically a paper pusher). This perception for the most part is inaccurate. A lot of your MGA’s have the authority to underwrite, bind and issue policies on behalf of the Carrier (this is why fees are collected to help absorb some of the costs associated with issuing the policy, handling audits, inspections, etc – remember most GA’s receive the exact same commission rate the retail agent does). For those who have not worked on both sides – I think you would have a tough time switching roles and would be surprised to see just how different the roles are from what you expected.
1. I deal with some of the biggest agencies in the country. Our office is extremely successful, and our agencies are big enough to be profiled by this very magazine.
2. My agents do not sell professional liability on a consistent basis because they focus on other lines of business. They are not specialists. Without me interpreting the policy correctly, they would not know what it is they are selling. Oftentimes my retailers bring me on to conference calls and meetings to close deals. Again – your point is ridiculous.
My point is one fold. If my retailer could do all of the policy interpretation and go into these meetings alone — why would not do it? These are NOT mom and pop shops. These retailers are big agencies with hundreds of employees. I deal with retailers from all over the country, and the answer is always the same.
No matter how big the retailer, no matter how reputable the agency, and no matter what you say sir expertise in this industry is EXTREMELY tough to come by when dealing with this class of business. This is why I am going to continue making a lot of money well into the future.
Most people do not get their CPCU or RPLU (or any similar designation) because they do not have the time or simply do not understand the concepts necessary to get the job done.
Expertise makes our job necessary.
Just like the smart kid in calculus class that everyone needed because they were too lazy to do the homework is necessary — so am I.
Retailers will always need “the smart kid” to copy off of because it provides an added layer of protection for themselves and it makes it easier for them to sell a policy when someone is available that actually understands what is being sold.
Retailers get bitter and start making comments like yours because they wish they could do it themselves and not have to give the revenue to a guy like me.
If you had said that it was hard to come by agents with expertise in the areas that you specialize in, I might have agreed with you. After all, there are enough markets around that are willing to deal directly with retailers that agents with expertise probably don’t often need us for those lines where they have expertise. They tend to use us for those lines of business for which they do not have particular expertise.
However, it is a far cry from saying that someone lacks line of coverage expertise and saying that they are “not intelligent” and, worse, that 70% are “complete morons”. I was objecting to your absurd characterizations.
Claiming as you did, and in all caps no less, that “IF RETAILERS WERE NOT STUPID, THE PROFESSIONAL WHOLESALER WOULD NOT EXIST” is so way over the top as to be laughable. It is insulting to the professional agents that we both work with. Most agents aren’t stupid — and that’s not why we exist.
As for my picking up a book, I have done my fair share of that. But I would point out that book learning or classroom learning has its limitations. Going back to my previous analogy, you might want to meet some women too.
I don’t do business with them because I have NEVER trusted them — however, at least Philly was always up front about their going around you to the retailer or around the retailer to the insured directly. Everyone knows this UP FRONT. The problem is — USLI used the LIE that they weren’t like Philly to gain our trust. If they’d just been up front about it we would have dealt with it and treated them like Philly.
ROTFL…that was cute! My saying is always, “Those that can, do. Those that can’t, teach. Those that can’t teach, consult!”
I actually don’t think of myself as a consultant so much as a teacher. I will willingly admit – from the standpoint of cold calling insureds day in and day out, it’s not for me. I love to teach my clients about professional liability (all levels) — they generally don’t know it as they have a GL mindset &/or don’t work in it much. THAT is the value added!
We are not trying to convince you their product is inferior — not at all. They still have a good product (though there are others that will compete nicely). We pushed them because of the ease of doing business – in by 2, out by 5 — which allowed us to return business to you quickly. Do you think with wholesalers moving business and revenues dropping while increasing the number of “partners” (I use that term loosely with USLI) they will be able to maintain that standard of business? Especially the way some of the submissions come in. No offense — there are some GREAT retailers that no how to fill out apps and there are some that, well, they don’t know how and all they do is gripe about us asking for more information.
Service will suffer.
This aside from the fact that if they have stabbed their wholesalers in the back that have given them MILLIONS in volume (quite literally) they are going to feel ANY loyalty to an agent giving them $100k??? (and that’s a lot for one retailer — remember, these are accounts that average $2500 MAYBE (if you are doing larger professional with them).
So, basically, you have no problem with a company that will stab you in the back, too?
What happened to the industry loyalty? Who are you going to go to when they non renew your insured after one claim? (I have several small NDO’s I’m working on with that situation right now)
As suggested above, don’t burn your bridges with your wholesalers. Unless you are a Gallagher, Lockton, Willis or Marsh you can’t exist without wholesalers to some degree.
We DO value loyalty and we have long memories when our “partners” (retailers &/or companies) don’t.
I really do not have time for all this back and forth.
To say someone is stupid and at the same time say they lack expertise is one and the same for me. That’s just like saying someone is a midget and saying they are vertically challenged to be nice. You refuse to acknowledge the fundamental and irrfutable point that is unavoidable. If anyone could avoid paying commission to an outside source — they would. End of story. Retailers need us. I know it. You know it. The markets know it.
Retailers should really worry that wholesalers do not start directly competing with them one day. Wholesale direct insurance. Sounds like a fascinating concept.
Congrats on the CPCU. The other three not so much. I did not see the RPLU in there. I would get going on that given all your comments.
I have been married for over 10 years.
Let’s both stop wasting each others time. You have business to place on your own, and I have clients know the value I bring to the table.
From those wholesalers that took them on retailer visits, especially within the last year (and in some cases weeks before) where they were making their claims while data mining our customers, I would say that possibly constitutes deceptive trade practices, possibly corporate espionage (which, yes, is a crime), tortuous business intervention, illelgal use of corporate trade secrets (seeing our relationships first hand with our clients) — who knows — is there an attorney out there???
PS –just one suit would FREEZE their right to delete anything under the E-Discovery laws and memoes could be requested under lawsuits and we’d find out how long this has really been going on.
Drew wrote:
“To say someone is stupid and at the same time say they lack expertise is one and the same for me.”
You can’t be serious. Are you saying for someone to be intelligent, they need to have expertise in everything? That would eliminate pretty much the entire population. Some of the most intelligent people I have ever met are Retailers. The fact they recognize their limitations in professional liability and seek outside counsel is an example of intelligence. It would be stupid for them to act like experts in areas where they are not. The lack of expertise in one specific specialty does not make you stupid. Not getting help does.
I’ve been reading these comments for almost two weeks now, and what is happening besides a lot of complaining? NOTHING. I have yet to hear a GA is willing to move business to another carrier. They are all afraid to lose a market for liquor and the small minimum premium business. So life goes on.
I have yet to see or hear any wholesaler RETURN THEIR CONTRACT –OR– start moving their book of business to another carrier. So all these posts and comments…….just lip service. I’ve been calling people asking what they are doing, and they confirm….nothing concrete. So what’s it going to take?
USLI may be smarter than we all think here. When push comes to shove, how much DWP will they really lose? I said it two weeks ago and I’ll say it again today…..where’s the action besides just complaining. Either return your contract, move business, or complain over a beer after work.
I didn’t know you could move millions of dollars of business in 2 weeks!! You need to come work for me, I could use a go-getter like you that can process THAT much business in two weeks! Dang — you’re a superhuman! If you can work that fast and be accurate too….I am sure there are more than a few MGA’s that would be willing to hire you. You should put your resume out now — be sure to note that you have the ability to move MILLIONS of dollars in small premium policies in 2 weeks!
Like I said before you cant just send your contract back and roll a book over night! Trust me I am sure most GA’s are still in the process of securing another market before sending the contract back (you know you don’t want to put the cart before the horse)………so don’t grow impatient and just settle down.
Perhaps you haven’t talked to the right MGA’s. I’ve heard that some MGA markets are offering to match USLI renewal quotes–price AND terms. But I suspect if MGA’s started doing this en masse, USLI would pull their contract immediately. When they’re doing it to the MGA, it’s just business. When the MGA does it to them, it’s a sin (bad faith).
I was stewing about this when I first found out what USLI was doing.
But now have a different opinion. In insurance just like anything else its all who you know. It all about service and commitment.
Yes what USLI has done was shady and I dont think I will trust them anymore but the more you spend being ticked off at this issue the more time you are taking away from writing bussiness. There are threads on here from both agents and wholesalers dising each other which is also a waste of time. If you are dealing with either a company, wholesaler or an agent you will draw your own conclusion on what you think of them. If service, quotes are not what you expected then move on. USLI is not the only company that we as insurance proffessionals deal with……..
You think that agents were true believers, how about the employees? Not only are a lot of them going to lose their jobs in the transition but I think that those who don’t are going to have to feel rather betrayed by their company.
All the talk about core values and 150 plans and it was all BS — something that was discarded like yesterday’s newspaper. It was their integrity as well as the USLI’s that was on the line and they are the ones who have to take the phone calls.
Would some USLI employees care to post their feelings on this from their home accounts?
I’ve talked to some former employees now at other carriers and they feel VERY betrayed and are extremely glad they are gone — they could sense this coming. Would be interesting if some of them would talk openly….
Agreed. Those of us that are out are sad to see this but glad to be gone. It will be tough for the ones that grew up in the biz there and have never been shown how it really works. One of Nerney’s famous sayings was “I want you to be able to work anywhere but choose to be at USLI”. Nice sentiment, but not realistic at all.
Most of the kids working at USLI have no idea what is going on. They are not underwriters in the traditional sense. They have no idea how to evaluate and price risk. They, like too many young folks, only know their company’s guidelines and whatever the rating system spits out.
Most of them are stuck at USLI because no one else wants to hire a box underwriter at the salaries being paid at USLI. They are so insulated from the real world that they have no idea they are not in the game. I bet over 95% will quickly adapt to the retail model. They don’t have a choice.
Long term, USLI may do as well or better than they would have with a wholesale model. But I suspect that a lot will lose their jobs in the next year or so as book transfers will probably hurt written premium much more than retailer production will help it.
It is going to take retailers some time to learn the “USLI way” — and in fact, I think it may be that USLI may have to learn the retailer way. Small accounts tend to have the lowest paid people working on them and that’s going to be a problem for USLI.
It’s interesting that the first reason given for the decision is that they aren’t meeting their top line premium goals.
Apparently Nerney blames the wholesalers instead of the economy, his own flawed business plan, etc.
Tom, pay attention here…
1. There is a recession and it is hitting small business worse than big business — and so it is hitting writers of small businesses harder than writers of big businesses. I can assure you that most of your wholesalers are down every bit as much as you are in both item count and premium. And so are most retailers. BRK.A fell from $150,000 a share to less than $80,000 a share at one point. What makes you think that you should be immune from the impacts of the recession?
2. You are not a standard market and should quit pretending you are one. Standard markets have to take a much broader selection of risks. They also pay profit sharing to their retailers.
3. Your product mix is too confusing. You need to take a line of business approach. The various combinations of products that are available is extremely confusing — even to people who work with you daily.
4. Your underwriting appetite is bizarre — you say you write things (like contractors) where your appetite is so narrow that you make your wholesalers look stupid when they tell retailers that you do them — only to have 95% of them declined.
5. This is a business that is grounded in trust before anything else. Good luck meeting those top line premium production goals now. Your wholesalers don’t trust you and your retailers only have to look at what you just did to your wholesalers to know how trustworthy you are.
No since trying to educate someone who is so far removed from the real world. He *might* get it when he doesn’t have his corporate jet anymore and he’s collecting that great big unemployment check!
I know the management of USLI keeps posting on here that it’s not going to happen, but as others have said, we wholesalers have to get our ducks in a row and prepare. This doesn’t happen overnight and the fact that they think it can is further evidence of how far removed they are from the way this business REALLY works.
They can say we are “lazy” or we need them…but the reality is, we aren’t lazy. We are profit concious just like them — their model worked for us on this tiny business where even touching it once we were losing money (the business was an accomodation for our partners, not to make money for us). Fact is, none of us are lazy — we just choose to expend our energy writing the meatier accounts writing us money and leave this small stuff to an “ease of business” model. Based on the amount of this business that is out there and now “up for grabs”, you and I both know how many markets are clammering for that business….including the willingness to make it REALLY easy for it to be moved!
As others have said, though — time to get to the getting to so the management of USLI lurking here can stop wondering and start seeing what betrayal gets you!
I really feel for the Kool-Aid kids. Here they are one day on top of the world………fresh out of school and hitting corporate america. The first real job you land is amazing. You are working for a successful company and a generous employer who appears to have your best interest at heart………then WHAM! All within a few moments the employer you had fondly admired, looked up to and respected turned into this deceitful, greedy person you hardly knew.
Now you are in a real position. You have grown accustom to your current lifestyle and income…the economy stinks and there aren’t many jobs out there what to do? Follow your own feelings and sort through the mess? Or continue to follow in the footsteps of your leader “Uncle Tom”! This is really a moral dilemma each of the kool-aid kids have to face……..Nice position you put these kids in Tom! Way to GO! How twisted is it that this was your plan and intent along!
That when you get your quotes (renewal or whatever) the wholesaler copy no longer says “wholesaler” it now says “customer”???
Interesting…..
I’ll be glad when I work through the cycle and don’t see anything at all! Just renewals and stuff that was in the works prior to T-Day 6/21 (T-Day = Tom’s D-Day)
1) No more agency visits from USLI every other week. Besides who will really let them in there office. If they do want to visit meet them at a fastfood place for a Dollar meal since that’s the only value they will bring.
2) No more hearing Tom tell us of the 100 year plan cut short by 85 years.
3) No more Customer college stuck in there office for 2 days.
4) No more production calls you are down
5 submissions.
5) No more lying on that dam Company Survey for 100% participation. Like to see that come out now.
6) Do you think they will show up for NAPSLO or AAMGA or cut expenses.
7) We don’t have to worry about Tom speaking on another Insurance panel designed for MGA’s & Wholesalers.
If this was in reaction to someone filing their fates and forms, why didn’t they freak out and change distribution models when Progressive did the same thing? Seems to me like that would have been a good time to tuck-tail-and-run. It was clearly and well timed occurrence that offered and out, seemingly. And it’s not like there aren’t plenty of other companies who have taken the products/forms and done something almost mirror image.
I just got to thinking — I wonder if the retailers are going to like the fact that on new business they are never blocked until coverage is bound….it might work for some but tick off some others. No protection on quotes….
Mr. Nearny is a CPCU — I wonder if he’s read the Canons lately or the Code of Ethics. Maybe someone should contact the AICCPCU and file a complaint — regardless of anything else, what they did was unethical plain and simple!
. Inquiry
a. Upon written, signed request, the president shall cause an inquiry to be made for the purpose of determining whether there is reasonable basis to believe a violation of this Section has taken place. Requests should be directed to the executive vice president at the national headquarters.
b. Inquiry shall be made by a committee appointed by the president. A committee of inquiry (thereafter the “committee”) shall be comprised of at least three persons, each of whom shall be a member of the Society. A finding concurred in by the majority of the committee shall be the finding of the committee.
c. The committee shall review the written request. If the committee finds that the written request does not state allegations which, if sustained, would constitute a violation of this Section, it shall so notify the president who shall notify the originator of the request. If the committee finds that the written request does state allegations which, if sustained, would constitute a violation of this Section, it may make inquiries of the member whose conduct is the subject of the request, and may make inquiries of other persons who may have knowledge of pertinent facts and circumstances.
d. The committee shall find whether the evidence is sufficitent to support the allegations in the request, and shall so notify the president who shall notify the member whose conduct is the subject of the request, and the originator of the request.
e. The committee may request guidance and advice from the Board of Directors or from the Ethics Committee. Such opinions or advice shall be reduced to writing and appended to the findings of the committee.
f. Relevant information gathered by the committee shall be given to any appropriate conference panel.
Well, he is certainly guilty of Specified 2 & 3 and unspecified 1 — possibly specified 1 if he’s found to have committed deceptive trade practices.
Specified Unethical Practices
1. To violate any law or regulation duly enacted by any governmental body whose authority has been established by law.
2. To willfully misrepresent or conceal a material fact in insurance and risk management business dealings in violation of a duty or obligation.
3. To breach the confidential relationship that a member has with his client or with his principal.
4. To willfully misrepresent the nature or significance of the CPCU designation.
5. To write, speak, or act in such a way as to lead another to reasonably believe that the member is officially representing the Society or a chapter of the Society unless the member has been duly authorized to do so.
6. To aid and abet in the performance of any unethical practice proscribed under this Section.
7. To engage in conduct which has been the subject of a presidential or Board of Directors directive to cease and desist.
8. To engage in any act of a retaliatory nature against another person reporting or providing evidence of an ethics violation.
——————————————————————————–
Unspecified Unethical Practices
1. A member shall not engage in practices which tend to discredit the Society or the business of insurance and risk management.
2. A member shall not fail to use due diligence to ascertain the needs of his or her client or principal and shall not undertake any assignment if it is apparent that it cannot be performed by him or her in a proper and professional manner.
3. A member shall not fail to use his or her full knowledge and ability to perform his or her duties to his or her client or principal.
I think you’re over-reaching. Nerney’s pledge to never go direct to retailers may have been ill advised and his failure to honor it reprehensible. But I haven’t seen anything beyond speculation that suggests it was part of a prearranged plan — an intentional fraud. Unless it is unethical — instead of just stupid — to violate your single most touted core principle, I don’t think there are any ethical issues here.
Personally, I think Nerney screwed up big time, a long ago. He never should have appointed national brokers — most carriers know better than to allow too much of their production to come from a single source.
And if he was unhappy with his production, he should have looked first at internal issues impacting production before blaming his wholesalers.
In my view, Nerney’s production problems stem from his own system. USLI has a convoluted and confusing product mix — they have over 100 products — and an equally convoluted and unclear underwriting appetite. While we generally understand the “hit zone” bullet points, understanding rarely went much beyond that. The gray areas, the outer boundaries, those were never made clear. How the heck do you market what you can’t possibly fully understand?
Nerney failed to take advantage of his “customers” underwriting abilities and essentially treated us as marketing reps — which makes no sense, in my view. GAs cannot make money on small accounts unless they can touch the file one time, to a high hit ratio. Period. End of story.
The ULSI system requires multiple touches to a low hit ratio — after which the underwriter has to start over with other markets. Unless you are sure you are going to get a quote. It is both safer and more cost effective to start with the other markets and (if you have it) your own underwriting authority.
Most of Nerney’s customers had decent “quote ratios” — but only because they learned early on that it was a waste of time and money to send business to USLI unless you were fairly certain that they would write it. So they didn’t get the app flow that they might otherwise have had and that, Dear Tom, is not the way to meet your top line production goals.
Tom, we weren’t lazy — your whole design is too stupid for words. And letting retailers join in won’t fix that.
As I told my agents when Reliance Special Risk started going direct, “You better hope they can write ALL of your surplus lines business.” Wholesalers are hungry now but you don’t want to be at the bottom of the pile when the market shifts.
Most Wholesalers/MGA’s support our local State Associations with usually @ 8-10 Wholesalers/MGA’s at the convention.
If we all stick together with our local state associations & advise our PIA/Big I we all will not be attending if a certain carrier decides to have a booth that convention may lose @ 8-10 vendors/sponsors who make up a good portion of the $$$$$.
Most states & regions have a local or regional surplus lines association let’s unite together & get the most of our associations.
Just think a state convention with @ 25% less vendors/sponsors & particapants?
So it’s over reaching if they were out seeing cutomers’ customers doing rollovers, 6 months, 3 months, two months and even less than 2 weeks before the announcement and then calling those retailers???
I really think they new two weeks before…companies do not make decisions in a day — if they do, they are completely stupid and deserve to be fired/go down the tubes.
I agree with you IF the visits weren’t so recent — but when some visits were so recent, there is a HUGE problem. Ethics would dictate if you knew you were changing to cancel those visits to avoid even the appearance of improprity.
Just changing your business model isn’t unethical – changing your business plan TWO WEEKS after you were out saying it was something else to get to your clients’ clients directly, does!
Unfortunately, USLI can afford to throw dollars around for sponsorships that may override that –and let’s face it, the Big I is out to protect the retailers, not the wholesalers.
You may be right but I figure it takes awhile to turn the ship around. Meetings with retailers would have been scheduled well in advance, etc.
I don’t think anybody knows when the decision was made — it could have been the day before it was announced or it could have been made months earlier. In the absence of proof to the contrary, my conservative nature is to give USLI the benefit of the doubt rather call their actions “unethical” without proof.
My suspicions are the same as yours but my suspicions are not proof.
1. I am not a USLI employee.
2. My MGA does not have a contract with USLI.
Now that we have this out, here we stand three weeks now and there is all this talk, but again where is the action? How many times have I been to the Brokers Lounge @ AAMGA or NAPSLO and I’ve heard MGA’s say they were going to do this or that, and it simply doesn’t transpire.
As much as this decision screws the wholesaler, Nerney is smarter that most think. He knows over years of experience the wholesalers will get upset, but will will they really do? If the wholesaler moves business, the MGA will lose a contract. The MGA needs DWP so they won’t move and risk not having a market for their retailers.
So as I posted 10 days ago, if the MGA community is really that frustrated and upset with this decision, I ask again what are you going to do about it? If USLI writes 400M DWP, that equates to 2M of NB and RN business each day. So we’ve gone three weeks now and this should equate to a few $$ of DWP that should have been moved. How much has really moved? I’ll bet very little.
People say this will transpire over time, but I ask why? You have NB & RN’s on your desk every day. What are you doing with them? What about all the people who have USLI’s retailer rating on your website of the 50/50 program implemented? Are you taking this off-line and replacing with another carrier? If not, what is the hesitation?
These posts are interesting to read, but it’s all smoke. I’ve been talking with many of my competitors and sure, they are frustrated, but the options of what to do are limited. Move biz – risk losing a market. Take the on-line system or 50/50 down – risk losing the market. Fail to place NB with them – risk losing the market.
Again, as I mentioned previously I don’t like this decision, but I think Nerney is gambling here that he has the MGA in a position where he wants them, and I think he just may win. Short term may be a slight drop, but I’ll bet Nerney doesn’t think this dip will be deep or for very long. Risk your RN retention ratio – it’s going to cost you money.
I know most carriers already are taking action to get this USLI business, but when I talk to my carrier folks, they indicate they aren’t see much. Hmmm….
Is there going to be action where premium moves, or is this just another distraction that we’ll all move-on from? It’s up to us as MGA’s…..what will we do?
USLI has already broken thier word on thier new distribution process. They have contacted a retail agent in Utah who writes Day Care accounts. USLI had been to this retailers office many times with thier MGA. They had also palced the link directly to them…etc..you get the idea. Guess what…The MGA pulled the link so USLI goes directly to the retail agent and offers up the contract at get this…20% to the retail agent. They also gave them access to a handfull of other primary products.
Do you really think you can trust these guys? If you do, you are a fool. By the way….look at USLI’s web site….They now have a link for “Retail Appointments”…Questions asked are…Wholesalers Used and Lines of Business….I wonder what USLI would want with this..
Do you THINK they want your busineses direct and will do or say anything they have to in order to get it……….YES
I heard from an insider that usli is down 40% in new submissions after this announcement and they are taking away the employees bonuses as a result. Unethical company ceo deserves it, the employees don’t.
Down only 40%..? What idiot would send this company anything. As far as cutting bonus” Uncle Tom just needs to step down and give up his 16 million $ paycheck. Thats right 16 mil..
Three or four others make some serious money as well but 95% of the emloyees are getting the shaft. Problem is…they can’t see it…too busy listening to the overhead say’ in by 2….out by 5…” hurry ..print more paper
There is absoulety no way a company would make such a big decision in a day. Which is what they say they did. Days even weeks prior to this decision I was out on the road with a USLI rep visiting brokers. They new what thet were doing for some time. If some wholesalers remember it was just about a month ago were USLI would call the broker for you to set up an appointment for them and the wholesaler.
During this call they made they would ask how much business they wrote and what products are they seeing most. This was all planned.
Now the question what do we do about it ?
yes we are all blowing off steam but what can we really do ? Shop are accounts wisley. Dont be so quick to put the account with USLI.
The reason i say this is how can we be sure that USLI is not going go direct. Ethics hmmmm
Again calm down……….somethings in life take time. I don’t think people are worried about losing their USLI contract. I think people want to make certain markets are in place to handle the business before they (THE WHOLESALER or MGA) sends their crappy contract back to Tom……..So give it another month or so and than come back!
They’re down only 40% because wholesalers are showing a “good faith” effort to place business with them so they won’t be cancelled before they can roll their books.
As far as the employees: Look again at their website and the benefits listed under the Career section. free medical/dental, daycare, lunch, fitness facility, tuition/education assistance. Its no wonder they have assistants with 9-10 designations including RPLUs. Although I’m not sure why you need all of that education to check/uncheck boxes on a computer screen…
You must have submitted this comment as soon as you got home from work in your ‘half-height’ cubicle. Save yourself while you can. You are in one of the insurance capitals of the country. Take this opportunity to free yourself and chalk it up to experience.
I agree with your comment (“They’re down only 40% because wholesalers are showing a “good faith” effort to place business with them so they won’t be cancelled before they can roll their books.”) I suspect new business will be down more like 60% to 80% once the market sorts itself out and other carriers have more-or-less matched the ULSI capabilities and pricing. I’m thinking that you may start to see that in 30 days but it will be a rout in 90 days.
The interesting question is how far down the renewals will be. If they are renewing maybe 70% now, will that fall by 1/3? 1/2? 2/3? Hard to say but a lot will depend on how quickly and how well competitors are able to offer viable alternatives and what incentives they are willing to pay to help move the book.
I kind of doubt that USLI will really be able to blanket cancel wholesalers because they won’t want to lose renewal premium as quickly as they will lose it if they cancel all the wholesalers who start moving business on them.
There is no way that they can ramp up and train retailers fast enough to offset the business that will be leaving once this really gets going.
As for the employees, I realize that their experience tends to be somewhat narrow but I’ve always found them to be reasonably well educated. Those with 9 designations, or whatever, aren’t the ones checking and unchecking boxes on a computer monitor.
I’d hire most of their employees in a heartbeat — to help me roll my book and communicate with the replacement carriers.
Has anyone else been experiencing a complete 180 in the service? Our people cant get a hold of anyone and quotes are lost in the ether. They have the UW’s so busy looking for agents that there isn’t anyone to handle the 60% of submissions that are still coming in.
That’s one thing I will not fault them on right now — at least from where I am sitting — what little I’ve still dealt with them (quotes hanging out from before this happened, renewals that were quoted prior to 6/21, endorsements on existing accounts, etc.) I haven’t seen a service decline…. YET. Though, admittedly, there hasn’t been a whole lot of interaction.
Still trying to goad me into identifying myself? If you were half as smart as you think you are, you’d have already figured out who I am. I’ve left enough clues throughout.
Since you are apparently a USLI employee, I was wondering if you might answer two questions…
1. Do you not feel betrayed by USLI management? How many thousands of times must you have heard, or said yourself, that USLI would never go direct…
2. If wholesalers can’t trust USLI to not go direct their customers, why do you think that retailers will trust you to not go direct to their customers?
For over three weeks since USLI’s announcement, there have been endless comments posted, most of which from anonymous sources or from individuals with silly fake names. Darth Vader? Yoda? Brokette? Jerry McGuire? And the impressive Lethal Dose of Koolaide. Please.
It is easy to be a big-mouth when no one knows who you are. If you believe so strongly in your opinions, why would you not have the courage to put your name down? What are you afraid of? Gutless immaturity. The other 99% of us that read this trash everyday are laughing at you, not with you. We are neither moved by your calls for joint action, or the impressed by your meaningless nonsense.
One can only conclude these juvenile comments are somehow reflective of each of your personal or professional failures.
If you were making money or trying to focus on writing some business, you would not have time for such childishness. These postings are being made by a few people, and there is no doubt that many have been made by people with multiple posting names. How sad that such a small group of people feel so compelled to represent hundreds of others. But of course, that is the way it works in the media, in politics, and everywhere else.
I am certain that USLI’s leadership decision was based on one thing only: What is best for the company. Period. Get over it.
Those of you caught up in this cowardice game of bashing and insulting are not worthy of calling themselves professional. If you don’t like the decision, and you don’t have the skill to adapt, you fail.
My bet is, USLI’s decision will ultimately prove to be a positive step towards a successful future. If that turns out to be the case, what will their competitors do? Start thinking of more posting names, because you’ll have lots to complain out then as well.
Seems like you decided to play the game as well. You have succeeded in blatantly contradicting yourself simply by posting your little rant. By your suggestions, if you were a “true professional,” you wouldn’t have posted anything at all. You also decided to play with a little anonymity yourself, “D.” The only question left is how much longer do you think you’ll be working for USLI?
Well D. Aaronson, if that’s your real name — and who can tell, really — why do you care what my real name is? Does it add to or detract from my message? Does a “bad” message suddenly have credibility because you know my name? Does a “good” message suddenly lose credibility because you don’t?
I’ve been posting on message boards — mostly sports and a little politics — for almost 15 years. I used to give my real name and city of residence — until I started getting death threats from someone who probably didn’t mean them but you can never be sure. So I adopted Yoda and have posted over that name for probably 10 years.
I’m curious Mr or Ms Mature Professional how it is that you neither know me nor know anything about me but can still, with cold objectivity no doubt, judge me. I’m immature. I’m childish. I apparently don’t work hard and am a professional failure. All this you know from the content of my messages?
It seems to me that your unsupported judgments speak more to your own immaturity and childishness than they do to mine. Sorry.
Any wholesaler who posted anything remotely negative about USLI over their own name, before lining up replacement markets, would be a damn fool.
If he or she owned the GA, they might lose their appointment prematurely. And if he or she didn’t own the GA, then they might lose their job, as the GA tried to avoid losing their appointment before (s)he was ready to move the book.
For the same reason, I doubt you will see any USLI employees posting anything negative about USLI over their real names. Not a smart career move. If there is one thing we old timers have learned through the years, it’s not to burn your bridges.
People just aren’t that stupid. Did you really think you could goad people into using their own names?
Where have you been? People are not upset that Mr. Tom decided to pull the trigger and go direct to the retail agent (the writing was all over the wall).
I have admiration for individuals who can make tough decisions and execute them all for the good of the company. What I can not respect is an individual who is calculated and deceitful in their quest for success.
15 YEARS, Yoda??? Posting on blogs daily apparently in the office and at home? Productive at work Yoda??? I hope your employer knows how you spend your time! What an assest to your company. Seriously Yoda, YOU NEED TO GET A LIFE…
And this is the FIRST blog I’ve ever posted on – I’m too busy earning a living instead of surfing blog sites all day and night.
I’m self employed and I admit to not having a life. But the reason that I don’t have a life isn’t because I spend my life on the internet. The internet is a diversion during 12 to 18 hour work days — pretty much 7 days a week, I might add.
And, not surprisingly, you USLI folks aren’t answering the questions that I posed — choosing instead to go after my internet usage. Weak sauce, my friends. Diversions are almost always weak. May I will repeat the questions for you…
1. Do you not feel betrayed by USLI management? How many thousands of times must you have heard, or said yourself, that USLI would never go direct…
2. If wholesalers can’t trust USLI to not go direct to their customers, why do you think that retailers will trust you to not go direct to their customers?
Wow! Yoda really hit a nerve! My guess is that this answers his question #1.
Also, those who criticize Yoda for reading and posting on the internet have of course done so themselves. They accuse him of not identifying himself when they have not identified themselves. We are hypocrites all.
I haven’t posted here since this change came about. Yoda sure dominates. Seems he’s the only one who’s posting these days. My advice Yoda, spend some time with the wife and get back to business.
Careful with your comments. Believe me, I’m on your side….I’m an MGA who was burned as bad as anyone and IS moving business. I could point to several of my other comments — however then the spies within USLI would figure out who I was. I was just being honest – something they’ll never do. But, remember, I prefaced that with saying that I hadn’t sent anything “new” so it’s all relative.
hmmm, maybe your right… oh, wait. Maybe some of us don’t want our contracts ripped out until we have our ducks in a row — so go back to your corner office and await the fall out. Trust us, we can move business faster than you can replace it calling OUR clients.
Yoda, they are in the “flight or fight” mode — they are cornered (and not in their cushy offices either).
If they would look at the post times, they would note that the great majority of them are centered around morning (no doubt while reading other periodicals to stay up on the business), or lunch (to get a laugh at what the latest USLI employee has posted) or after working hours (of course, mine’s at 8:21 and I still happent to be working — oh, darn, that probably gave me away because according to Mr. Nearny all of us are lazy and none of us work late).
Yoda, I, like you, have posted for YEARS on BBS in either politics or common interest groups — you never give your real name — BAD PERSEC!!
Though, Mr. Nearny does have “some” point — a lot of people post things because of lack of GIC (geographically induced consequences) that they wouldn’t otherwise post – you know, internet cowboys. Though, I don’t see anyone posting any threats, childish remarks or otherwise callow and sardonic posts — do you??
Sorry, such big words for this little child.
Oh, and, Mr. Nearny, I’m not saying ANYTHING here that I wouldn’t (and haven’t) said to your employees if/when they call — or to you directly. In fact, maybe you should go call on some of your brokers now and let them tell you directly how they feel.
I really wish we could use our real names because there are several on here I’d like to buy a drink! (however Yoda is EXACTLY right as to why we can’t)
Do you think that if you stay and buy into this betrayal that ANY of us will follow you if you ever leave???? We’ll remember your charachter and how you bought into this.
Like Yoda, I’ve left PLENTY of clues. (not intentionally) — My own boss recognized my writing style before I even admitted — though they thought my posts were very amusing, we don’t want our contract cancelled until everything is in motion. Though, at this point — it really almost is. One more piece and maybe I’ll reveal — come back in August.
OK, USLI EMPLOYEES — you are the ones being VERY childish! VERY childish.
A) Yoda never said he’d been posting non stop 1,000 posts a day.
B) I have a board I’ve been frequenting for 5 years — I have less than 1000 posts — that’s not even 1 post a day. I’m sure Yoda could say the same.
You see, in your immaturity, what you don’t realize is there are a lot of boards out there to get information on subjects you care about… in fact, American Broker even has one for insurance agents to discuss issues about hard risks, markets, etc (hmmm, I should visit over there, haven’t been there in months and see if this subject is on the block over there).
If you like underwater basket weaving, you could probably find one about that — mabye you like MBL, photography, investing? There’s a board for everyone and MOST of us use them to find information or get feedback (for instance, I like to talk to others with experience when buying a piece of equipment for my hobby) You may frequent it for several days in a row and then not again for months or even more.
Now, you don’t like to do that? Fine — maybe you take this little callow attitude and your little feelers have gotten hurt on boards because they don’t think your a god (little g) like you view yourself?
One quick thing — the one thing I DO need to get a life from is working too hard — WAY too many hours and your stunt, USLI, didn’t help with my workload!
Again, your childish rants and name callings will not change the situation.
My MGA told me that a USLI underwriter cancelled his appointment with them today saying that they were canceling all MGA sales calls until things cooled down. You gotta wonder if they’re using the time to call on agencies instead or are they really hiding out from their customers.
I hadn’t heard that they were canceling field visits but it makes sense. What are they gonna say to their wholesaler, “I know — let’s go visit some retailers!”?
Their process for marketing to wholesalers has to change rather dramatically.
I heard from an agent that it was $50K year 1 and $250K year 2 on. At $250 a year you need to appoint a lot of agents. How are they possibly going to visit them all 20 times per year?
If USLI has $400 mil now with wholesalers and if they lose $300 mil of that, then they would have $100 mil left and would need $900 mil to get to $1 billion.
And to get that $900 mil, at $50,000 “a pop”, they would need to appoint, train and manage 18,000 retailers. In fact, getting back to just the $400,000 that they have now would take 6,000 retailers at $50,000 “a pop”. Boy howdy that’s a lot of retailers.
Even if the number was half that (ie: if each of their retailers wrote an average of $100,000 instead of $50,000), the number of retailers needed to get to $1 bil is huge. And if they appoint that many retailers, they will probably lose the rest of their wholesaler production as there would no longer be any value in the appointment.
So what happens if they don’t meet their top line production goals? It seems to me that most of their products could be sold directly to the public over the internet. And frankly, I don’t know why they didn’t just skip working with retailers and go straight to the public. I can’t imagine they won’t end up there eventually anyway. Their product orientation, as opposed to line of business orientation, is ideally suited for it.
I do want to add — they are assuming that they will get good, clean, loss free business that when quoted on line will be totally accurate and honest. That agents won’t throw EPLI for a GC into artisan, or some other such thing and totally mess up their loss ratios.
That’s an awful lot of assumptions….
Good Luck, USLI.
Oh, and you USLI employees who enjoy your 9-5 and 90 minute lunch to use the workout facility — I don’t think you’ll be having much time to do that. You’ll be working like a dog like the rest of us…18 hours a day to just keep up the service on all of those submissions.
18,000 retailers sending in an average of 2 submissions a day…..
oh heck, I’ll be nice and say it’s 1 day.
Look around your cubicle, USLI-ite — divide that up…. how many a day will you be working on??
I do want to add — they are assuming that they will get good, clean, loss free business that when quoted on line will be totally accurate and honest. That agents won’t throw EPLI for a GC into artisan, or some other such thing and totally mess up their loss ratios.
That’s an awful lot of assumptions….
Good Luck, USLI.
Oh, and you USLI employees who enjoy your 9-5 and 90 minute lunch to use the workout facility — I don’t think you’ll be having much time to do that. You’ll be working like a dog like the rest of us…18 hours a day to just keep up the service on all of those submissions.
18,000 retailers sending in an average of 2 submissions a day…..
oh heck, I’ll be nice and say it’s 1 day.
Look around your cubicle, USLI-ite — divide that up…. how many a day will you be working on??
Tom will have to build 4 more buildings just to house the employees to keep up with that number of submissions from a logging standpoint, let alone an underwriting one.
It would be stupid to think there aren’t further plans to go beyond the retailer. It took precise planning to bypass the wholesaler and it’s only a matter of time before they go direct to the consumer.
.
As I read some many comments, thoughts & feelings I finally accepted the end for USLI & the wholesaler.
Yes we all know how upset we all are. Not by the direction USLI is going with retail appointmnets. ( We all knew this day would come & Tom please DO NOT insult the wholesaler or any other USLI clone ) It was the way it was done.
Yes the drop off in new business being written maybe a red flag that will keep you & the clones up at night & it very well should.
Yes you already have called on my retailers ( Please don’t think us wholesalers are not pounding on the doors with every retail visit you made with us we kept notes & reports as well) We can certainly hit the streets a lot quicker then you leaving a voice mail at my retailers office. But what I am finding out about my hardworking retailers they need a reliable trust worthy Wholesaler more then they need a small product driven carrier with in the box underwriting concept with limited products. Please do not insult their intelligence the way you insulted ours. What I have found very interesting some of my retailers have already declined your offer & even commented how can you do that & what would convince me this will not happen to me. Of course this is a retailer who comes to me & my fellow E & S brokers in the state and combined only gives USLI @10K a year maybe a little higher if something sneeks thru & one of the smarter USLI U/W’s knows this is a risk that should fit even though it was a tad out of the box he underwrote. When my retailer declined your offer I found it funny he said no I am Committed to the Wholesalers I have been doing business with all these years.
Yes I do have sympathy for Middle management & my Underwriters. Recently you have them calling & feeling us out on our thoughts and telling us they will not be using any info supplied by the Wholesaler. As I listen to he/she I felt sad for that person. At one time you put them in a great work enviroment with great benefits, health insurance, bonuses & salary packages. What do you think their anxiety is at night? Do you think they’re sleeping well knowing these massive changes are coming & if they can believe there leader? You’ve lost the trust & intergrity of the Wholesale Marketplace it would be a shame a CEO/Leader lost that same with the troops/employees he’s leading for this new change. Here I fell sorry for since your decison will effect your employees & there familes if you acted out of EGO or straight thought.
Yes us wholesalers will go on & move on & USLI will be a good story at conventions & marketing meeting of a good company gone bad.
Yes as a wholesaler who has seen hard markets turn soft to soft markets turning hard you do stay up at night during the lean & very lean times how are we going to survive. How do we cut expenses, how can we hold onto our employees to avoid layoffs. What do I have to cut in order to hold onto my agency & employees. These are very diffucult questions that are addressed in soft markets & yes rewarded in the hard market. When your in business over 4 decades you gain a trust with your retailers and the companies you have been doing business with. I just do not understand why you broke that trust.
Yes some of the retailers are decling your offer & you may pick up a few which as a wholesaler know usually those are the retailers you really have little use for. I just hope they do not cut there nose to spite there face.
Plan B. It’s going to take many many years to build up what you once had in the wholesale market. Why not cut out part of the plan & try & go direct now to cut out expenses & possible failures the path you have chosen. USLI can easily be set up to go direct with a few lines that can be captured for the public. Inside expenses can be cut with a heavy foot & spent on national marketing to the general public. it makes sense with a few lines. Mr. Buffet at the end of the day wants to see results.
It seems it’s time the Gecko gets a playmate & what better way with another lizard.
To some of the fine people at USLI good luck in your futures & paths hope most of you come out of this unscratched for you and your familes. It’s been great working with most of you!
I agree with your comment to a certain degree. While I decide who I want to do business with and determine if the products fit well within the agencies portfolio I must also take into consideration long standing business relationships (whether that be another Carrier, Insured, The Wholesale Broker, Etc). The insurance industry is a small circle of professional’s you never know who you could be working with or for in the future so the last thing you want to do is go around pissing people off all for your own personal gain.
If anyone is sick of reading posts or posting, there is a simple solution. Stop searching out the article on IJ and reading the comments.
To those of you who have not had too much of this banter, let’s discuss USLI and the post titled “taking the gloves off.”
As a competitor, nothing warms my heart like hearing that USLI is talking to small agencies or asking for a $50K commitment in year 1. Heck, that’s one account in the real world.
At the end of the day, no one really cares about USLI and their $1,500 average premium. Wholesalers are p!ssed (and rightfully so) because they were lied too. In many cases, their marketing efforts are being used against them. If you do not appreciate why they are upset, you lack any type of empathy. There are many USLI wholesalers with seven figure books of business who didn’t see this coming (one could argue ignorance is bliss).
The fact of the matter is USLI is either trying to be Philly or Geico. The differences being Philly actually accepts risk and handles six figure accounts, and Geico sells car insurance (not commercial insurance).
Either way, I love competing against Tom Nerney. He is an insurance carrier’s best friend.
I tend to agree that five years from now nobody will care. But for now, people do care and are curious as to how this will develop. That’s why people are still writing about it — it’s a good way to learn what others are learning about the situation. There hasn’t exactly been a lot of follow up in IJ…
But I want to very much disagree with this statement: “I now find it funny that wholesalers are posting and implying that us retailers need to stick together with them when we were being trashed early on.”
To begin with, I don’t think many wholesalers are posting that retailers should stick together with them — although some are happy to report that their’s are and others are wondering out loud why retailers would trust USLI when the fact that they are not trustworthy should be pretty apparent. Wholesalers and retailer alike must do what they determine to be in their own best interests.
But as for “trashing” retailers, I think that was one guy — Drew — and others (myself included) rose to your defense.
Interesting Yoda that you find it perfectly acceptable, and I quote, “Wholesalers and retailer alike must do what they determine to be in their own best interests.” But you slam USLI for doing what was in their best interest.
No matter what USLI’s delivery would have been, it would have been received poorly. They just had to do what they had to do. And what they are doing will be in the best interest of the company as well as the customer who is paying premium.
I am sorry but I would be so tired of the kool-aid if I worked there. It is very cult like…….but if you enjoy the cult atmosphere you are at the right place – who am I to judge.
I just got a call from one of my retailers….they had a message from USLI that said they were going to be in the area and wanted to talk to them about a direct appointment.
This was a retailer that a USLI employee visited with me VERY SHORTLY before the announcement was made.
NICE…..
And forget about them just going after your big agents — this particular agent is SMALL.
EVERYTHING they said was PURE LIES.
Nice ethics to ALL of you invovled — you know who you are!
If the trust is gone, why still write about this? This issue is now almost a month old. Is there some sort of life crisis going on concerning this that I don’t know about?
Some facts: USLI has moved on. Some wholesalers will stay, others will look to do roll overs. USLI will seek retailers. Some they will get but certainly not all. That’s the nature of sales whether it is the insurance business or any other business. Who is to say how this will shake out short or long term and quite frankly, who cares? I’m too busy during the day trying to sell insurance but here I am at home after a long day, reading and posting more trash on this string.
Time will tell what will happen. No business is disolution proof whether it is USLI, wholesalers or agencies like mine. All of us have to hustle to survive. And guess what friends, 5 years from now, no one will really care about this.
I now find it funny that wholesalers are posting and implying that us retailers need to stick together with them when we were being trashed early on. When it makes sense for my business, I will partner with anyone if there are benefits for both of us but I’d like to think that I’m smart enough to know that any business cant go without changes year after year, otherwise how can you compete? Shame on anyone who believed otherwise. Peace.
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This maybe a foolish question so I hope I can get an MGA response along with a USLI response.
What happens to the people that were hired under the USLI/MGA 50/50 program?
Are these people out a job? Are they still marketing the USLI product were they must visit at least 20 retailers a week for that MGA but also have to report to USLI?
For those who do not know the program that’s when USLI & a wholesaler split the salary of some one up to @$25k a piece for up to 2 years while that person nust visit at least 20 retailers a week & report back to the wholesaler & USLI almost each week.
For those Wholesalers who are in this situation were do you go from there?
To USLI what happens as well? Do you keep that person & pick up his/she whole salary while they now market directly to you?
I’m jusr curious & hope those in the program can shed some light on what happens to that person?
Nancy, nobody is slamming “USLI for doing what was in their best interest.” I agree, there would always have been some grumbling, however.
USLI is being slammed for their duplicitous behavior over the years, taking a virtual blood oath that they would never go direct to retailers — while worming their way into agent offices and making contacts with the very retailers that they are now approaching. It’s an ethical complaint — not a business plan complaint.
That said, I don’t think it is a very good business decision either. Give competitors three months to gear up and I believe you will begin to lose business at a much faster rate than you anticipate — and at a much faster rate than you will be able to replace it. Guessing, you will lose 1/2 to 3/4ths of your current wholesaler book by the end of 2011. And at the same time, I think you have seriously underestimated the difficulties of finding, training and managing the hundreds or even thousands of retailers that you will need to offset those losses and grow your book.
But that’s just a difference of opinion about “what is best for USLI” and is a far cry from “slamming” you for doing what Nerney thinks is best.
No one is slamming USLI for doing what is “in their own best interest” Even that is debatable, though — the number of retailers they are going to have to appoint to offset the volume they are losing from wholesalers (myself included) and the cost to service that many customers is going to FAR offset any additional commisisons you paid to wholesalers.
Additionally, you just don’t get it — apparently you and the other CPCU’s in your organization have not checked the CPCU code of ethics lately or you just don’t care!
YOU LIED!!!
You were practicing what many consider DECEPTIVE TRADE PRACTICES — you were out with wholesalers visiting retailers DAYS before this annoucement — you and other top managmeent knew the changes were coming. Yet you had your people out lying to your clients and to their clients all in the name of gaining access and forming bonds with their clients.
The 50/50 program is in run-off. It is now optional for the wholesalers to continue the program through the end of the 2 year commitment or drop out and take on the full responsibility for the individual. USLI has said that if there is an issue placing the 50/50 full time in the MGA, they would try and find something for them.
The interesting thing that I never knew existed was the catalyst program. Did anyone here have a catalyst in their shop? If so, I can’t imagine how betrayed the brokerage must feel.
With the exception of a couple of recent good questions, this thread has pretty much been talked out.
The young USLI trolls have had their content free strings of name calling. The young anti-USLI trolls have had their content free strings of name calling. Most of the adults have left the room, and the good conversation with them, and I hope I’m leaving early enough to still earn the adult label.
Either way, college football season kicks off soon — Go Dogs! — and I need to get my beer lifting arm in shape.
To Tom Nerney, shame on you. As Warren Buffett has said, “It takes twenty years to build a reputation and five minutes to lose it. If you think about that you will do things differently.” (Tao #11) You should have thought about that…
A man’s word is supposed to be his bond. If making the promise was a mistake then you shouldn’t have made it. And having made it, you should have lived with it. At the very least, you should have given a year’s notice or something — a year without making the promise and without sending your employees into retailers’ offices with your GAs. Nobody is upset with the decision; everybody is upset with how you implemented it. They are upset because they believed you and apparently they shouldn’t have.
To USLI senior management — including Tom Nerney — I wish you the best of luck, I honestly do. There’s enough business out there for everybody.
But I think you’re going to find that not only have you underestimated the response of your wholesalers, you have also underestimated the difficulty of finding, appointing, training and managing a large number of retailers.
They are not “stupid”, as one poster said. But a disproportionate number of small accounts tend to be handled by entry-level personnel and I cannot imagine that your rather complicated hodge-podge of products will be something that they will master easily.
I strongly encourage you to simplify your product offerings and your underwriting criteria. No retailer is going to use you to a low quote/hit ratio for very long — the premium and the income on each write is too low. It is a lot easier to send it to a wholesaler and let them fool with it. In my opinion, more than any other company than I can think of, USLI needs wholesalers to screen their business.
To USLI’s employees, I wish you the best of luck too. Tumultuous times are ahead but, remember: in great chaos lies great opportunity.
To retailers, I really don’t give a rip whether or not you take on a USLI appointment. That’s your call. Your wholesalers will look for new or better or cheaper products — products that you need, and that USLI doesn’t offer. Life will go on.
Finally, to my fellow wholesalers, I’m done with this. Truthfully, I’m way more worried about you and what you have up your sleeves than I am about USLI. And you should be way more worried about me. I’ve have got some kick-butt improvements that I’m about to introduce in my program and I am going to whoop you big time on that class. Be afraid. Be very afraid.
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Yes there’s one in a large E & S brokerage in Philly, One or two in Chicago & one of them being a large brokerage house.
There maybe @ 10-15 wholesalers that have them in there shop. I’m just wondering what do they do? Do you keep them on board I’m just curious what the future holds for this young insurance professional just starting his career.
I heard that one of the catalysts down here in FL came to work one day and was told by the MGA that they can pack their things and go home. Little solace to the MGA as I’m sure the catalyst had already taken all the info that USLI needed.
I happen to be a retailer in SE Pennsylvania that has not as yet decided if I want to file an agency application with them. While my office is not in the same area as the USLI building, I happen to live not far from there.
USLI has hired contractors to build an addition to their exisitng building. I guess they have been at this for about a year but the building now looks near completion (and actually looks quite nice on the outside). What strikes me though is that the addition seems much larger than their current building so unless some new tenants are coming on board, they are adding a lot of office space with a defined purpose in mind. Mind you, the construction has been going on well before this announcement.
I’m not going to take any digs at their senior management as I personally don’t know them but I’ve got to sense that they had to know that this news would not be well received by many and potentially could reduce their book in half if not more. With this loss coupled with the extrodinary expense of a new facility, I’ve got to imagine that if their management is bright (I know, some of you would argue that), they would have to expect for there to be, at a minimum, great short term losses with the hopes of rebuilding their business over time.
Does anyone think that their parent has afforded them with the flexibility to do this, particularly since they only make up a small part of BH? If not, I’m not sure I would take this risk for fear that it would blow up in my face. It just doesn’t add up to me. Any thoughts?
Thanks for the final comments; Y-ou O-ut D-id A-ll.
I love the way you declare the end of the postings. I’ve learned a lot. Like how to put my computer down my throat to make myself vomit. You clearly are the all time champion of non-stop narcissism. Just one question: Would you mind keeping your other personalities around so I can continue to be nauseated by your never-ending garbage? Please don’t stop!
(This is the part where poor Yoda writes postings under the names of others to defend himself. Remember people, Yoda has no life.)
It’s now been 4 weeks and I ask what are we doing about this, other than complaining? The answer….not much.
Consider this. USLI was not the first company to offer surplus lines capacity to retailers. Berkley set up a division OVER 12 MONTHS ago called Berkley Regional Specialty that works directly with retailers. Where is the screaming about this?
So Berkley goes direct and how much business to we as wholesalers continue to send to Nautilus? As much as we did before they took this action. So USLI decides to go direct but doesn’t form a separate company like Berkley did. And how much business will they continue to write? I’ll bet as much as they did before.
I posted previously yeah, everyone is upset but what are we going to do about it? In the 4 weeks since the announcement – we’ve done very little. People say it takes time. Garbage. Berkley set up BRSIC over a year ago and Nautilus is still writing 250M of DWP. What did people do about it – exactly nothing…other than complain.
So you have two players, USLI writing 400m DWP and Brekley, writing who know how much premium, but Nautilus is writing 250M in DWP, and as wholesalers we’re feeding these markets every day. We obviously aren’t too upset. If we were, there are CLEARLY other markets where we can place this business.
And we wonder why they go direct to retailers? The answer is very simple….because they can, they have, and the affects to wholesaler-provided premium are minimal.
So we have two large players now going direct. Who’s going to be next? As wholesalers we’re asleep at the wheel.
Time to send the message to these carriers. If you don’t, what are we telling the other carriers. Our distribution model for binding authority business is clearly changing….and it’s changing fast.
Anyone who feels what Mr. Nearny or other CPCU’s on the “Executive Leadership” Board at USLI did is a violation of the CPCU Code of Ethics mentioned before in this thread, should file a formal complaint with the CPCU Society.
These must be sent in writing and signed.
The proper person to send them to is as follows:
Jim Marks
% CPCU Society
720 Providence Road
Malvern, PA 19355
There is already at least one complaint filed — possibly more.
You are free to disagree that it is a violation…this is for those who’s own personal case with USLI was a blatant lack of ethics: i.e. those with 50/50 employees that were “spying”, those who went on recent customer’s customer calls, etc.
All you USLI employees are free to flame away…though perhaps if you are a CPCU you should go back and study the Code of Ethics a bit more.
Wow! Since Yoda left (except for the Unhappy post – which was one of his 9 personalities), there have been no other posts! Yoda seemed to be the only one expressing his grievences – a disproportionate amout – and now it’s nice and quiet. Except for those of us expressing our happiness! Nice to see. Happy! Now Yoda, exhibit some self control and follow through on your promise!
It is not the issue of going direct or changing their business model to also go through retailers. You don’t get it.
US Liability is the only E&S carrier who committed to only work through professional wholesalers. They told their wholesalers this multiple times. They used it in their advertising. Because of this the wholesale brokers let them deeper into their operation than they normally would. When the wholesalers heard rumors that they would eventually go to retail agents they contacted the company and were repeatedly assured that USLI only dealt through professional wholesalers.
When the underwriters asked to go out on retail agent visits with the wholesaler, the wholesaler agreed and trusted that they were JUST looking to help the wholesaler write more business with that retail agent. Now, that information gathered might be put to a different use.
Some wholesalers participated in their 50/50 program (where USLI agreed to pick up half the salary to have a person in the wholesalers office to call on retail agents to sell USLI products) Now that information will be used in a different way.
USLI has retail web quote, where you can go up to the wholesalers website and get USLI quotes. The retail agents input their name, agency and e-mail address. USLI could now monitor which retail agents were registered and quoting business with that wholesaler. They could even monitor hit ratio with that retail agent. Again the wholesaler trusted that this information would only be used to help the wholesaler hopefully write more business. Wholesalers let USLI deep into their operation and now that trust has been broken. The wholesaler has no idea how the valuable information that USLI gathered will be used.
Any why was this decision made? USLI was not happy with the amount of business they were writing. While nearly every E&S carrier (except new entrants) were down significantly in volume, USLI was slightly up or at worst flat. So rather than add new programs or product lines or coverages they broke the extreme trust they built with the wholesale brokers and changed their business model. At least with Philly, wholesalers know that they use both wholesalers and retail agent, while USLI attempted to differentiate themselves from Philly by committing to only work through professional wholesalers.
In many wholesale broker’s offices, USLI was given first look at business because of their ease of use. Now all things being equal, wholesalers who still use them will write the account elsewhere. The level of commitment will drop.
The number of wholesalers contacting other markets to potential roll business has been extremely active. It does take time and there are details to be handled. The number of markets contacting the wholesalers to ask for the USLI business has wiped into a flurry.
Just to be clear, USLI had its downsides prior to this decision.
1. They were true box underwriters. It either fit or it didn’t fit. No exception underwriting. No accounts over $25,000 in premium.
2. If the wholesaler was sued due to a claim denial, they were on their own. Many E&S carriers will look at the reason the wholesaler was named in the suit and will provide defense if the wholesaler was not at fault.
3. They do not offer contingent commissions.
4. They have “quirks”. An example of this is that they won’t write any apartment risks who has evicted a tenant.
5. They were already doing business through wholly owned wholesale brokers.
Bottom line they built a deep, deep level of trust with their wholesale brokers and the wholesale brokers responded by letting them deeper into their business than they would any other insurance company. THEY BROKE THE EXTREME LEVEL OF TRUST THAT THEY BUILT! If other E&S carriers decided to go direct to retail agents there would not be this backlash because the level of extreme trust is not there.
Wholesalers add a significant value to the transaction. If they didn’t they would be out of business. Wholesalers are not asleep at the wheel I can assure you.
What has been done in the mean time? A lot! Most of it has been behind the scenes. Give it another 30 to 60 days and you will see significant changes. Already the submission count is down 40%. 40% is nothing?
Why should USLI be trusted by ANYONE going forward? Much like a devoted husband who professed he would never cheat and then does, they have little basis for being trusted going forward. I venture to guess the saying that once a cheater, always a cheater holds true. Insurance agents hold grudges for a long time. They remember when a company screwed them 20 years ago and can tell that story like it was yesterday. Retail agents watch your back.
Reading the comment from “Off the sidelines” It is all so true……….this was the way they conducted business across the board……….I honestly don’t know how Tom Nerney can look himself in the mirror or sleep at night (I know I would feel like complete crap, ashamed and a very unworthy/disgusting person).
Sorry Happy, I made no promises to leave. I merely said that the thread was dying out, that little was left to say that was new, and so I was done.
However, while I try not to respond to trolls like you, I did want to make clear that I have not posted under any other name but Yoda. There are no 9 personalities.
I’ve worked in two industries in my 50+ years, construction and insurance, and I’ve never seen a more adversarial group than insurance “professionals”. No wonder we’re so disrespected by the public. We can’t even stick together on a silly message board. And, apparently, integrity (which USLI seems to lack) isn’t important enough for us (retailers & wholesalers) to value in the same way, if at all. It’s a sad commentary on our industry. Thanks for the response, Yoda. Go get ’em!!
I am NOT Yoda and I can guarantee you, Tom, Drew, Sue and the other USLI employees posting here there are dozens of people posting here and we are NOT the same so quit disillusioning yourself.
Your lack of ETHICS is astounding and I have NO clue how you sleep at night or look at yourself in the mirror in the morning knowing what you are doing!
I don’t think it is an ethical violation (CPCU) and I don’t think it was a “lie” per se. Or at least I have seen nothing that leads me to believe that this decision was the thought out culmination of a plan to gather information that could then be used to steal wholesalers business. I have never seen anyone at USLI who was so lacking in integrity nor have a seen any hint that anyone at USLI might be so lacking in integrity. It runs counter to everything I believe about those folks.
I think what it was a poorly vetted business decision, and nothing more. They saw business going away — including a big chunk of it at one time — and they saw the potential for a lot more of it to do the same.
I think they felt the need to react decisively and I think they horribly underestimated the extent to which their GAs had relied upon their promises and would feel betrayed by the way that the change was implemented.
I don’t believe that they have an General Agent’s Advisory Committee. If they did, it failed them miserably. If they didn’t but had had, I don’t think this decision would have been made in this way.
I still think that they are good people — but good people screw up to.
I agree Tom hired some eager, good young talent who had nothing but the best intentions following the direction of upper management who they looked up to and respected. I have no doubt most of the USLI employees had no idea of the ultimate goal. However I think it would be naive and foolish to think this wasn’t premeditated and calculated.
Tom is a smart businessman. And smart businessmen dont make such drastic and impulsive decisions overnight.
If you’d had them visit your clients with you DAYS before and then target ALL of those clients (including physically visiting some) AFTER they promised they’d be put on a do not call list, you would feel differently.
Clearly Yoda is not the only one posting here, but it is rather amusing to read your weightless posts defending USLI and the deceitful senior management team. Everyone is allowed to have an opinion and Yoda isn’t alone in his. You’re obviously brainwashed and don’t realize that you work for people who are completely out for themselves.
Everyone needs to calm down and think of your own businesses. It’s a shame that everyone thinks they work for free. I work to make money! If your business is going downhill wouldn’t you do whatever it takes to bring in the cash from fresh companies?
Boo Hoo! Ok what are sale people for in insurance! Cheats and unethically ripping insured off! Talk about victims… All Insurance Industries are UNETHICAL
How quickly you forget who indemnified you when your car was destroyed by hail or when you rammed into the van in front of you. And how much cash do you have stashed away to rebuild your home when it burns to the ground?
I would move further into a business insurance example but clearly someone with your lack of intelligence is employed BY someone.
This industry keeps commerce moving, don’t forget it.
I am sorry they feel that way as well. The insurance industry certainly has it’s share of “bad apples”, but no more or no less than any other industry out there. Unfortunately, consumers (and businesses) don’t take the time to do due dilligence on who they are working with — i.e. checking up on designations to make sure people actually hold them in good standing; checking with their department of insurance to see if the person is really licensed without any fines/penalities and how long they are licensed (most states have that available on line now); checking the ratings of carriers; and checking up to make sure things are as they seem on all levels. After all, when it comes down to it, unless you have a claim, we are selling you a piece of paper that makes a promise — that paper better be worth it’s weight in gold.
In my over 27 years in this industry I’ve seen crooked agents pull it all — but the one thing that is and has remained true — that is LESS THAN one percent of the agents I’ve come in contact with.
Do a little homework on the people you are doing business with – not just in insurance but in all things you do.
There are many very fine and extremely ethical people in this industry — which is probably why so many of us are so “hostile” about this issue because our industry has enough “image” trouble without something like this.
There is no “silence forever” — people may grow tired of posting on here — but at industry events I can assure you they are still VERY willing to discuss this and it is a VERY hot topic.
Though I suppose you like the silence on here because then your employees can’t read it.
We have had a few situations lately where they seemed overly aggressive in finding out why something didn’t renew (almost felt like they were digging for something).
What is the latest? What percentage is their new business submissions down? How is their renewal retention going? How many retail agents have they appointed?
USLI will NEVER tell you the truth – though industry rumors are many key (and good) underwriters have jumped ship. Weird, though, even the ones we know to have jumped (because they have popped up at other carriers) – well, their email doesn’t bounce, someone else just answers it and never explains why the intended person isn’t responding.
Rumor also has it from attending industry functions, many MGA’s have began moving business and they are hurting.
Their new strategy — Preferred Wholesalers — hmmmmm??? Does this mean they lie to their preferred wholesalers less?
Time will tell – a good sign to watch is AM Best over the next 6-12 months. That will tell you without any doubt if they are losing volume.
I’m sure their heads are spinning, though, that people are still posting here.
I spoke with their management last week (job interview) They are apparently interviewing for about twenty underwriting/business development execs across the country. Interesting to note that one thing they wanted was to set meetngs with retail agents AND their customer
As if it is not already known. Other markets are stepping in and handing USLI their lunch.
It is really easy to beat USLI. USLI relied on trust to place business. That is gone.
It is hilarious that USLI expects that people will not tear them apart at any chance they get.
USLI puts up quotes that do not cover the client correctly in many circumstances.
I would advise all wholesalers to continue beating their brains in with alternative markets.
I would advise all retailers to be very careful. These people are looking to go after your client direct.
The only why you can sell crap coverage is by selling it direct to an uneducated consumer under the guise commercials staring geckos with horrible accents.
Just got a copy of letter from national GA. They are cutting ties with USLI December 1. Claim to have at least 3 carriers to pick up business. HOw many more to follow.
Hmmmmm,, know of a national wholesaler who turned in their contract. It was a matter of ethics. Why deal with a carrier who flat out lied to you? Just like if a retail agent flat out lied to them, they would cut them off.
Plus their policy forms are not all that fantastic…. all their applications are warranty applications….. and they ARE calling on the retail agents of the wholesalers they are dealing with….. not sure why ALL of their wholesalers are not turning in their contracts.
And when it declines 70-90%?? Uncle Warren will have to do SOMETHING.
It’s declining more than 30% — every day we hear about another MGA turning in their contract. When the volume/revenue hits a 50% decline, things will start to happen.
If I was interviewing and did my research and came across this and asked some questions in the industry, there’d be NO WAY I’d take a job with a company with this kind of publicity — but, then again, lots of people out of work that need a paycheck willing to compromise their ethics.
Their employee retention is consistently between 95% and 100% each year. If you were in a hurry to leave it was probably because you couldn’t deliver what they demanded. You are correct if your point was that USLI isn’t for those who are unmotivated.
The retention rate cannot possibly be 95%. Many people have left and many will continue to leave. Those who actually enjoy going there everyday are the hand picked royalty that are programmed to do as told and nod so that they can try and make it trickle down through the many layers of leadership created as a joke. Team leaders, Directors, assistant vice presidents, second vice presidents, vice presidents, senior vice presidents, executive vice presidents…The list goes on and on. It’s all a game and the employees become nothing but meaningless pawns.
Wasn’t one of the vice presidents a personal trainer in the gym? Now a vice president? Funny how things work out.
I am curious, does anyone know how this change has affected USLI now that a few months have gone by? Did agencies cancel their conract with USLI? Stop sending in NB submission? Replace renewals? Did USLI do anything to help their MGAs remain loyal? Why is it such a terrible place for which to work? Thank you for your response and time.
I will attempt to answer your question, but I’m just looking at it from one perspective – your milage may vary with others who are lurking here (especially the koolaid drinkers that remain at USLI)
I am curious, does anyone know how this change has affected USLI now that a few months have gone by?
**Sources say, they are losing business in LARGE percentages and the indians are getting restles thus the chiefs are acting in desperation… They were last evaluated by AM Best May 2010 (www.ambest.com) — courious they waited until AFTER their annual rating to make this announcement — anyhow, look for the new rating in May 2011 to get your “official” answer.
Did agencies cancel their conract with USLI?
Some, yes.
Stop sending in NB submission?
Many, yes.
Replace renewals?
Sources say many, yes.
Did USLI do anything to help their MGAs remain loyal?
“token” meaningless gestures, empty words and hollow promises.
Why is it such a terrible place for which to work?
I suppose if you are a mindless drone who has never worked anywhere else in our industry and LOVE hundreds of layers of meaningless management to just stroke people’s egos, it’s a great place to work.
You might ask some of those that have left – I can count several, but will not call them out — it is up to them if they will post or not. You’d probably get a better response if you figure out who they are and ask them “off line”.
To anyone who doubted USLI’s ultimate goal is to even go around the retailer and directly to the risks (insureds) — look at their sister company – Medical Protective.
Medical Protective has quitely cut relationships with MGA’s — and instead of trying to go to the retailers, they are soliciting the insureds directly.
Berkshire Hathaway’s goal is to make all of their insurance companies like the little lizzard…
The shortest distance between two points is not through the wholesaler.
I enjoyed readin all these posts, as I just got though them. JUST got through them, at 10:41pm EST. I have never worked with USLI directly, but I am not oblivious to them. Still I find it humorous how many posts there are about them between the hours of 9-5.
Don’t you people have jobs, customers, insureds to tend to? I know at my company we are bogged down with calls that there is hardly time to do any entertaining reading, let alone write comment in post chats.
I applaud USLI, not for what they have done to whoever feels kilted by this move, but for clearly trimming the fat of an unnecessary burden.
Learn your trade and get to work! if nothing else, your ramblings have proven how useless a good portion of this market truly is.
To quote Jeffrey Lebowski, “Get a job, sir!”
As a young underwriter working for Wholesaler/MGA in the south I was afforded the opportunity to attend several USLI sponsored classes. At one of those classes Tom Nerney described what he called the 100 year plan. He outlined how USLI would always be committed to the professional wholesaler distribution model. It seems now that this was all a lie and that Mr. Nerney’s word was only as good as the hard market cycle. I guess his 100 year plan was really only 100 dog years which seems to be about the same length as his tenure at USLI.
Sorry to see this happen.
Maybee if USLI had not been sending underwriters to our office every month and foucused on creative product development we could have written more business. Seems like someone from USLI is in our office at least once a month.
I can’t even fathom what their travel expenses are.
1. Wholesalers no longer bring the same value to the business that USLI writes. Accounts are small, competitive, and generally uncomplicated. Wholesalers are over-estimating their importance to this market segment, and under-estimating the retailer’s competence. They are not selling big accounts, people! Wake up!
2. Nerney is intensely driven and extremely dedicated to his employees. They, in turn, are loyal warriors, and totally dedicated to him, with the talent to execute.
3. Nerney is a savvy visionary. USLI has invested in and developed superb technology that will enable them to rapidly leverage the retailers into using his products and services. Everyone knows the service delivered by their underwriters, adjusters, accouting people, etc, is unmatched, and that certainly will not change.
4. Wholesalers are lazy. OK, not all. But most. Their focus has been large accounts for years. Now that has dried up because of the shrinkage in the housing market, contracting business and generally suppressed pricing in the mid-market. They are unwilling to pull the business in, waiting complacently for the next hard market miracle. Keep waiting. There are few signs of the market turning soon. High fees on small accounts are hurting wholesalers. Talk about greed!
5. USLI is highly profitable. Their products are properly priced and crafted. They’ll continue to make a huge profit because unlike so many carriers, they are disciplined with smart, seasoned senior staff who understands how to compete with their niche business.
Wholesalers can be upset all the want, but it’s a waste of energy. Bottom line is, they should not look a gift horse in the mouth, and if USLI products sell, then it would be full-hearty for wholesalers not to sell them. Most will, as soon as their emotions are in check.
Of course the real beneficiary will be the policyholders, as more sellers of insurance have access to USLI’s products.
When it comes to an abrupt change in the marketplace it is amazing how quickly everyone chimes in with their 2 cents and dumps an entire group into one catergory (in this case the wholesaler) and points the finger. Now I have read some of these posts and I don’t agree with some of the comments made by the Professional Wholesaler in regards to the Professional Retail Agents inability to complete applications and write business, we all serve a valuable purpose within the insurance industry and deserve to be respected for our contributions. I think people are losing sight of what has happened. Regardless if the decision to go direct to the retail agent proves to be a positive or negative decision is besides the point, the fact remains the way in which USLI went about getting to this position really shows the lack of trust, ethics and integrity of the people at the top. Yes I agree they offer great products and provide great service……but can’t be trusted. That is a decision and a risk people will take when deciding to write with USLI in the future.
My father once told me, “Never bite the hand that feeds you.” This is a foolish decision by USLI. How many MGAs are going to remain committed to USLI and continue placing business with them? I know my own is NOT. Thanks for the memories, USLI. And good luck to you when your renewals start flying out the door and your loss ratios go up.
I have enjoyed working with USLI, and hope that my boss allows me to continue to do so. They bring great products and have a great attitude.
I agree. I think it’s going to backfire big time.
Correct it was the MGA community that made them- what Greed- I guess you can remove the body from Phly Ins Co- but not the Phly ins Mentality formthe body- I wonder if they will but their retailers too by eventually becoming a direct writer-what a black eye for the Buffett franchise
WOW! Talk about branding a name for yourself hearing those exact words for the last 15 years. Changing a brand/logo like that must be very hard for Mr. Nearny. Sort of like finding out the good old Gecko appearnce is only a costume and underneath lies a Snake.
I wonder how easy it will be to train those retail agents & will they be able to drink the Kool-Aid like so many others.
If the Berry family can only see. What a shame this will become a train wreck.
This will be a huge mistake. What this really says is they can’t compete or sell their product so they blame wholesale brokers for it and will try retail agents direct.
The graveyard of carriers who tried that. time to dig another plot!
Agreed on all counts! How are retailers going to sell products that numerous other carriers already write and that give contingencies for the business. They should focus on the products themselves and look in the mirror to place blame for a lack of production. The wholesalers can sell products so by dumping the distribution channels it will backfire.
They will probably start tanking, then the their market value will go down, they will get acqired and Warren will end up making his money back…. But Nerney is going to be eating his words.
A diappointing turn. Will USLI be able
to tolerate the many poor incomplete
submissions they’ll now have to handle
which the wholesaler was the first line of
defense by having the retailer obtain the correct information so the submission could be made. The USLI loss ratio will
increase substantially.
You nailed it. They have constantly blamed the brokers instead of listening to our feedback about the competition. I’m just glad we took them on retail visits and input retailer names into their system so that they have a good idea of who they want to target. (That’s sarcasm.)
Taking some of you on those retailer visits now makes me feel dirty and used.
I love how Nerney blames the wholesalers for the increased expense ratio. I guess the increased expenses have nothing to do with USLI executives flying privates jets and spending money on vanity projects like a bigger gym and cafeteria.
Only Nerney can look you in the eye and tell you he is not concenred about top line growth all the while working towards a direct distribution method behind the scenes.
USLI owns/controls three different wholesalers. At least hey are now admitting they are going direct.
will they face litigation for using their direct contact with retailers through their contracted MGAs to obtain potential client lists???
How do you think Tom must feel? He has to live with himself. Talk about feeling CHEAP & DIRTY.
USLI is a strong company with great products available. I feel it was a great decision to make this available to retailers. Most of what they sell is competitive against their standard writers and this business is not going to the e&s market.
I guess there are some still drinking the juice.
It might have been a “great move” for retailers who want to access the product, but USLI is betraying their wholesale agent base that handed them $378 million premium. I think they are very self-centered to think they will not take a very large premium hit for this move.
One of my carriers in the area has already received 3 resumes from employees at USLI.
Must be a fun place to work these days/
Anyone want to buy an on-line rating program? Will he hardly used.
wholesalers have no control in the current marketplace…and right when they are/were about to, USLI does this? odd timing…
It will be interesting to see if any retailers, who don’t like it when one of their carriers goes multi-channel, will support their wholesalers and refuse to go direct with USLI. Money talks and a 17% or 18% commission might sway some. But I bet some retailers will decline USLI’s offer and support their wholesale partners. Am I naive?
Dance with the one that brought you?
How many oil and gas accounts will end up on their books classified as “office”?
Sad day for USLI………
Currently they are in the process of bypassing the MGA’s and the retailers will love it (for a season). But this will only last until USLI becomes a more recognized “brand” (similar to GEICO)and changes to a B2B model via their online presence. At that point in time, USLI won’t need any of those pesky MGA’s or retailers.
I have no dog in this fight and am on the carrier side. We target niches that wholesalers write and if a retailer can work directly with a carrier they will work directly with the carrier 99 out of 100 times. Agents are no more loyal than USLI (or the ultimate client for that matter). Not sure why Wholesalers think USLI owes you so much. You will easily work with a new player you have to compete with USLI if you had the opportunity to get more commission. Sounds like you should look in the mirror. I am sure this post will fire some of you up…
a lot of posts on here from you “poor innocent wholesalers”. unfortunately, you put too many eggs in the USLI basket…and they turned on you.
It’s disappointing to see a company lack integrity and morals. They reassured MGA’s multiple times they would not go to direct agency appointments. And based on their new contract they are then trying to take the business that MGA’s have spent the time cultivating. What they are doing is legally acceptably but their actions are morally reprehensible. For a company to not belive in a soft market or recession, and based off of their email notification of the change they are also not aware of competition, good luck with the real world. The honeymoon is over and now you get the headache and hassle of dealing with retail agents. Luckily in the world of business there will be another carrier(s) who steps up to take the business and rewrite it.
Good Move. Probably got back to the company about the “big honk’n brokers fees” added on to the policies by wholesalers. Had a small account with USLI through a wholesaler, by the time he finished with the fees the price up 105%, and I made $60.00. Renewed it this year with one of the retailers USLI appointed, no fees, client is paying 1/2 what he did the year before.
Unfortunately we agents have to be able to sell something. The only person we must be loyal to is our customer and thats it. I am more than capable of writing a policy without a wholesaler. I dont see the need for them in certain situations and this would be one of them. In all my years as an agent, a wholesaler has proved to be more of a hindrance to writing business than actually a benefit.
USLI doesn’t owe brokers anything… nor do we owe USLI any future business. All I am stating is the fact: brokers will be just as happy to move all of their business to another carrier. And by the way… USLI is not the “major player” they might think they are/were in the E&S market.
Let’s remember no courtesy filings for any USLI retail agents
How many retailers will it take to replace the $400M of business generated by under 200 wholesalers?
Do any of you even live in the real world? USLI is a reputable company selling great products and providing impeccable service. Regardless of their decision to go direct, I will still work with them. The business world is competitive and times change and create different situations that make it inevitable to stay in one place without sinking. Good move, USLI. I commend you for making the decision while still staying committed to the wholesalers who gave you their business.
What a crock! We’ve been asking them for years if they intended to do this and they have vehemently denied it at every turn, referring back to their “commitment”. I’ve worked with retailers for over 20 years and USLI has no idea what’s in store for them. They thought we were bad?!? HAH!
Jerry, I commend you for your decision to continue doing business with USLI. That said, part of the benefit of writing surplus lines business is that one does not have to compete with retail appointments for the most part. Being an E&S MGA, these retail appointments decrease USLI’s value as a market to my firm.
Trust me, it has never been to my benefit as an agent to have to go through a wholesaler, never. And so far it hasnt been to my clients benefit either.
I totally understand where the wholesalers are coming from though.
“Tom Nerney has gone completely mad… and I’m reaping all the benefits…” (curtain close)
It’s disappointing to see a company lack integrity and morals. They reassured MGA’s multiple times they would not go to direct agency appointments. And based on their new contract they are then trying to take the business that MGA’s have spent the time cultivating. What they are doing is legally acceptably but their actions are morally reprehensible. For a company to not belive in a soft market or recession, and based off of their email notification of the change they are also not aware of competition, good luck with the real world. The honeymoon is over and now you get the headache and hassle of dealing with retail agents. Luckily in the world of business there will be another carrier(s) who steps up to take the business and rewrite it.
USLI employs two dozen direct marketers. They have multiple wholesalers under their control, and they have opened up three branches in two years. Does anyone really believe this was a surprise?
I don’t think anyone will argue with you about it not being a surprise, the writing was all over the wall. I think what has created these unfavorable feelings & resentment is the way in which Mr.. Tom orchestrated the change. And the fact that the so called “Partnership” was anything but a “Partnership”, very deceitful. To look back and know every move, promise, etc. was precisely calculated and executed leaves you no choice but to feel used and betrayed. Only time will tell if the move was a wise business decision for USLI…….. In the meantime just as Tom has made it clear that business is business, the wholesalers will also make it clear that business is business.
The unfortunate truth is really the loss of specialization. As shared below, they will now be dealing with the retail agents who have traditionally used wholesalers for their niche expertise. Of course this is a generalization. But, the products that are actually targets for new appointments require more knowledge, training and depth of understanding which the wholesaler provides. Buffet’s up to his neck in it lately, isn’t he?
And I remember Mr Nerney telling us how he only wanted to deal with wholesalers because he had absolutely no interest in dealing with all those retailers that we had to vet, contract with, and account with. He said that was our job and he only wanted to deal with a relatively small number of wholeslaers.
Well that small number of wholesalers will hopefully start pulling their business away from USLI and he can have the nightmare of 10,000 or so retailers!
I hope I’ll be able to give them enough new business to help them grow. I sure want to help them grow & be profitable.
I wonder if we will ever see them at NAPSLO or AAMGA. Sort of like Death by Cop since they shot themselves in the head.
RIP USLI
Hey give me a little more of that Kool Aid fruit juice. LOL
“In the meantime just as Tom has made it clear that business is business, the wholesalers will also make it clear that business is business.”
Indeed business is business, but there has to be something said about being a man. I’d rather sleep with myself peacefully at night knowing that I kept my word by staying “Committed to the Professional Wholesaler.” If Tom Nerney can sleep well at night knowing that he lied, used and broke his word to his loyal customers then good for him.
Numerous posters have raised the fact that USLI has received numerous Retail entity names through electronic means- others have raised suing them as a response. The identities of retail agents in probably in he public domain as all IsnuranceAgences advertise have websites and etc. However, if specific individuals were to be contacted- that is not public information.
Other issues are also triggered such as State & Federal Privacy laws. It only takes 3 to support the filing of a Class Action suit together with seeking an injunction. Please post your phone number and or email address and we will be happy to explore the opportunity.
Have always had doubts about their intentions even though they claimed they would never go direct. They have been collecting retailer data for years and contacting retailers direct via phone and promoting co-visits to “help the wholesaler”. Won’t be writing any more business with USLI.
Here we go again, another ignorant comment. I have worked with my fair share of mindless and inept retail agents(and worked with a fair number of mindless and inept wholesalers on the retail side) but I am smart enough to know there are far more competent, professional and valuable agents on both sides to not allow 1 rotten apple spoil the entire bunch. Each agent provides value and expertise within the sector of the industry they serve. I am not sure why this situation has turned into an “Us” vs. “Them”? Anyone?
Let me first say, I do not work in the insurance industry so I provide a truly “outside looking-in” perspective. With that said, I do clearly understand business, both the idea of business partnerships as well as the idea of customer service through my experiences teaching at a major business school. These comments make a couple things clear to me:
1. The angry wholesalers find themselves that way for one of two reasons…they feel threatened by USLI and fear impact to their bottom line or they feel as though USLI has “betrayed” their trust and partnership. Perhaps this move was a reaction to a betrayal by the wholesalers…ever give any thought to that? Who made it “business is business” first? I think the wholesalers need to ask themselves that question.
2. Those wholesalers that support the move and look to continue their relationship with USLI have confidence in their operations and their relationships with their retailers and as a result, do not see USLI as a threat, but rather as a complement to their business. If a smaller retailer may not be able to support paying a wholesaler fee in some cases, wouldn’t it make sense to offer them up to USLI direct in that case? That’s a true “business partnership” and in the long run, will generate the best loyalty among wholesalers and retailers. Think back to the movie the Miracle on 34th Street and the positive image that was formed when Gimbols was referrring it’s customers to Macys. It does works.
3. Finally, in this day and age of the Internet and the Information Age, it is foolish to think that a specialized company would not eventually go direct to client/retailers. Amazon, half.com, ebay, and other online retailers all made themselves overly successful by providing a direct view into their offerings and products. It was only a matter of time in a day and age that requires business to be lean and cut costs to remain competitive.
In the end, if wholesalers want to remain competitive, they will want to think twice about how quickly they cut their ties with a company they have relied on heavily in the past. In the end, “business is business” and it’s a matter of understanding the impact to your business model and customer base. Perhaps USLI is not the company being bold and foolish here…perhaps it is the wholesalers that have immediately jump ship that are being foolish.
Enjoy your weekend.
Having worked with USLI for many years I’m disapppointed but not surprised. A few posters have touched on objective reasons why USLI would move this direction. One thing that has not been discussed is that broker base is not as loyal as USLI would like. While USLI offers a slam-dunk binding mechanism, some of USLI’s larger wholesalers have moved entire books of business (cough-cough: “Burns & Wilcox”) to in house facilities. While I can not grasp the economics of doing so, apparently some of the biggies think otherwise.
With large books at risk of being moved, USLI feels threatened and thinks they can win the hearts and minds of retailers. As other posters have indicated, wholesalers greed with over-feeing $1,500 policies has made Nerney’s decision easier. They see that money is being left on the table, if the wholesaler has no problem collecting $1,850 for a $1,500 policy.
As much as the wholesalers are complaining here, how many will really return their contract? Furthermore, since there are FEW markets to handle the low minimum premium accounts, will the wholesalers really move business to other markets at the risk of losing a market for the minimum premium accounts?
Time will tell if this will take place, but I don’t think it will be as bad as people think. Wholesalers are notorious for talking big, but when it comes to action, that’s another story.
As much as I don’t like this decision, I’ll bet this won’t affect their DWP numbers as much as people think. And if they save commission to the MGA – they are ahead. Remember, USLI didn’t force the wholesalers to take on the USLI Marketing folks – we all did that ourselves. Thought it would bring you more business.
Final thought is this. If the RETAIL agent can get 15% commission on these renewal policies, will the MGA really have an oopportunity to move that business to another market? Retailers have proven themselves over time to be lazy and will gladly take the 15% commission from USLI by doing minimal work to renew these. The MGA has to sell the value to the retailer to shop the renewal, so we’ll see what really happens.
To everyone complaining, let’s see how upset you really are. Wil you return a contract or move large amounts of business to another market? Or, are you already over your disappointment and it’s time to mvoe on?
I think you will be surprised with what the wholesalers do and the actions they take…………Only time will tell if they are bluffing or fed up………Going to be interesting!
I have had 6 markets and 2 Lloyd’s brokers offer me a “better deal” so far to assume this business. Regardless of what my friends say, it did not make sense to put the business there before, and I will wait and see what happens with USLI before severing my ties. My family is in this business for the long run and I don’t want to be influenced by people on my side of the business who have already cashed out to national retailers and are pontificating about what is right. I have to decide what is right for me.
Apparently this person doesn’t have many friends in the industry. Otherwise, they would have already spoken to all of them and learned just how many have already begun the process of book roll overs. There are handfuls of companies contacting us right now asking for the business on same terms all the way around. There are millions of dollars being repositioned and shifted as we speak.
Think about it… USLI operates at a 90% combined goal and often beats it significantly. Which companies wouldn’t want a book of that business at the same terms or better, gladly? And who wouldn’t move it after feeling used, lied to, and cheated?
We can go round and round in circles but this all comes back to only one thing, and only one reason we are all ticked off. USLI’s slogan/motto was “We are fully committed to the Professional Wholesaler as our sole method of distribution.”
Hey, you had your chance. You blew it.
Now get out of the way and let us retailers deal directly with USLI.
“committed to the wholesaler” is printed on every document. Every USLI employees swears they are dedicated to wholeslaers. USLI asked its partners to take them into the retailers (as partners with the wholesalers) . All lies. What goes around comes around. Will wholesalers send back their USLI contracts–hell no BUT will they help USLI succeed–hell no. Lie once–lie again. Sorry boys but you might be A++ with AM Best BUT you are F with anyone who has intgrity. You wasted years and a reputation. I blame Tom and if Buffett wasnt running a 50 billion dollar operation Tom’s little $375 million would show up on radar and he be gone in disgraces. By the way, all the USLI employees know its a baout face and they are not happy about it.
I think the market would be better off with fewer wholesalers, and it is starting to adjust. We already have Tri Cities and Crump, Colemont and Amwins and now Cooper Gay and Swett. There is simply too many wholesalers in the market, and the market (i.e. the invisible hand) is sorting this out naturally.
Is there a reason why these ignorant people keep placing the entire wholesale sector into one bad bunch? Trust me all industries have rotten apples but should they all be rotten because of one or two individuals ALLEGED wrong doing? To say yes would be ignorant (I would say this about any industry not just the wholesale industry)! When the whole AIG Marsh scandal broke we (the insurance industry) didn’t want to be viewed by the people unfavorably because of the wrong doing of a few peoples actions so why do we turn on each other within our own industry when ALLEGED wrong doings arise…….I am sure there is a lot more to the story than what has been released.
I have personally heard Tom Nerney address the concerns of USLI client MGAs that it looked like USLI was positioning itself to go direct.
“Trust us”, he said. “We won’t take your hard work to build our book and then steal your client base by going direct. Never.” It was a blood oath and I have heard him say it at least a dozen times. And he’s had to say it as the focus on small accounts and “retailer web quoting” smelled funny in it’s implementation.
And now, lo and behold, that is exactly what he had gone and done.
Warren Buffett is known for his integrity. I wonder what his thoughts are on his duplicitous President. Is he a co-conspirator or merely an enabler? If Nerney survives with his job, I think we will know the answer.
Yoda out…
Oh please. Nobody didn’t perform.
Let me ask you this. If wholesalers can’t trust USLI to go direct to retailers, how can retailers trust USLI to not go direct to customers?
Maybe they want to become another GEICO — which is also a Bershire company. It’s not like their product line is all that complex.
Yoda out…
“A savvy visionary”? Uh, okay. I think that retail or direct is probably a better model for them. My objection is to the fact that they have been bald faced lying to their MGAs for years telling us that they would not do exactly this.
It is possible to be a savvy visionary and a lying sack of **** at the same time, you know.
Yoda out…
As twisted as all of this is, Nerney is there until the end of the 150 year plan. Buffet’s “Laissez-Faire” style makes this assumption rather far fetched. Unfortunately, the punishment that will take place is a massive loss of premium to competitors through book roll-overs. Most of the wholesale base is already beginning the process simply based on principal alone.
It seems apparent to me that USLI is already anticipating this loss of revenue (on top of the $40 million book that Burns & Wilcox will be rolling into their new startup company)due to the fact that they are pushing for about 125 retail appointments by the end of 2010. They know they have to build this new base quickly and flood premium in to back fill.
USLI was a great resource and option for the wholesalers. This takes them back to square one where they will surely struggle to be as great for quite some time.
And another thing, the agents commenting on this post such as ‘PEN15’ and ‘Ben Dover’ will still be accessing USLI through a brokered arrangement whether it be a wholesaler or a retailer with a contract. I doubt they are the caliber targeted for appointments. They are also prime examples of what USLI has to look forward to! I wonder if they sign their apps “Ben Dover”?
The reason for the recent wholesale consolidation is because the majority of national wholesalers (with the obvious exception of Burns and Wilcox) are BROKE! AmWins, Colemont, Swett are failed business models. They have way too many Chiefs taking big salaries and adding nothing to the bottom line. They also over-payed mediocre producers more money than they deserved to bolster the top line that did not result in profits.
The independent local wholesalers who do not advertise in trade journals are alive and well. Let the “billion dollar” wholesalers go away and wholesale distribution improves.
Interesting article and situation…..great comments……..I am not in the insurance industry and don’t really know anything about the situation, except for what I have read here……….I sure hope this Nerney character is close to retirement? If not he may want to look into hiring a few body guards!
Anybody that continues to do business with these guys are no better than they are. Nerney and his kool aid boys have no integrity. I dont see how he can look himself in the mirror nor can I understand how anyone that continus to do business with them can look themselves in the mirror. All broker should not only move thier book at renewal but they should take it a step further and move it now. Carriers will offer short term policies and then USLI would have to RETURN premiums. STICK it to them like they have stuck it to us. No integrity. Down south, a mans word and handshake are worth more than anything else.
Nerney is a liar and so are most of his staff. However, some are good people and should move on out while they can. Now is a good reason to leave. Stick around and they would then be no better then uncle TOM
As mentioned many times previously, USLI will have their hands full dealing with 3x to 10x the customer base in going direct. There is a lot of packaging done by wholesalers to get business through the USLI “process.”
Conversely, it will be difficult for retailers to get used to the USLI “way.” Wholesalers that have been successful with USLI needed to learn “the box” and all the rules unique to USLI. I am guessing many retailers will get frustrated with declination ratios over 60%, the inability to backdate or bind with outstanding subjectivities. USLI has never been the easiest company to work with.
Things will all get back to normal soon enough. It will certainly be an interesting 18 months.
“There’s the door. Don’t let it hit you in the a–.” Charming fellow; classy too!
USLI surely does not have their valued partners’ backs.
There have been a number of derogatory comments made about wholesalers and excessive fees being charged. There also appears to be some sentiment that wholesalers bring nothing of value to the business transaction.
I do not know what the posters consider excessive fees. I do know that without fees most wholesalers would lose money on USLI accounts because of the small amount of commission income(the Retailer gets paid on multiple lines of coverage not just a $1,500 policy). Policy fees are necessary to pay salaries and overhead. If you feel like a particular wholesaler is charging excessive fees, you should look for another wholesaler. The last I checked, retailers were not forced to work with just one wholesaler.
If wholesalers are not bringing any value to the retailer, they need to be replaced. There are times when an account does not belong with USLI even if they are the cheapest price. A good wholesaler recognizes these situations and provides a better alternative. Insurance is not a commodity item.
There is little doubt the majority of USLI products are best positioned for the standard market. This is not the fault of the wholesaler. The USLI appetite was not always so narrow, and the wholesaler would much prefer to utilize USLI for many more risks. Instead wholesalers provide alternate solutions when it doesn’t fit USLI. Many retailers appreciate not having to work with multiple carriers on small premium business. The wholesaler does not mind doing the dirty work.
If your wholesaler does not make it easier for you to do business, they need to be replaced. Wholesalers are no different than the retail world or carrier side. There are great ones, there are terrible ones and there are way too many average ones. It’s your mission to find the great ones. Don’t settle for average.
Wholesalers have been making decisions for years on where to place business, and have used USLI when it makes sense for them, on their terms. Now they cry foul that USLI is not happy with that formula, and has raised their hand and said they are expanding how they distribute. I can understand why the wholesaler does not like it, because they want to have a say in how another company sells their product. It looks to me like they had their chance, and did not think it was worth it to support this company enough. Maybe they’ll support the balance of the wholesale-only companies better (not just when they can extort more commission when the chips are down).
I have not read any comments that USLI does not have the right to appoint retailers. In fact, it has been quite the opposite. Most people believe it makes good business sense for USLI to utilize a direct approach since their product offering is a better fit for the standard market.
I think the issues for most are quite simple:
1. As recently as last week, USLI was in their customers’ offices swearing they would NEVER go direct. People are upset about being lied too.
2. Wholesalers believe they were used. Over the last few years USLI has instituted a number of initiatives that put them directly in contact with the largest retailers of their wholesale customer base. USLI was able to generate a tremendous amount of retail information through the efforts of their wholesaler partners.
At the end of the day, you are only as good as your word. USLI has spoken loud and clear.
In this day and age, it looks like USLI will follow a business model similar to Lexington.
It will set aside a large number of underwriters to chase retail business, and it will designate some underwriters to go after business from wholesalers. This analogy makes sense. The fisherman with the most lines in the water is usually the most successful.
In the end, USLI delivers a great product and has a great management team. I’m sick of the wholesaler comments pissing and moaning about what might happen.
If the wholesalers could provide some value in this market, they could justify their existence. But, unfortunately, on the most part they cannot.
They will keep a renewal at any costs even if it means screwing their incumbent carrier.
What goes around comes around I say…..
with regard to the comment about brokers somehow going away,I disagree. The market will flip again-it always does and retail agent’s will be needing E&S again.
Actually, if any part of the distribution chain could be eliminated, the retail agent could. For the most part they are comprised of salesman who have no clue what is covered in a policy. As one of the folks here said, wait until USLI gets an oil & gas contractor classified as an “office”.
Please find a new policy attached, for slightly less premium (maybe), that will replace your USLI policy midterm. Although this option was available 6 months ago, I did not think it was in your best interest.
Based on increased commission and fees that I will collect, and the ability to protect my business, I now find it in your best interest to move this policy to an inferior rated carrier, and trust you understand my position. If you want to discuss, please feel free to contact me in February at the Boulders, July at the Breakers, October in Atlanta, November overseas on a cruise ship, etc.
Regards;
Your MGA
ps to retailer – let me know if you need help explaining this one.
The retailer should have an easy time explaining this once they get back from and Erie excursion to the bahamas or an Auto Owners trek to Vegas, etc.
Anyone who denies the effectiveness of incentives or the appreciation for them should promptly climb back into their hole. How many of your insured contractors receive promotions and kickbacks from their suppliers for volume/bulk purchase? How about your insured real estate agent?
What’s all of this I read about lies? Of those of you who write about lies, how many cheated on their spouse after swearing to eternal love, ’til death do you part?
Things change. Relationships change. Businesses change.
USLI’s has two responsibilities and only two: Profitability and Growth.
If wholesalers feel jilted, they should consider the same two goals. This is business, not romance.
“Part of being a winner is knowing when enough is enough. Sometimes you have to give up the fight and walk away, and move on to something that’s more productive.”
Donald Trump
Ahhh………words of wisdom! NOT
You do not know what you are talking about…..
How sad the east coast and Southwest must be if the wholesalers there are so greedy, lazy and fee based. Out west we have at least one wholesaler that is an expert in profesional liability, assists me in selling, does not charge fees in excess of 3-4% and keeps me for getting sued by advising me on coverage-so I can better inform my customers. USLI products are very good- but lack many coverage features many others have- at – least in working with my wholesaler- I can give my customer an informed choice of cheap or broad coverage. I won’t say who hey are-t but you all know them- they publish more how -to articles than anyone I know- and from what I ahve read here- evryone else should need them too…
LIed
As someone that was in the wholesale side for a short period of time and then back to the retail side I have several observations.
USLI’s intention has always been to compete with standard markets while being a non-admitted company. They constantly talked about being a product based company, which is true for an E&S market their product was comprehensive. However, compared to an Admitted carrier the product was inferior. This on top of the fact that they were just not competitive while spending tons of money on expenses instead of just looking at rate relief. One of the things that drove me crazy was being within a $100 of getting an account and not being able to meet or beat the competition to get the account.
I have talked to several retailers and there are going to be some major trust issues with how USLI. Personally, I would never work with USLI after they came to my office and talked about being a “partner” and then stuck it to us. I think it is funny that USLI employees on here are staunchly defending the decision and calling wholesalers lazy.
Also, retailers are not going to want to keep sending submissions when 90% of them are declined. Even though the USLI employees keep referring to wholesalers as lazy wait until they send declination after declination to these retailers. Retailers are going to get absolutely tired of sending business for them to look at and to keep getting shot down. Work smarter not harder.
It will be interesting to see how things play out. Game on.
Where am I going to get my daycare coverage from now?
I wonder what the sentiment will be in about 3 minutes when all of the employees are at their desks reading these comments. May be a voluntary reduction in staff coming soon and Nerney will have his expense ratio’s back where he wants them.
Fact: USLI is wildly profitable. 82% – 87% combined ratio is quite familiar to them over the past 6-8 years even in this soft market.
Why doesn’t a carrier that is truly wholesale exclusive & looking to break into one of USLI’s core business just simply file a “me too” filing and start moving books of business? Could argue this is a short-term solution as the retailer will eventually get a USLI appointment direct and move the business back, but I think that if you got started immediately a carrier could move a sizeable chunk of the easy-to-write, small biz and keep most of it for 3-5 years.
USLI does not believe in a “soft market”. It follows therefore that if you are not growing (which they are not), then you cannot blame the non-existent soft market cycle.
You could always blame yourself, you say? Pfff-shaw! USLI spends vast sums of money on marketing (they greatly admire their sister company GEICO that spends almost $1B per year on marketing), they give free marketing material out like it grows on trees and they have 15-20 people flying around the country and staying in hotels every day of the work week. So, obviously, it cannot be USLI’s fault that they are not growing.
So ….. it must be the wholesaler. Burns getting ready to move a large book aside, this is the psychology/mentality at USLI.
Maybe but while USLI’s low cost products may appeal to the retailer, they are a very difficult carrier to deal with.
I don’t think most retailers will continue to do business with them for very long. The commission won’t be worth the trouble on a book that isn’t large enough to ever learn the nuances of working with them.
Even at the wholesale level, we had a designated individual who worked their accounts only because they were so nit picky that “regular brokers” didn’t want to mess with them for the low income involved.
The only way to make using them user friendly for the retailer is to change their products to make them much clearer and more easily understood — in effect to dump their “products” and to write lines of business like everyone else. But that would entail and even bigger corporate shift than writing direct to the retailer — and with a presumably negative impact on their combined ratio.
I still have to ask this same question: If the wholesalers can’t trust them to not go direct to retailers, then how can retailers trust them to not go direct to insureds? Maybe they want to be a small commercial version of their sister company — Geico.
Yoda out…
Way back in the days when the grass was still green ….
1. Direct bill
2. Automated/online quoting system
3. Direct marketing force (field and home office)
4. Collection of retailer data (obtained both from wholesalers as well as through direct market research and copied off the applications submitted)
5. Opening regional offices in CA (2) and TX (more are soon to come)
6. Placing USLI employees in their wholesalers offices as “catalysts” for 6 months to 2 years to “learn about what our wholesalers see” (you know wholesalers see? business from retailers)
7. Testing out the marketing of USLI products directly to retailers via the “50/50” program where USLI split the cost of a person with their wholesaler to market just USLI’s products/online quoting system.
8. Having Berkshire Hathaway buy wholesalers which are then operated by USLI (Gateway (MO), Apogee, Gateway Specialty (PA). Gateway (MO)’s president = former AVP at USLI).
Many of these things began over 5 years ago. It seems relatively obvious to me that there was a plan. I just wonder was it a diabolical master plan from the beginning or were these originally ideas to help their wholesalers, but just happen to have easy application to retailers as well? Hard to say.
I can say this with 100% certainty. In the summer of 2008, the second in command at USLI was having conversations about what a “soft landing” would look like in going direct to retailers; i.e. how they would do this without causing a huge storm with their wholesalers. I’m thinking they never quite figured that out ;)
A direct appointment makes me an agent… which means no broker fees. These types of MP policies are not profitable without a significant broker fee that is well above the extra 5-7 percent USLI will be offering. I will stick by my wholesalers on this one.
A direct appointment makes me an agent… which means no broker fees. These types of MP policies are not profitable without a significant broker fee that is well above the extra 5-7 percent USLI will be offering. I will stick by my wholesalers on this one.
WESTERN WORLD INS CO
I would explain it to the retailer this way: “Here is a policy from a Carrier that will not Exclude everything that could ever result in a claim.” Firearms exclusions, A&B exclusions, participant exclusions, Injury to independent Contractor exclusions.
It’s easy to have a great Combined Ratio when you never have to pay a claim.
Those of you wholesalers who think you’re going to just move your USLI business to another carrier in retaliation for USLI abandoning you ought to read your contract with USLI a little more closely. You think you’re a broker representing the insured, but USLI’s agreement is more like an agency contract than a brokerage agreement. You aren’t allowed to simply move a USLI renewal. The contract gives USLI a lot more control of their renewals than any other carrier in the business has over its renewals placed via brokers. Now, if you’re an MGA, that’s a different story, as MGAs typically have an AGENCY agreement with their carriers, so USLI’s agreement wouldn’t be out of the ordinary. But if you’re a wholesale BROKER, you might be surprised to learn that you signed what is in effect an agency contract, not a brokerage agreement. So good luck moving that business without USLI taking legal action for breach of contract.
Either you work for Burns & Wilcox and enjoy patronizing the rest of us or, you are way behind.
B&W has started their own company and done a ‘me too’ filing. Policy language, rates and everything.
This is why USLI has made the move they have.
Idea Squasher: I think you missed the key point of my idea.
Another carrier, not a wholesaler. I doubt Burns would have much success moving books of business from their direct competitors. That is the key. Burns moving their book to themselves is a great idea in my opinion, but not the idea I’m talking about.
Ideally, someone that is wholesale exclusive currently. Admittedly, the USLI service proposition is difficult to match and I doubt there is anyone with their level of sophistication when it comes to tech systems. BUT … the books you would be looking at are incredibly profitable and don’t require a lot of underwriting as they tend to not have a lot of moving parts. If you were a carrier trying to build a profitable book in a certain line, USLI’s business could provide a good, profitable base to start from.
When I found out about the action USLI was making I was very upset. Up unti a few weeks ago I was going out on agency visits with USLI Reps. At these visits the USLI rep would mention to to the agent that going to the whole saler would be the only way of getting a quote. PLus the mentionof them being loyal to there wholesalers. Another notion that I though about was a few months ago USLI started a program were they would call the agent on the wholesalers behalf and set up appointments. USLI was at that time finding out how much business the agency had. What products they see most. This was all planned and to think that us wholesalers trusted USLI as we did. I do beleive that USLI had burned a bridge without really thinking about the outcome. Who is to say that in the future USLI will lie to brokers/agents and go directly to the insureds. I have really lost my confidence and trust with USLI.
..gets the lowdown on their volume and appetite…then goes right for the business direct! Brilliant!
But very unsavory.
Agree completely with Carrier Perspective. All those poor wholesalers are going to do is find another market to use and abuse…and in the current environment, that’s not going to take long at all.
Not sure how this evolved into bashing E&S brokers or retail agents. It is our job to provide our retail agent customers with incredible service, professional knowledge, multiple quotes when prudent, and to conduct ourselves with honesty and integrity. We value our retail agent customer’s ability to produce business, inform clients, and sell quotes.
Each E&S shop will handle this USLI setback in their own way, but should always consider what is best for their customer, the retail agent. That is why we initially began writing with USLI in the first place. The business will end up where it should be placed, usually the broadest coverage for the best price.
Now, get back to work and write some business!
So much for loyalty to the wholesaler. What a shame.
….all the happy retailers posting herein get a dose of the “rubber hose treatment” meted out by the marketing boys at USLI. And I do mean “boys”. You will be repeatedly queried on “what can we do to help you write more business”? They will insinuate that you have NO clue as to what you’re doing (in spite of the fact that they will admit they haven’t been in the business long enough to have experienced a “soft cycle”). They will insist (if you want to keep your appointment) that they be allowed direct access to your clientele and then, when you think you’ve met all of their demands, they will steal your customers from you. I never placed any business with USLI but I had to sit through these unproductive meetings. You retailers are the same bunch who act surprised when your new wife (who you dated while she was married to someone else) is caught cheating on you. Get me some popcorn. I’m looking forward to this drama.
Has anyone had a chance to review your “new contract” sent out by USLI? Basically, it gives them the right to cancel your contract at any given moment and TAKE the business direct.
Opinions?
Wednesday, November 11, 2009 | Author: Tom Nerney |
Our Committment to the Professional Wholesaler
Dear Valued Customer:
While some people may simply define commitment as a pledge to do what they say they will do, that definition is not enough by our standards. We see commitment not just as a pledge to do what we say we will do, but also as a statement of the actions that we are willing to take to assist our customer in being the best at what they do — selling insurance!
Some of you have said that you believe that our company intends to cut out the professional wholesaler and go direct to the retailer in the future. This type of rumor can be harmful to our valued relationship, which is why I feel that it is important to address our commitment to you again in this letter. In some instances, I can understand why this type of rumor may exist. However, the irony is that I cannot think of another insurance company that is doing as much to support the professional wholesaler as United States Liability Insurance Group. Many of the things we are doing to support the professional wholesaler are the very things that may be causing you concern. In the past several years, we have brought you many positive initiatives to assist you in what you do and to further develop the relationship we have built between us.
When one reflects on these things, hopefully the reaction is not fear, but rather trust that we are merely trying to grow our company and strengthen the current relationships we enjoy with our only customer – the professional wholesaler. While we may be different in some of our approaches from other companies, different is not always bad. We believe strongly in what you can do and feel that there is much more we can do together in years to come. We are excited about working with you and your team during the remainder of 2009. Thank you for your continued support and business.
Warm Regards,
Thomas P. Nerney
THIS WAS THE CEO’S MESSAGE PRIOR TO LAST WEEK!
Note From Thomas P. Nerney, Chairman, President & CEO
United States Liability Insurance Group is a proud member of Berkshire Hathaway. Our group consists of three insurance companies, United States Liability, Mount Vernon Fire and U.S. Underwriters Insurance Company. All three companies are rated A++, the highest rating available to any insurance entity by A.M. Best, the premier analyst of insurance companies. Our three companies give us the ability to offer admitted or non-admitted insurance policies in all 50 states and the District of Columbia.
Committed to Making a Difference
Our business philosophy is built on five fundamental principles:
• We are a specialty products company delivering innovative and stable products
• Committed exclusively to one method of distribution – the professional wholesaler
• Underwriting competency and discipline is our company heartbeat, the entire organization works to help strengthen this effort
• Create a community environment where our people know they are our #1 asset
• Consistency of five community goals – these goals do not change year-to-year
1. Combined ratio of 90% or less
2. Get what we want and have our Customers love giving it to us
3. Be the # 1 service company in the insurance industry
4. Make our people feel # 1
5. Keep it simple, give 100% effort, win and have fun doing it
These five principles and five community goals have assisted us greatly with our efforts to have our people understand clearly who we are and what we are trying to do. This clarity of purpose enables each person to focus on how their contribution works toward our ultimate goal which is to be the best insurance company at underwriting and servicing small premium accounts.
Our people are committed to working each and every day toward this goal. Our love for the industry, our pride in its significant contributions to our national economy, and our desire to be the very best we can be drives us to do our part to add true value in what we do. We understand that we can make a difference in service, education of our people, technical knowledge, claims expertise and financial stability.
We invite you to learn more about our company. We also invite you to learn more about the fantastic opportunities which are available to you within the insurance industry whether as an agent, wholesaler or working within an insurance company. The industry needs good people who care and who want to make a meaningful difference!
Thanks for visiting our website and I wish you all the best!
Was this in the 150 year plan?
It is unfortunate that you think all of the wholesalers/MGA’s out there are inventing the fact that Tom Nerney made promises over and over again to his customers that he had no intention on going direct to the retail agent and he was 100% committed and dedicated to his wholesale partners? People wouldn’t be as furious and upset as they are had just left the statement alone and never said it. But Mr Nerney repeatedly (ever chance he got) promised the wholesalers/MGA’s he was committed and dedicated to his only partners/customers (the Professional Wholesalers).
Trust is the single most important factor in any business relationship. One can not turn and look the other way in a situation like this. Nor should others be naive to think it won’t happen again in the very near future.
Dovetron — you are mistaken on several counts.
#1: It IS all about the breaking of a promise made literally hundreds of times to the wholesalers/MGAs. Many of these same wholesalers use carriers that already do business with retailers. The difference? The many promises and reassurances made by USLI to these wholesalers that USLI would always support them. Not only that, but USLI used this promise in order to gather market data on the wholesalers’ retailers, in order to go visit their wholesalers’ top retailers, in order to place USLI employees in the wholesalers’ office as temporary “brokers”. If you cannot see how this would enrage the wholesalers, I really don’t know what else to say.
#2: I cannot argue with the profitable part of your comment. Dead on there. Efficient? A few comments about what this might mean. Great technology to support processing business (I say processing because it’s not underwriting)? Sure. Paying your employees 25-40% less than market value? Yep. Requiring your employees on marketing trips to only fly before 9am or after 5pm. Yes, again. Requiring all meetings take place and end prior to 9am or start after 5pm? Yep. Is this efficiency? Could be, but … I would not want to work for a company that is this type of efficient.
#3: It is not foolish to think that this move did not have Warren’s blessing. Do you think Warren came up with or signed off on the GEICO gecko? I doubt it, but GEICO spends about $750M a year on that little reptile – about twice what USLI is worth. Buffet’s MO is not NOT sign off on or “bless” decisions by the managers running his company. That’s why he bought them — they were successful.
I agree that in the long term it’s anyone’s guess what the outcome will be, but in order to be successful marketing and selling their products to 10,000 retail agents versus 200 wholesale agents, USLI is going to have to change.
This does not suprise me, Corporate America is ruining our business! USLI had no problem with the wholesale industry until the corporate Bullies came along.
Wholesalers just can’t win. We are not to bright if we “put all our eggs in one basket”, yet we are not loyal if we don’t give the companies all our business.
The moral of the USLI “story” here is that USLI is willing to do whatever it takes to write business.
Mark my words: Once the retailer experiment fails, USLI will start pursuing business direct to the client.
Anyone that gives USLI fuel to go down this road is foolish.
Fool me once, shame on you. Fool me twice, shame on me.
Insurance is an industry based on trust. USLI has showed they cannot be trusted.
Interesting blog. Here is my take…
1) I honestly don’t believe this is about Nerney breaking his promise (that is if he promised never to use a retailer, did he???), but that the wholesalers believe their revenue stream wont be as it was through USLI. Let’s face it, if adding retailers meant in some skewed way that wholesalers would make more cash, what would they care? They couldn’t be that thin skinned over what they claim is principle causing them to stick their customers with less solid insurers, could they?
2) USLI will likely emerge as a much stronger company at the end of the day. Might there initially be some erosion from their book from wholesalers looking to exact retribution? Probably. But this much is also clear….They are one of the most efficiently run and profitable insurers in the industry.
3) Clearly USLI is Nerney’s company and all decisions are his to make but it would be foolish to think that this move and the PR behind it would not have been made without Buffet’s blessing. If Buffet thought otherwise, Nerney likely would not have pulled the trigger. It takes guts to make tough decisions for the company that you are placed at the helm. One thing about Buffet is that his organization is seen as pristine and if he felt this would tarnish it long term, regardless of USLI’s size, he would have shot it down. Even after a tough 2008 and questions concerning his purchase of BNSF, BH remains the class organizations of all in the U.S. With a lesser/different owner, this move may have been riskier but Buffet is a visionary and has great senior management in his companies, including USLI, otherwise he would not have them as a part of his stable.
The effects of this can’t be measured in months or maybe in the first couple of years. Long term, however, USLI will likely emerge as a company that will profitably grow in ways in which their prior model did not allow them to. This one will be interesting to see how everything plays out.
We might debate the quality of coverage; Admitted vs. Non-admitted; and we might take a veteran industry perspective…but the truth is, this move is designed to meet the long term reality of consumer demand and decreased retailer professionalism.
As more retail agents compete only on price – not even understanding coverages much less explaining them – “quality” ceases to have value.
There are multiple causes for this societal shift…suffice it to say, futurists see this trend. Us wholesalers are heavily invested in and dependent on the salesmanship and professional integrity of independent agents who in turn are struggling to meet the demands of an ever-declining business IQ among their customer base.
Just think about the meta-message inherent in the Progressive ads where a dingbat salesclerk pulls your product off a shelf.
USLI and more specifically, Tom Nerney advocate the importance of offering a “company story.” The purpose of this “company story” is to construct a consistent message about USLI’s core values and generate TRUST amongst its customers.
I had the pleasure of listening to Tom’s eloquent delivery of USLI’s company story twice, and both times he was consistent in his delivery. His message was that of “being committed to the Professional Wholesaler.”
In light of recent events, Tom Nerney’s company story has changed, the TRUST is gone, and what plays out in the end I feel will be like a bad lifetime movie with alternate endings.
I wish you the best of luck USLI in what plays out in the months to come, and for the sake of your employees, I hope the ending is a “happy” one. My heart goes out to all of you who have worked so hard to develop great relationships with your wholesalers over the years. It seems as though Tom has little appreciation for all your life’s work.
Good luck to you all, and let me know if you want any help with your resume.
Your approach works well in theory but some posting here have already complained of (greedy) wholesaler fees regardless of the commission. If your retailer can’t sell fees, your approach falls apart. I submit that USLI will fail because their approach is shrill and retailers won’t put up with it. Larger agencies MIGHT but what do THEY need with another BOP market? Smaller entrepreneurial agencies will never tolerate a carrier “in their face” demanding business. Most smaller agents have hooked up with some kind of networked arrangement to get access to the markets they are not directly appointed with and don’t need, again, any more BOP markets. The business USLI writes is a loss leader for most agents. You can’t spend time adding value and squeeze any profit from a $500.00 policy premium. USLI is the next GEICO. How else can this drama end?
Many have commented that USLI is going to become the next GEICO and have drawn several comparisons. Definitely a possibility.
Here’s another thought: Philadelphia Insurance Company — you may remember that USLI’s new ploy is strikingly similar to what Philly did several years ago (then they tried to go back to the wholesalers, then they cut most of them loose again).
First, as another motivating factor (market forces, B&W etc) don’t underestimate how much the sale of PIC to Tokio Marine for over $3B had on Tom Nerney. He used to be the president at Philly, he left, they went direct to retailers (for the most part) and then were sold for a large fortune. Many have spoken of “greed” as a factor in USLI’s move. I’m not 100% sure about that, but if it is, then the Philly sale as to factor in heavily.
Second, and here’s the prediction, USLI will not end up turning into a GEICO. They are really not geared up with the infrastructure to deal with retailers — only three regional offices currently. Even with a good technology platform, it would take some time to get rid of people who currently have the title of “underwriter” and replace them with sales, marketing & IT staff to run a tech-based operation.
I predict that long before USLI goes direct to the consumer, they will be purchased by Tokio Marine and folded into Philadelphia Insurance Company. Yes, lots of personal history to overcome with Tom, the MaGuire’s etc. But I think it’s going to happen. Call me crazy!
Second,
Dear Texan: The reason wholesalers still exist is because non-admitted companies don’t have the enormous infrastructure to deal with retail production sources, nor do they want to. Having worked both retail and wholesale, I can attest to my experience in agencies that hire the cheapest employees to populate their offices with the thinking that “a monkey could process the paperwork”. Surplus lines carriers actually underwrite business. They don’t just find a rate in a manual or online and “process” a quote. As such, they do not wish to do business with “monkeys”. I would guess that you’ve never done business with a professional wholesale partner and you allow your clients to treat you as nothing more than another business commodity.
Brookette:
I do not charge high fees. If the insured does not want to accept a fair $100 to $200 fee on a policy then they can feel free to play russian roulette with their insurance.
Most retailers are not intelligent. I am sorry but it is true. They could not tell you why its not a good idea to add an additional insured on a policy if they are doing business with them, and they would not understand what a financial institutions exclusion on a appraiser policy would mean for their insured. Nor would they have the relationships or expertise necessary to get something done if a carrier is treating any specific insured badly.
My value is simple. I am the insured’s advocate. I trigger policies, I allow my retailers to write more business because since I do all the work, and I make sure the insured is properly covered. If any retailer cannot understand that and appreciate the fee — well then quite frankly they can go it on their own and when the claim is not covered they pay more for their own professional liability policy.
Fees in other industries are common. Airlines charge baggage fees. Hospitals charge documentation fees. Car dealers charge delivery fees. Mortgage brokers charge so many fees that it is impossible to name them all. The average american consumer gets NOTHING for most fees they pay.
I provide real value in the form of making sure that the average insured does not get screwed because their retailer does not know the difference between a retroactive date and a continuity date.
If any of my retailers made a comment like the one Texan made, I would cut them off.
The average american retailer should be scared stiff of the idea that one day us wholesalers might just decide it is a good idea to become retailers ourselves.
Good wholesalers know that we do not need retailers. It’s the other way around. Without us claims get denied and premiums go up.
USLI does not scare me. If they want to be the Walmart of the insurance industry, let them. They have a bad policy form, and their underwriters do not underwrite.
Every retailer should be scared stiff of dealing with USLI. USLI will has no problem excluding something that needs to be covered because their bottom line is profitability at any cost.
And for a retailer that probably spends most of their time on items like GL and workers comp… I say good luck getting it done on your own.
I personally know my customers would rather make an extra buck in the form of more commission from me and take solice in the idea that I have made my career in making them more efficent and productive organizations that sell policies that produce when the claims arrive.
Thank you, Drew, for stating the case more eloquently than I.
Retailers are not intelligent? Really, Drew? Sorry, but only an idiot would make such a statement.
Here’s the deal… Retailers (as a group) are no more or less intelligent than wholesalers. Or company people. Or plumbers. It’s about training — not intelligence — and about the extent to which an individual is or is not sufficiently motivated to secure the training needed to meet the highest professional standards.
I’ve been a retailer, a company person and, for the past 20 years, a wholesaler. And I will tell you that one of the wholesaler’s most important jobs is finding retail production sources that are sufficiently trained, honest, motivated and organized that they can be trusted to be consistently professional. If the retailer is professional, then the wholesaler can make the most effective use of his or her time — instead of having to spend twice the time on each submission for half the hit ratio.
Sorry Drew but my experience has been that poor wholesalers tend to attract poor retailers. And strong wholesalers tend to attract strong retailers. If the agents who are drawn to you are “not intelligent”, then perhaps you should ask yourself why that is — and what you have to do to attract a better quality retailer.
As respects fees, sometimes they are justified and sometimes they are not. A wholesaler is supposed to add value to the transaction. If they don’t, then their fees are probably not justified. If they do, then they are worth every penny. The same holds true, by the way, for retailers.
I think that USLI is going to have a tough go of this.
~ Their wholesaler “partners” will abandon ship as soon as they can find carriers willing to say “me too” and do a book rollover. It’s about trust and trust has been irretrievably shattered.
~ The drop off in business will result in some pretty hefty layoffs; USLI is going to lose some key talent. I cannot imagine that a lot of the good people, people who have taken great pride in their corporate image and pledge, are not already out there interviewing. Perhaps with a carrier who is in the process of gearing up to say, “me too”.
~ As I’ve said before, if wholesalers can’t trust USLI to not go direct to retailers, then how can retailers trust USLI to not go direct to customers? I just don’t think that retailers are going to rush to line up for this appointment.
~ Retailers tend to assign small accounts to their least trained individuals and they are going to struggle to do business the USLI way. Indeed, I think that USLI will have to change the way that they do business — abandoning their “product approach” — and its focus on minutia — and going to a very simplified line of business approach.
Finally, as respects whether or not Buffett gave advance approval of this move, I’d guess not. He doesn’t tend to inject himself into the companies that he manages, but he does field phone calls from his Presidents and he acts as a sounding board when asked.
This is or should have been a matter that Nerney sought him out about — whether he did or not, I can’t say.
But I would be very hard pressed to think that Buffett would have ever approved this kind of betrayal. I’m a bit of a Buffettologist and his number one guiding principal has always been to act with integrity.
The Buffett that I “know” would have much rather written off the loss of a $40 million book than to have gone back on his word — especially in such a public way. I still think that Nerney will lose his job over this.
Parting thought… Nerney has nobody but himself to blame for his current troubles. I mean what the hell was he appointing large national MGAs for in the first place? The only way those folks can make money on small accounts is to go after the underwriting profit too. That they would eventually do so is entirely predictable. And Nerne’s failure to anticipate that, and/or his decision to appointed them anyway, is his own mistake.
Yoda out…
While there are a lot of high end retailers out there I would agree with this comment 100%. Most retailers are “ham n’ eggers” that put little to no effort into furthering themselves in this industry to help their clients.
Being in FL we have a $35 cap on fees and you don’t know how many times I have gone back and forth assisting an agent on a $500 policy. By the time it was said and done I actually lost money on the damn thing because of the time and effort I put into it.
To all:
There is something very simple all wholesalers can do to make it more costly for USLI to do business with retailers.
PASS MORE Commission. I give all retailers at least 20 points on all deals.
I work off of my fees where it is legal.
If USLI wants to work with my retailer, make them give retailers more commission.
Easy. Simple. Greedy. Fighting fire with fire never sounded so easy.
Most retailers will be happy with the extra commission and appreciative that someone that knows what they are doing is handling their business.
If all wholesalers follow suit USLI will be forced to make a decision, and no matter how they proceed it will cost them more money.
Good enough for me.
Who can compete specifically on their Daycare product and Janitorial product?
VERY well said. On all points.
I can only add, once trust is broken, it’s hard to regain. Even with the back peddling of saying they are only going to appoint 150 retail agents nationwide — how can we trust them on that?
I, personally, feel EXTREMELY betrayed — I bought the USLI line hook line and sinker — I did customer’s customers visits, etc. As little as THREE WEEKS ago (two weeks before the announcement) they were in visiting my agents with me – -I absolutely and unequivocally do not believe they didn’t know at the time — the employees who came out may not have, but Drew and those at the top most certainly did! I just wonder how long — they’ve been doing customer’s customer visits with me a long time.
I feel like a girl the morning after she realizes the guy said “oh honey, I’ll love you forever if you just sleep with me” and then realizes it was a line. Only, this is WAY worse — I wouldn’t be stupid enough to buy that. I thought USLI and their employees had more ethics and professionalism! I feel dirty and cheated on!
And I completely agree- if they do this to wholesalers like has that have a million or more in business, I hope the retailers who may not even hit $500k with them don’t think they can trust them!!!
Shades of Philly all over again — but at least with Philly you know they are the “player” of our industry and go into it with full foresight that they might stab you in the back!
If this is your experience, I suggest you find new wholesalers! There are wholesalers out here that DO value loyalty and partnerships. I grew 20% with USLI last year. I am extremely loyal to my markets — I try and discourage retailers from shopping existing accounts for a variety of reasons, however sometimes as wholesalers we’re forced to. When that occurs, I ALWAYS give the current carrier last look/last opportunity and those quoting against are told that and they appreciate it because they know if it’s their renewal they are getting last look.
If you have disloyal wholesalers, find new business partners!
You do understand in MANY instances we only get that or WAY less — in the majority of instances most of us pass 50% or better on to you. We have overhead and costs as well we aren’t charities any more than you are!
On many of my USLI accounts I pay 15% to 18% to agents. We NEVER charge fees on admitted USLI DESPITE the work it takes to write these tiny accounts — we barely break even on them but they are an accommodation for our business partners.
Believe me, if we could pay 20%, we would.
The only way we can is to charge HUGE fees and then where would that leave you when your client goes down the street with a BOR not charging those fees and paying a little less commission? Your competition is going to accuse you of being unethical for charging all the fees and taking all the commissions.
Remember, 99% of the time we are making the same as or less than retailers.
I love how retailers assume we get like 50% commissions or something. Would be nice!
Where do you work at in USLI??
I hear One Beacon is looking for tech underwriters.
In the E&S market who is USLI’s biggest competitor?
There are a slew of companies that can compete on USLI pricing and programs.
Being on the West Coast the markets I’m aware of that can compete would be:
Scottsdale/Western Heritage
Nautlius
Catlin
Max Specialty
Penn America
Montpelier
Markel/Essex
Capital Indemnity
Century Surety
First Financial/Burlington
and on and on….
No, One Beacon sold their tech business to Hannover.
You can’t just send your contract back and roll a book overnight lady – You get real! I would venture a guess many Wholesalers/MGA’s are talking with other markets and are in the process of moving their books and giving USLI the finger.
And I say if obtaining an appointment with USLI makes sense for the agency you work for more power to you (I could care less if they burn you in the end)……….So best of luck to you!
But let me ask you this and any other retail agent who wants to chime in…………have you ever contacted your wholesaler to try to negotiate a higher commission rate & suggest if they offer higher commission they could bump up the policy fee…….of course all in the best interest of your clinet, the insured?
USLI has been planning this for some time. Do you really think that it was a decision made overnight? They have no ethical standards. Those (agents-MGA’s) that say they understand are disconnected. How can you partner with a company that does this. How can you trust or have any respect for any of thier employees? For those employees still working at USLI, you have no integrity. You hang around dogs that have fleas, you get them. You career will be tainted and you will be looked upon as part of an unethical group of individuals who’s greed overcame you. Nearney makes all the money with a handfull of others being paid fairly well. The rest of the employees are mid level talent acting as a flunky. They get paid nothing comparred to the industry and are being used daily by the greedy one at the top. Nearney will use his cult tactics to get you to believe daily that you are doing the right thing but I can gaurantee you in the end, he will turn his back on you for his own personal gain. USLI is a joke in the industry. Other companies laugh at thier leader and their employees. Other MGA”s always talk about the Kool Aid boys and what a joke they are. NO RESPECT..I wonder what Buffet thinks of all of this? My take is that he will NEVER go anywhere near this one as he would be ashamed. In the end, Buffet will ALWAYS have this in the back of his mind when he is speaking to Nearney. As far as moving forward, only the second tier MGA’s will continue to support these people because they have few options. No operation with any integrity will support these people moving forward and NO RETIAL agent from the top tier will support them either. USLI has really made a bad decision. The greedy leader is responsible for messing up what was a pretty good company. Too bad…they could have been a “Contender”
Boy, Drew’s original post on this says it all. Being from another side of the business risk transfer but having dealt with Warren and his companies for years, Tom and he are yuking it up on this under the delusion that they can get to the insureds and carve out “wasteful” distribution they don’t literally own. Reatilers would exteremely naive and foolish to not see what is next. As I write this Tom Petty croons on the radio “this will be the last time you’re going to hurt me”. Retailers be VERY AFRAID.
Yoda,
I stand by my comments. Maybe 70% of retailers are complete morons. I have some very good retailers, and those are the ones I choose to partner with on a day to day basis.
You can complain and moan about the my comments all you want.
At the end of the day, though, it remains:
IF RETAILERS WERE NOT STUPID, THE PROFESSIONAL WHOLESALER WOULD NOT EXIST.
There I said it. You people need us, because you are and will always be lazy, incompetent, and most of the time — Both.
Drew “out”
I have been in this industry for 35 years as captive agent, claims adjuster, agency owner, company commercial underwriter. I find your comments about USLI very interesting and really, very informative.
I have to agree, that trust makes this business go round (or did…sometimes I wonder).
So here is my question: Many of you have used Phly as another example of company going around the backs of its producers. Then why do you still do business with them? Please note that this is a legitimate question for which I would really like to know the answer.
.
Drew, wholesalers don’t exist because retailers are lacking intelligence. They exist for a variety of reasons, including:
1. Some retailers, and on small accounts, especially their assistants, are not adequately trained (not, “not intelligent”) in specialty lines, generally.
2. It is cheaper for binding authority carriers to use MGAs to serve as their “regional offices” than it is to set up and maintain their own regional offices.
3. We are far better at marketing to the small town agents, and to small to medium sized agents generally, than they are. We don’t just add value to the transaction — we add transactions.
4. Few agents write enough of certain lines of insurance that it is fiscally responsible to develop either their knowledge of every specialty or their knowledge of the marketplace for all specialties. It’s not that they are not smart enough. It’s that they don’t have the need.
Basically, we are consultants and you seem mighty full of yourself in that role. It might be wise to be a little more humble. Remember what they say about consultants… A consultant is a man who knows 120 different sexual positions — but who doesn’t know any women.
My point is twofold.
First, you don’t have to sell to the public — they do. You have the easier job. You can pontificate all you want on your intelligence, but they know the women and you should respect that.
In fact, it is clear that you need to respect your customers a whole lot more than you do. If you are not able to do that, I suggest you find a new line of work.
Second, and I repeat, if 70% of your agents are “complete morons”, then you have attracted those at the bottom of the barrel and you might consider why that is — and what changes you need to make in you that will improve your attractiveness to those at the top of the barrel. Because until you make some changes yourself, you are always going to attract the “morons”.
Yoda out…
All of these coments from wholesalers, are you trying to convince yourselves all of these posts are true? No one else is buying it. Retailer will do what’s easiest and best for their insureds. How is my wholesaler who has pushed USLI for years going to now try to tell me they are all of a sudden inferior because they are increasing their appointments? Sounds like you are all just trying to make yourselves feel better!
Yes I agree that retail agents are going to do what ever is easier to get the business and help insureds. But who is to say that USLI will not turn there backs on the retailers as well. Then Wholesalers can say we told you so. Retailers are going to do what they want to do simple as that.
As to USLI I beleive the trust is gone. How can the USLI reps go back out to these retail agents and tell them they want to write direct with them after I am sure they were there before with a wholesaler stating that our only way of distrabution is through the wholesaler. We stand by our wholesaler…..
Now they are going to go back out and tell the retail they can come direct.
Hmmm just come right out and say you lied.
We will have see what happends . But my advice to other wholesalers do not put all your eggs in one basket.
And to retail agents- dont burn the bridge with your wholesaler. You never know when you will need a quote right away and USLI can not write.
It’s comical to think that the griping wholesalers do so because they feel burned and in their quest to stick it to USLI are trying to warn us retailers that we need to feel scared in that one day, they will turn their back on us too so don’t trust them. I’m a retailer and simply put am not scared. I’m here to serve my insureds and if it makes good sense to use USLI, I will. Beyond that, USLI simply does not currently have the infrastructure to grow into, as has been suggested, a GEICO. When will that happen folks? 50 years from now? Do you really think a company that writes 400M will spend 1 Bil on advertising as the big boys do? Beyond that, USLI has not abandoned their wholesalers but only have added retailers like us to grow their business. Get real people, all of the wholesalers are not leaving because many have concluded that it is good for their business to stay with USLI. For those that don’t, put it elsewhere as I will gladly do what I can to write through them if if helps my insureds.
In closing, I like the comment by Cassandra from earlier today. If USLI is now being compared with Phly that goes around the backs of its producers, why still do business with them?
Wholesalers, please accept the change in the landscape and let us retailers celebrate the chance to write direct without the complications you cause many of us.
I thought the post had to do with USLI? As I read through the comments I noticed a lot of posts debating who provides more value the retail agent or the Wholesaler/MGA. The roles are too disimilar to compare, not comparing apples to apples. While some retail agents perception of the GA’s role is simily to prepare a submission to present to the Company, wait for a quote & forward on to the retail agent for review and consideration (basically a paper pusher). This perception for the most part is inaccurate. A lot of your MGA’s have the authority to underwrite, bind and issue policies on behalf of the Carrier (this is why fees are collected to help absorb some of the costs associated with issuing the policy, handling audits, inspections, etc – remember most GA’s receive the exact same commission rate the retail agent does). For those who have not worked on both sides – I think you would have a tough time switching roles and would be surprised to see just how different the roles are from what you expected.
Yoda:
Your two point argument is completely unfounded:
1. I deal with some of the biggest agencies in the country. Our office is extremely successful, and our agencies are big enough to be profiled by this very magazine.
2. My agents do not sell professional liability on a consistent basis because they focus on other lines of business. They are not specialists. Without me interpreting the policy correctly, they would not know what it is they are selling. Oftentimes my retailers bring me on to conference calls and meetings to close deals. Again – your point is ridiculous.
My point is one fold. If my retailer could do all of the policy interpretation and go into these meetings alone — why would not do it? These are NOT mom and pop shops. These retailers are big agencies with hundreds of employees. I deal with retailers from all over the country, and the answer is always the same.
No matter how big the retailer, no matter how reputable the agency, and no matter what you say sir expertise in this industry is EXTREMELY tough to come by when dealing with this class of business. This is why I am going to continue making a lot of money well into the future.
Most people do not get their CPCU or RPLU (or any similar designation) because they do not have the time or simply do not understand the concepts necessary to get the job done.
Expertise makes our job necessary.
Just like the smart kid in calculus class that everyone needed because they were too lazy to do the homework is necessary — so am I.
Retailers will always need “the smart kid” to copy off of because it provides an added layer of protection for themselves and it makes it easier for them to sell a policy when someone is available that actually understands what is being sold.
Retailers get bitter and start making comments like yours because they wish they could do it themselves and not have to give the revenue to a guy like me.
It is what it is. Do not be bitter.
Pick up a book and learn something.
Drew “out”
If you had said that it was hard to come by agents with expertise in the areas that you specialize in, I might have agreed with you. After all, there are enough markets around that are willing to deal directly with retailers that agents with expertise probably don’t often need us for those lines where they have expertise. They tend to use us for those lines of business for which they do not have particular expertise.
However, it is a far cry from saying that someone lacks line of coverage expertise and saying that they are “not intelligent” and, worse, that 70% are “complete morons”. I was objecting to your absurd characterizations.
Claiming as you did, and in all caps no less, that “IF RETAILERS WERE NOT STUPID, THE PROFESSIONAL WHOLESALER WOULD NOT EXIST” is so way over the top as to be laughable. It is insulting to the professional agents that we both work with. Most agents aren’t stupid — and that’s not why we exist.
As for my picking up a book, I have done my fair share of that. But I would point out that book learning or classroom learning has its limitations. Going back to my previous analogy, you might want to meet some women too.
Yoda (CPCU, AU, ASLI, CISC) out…
Really???
http://www.redorbit.com/news/display/?id=1869474
No, they didn’t…or if they did, they are coming back!
I don’t do business with them because I have NEVER trusted them — however, at least Philly was always up front about their going around you to the retailer or around the retailer to the insured directly. Everyone knows this UP FRONT. The problem is — USLI used the LIE that they weren’t like Philly to gain our trust. If they’d just been up front about it we would have dealt with it and treated them like Philly.
Yoda,
ROTFL…that was cute! My saying is always, “Those that can, do. Those that can’t, teach. Those that can’t teach, consult!”
I actually don’t think of myself as a consultant so much as a teacher. I will willingly admit – from the standpoint of cold calling insureds day in and day out, it’s not for me. I love to teach my clients about professional liability (all levels) — they generally don’t know it as they have a GL mindset &/or don’t work in it much. THAT is the value added!
We are not trying to convince you their product is inferior — not at all. They still have a good product (though there are others that will compete nicely). We pushed them because of the ease of doing business – in by 2, out by 5 — which allowed us to return business to you quickly. Do you think with wholesalers moving business and revenues dropping while increasing the number of “partners” (I use that term loosely with USLI) they will be able to maintain that standard of business? Especially the way some of the submissions come in. No offense — there are some GREAT retailers that no how to fill out apps and there are some that, well, they don’t know how and all they do is gripe about us asking for more information.
Service will suffer.
This aside from the fact that if they have stabbed their wholesalers in the back that have given them MILLIONS in volume (quite literally) they are going to feel ANY loyalty to an agent giving them $100k??? (and that’s a lot for one retailer — remember, these are accounts that average $2500 MAYBE (if you are doing larger professional with them).
So, basically, you have no problem with a company that will stab you in the back, too?
What happened to the industry loyalty? Who are you going to go to when they non renew your insured after one claim? (I have several small NDO’s I’m working on with that situation right now)
As suggested above, don’t burn your bridges with your wholesalers. Unless you are a Gallagher, Lockton, Willis or Marsh you can’t exist without wholesalers to some degree.
We DO value loyalty and we have long memories when our “partners” (retailers &/or companies) don’t.
Yoda,
I really do not have time for all this back and forth.
To say someone is stupid and at the same time say they lack expertise is one and the same for me. That’s just like saying someone is a midget and saying they are vertically challenged to be nice. You refuse to acknowledge the fundamental and irrfutable point that is unavoidable. If anyone could avoid paying commission to an outside source — they would. End of story. Retailers need us. I know it. You know it. The markets know it.
Retailers should really worry that wholesalers do not start directly competing with them one day. Wholesale direct insurance. Sounds like a fascinating concept.
Congrats on the CPCU. The other three not so much. I did not see the RPLU in there. I would get going on that given all your comments.
I have been married for over 10 years.
Let’s both stop wasting each others time. You have business to place on your own, and I have clients know the value I bring to the table.
From those wholesalers that took them on retailer visits, especially within the last year (and in some cases weeks before) where they were making their claims while data mining our customers, I would say that possibly constitutes deceptive trade practices, possibly corporate espionage (which, yes, is a crime), tortuous business intervention, illelgal use of corporate trade secrets (seeing our relationships first hand with our clients) — who knows — is there an attorney out there???
PS –just one suit would FREEZE their right to delete anything under the E-Discovery laws and memoes could be requested under lawsuits and we’d find out how long this has really been going on.
Hahahaha…yeah, retailers will RARELY us on line rating — most prefer to send in to us as it is now. USLI will definitely see an increased work flow.
Drew wrote:
“To say someone is stupid and at the same time say they lack expertise is one and the same for me.”
You can’t be serious. Are you saying for someone to be intelligent, they need to have expertise in everything? That would eliminate pretty much the entire population. Some of the most intelligent people I have ever met are Retailers. The fact they recognize their limitations in professional liability and seek outside counsel is an example of intelligence. It would be stupid for them to act like experts in areas where they are not. The lack of expertise in one specific specialty does not make you stupid. Not getting help does.
I’ve been reading these comments for almost two weeks now, and what is happening besides a lot of complaining? NOTHING. I have yet to hear a GA is willing to move business to another carrier. They are all afraid to lose a market for liquor and the small minimum premium business. So life goes on.
I have yet to see or hear any wholesaler RETURN THEIR CONTRACT –OR– start moving their book of business to another carrier. So all these posts and comments…….just lip service. I’ve been calling people asking what they are doing, and they confirm….nothing concrete. So what’s it going to take?
USLI may be smarter than we all think here. When push comes to shove, how much DWP will they really lose? I said it two weeks ago and I’ll say it again today…..where’s the action besides just complaining. Either return your contract, move business, or complain over a beer after work.
I didn’t know you could move millions of dollars of business in 2 weeks!! You need to come work for me, I could use a go-getter like you that can process THAT much business in two weeks! Dang — you’re a superhuman! If you can work that fast and be accurate too….I am sure there are more than a few MGA’s that would be willing to hire you. You should put your resume out now — be sure to note that you have the ability to move MILLIONS of dollars in small premium policies in 2 weeks!
~~~Rolling Eyes~~~
Like I said before you cant just send your contract back and roll a book over night! Trust me I am sure most GA’s are still in the process of securing another market before sending the contract back (you know you don’t want to put the cart before the horse)………so don’t grow impatient and just settle down.
Perhaps you haven’t talked to the right MGA’s. I’ve heard that some MGA markets are offering to match USLI renewal quotes–price AND terms. But I suspect if MGA’s started doing this en masse, USLI would pull their contract immediately. When they’re doing it to the MGA, it’s just business. When the MGA does it to them, it’s a sin (bad faith).
What USLI did is akin to your partner marrying you just to date your best friend.
I suspect based on the way the person stated this, it is a USLI employee/manager….they are growing impatient waiting for the storm.
Are the MGA’s and Wholesalers going to allow USLI to get the last laugh? Thoughts?
Read through ALL of the comments, then ask that question again….
Patience, grasshopper.
You sure? Or will Tom Nerney’s statement that “MGA/Wholesalers are lazy” prove to be true?
do a Google search for USLI Ezpay and check out the web-site. Compare that to Geico’s website…………I will let you draw your own conclusion.
Do you folks EVER put any time into selling insurance??
Do a GOOGLE search on “will obsessing over USLI help my sales grow”
I was stewing about this when I first found out what USLI was doing.
But now have a different opinion. In insurance just like anything else its all who you know. It all about service and commitment.
Yes what USLI has done was shady and I dont think I will trust them anymore but the more you spend being ticked off at this issue the more time you are taking away from writing bussiness. There are threads on here from both agents and wholesalers dising each other which is also a waste of time. If you are dealing with either a company, wholesaler or an agent you will draw your own conclusion on what you think of them. If service, quotes are not what you expected then move on. USLI is not the only company that we as insurance proffessionals deal with……..
That’s funny of Tom Nearny to say that —
He will be eating his words in the unemployment line rather than from his corporate jet.
Ask Tom Nearny how many wholesalers have refused to sign their little addendum…
It’s easy to tell when the USLI management post….
How are the USLI employees taking this???
You think that agents were true believers, how about the employees? Not only are a lot of them going to lose their jobs in the transition but I think that those who don’t are going to have to feel rather betrayed by their company.
All the talk about core values and 150 plans and it was all BS — something that was discarded like yesterday’s newspaper. It was their integrity as well as the USLI’s that was on the line and they are the ones who have to take the phone calls.
Would some USLI employees care to post their feelings on this from their home accounts?
Yoda out…
I’ve talked to some former employees now at other carriers and they feel VERY betrayed and are extremely glad they are gone — they could sense this coming. Would be interesting if some of them would talk openly….
Agreed. Those of us that are out are sad to see this but glad to be gone. It will be tough for the ones that grew up in the biz there and have never been shown how it really works. One of Nerney’s famous sayings was “I want you to be able to work anywhere but choose to be at USLI”. Nice sentiment, but not realistic at all.
Most of the kids working at USLI have no idea what is going on. They are not underwriters in the traditional sense. They have no idea how to evaluate and price risk. They, like too many young folks, only know their company’s guidelines and whatever the rating system spits out.
Most of them are stuck at USLI because no one else wants to hire a box underwriter at the salaries being paid at USLI. They are so insulated from the real world that they have no idea they are not in the game. I bet over 95% will quickly adapt to the retail model. They don’t have a choice.
……. if they even have a job in a year.
why would the USLI lose there jobs? Wouldt they have more work by stealing our retailers from us wholesalers?
Personally, I don’t think so.
Long term, USLI may do as well or better than they would have with a wholesale model. But I suspect that a lot will lose their jobs in the next year or so as book transfers will probably hurt written premium much more than retailer production will help it.
It is going to take retailers some time to learn the “USLI way” — and in fact, I think it may be that USLI may have to learn the retailer way. Small accounts tend to have the lowest paid people working on them and that’s going to be a problem for USLI.
Yoda out…
http://www.armofohio.com/files/Website%20Files/USLI%20June%202010%20pdf.pdf
It’s interesting that the first reason given for the decision is that they aren’t meeting their top line premium goals.
Apparently Nerney blames the wholesalers instead of the economy, his own flawed business plan, etc.
Tom, pay attention here…
1. There is a recession and it is hitting small business worse than big business — and so it is hitting writers of small businesses harder than writers of big businesses. I can assure you that most of your wholesalers are down every bit as much as you are in both item count and premium. And so are most retailers. BRK.A fell from $150,000 a share to less than $80,000 a share at one point. What makes you think that you should be immune from the impacts of the recession?
2. You are not a standard market and should quit pretending you are one. Standard markets have to take a much broader selection of risks. They also pay profit sharing to their retailers.
3. Your product mix is too confusing. You need to take a line of business approach. The various combinations of products that are available is extremely confusing — even to people who work with you daily.
4. Your underwriting appetite is bizarre — you say you write things (like contractors) where your appetite is so narrow that you make your wholesalers look stupid when they tell retailers that you do them — only to have 95% of them declined.
5. This is a business that is grounded in trust before anything else. Good luck meeting those top line premium production goals now. Your wholesalers don’t trust you and your retailers only have to look at what you just did to your wholesalers to know how trustworthy you are.
Yoda out…
Yoda,
No since trying to educate someone who is so far removed from the real world. He *might* get it when he doesn’t have his corporate jet anymore and he’s collecting that great big unemployment check!
I know the management of USLI keeps posting on here that it’s not going to happen, but as others have said, we wholesalers have to get our ducks in a row and prepare. This doesn’t happen overnight and the fact that they think it can is further evidence of how far removed they are from the way this business REALLY works.
They can say we are “lazy” or we need them…but the reality is, we aren’t lazy. We are profit concious just like them — their model worked for us on this tiny business where even touching it once we were losing money (the business was an accomodation for our partners, not to make money for us). Fact is, none of us are lazy — we just choose to expend our energy writing the meatier accounts writing us money and leave this small stuff to an “ease of business” model. Based on the amount of this business that is out there and now “up for grabs”, you and I both know how many markets are clammering for that business….including the willingness to make it REALLY easy for it to be moved!
As others have said, though — time to get to the getting to so the management of USLI lurking here can stop wondering and start seeing what betrayal gets you!
I really feel for the Kool-Aid kids. Here they are one day on top of the world………fresh out of school and hitting corporate america. The first real job you land is amazing. You are working for a successful company and a generous employer who appears to have your best interest at heart………then WHAM! All within a few moments the employer you had fondly admired, looked up to and respected turned into this deceitful, greedy person you hardly knew.
Now you are in a real position. You have grown accustom to your current lifestyle and income…the economy stinks and there aren’t many jobs out there what to do? Follow your own feelings and sort through the mess? Or continue to follow in the footsteps of your leader “Uncle Tom”! This is really a moral dilemma each of the kool-aid kids have to face……..Nice position you put these kids in Tom! Way to GO! How twisted is it that this was your plan and intent along!
That when you get your quotes (renewal or whatever) the wholesaler copy no longer says “wholesaler” it now says “customer”???
Interesting…..
I’ll be glad when I work through the cycle and don’t see anything at all! Just renewals and stuff that was in the works prior to T-Day 6/21 (T-Day = Tom’s D-Day)
College? We were informed by a former USLI big wig that they looked for talent for their Liquor department at Bars & Restaurants.
True Story.
Let’s look on the positive side.
1) No more agency visits from USLI every other week. Besides who will really let them in there office. If they do want to visit meet them at a fastfood place for a Dollar meal since that’s the only value they will bring.
2) No more hearing Tom tell us of the 100 year plan cut short by 85 years.
3) No more Customer college stuck in there office for 2 days.
4) No more production calls you are down
5 submissions.
5) No more lying on that dam Company Survey for 100% participation. Like to see that come out now.
6) Do you think they will show up for NAPSLO or AAMGA or cut expenses.
7) We don’t have to worry about Tom speaking on another Insurance panel designed for MGA’s & Wholesalers.
8) Retail vists a thing of the past.
9) Makes good conversation for this Blog
10) Don’t need to meet Judas in hell he runs USLI
You need to edit #6:
6) Do you think they will show up for NAPSLO or AAMGA or PLUS or cut expenses.
Which brings up a point — are they now going to travel to EVERY state for EVERY Big I convention/trade show??????
Hmmm, cutting expenses????
If this was in reaction to someone filing their fates and forms, why didn’t they freak out and change distribution models when Progressive did the same thing? Seems to me like that would have been a good time to tuck-tail-and-run. It was clearly and well timed occurrence that offered and out, seemingly. And it’s not like there aren’t plenty of other companies who have taken the products/forms and done something almost mirror image.
I just got to thinking — I wonder if the retailers are going to like the fact that on new business they are never blocked until coverage is bound….it might work for some but tick off some others. No protection on quotes….
Mr. Nearny is a CPCU — I wonder if he’s read the Canons lately or the Code of Ethics. Maybe someone should contact the AICCPCU and file a complaint — regardless of anything else, what they did was unethical plain and simple!
. Inquiry
a. Upon written, signed request, the president shall cause an inquiry to be made for the purpose of determining whether there is reasonable basis to believe a violation of this Section has taken place. Requests should be directed to the executive vice president at the national headquarters.
b. Inquiry shall be made by a committee appointed by the president. A committee of inquiry (thereafter the “committee”) shall be comprised of at least three persons, each of whom shall be a member of the Society. A finding concurred in by the majority of the committee shall be the finding of the committee.
c. The committee shall review the written request. If the committee finds that the written request does not state allegations which, if sustained, would constitute a violation of this Section, it shall so notify the president who shall notify the originator of the request. If the committee finds that the written request does state allegations which, if sustained, would constitute a violation of this Section, it may make inquiries of the member whose conduct is the subject of the request, and may make inquiries of other persons who may have knowledge of pertinent facts and circumstances.
d. The committee shall find whether the evidence is sufficitent to support the allegations in the request, and shall so notify the president who shall notify the member whose conduct is the subject of the request, and the originator of the request.
e. The committee may request guidance and advice from the Board of Directors or from the Ethics Committee. Such opinions or advice shall be reduced to writing and appended to the findings of the committee.
f. Relevant information gathered by the committee shall be given to any appropriate conference panel.
Well, he is certainly guilty of Specified 2 & 3 and unspecified 1 — possibly specified 1 if he’s found to have committed deceptive trade practices.
Specified Unethical Practices
1. To violate any law or regulation duly enacted by any governmental body whose authority has been established by law.
2. To willfully misrepresent or conceal a material fact in insurance and risk management business dealings in violation of a duty or obligation.
3. To breach the confidential relationship that a member has with his client or with his principal.
4. To willfully misrepresent the nature or significance of the CPCU designation.
5. To write, speak, or act in such a way as to lead another to reasonably believe that the member is officially representing the Society or a chapter of the Society unless the member has been duly authorized to do so.
6. To aid and abet in the performance of any unethical practice proscribed under this Section.
7. To engage in conduct which has been the subject of a presidential or Board of Directors directive to cease and desist.
8. To engage in any act of a retaliatory nature against another person reporting or providing evidence of an ethics violation.
——————————————————————————–
Unspecified Unethical Practices
1. A member shall not engage in practices which tend to discredit the Society or the business of insurance and risk management.
2. A member shall not fail to use due diligence to ascertain the needs of his or her client or principal and shall not undertake any assignment if it is apparent that it cannot be performed by him or her in a proper and professional manner.
3. A member shall not fail to use his or her full knowledge and ability to perform his or her duties to his or her client or principal.
I heard one of his top guys used to be his caddy.
Now that is funny!
It would be funny if it weren’t true.
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I think you’re over-reaching. Nerney’s pledge to never go direct to retailers may have been ill advised and his failure to honor it reprehensible. But I haven’t seen anything beyond speculation that suggests it was part of a prearranged plan — an intentional fraud. Unless it is unethical — instead of just stupid — to violate your single most touted core principle, I don’t think there are any ethical issues here.
Personally, I think Nerney screwed up big time, a long ago. He never should have appointed national brokers — most carriers know better than to allow too much of their production to come from a single source.
And if he was unhappy with his production, he should have looked first at internal issues impacting production before blaming his wholesalers.
In my view, Nerney’s production problems stem from his own system. USLI has a convoluted and confusing product mix — they have over 100 products — and an equally convoluted and unclear underwriting appetite. While we generally understand the “hit zone” bullet points, understanding rarely went much beyond that. The gray areas, the outer boundaries, those were never made clear. How the heck do you market what you can’t possibly fully understand?
Nerney failed to take advantage of his “customers” underwriting abilities and essentially treated us as marketing reps — which makes no sense, in my view. GAs cannot make money on small accounts unless they can touch the file one time, to a high hit ratio. Period. End of story.
The ULSI system requires multiple touches to a low hit ratio — after which the underwriter has to start over with other markets. Unless you are sure you are going to get a quote. It is both safer and more cost effective to start with the other markets and (if you have it) your own underwriting authority.
Most of Nerney’s customers had decent “quote ratios” — but only because they learned early on that it was a waste of time and money to send business to USLI unless you were fairly certain that they would write it. So they didn’t get the app flow that they might otherwise have had and that, Dear Tom, is not the way to meet your top line production goals.
Tom, we weren’t lazy — your whole design is too stupid for words. And letting retailers join in won’t fix that.
Yoda out…
Yes he’s now running there CA office. Wonder how he passed the caliber test
Just a thought. Do you think The king wants to be the first commercial carrier to go directly to the public like GEICO?
Batter up.
So far today USLI has called three of my v small retailers inquiring on getting a direct appointment with USLI.
Let the games begin & let them find out the loyalty some of your great retailers have to there wholesaler.
Some are disgusted a carrier can do this. Others who knows but in the long run we have some pretty loyal retailers.
Like one said where is the integrity.
I thought they were only going after brokers with 5 mill in premium?
As I told my agents when Reliance Special Risk started going direct, “You better hope they can write ALL of your surplus lines business.” Wholesalers are hungry now but you don’t want to be at the bottom of the pile when the market shifts.
Has anyone heard from their underwriter or anyone with USLI unsolicited since the big news broke?
YUP…it was funny.
I won’t go into details — it removes my adnonimity in posting — but it was a very funny call!
On there Home Page is an icon for Retail Appointments.
They are pushing ahead no matter what!
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Here’s an idea
Most Wholesalers/MGA’s support our local State Associations with usually @ 8-10 Wholesalers/MGA’s at the convention.
If we all stick together with our local state associations & advise our PIA/Big I we all will not be attending if a certain carrier decides to have a booth that convention may lose @ 8-10 vendors/sponsors who make up a good portion of the $$$$$.
Most states & regions have a local or regional surplus lines association let’s unite together & get the most of our associations.
Just think a state convention with @ 25% less vendors/sponsors & particapants?
So it’s over reaching if they were out seeing cutomers’ customers doing rollovers, 6 months, 3 months, two months and even less than 2 weeks before the announcement and then calling those retailers???
I really think they new two weeks before…companies do not make decisions in a day — if they do, they are completely stupid and deserve to be fired/go down the tubes.
I agree with you IF the visits weren’t so recent — but when some visits were so recent, there is a HUGE problem. Ethics would dictate if you knew you were changing to cancel those visits to avoid even the appearance of improprity.
Just changing your business model isn’t unethical – changing your business plan TWO WEEKS after you were out saying it was something else to get to your clients’ clients directly, does!
Unfortunately, USLI can afford to throw dollars around for sponsorships that may override that –and let’s face it, the Big I is out to protect the retailers, not the wholesalers.
You may be right but I figure it takes awhile to turn the ship around. Meetings with retailers would have been scheduled well in advance, etc.
I don’t think anybody knows when the decision was made — it could have been the day before it was announced or it could have been made months earlier. In the absence of proof to the contrary, my conservative nature is to give USLI the benefit of the doubt rather call their actions “unethical” without proof.
My suspicions are the same as yours but my suspicions are not proof.
Yoda out…
1. I am not a USLI employee.
2. My MGA does not have a contract with USLI.
Now that we have this out, here we stand three weeks now and there is all this talk, but again where is the action? How many times have I been to the Brokers Lounge @ AAMGA or NAPSLO and I’ve heard MGA’s say they were going to do this or that, and it simply doesn’t transpire.
As much as this decision screws the wholesaler, Nerney is smarter that most think. He knows over years of experience the wholesalers will get upset, but will will they really do? If the wholesaler moves business, the MGA will lose a contract. The MGA needs DWP so they won’t move and risk not having a market for their retailers.
So as I posted 10 days ago, if the MGA community is really that frustrated and upset with this decision, I ask again what are you going to do about it? If USLI writes 400M DWP, that equates to 2M of NB and RN business each day. So we’ve gone three weeks now and this should equate to a few $$ of DWP that should have been moved. How much has really moved? I’ll bet very little.
People say this will transpire over time, but I ask why? You have NB & RN’s on your desk every day. What are you doing with them? What about all the people who have USLI’s retailer rating on your website of the 50/50 program implemented? Are you taking this off-line and replacing with another carrier? If not, what is the hesitation?
These posts are interesting to read, but it’s all smoke. I’ve been talking with many of my competitors and sure, they are frustrated, but the options of what to do are limited. Move biz – risk losing a market. Take the on-line system or 50/50 down – risk losing the market. Fail to place NB with them – risk losing the market.
Again, as I mentioned previously I don’t like this decision, but I think Nerney is gambling here that he has the MGA in a position where he wants them, and I think he just may win. Short term may be a slight drop, but I’ll bet Nerney doesn’t think this dip will be deep or for very long. Risk your RN retention ratio – it’s going to cost you money.
I know most carriers already are taking action to get this USLI business, but when I talk to my carrier folks, they indicate they aren’t see much. Hmmm….
Is there going to be action where premium moves, or is this just another distraction that we’ll all move-on from? It’s up to us as MGA’s…..what will we do?
USLI has already broken thier word on thier new distribution process. They have contacted a retail agent in Utah who writes Day Care accounts. USLI had been to this retailers office many times with thier MGA. They had also palced the link directly to them…etc..you get the idea. Guess what…The MGA pulled the link so USLI goes directly to the retail agent and offers up the contract at get this…20% to the retail agent. They also gave them access to a handfull of other primary products.
Do you really think you can trust these guys? If you do, you are a fool. By the way….look at USLI’s web site….They now have a link for “Retail Appointments”…Questions asked are…Wholesalers Used and Lines of Business….I wonder what USLI would want with this..
Do you THINK they want your busineses direct and will do or say anything they have to in order to get it……….YES
I heard from an insider that usli is down 40% in new submissions after this announcement and they are taking away the employees bonuses as a result. Unethical company ceo deserves it, the employees don’t.
Down only 40%..? What idiot would send this company anything. As far as cutting bonus” Uncle Tom just needs to step down and give up his 16 million $ paycheck. Thats right 16 mil..
Three or four others make some serious money as well but 95% of the emloyees are getting the shaft. Problem is…they can’t see it…too busy listening to the overhead say’ in by 2….out by 5…” hurry ..print more paper
There is absoulety no way a company would make such a big decision in a day. Which is what they say they did. Days even weeks prior to this decision I was out on the road with a USLI rep visiting brokers. They new what thet were doing for some time. If some wholesalers remember it was just about a month ago were USLI would call the broker for you to set up an appointment for them and the wholesaler.
During this call they made they would ask how much business they wrote and what products are they seeing most. This was all planned.
Now the question what do we do about it ?
yes we are all blowing off steam but what can we really do ? Shop are accounts wisley. Dont be so quick to put the account with USLI.
The reason i say this is how can we be sure that USLI is not going go direct. Ethics hmmmm
If you don’t have a USLI contract, how can you say this? You have NO CLUE.
If we’re at the same place, why are all of the brokers getting calls from USLI asking why their submissions are “down” and their volume is slipping?
Again calm down……….somethings in life take time. I don’t think people are worried about losing their USLI contract. I think people want to make certain markets are in place to handle the business before they (THE WHOLESALER or MGA) sends their crappy contract back to Tom……..So give it another month or so and than come back!
They’re down only 40% because wholesalers are showing a “good faith” effort to place business with them so they won’t be cancelled before they can roll their books.
As far as the employees: Look again at their website and the benefits listed under the Career section. free medical/dental, daycare, lunch, fitness facility, tuition/education assistance. Its no wonder they have assistants with 9-10 designations including RPLUs. Although I’m not sure why you need all of that education to check/uncheck boxes on a computer screen…
You must have submitted this comment as soon as you got home from work in your ‘half-height’ cubicle. Save yourself while you can. You are in one of the insurance capitals of the country. Take this opportunity to free yourself and chalk it up to experience.
I agree with your comment (“They’re down only 40% because wholesalers are showing a “good faith” effort to place business with them so they won’t be cancelled before they can roll their books.”) I suspect new business will be down more like 60% to 80% once the market sorts itself out and other carriers have more-or-less matched the ULSI capabilities and pricing. I’m thinking that you may start to see that in 30 days but it will be a rout in 90 days.
The interesting question is how far down the renewals will be. If they are renewing maybe 70% now, will that fall by 1/3? 1/2? 2/3? Hard to say but a lot will depend on how quickly and how well competitors are able to offer viable alternatives and what incentives they are willing to pay to help move the book.
I kind of doubt that USLI will really be able to blanket cancel wholesalers because they won’t want to lose renewal premium as quickly as they will lose it if they cancel all the wholesalers who start moving business on them.
There is no way that they can ramp up and train retailers fast enough to offset the business that will be leaving once this really gets going.
As for the employees, I realize that their experience tends to be somewhat narrow but I’ve always found them to be reasonably well educated. Those with 9 designations, or whatever, aren’t the ones checking and unchecking boxes on a computer monitor.
I’d hire most of their employees in a heartbeat — to help me roll my book and communicate with the replacement carriers.
Yoda out…
100% agree, Yoda.
I’ve said the proverbial doodoo will hit the windtunnel about October.
Things should get REAL fun then!
I have never looked forward to the NAPSLO or PLUS Convention before, but not this year. I can’t wait to hear the USLI spin doctors in action.
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Not to worry USLI already has two people going to NAPSLO.
Who wants to be the first to set an appointment/meeting with them? I wonder if they will reserve a table or suite.
Who will be going to there cocktail party?
Sign me up this is going to be fun.
Has anyone else been experiencing a complete 180 in the service? Our people cant get a hold of anyone and quotes are lost in the ether. They have the UW’s so busy looking for agents that there isn’t anyone to handle the 60% of submissions that are still coming in.
That’s one thing I will not fault them on right now — at least from where I am sitting — what little I’ve still dealt with them (quotes hanging out from before this happened, renewals that were quoted prior to 6/21, endorsements on existing accounts, etc.) I haven’t seen a service decline…. YET. Though, admittedly, there hasn’t been a whole lot of interaction.
Still trying to goad me into identifying myself? If you were half as smart as you think you are, you’d have already figured out who I am. I’ve left enough clues throughout.
Since you are apparently a USLI employee, I was wondering if you might answer two questions…
1. Do you not feel betrayed by USLI management? How many thousands of times must you have heard, or said yourself, that USLI would never go direct…
2. If wholesalers can’t trust USLI to not go direct their customers, why do you think that retailers will trust you to not go direct to their customers?
Yoda out…
For over three weeks since USLI’s announcement, there have been endless comments posted, most of which from anonymous sources or from individuals with silly fake names. Darth Vader? Yoda? Brokette? Jerry McGuire? And the impressive Lethal Dose of Koolaide. Please.
It is easy to be a big-mouth when no one knows who you are. If you believe so strongly in your opinions, why would you not have the courage to put your name down? What are you afraid of? Gutless immaturity. The other 99% of us that read this trash everyday are laughing at you, not with you. We are neither moved by your calls for joint action, or the impressed by your meaningless nonsense.
One can only conclude these juvenile comments are somehow reflective of each of your personal or professional failures.
If you were making money or trying to focus on writing some business, you would not have time for such childishness. These postings are being made by a few people, and there is no doubt that many have been made by people with multiple posting names. How sad that such a small group of people feel so compelled to represent hundreds of others. But of course, that is the way it works in the media, in politics, and everywhere else.
I am certain that USLI’s leadership decision was based on one thing only: What is best for the company. Period. Get over it.
Those of you caught up in this cowardice game of bashing and insulting are not worthy of calling themselves professional. If you don’t like the decision, and you don’t have the skill to adapt, you fail.
My bet is, USLI’s decision will ultimately prove to be a positive step towards a successful future. If that turns out to be the case, what will their competitors do? Start thinking of more posting names, because you’ll have lots to complain out then as well.
Seems like you decided to play the game as well. You have succeeded in blatantly contradicting yourself simply by posting your little rant. By your suggestions, if you were a “true professional,” you wouldn’t have posted anything at all. You also decided to play with a little anonymity yourself, “D.” The only question left is how much longer do you think you’ll be working for USLI?
Well D. Aaronson, if that’s your real name — and who can tell, really — why do you care what my real name is? Does it add to or detract from my message? Does a “bad” message suddenly have credibility because you know my name? Does a “good” message suddenly lose credibility because you don’t?
I’ve been posting on message boards — mostly sports and a little politics — for almost 15 years. I used to give my real name and city of residence — until I started getting death threats from someone who probably didn’t mean them but you can never be sure. So I adopted Yoda and have posted over that name for probably 10 years.
I’m curious Mr or Ms Mature Professional how it is that you neither know me nor know anything about me but can still, with cold objectivity no doubt, judge me. I’m immature. I’m childish. I apparently don’t work hard and am a professional failure. All this you know from the content of my messages?
It seems to me that your unsupported judgments speak more to your own immaturity and childishness than they do to mine. Sorry.
Yoda out…
Yoda rocks
Yoda – you sound like you have an English accent still.
Any wholesaler who posted anything remotely negative about USLI over their own name, before lining up replacement markets, would be a damn fool.
If he or she owned the GA, they might lose their appointment prematurely. And if he or she didn’t own the GA, then they might lose their job, as the GA tried to avoid losing their appointment before (s)he was ready to move the book.
For the same reason, I doubt you will see any USLI employees posting anything negative about USLI over their real names. Not a smart career move. If there is one thing we old timers have learned through the years, it’s not to burn your bridges.
People just aren’t that stupid. Did you really think you could goad people into using their own names?
Yoda out…
Coward
Where have you been? People are not upset that Mr. Tom decided to pull the trigger and go direct to the retail agent (the writing was all over the wall).
I have admiration for individuals who can make tough decisions and execute them all for the good of the company. What I can not respect is an individual who is calculated and deceitful in their quest for success.
Discretion, as they say, is the better part of valor.
Yoda out…
So, after 15 years, Yoda is what, a clerk?? When will you be a big enough man to sign your name? Another 15 years?
My wife says I can’t go to eharmony.com until they have another one of those “free” weekends.
She has a sense of humor, that one. Waaaay better sense of humor than the trolls from USLI.
Yoda out…
HEY YODA — IF YOU HAVE BEEN POSTING MESSAGES FOR 15 YEARS, YOU SERIOUSLY NEED TO GET A LIFE!!!
IF YOU EVER DECIDE TO SWITCH TO ANOTHER FAMOUS CHARACTER, TRY “GOOFY.”
15 YEARS, Yoda??? Posting on blogs daily apparently in the office and at home? Productive at work Yoda??? I hope your employer knows how you spend your time! What an assest to your company. Seriously Yoda, YOU NEED TO GET A LIFE…
And this is the FIRST blog I’ve ever posted on – I’m too busy earning a living instead of surfing blog sites all day and night.
Over and Yoda, get out.
Mini Cooper, you beat me to it!! You are right MC, this guy seriously needs to get a life!!
I have learned something from his postings, however. I thought he was 3, but add 15 and he is at least 18.
Yoda, pick a new character name that is more appropriate. Try Goofy.
You feel pretty powerful in this world, don’t you Yoda? LOSER!
I’m self employed and I admit to not having a life. But the reason that I don’t have a life isn’t because I spend my life on the internet. The internet is a diversion during 12 to 18 hour work days — pretty much 7 days a week, I might add.
And, not surprisingly, you USLI folks aren’t answering the questions that I posed — choosing instead to go after my internet usage. Weak sauce, my friends. Diversions are almost always weak. May I will repeat the questions for you…
1. Do you not feel betrayed by USLI management? How many thousands of times must you have heard, or said yourself, that USLI would never go direct…
2. If wholesalers can’t trust USLI to not go direct to their customers, why do you think that retailers will trust you to not go direct to their customers?
Yoda out…
Pretty pathetic Yoda…
This is my last post, Yoda, I do have a life and intend to spend it in the REAL world and not in front of a computer 12-18 hours a day.
Try Match.com or EHarmony and maybe you won’t need to post as much to have social interaction.
Get out, Yoda out…
Those attacking Yoda are definitely not practicing their CARE2 principles.
Wow! Yoda really hit a nerve! My guess is that this answers his question #1.
Also, those who criticize Yoda for reading and posting on the internet have of course done so themselves. They accuse him of not identifying himself when they have not identified themselves. We are hypocrites all.
http://www.eharmony.com/
At least Yoda comes across as well educated and articulate. Unlike the koolaid kids (and I mean kids look at your reaction).
I haven’t posted here since this change came about. Yoda sure dominates. Seems he’s the only one who’s posting these days. My advice Yoda, spend some time with the wife and get back to business.
Careful with your comments. Believe me, I’m on your side….I’m an MGA who was burned as bad as anyone and IS moving business. I could point to several of my other comments — however then the spies within USLI would figure out who I was. I was just being honest – something they’ll never do. But, remember, I prefaced that with saying that I hadn’t sent anything “new” so it’s all relative.
hmmm, maybe your right… oh, wait. Maybe some of us don’t want our contracts ripped out until we have our ducks in a row — so go back to your corner office and await the fall out. Trust us, we can move business faster than you can replace it calling OUR clients.
Yoda, they are in the “flight or fight” mode — they are cornered (and not in their cushy offices either).
If they would look at the post times, they would note that the great majority of them are centered around morning (no doubt while reading other periodicals to stay up on the business), or lunch (to get a laugh at what the latest USLI employee has posted) or after working hours (of course, mine’s at 8:21 and I still happent to be working — oh, darn, that probably gave me away because according to Mr. Nearny all of us are lazy and none of us work late).
Yoda, I, like you, have posted for YEARS on BBS in either politics or common interest groups — you never give your real name — BAD PERSEC!!
Though, Mr. Nearny does have “some” point — a lot of people post things because of lack of GIC (geographically induced consequences) that they wouldn’t otherwise post – you know, internet cowboys. Though, I don’t see anyone posting any threats, childish remarks or otherwise callow and sardonic posts — do you??
Sorry, such big words for this little child.
Oh, and, Mr. Nearny, I’m not saying ANYTHING here that I wouldn’t (and haven’t) said to your employees if/when they call — or to you directly. In fact, maybe you should go call on some of your brokers now and let them tell you directly how they feel.
of course he did! and I have a new post name —
I really wish we could use our real names because there are several on here I’d like to buy a drink! (however Yoda is EXACTLY right as to why we can’t)
Let me add a third question…
Do you think that if you stay and buy into this betrayal that ANY of us will follow you if you ever leave???? We’ll remember your charachter and how you bought into this.
Like Yoda, I’ve left PLENTY of clues. (not intentionally) — My own boss recognized my writing style before I even admitted — though they thought my posts were very amusing, we don’t want our contract cancelled until everything is in motion. Though, at this point — it really almost is. One more piece and maybe I’ll reveal — come back in August.
The hate and childishness is coming from WHERE?????? Seriously!
OK, USLI EMPLOYEES — you are the ones being VERY childish! VERY childish.
A) Yoda never said he’d been posting non stop 1,000 posts a day.
B) I have a board I’ve been frequenting for 5 years — I have less than 1000 posts — that’s not even 1 post a day. I’m sure Yoda could say the same.
You see, in your immaturity, what you don’t realize is there are a lot of boards out there to get information on subjects you care about… in fact, American Broker even has one for insurance agents to discuss issues about hard risks, markets, etc (hmmm, I should visit over there, haven’t been there in months and see if this subject is on the block over there).
If you like underwater basket weaving, you could probably find one about that — mabye you like MBL, photography, investing? There’s a board for everyone and MOST of us use them to find information or get feedback (for instance, I like to talk to others with experience when buying a piece of equipment for my hobby) You may frequent it for several days in a row and then not again for months or even more.
Now, you don’t like to do that? Fine — maybe you take this little callow attitude and your little feelers have gotten hurt on boards because they don’t think your a god (little g) like you view yourself?
You have your hobbies, we have ours.
One quick thing — the one thing I DO need to get a life from is working too hard — WAY too many hours and your stunt, USLI, didn’t help with my workload!
Again, your childish rants and name callings will not change the situation.
My MGA told me that a USLI underwriter cancelled his appointment with them today saying that they were canceling all MGA sales calls until things cooled down. You gotta wonder if they’re using the time to call on agencies instead or are they really hiding out from their customers.
To all of you who stay and buy into this –this is your legacy – one of betrayed trust.
It will follow you for the rest of your careers — and as young as some of you are, that’s a very long time.
I hadn’t heard that they were canceling field visits but it makes sense. What are they gonna say to their wholesaler, “I know — let’s go visit some retailers!”?
Their process for marketing to wholesalers has to change rather dramatically.
Yoda out…
go to usli.com
look at new logo
it say US LI
they sure do and sure did and will
USLI is looking for a $50K premium commitment in order to appoint retail agencies.
They should have no problem growing to $1B in written premium at $50K a pop.
I heard from an agent that it was $50K year 1 and $250K year 2 on. At $250 a year you need to appoint a lot of agents. How are they possibly going to visit them all 20 times per year?
.
Let’s see…
If USLI has $400 mil now with wholesalers and if they lose $300 mil of that, then they would have $100 mil left and would need $900 mil to get to $1 billion.
And to get that $900 mil, at $50,000 “a pop”, they would need to appoint, train and manage 18,000 retailers. In fact, getting back to just the $400,000 that they have now would take 6,000 retailers at $50,000 “a pop”. Boy howdy that’s a lot of retailers.
Even if the number was half that (ie: if each of their retailers wrote an average of $100,000 instead of $50,000), the number of retailers needed to get to $1 bil is huge. And if they appoint that many retailers, they will probably lose the rest of their wholesaler production as there would no longer be any value in the appointment.
So what happens if they don’t meet their top line production goals? It seems to me that most of their products could be sold directly to the public over the internet. And frankly, I don’t know why they didn’t just skip working with retailers and go straight to the public. I can’t imagine they won’t end up there eventually anyway. Their product orientation, as opposed to line of business orientation, is ideally suited for it.
Yoda out…
I was just about to post similar calculations.
I do want to add — they are assuming that they will get good, clean, loss free business that when quoted on line will be totally accurate and honest. That agents won’t throw EPLI for a GC into artisan, or some other such thing and totally mess up their loss ratios.
That’s an awful lot of assumptions….
Good Luck, USLI.
Oh, and you USLI employees who enjoy your 9-5 and 90 minute lunch to use the workout facility — I don’t think you’ll be having much time to do that. You’ll be working like a dog like the rest of us…18 hours a day to just keep up the service on all of those submissions.
18,000 retailers sending in an average of 2 submissions a day…..
oh heck, I’ll be nice and say it’s 1 day.
Look around your cubicle, USLI-ite — divide that up…. how many a day will you be working on??
I was just about to post similar calculations.
I do want to add — they are assuming that they will get good, clean, loss free business that when quoted on line will be totally accurate and honest. That agents won’t throw EPLI for a GC into artisan, or some other such thing and totally mess up their loss ratios.
That’s an awful lot of assumptions….
Good Luck, USLI.
Oh, and you USLI employees who enjoy your 9-5 and 90 minute lunch to use the workout facility — I don’t think you’ll be having much time to do that. You’ll be working like a dog like the rest of us…18 hours a day to just keep up the service on all of those submissions.
18,000 retailers sending in an average of 2 submissions a day…..
oh heck, I’ll be nice and say it’s 1 day.
Look around your cubicle, USLI-ite — divide that up…. how many a day will you be working on??
Tom will have to build 4 more buildings just to house the employees to keep up with that number of submissions from a logging standpoint, let alone an underwriting one.
It would be stupid to think there aren’t further plans to go beyond the retailer. It took precise planning to bypass the wholesaler and it’s only a matter of time before they go direct to the consumer.
I agree. Even though usli swears that’s not there intention. Trust is gone. Now it’s up to us wholesalers,retailers on where we go from here.
Move your book and move it fast!
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As I read some many comments, thoughts & feelings I finally accepted the end for USLI & the wholesaler.
Yes we all know how upset we all are. Not by the direction USLI is going with retail appointmnets. ( We all knew this day would come & Tom please DO NOT insult the wholesaler or any other USLI clone ) It was the way it was done.
Yes the drop off in new business being written maybe a red flag that will keep you & the clones up at night & it very well should.
Yes you already have called on my retailers ( Please don’t think us wholesalers are not pounding on the doors with every retail visit you made with us we kept notes & reports as well) We can certainly hit the streets a lot quicker then you leaving a voice mail at my retailers office. But what I am finding out about my hardworking retailers they need a reliable trust worthy Wholesaler more then they need a small product driven carrier with in the box underwriting concept with limited products. Please do not insult their intelligence the way you insulted ours. What I have found very interesting some of my retailers have already declined your offer & even commented how can you do that & what would convince me this will not happen to me. Of course this is a retailer who comes to me & my fellow E & S brokers in the state and combined only gives USLI @10K a year maybe a little higher if something sneeks thru & one of the smarter USLI U/W’s knows this is a risk that should fit even though it was a tad out of the box he underwrote. When my retailer declined your offer I found it funny he said no I am Committed to the Wholesalers I have been doing business with all these years.
Yes I do have sympathy for Middle management & my Underwriters. Recently you have them calling & feeling us out on our thoughts and telling us they will not be using any info supplied by the Wholesaler. As I listen to he/she I felt sad for that person. At one time you put them in a great work enviroment with great benefits, health insurance, bonuses & salary packages. What do you think their anxiety is at night? Do you think they’re sleeping well knowing these massive changes are coming & if they can believe there leader? You’ve lost the trust & intergrity of the Wholesale Marketplace it would be a shame a CEO/Leader lost that same with the troops/employees he’s leading for this new change. Here I fell sorry for since your decison will effect your employees & there familes if you acted out of EGO or straight thought.
Yes us wholesalers will go on & move on & USLI will be a good story at conventions & marketing meeting of a good company gone bad.
Yes as a wholesaler who has seen hard markets turn soft to soft markets turning hard you do stay up at night during the lean & very lean times how are we going to survive. How do we cut expenses, how can we hold onto our employees to avoid layoffs. What do I have to cut in order to hold onto my agency & employees. These are very diffucult questions that are addressed in soft markets & yes rewarded in the hard market. When your in business over 4 decades you gain a trust with your retailers and the companies you have been doing business with. I just do not understand why you broke that trust.
Yes some of the retailers are decling your offer & you may pick up a few which as a wholesaler know usually those are the retailers you really have little use for. I just hope they do not cut there nose to spite there face.
Plan B. It’s going to take many many years to build up what you once had in the wholesale market. Why not cut out part of the plan & try & go direct now to cut out expenses & possible failures the path you have chosen. USLI can easily be set up to go direct with a few lines that can be captured for the public. Inside expenses can be cut with a heavy foot & spent on national marketing to the general public. it makes sense with a few lines. Mr. Buffet at the end of the day wants to see results.
It seems it’s time the Gecko gets a playmate & what better way with another lizard.
To some of the fine people at USLI good luck in your futures & paths hope most of you come out of this unscratched for you and your familes. It’s been great working with most of you!
It was good while it lasted
God Speed
I agree with your comment to a certain degree. While I decide who I want to do business with and determine if the products fit well within the agencies portfolio I must also take into consideration long standing business relationships (whether that be another Carrier, Insured, The Wholesale Broker, Etc). The insurance industry is a small circle of professional’s you never know who you could be working with or for in the future so the last thing you want to do is go around pissing people off all for your own personal gain.
If anyone is sick of reading posts or posting, there is a simple solution. Stop searching out the article on IJ and reading the comments.
To those of you who have not had too much of this banter, let’s discuss USLI and the post titled “taking the gloves off.”
As a competitor, nothing warms my heart like hearing that USLI is talking to small agencies or asking for a $50K commitment in year 1. Heck, that’s one account in the real world.
At the end of the day, no one really cares about USLI and their $1,500 average premium. Wholesalers are p!ssed (and rightfully so) because they were lied too. In many cases, their marketing efforts are being used against them. If you do not appreciate why they are upset, you lack any type of empathy. There are many USLI wholesalers with seven figure books of business who didn’t see this coming (one could argue ignorance is bliss).
The fact of the matter is USLI is either trying to be Philly or Geico. The differences being Philly actually accepts risk and handles six figure accounts, and Geico sells car insurance (not commercial insurance).
Either way, I love competing against Tom Nerney. He is an insurance carrier’s best friend.
I tend to agree that five years from now nobody will care. But for now, people do care and are curious as to how this will develop. That’s why people are still writing about it — it’s a good way to learn what others are learning about the situation. There hasn’t exactly been a lot of follow up in IJ…
But I want to very much disagree with this statement: “I now find it funny that wholesalers are posting and implying that us retailers need to stick together with them when we were being trashed early on.”
To begin with, I don’t think many wholesalers are posting that retailers should stick together with them — although some are happy to report that their’s are and others are wondering out loud why retailers would trust USLI when the fact that they are not trustworthy should be pretty apparent. Wholesalers and retailer alike must do what they determine to be in their own best interests.
But as for “trashing” retailers, I think that was one guy — Drew — and others (myself included) rose to your defense.
Yoda out…
Interesting Yoda that you find it perfectly acceptable, and I quote, “Wholesalers and retailer alike must do what they determine to be in their own best interests.” But you slam USLI for doing what was in their best interest.
No matter what USLI’s delivery would have been, it would have been received poorly. They just had to do what they had to do. And what they are doing will be in the best interest of the company as well as the customer who is paying premium.
Keep drinkin’ the Kool Aid, Nancy.
I am sorry but I would be so tired of the kool-aid if I worked there. It is very cult like…….but if you enjoy the cult atmosphere you are at the right place – who am I to judge.
I just got a call from one of my retailers….they had a message from USLI that said they were going to be in the area and wanted to talk to them about a direct appointment.
This was a retailer that a USLI employee visited with me VERY SHORTLY before the announcement was made.
NICE…..
And forget about them just going after your big agents — this particular agent is SMALL.
EVERYTHING they said was PURE LIES.
Nice ethics to ALL of you invovled — you know who you are!
If the trust is gone, why still write about this? This issue is now almost a month old. Is there some sort of life crisis going on concerning this that I don’t know about?
Some facts: USLI has moved on. Some wholesalers will stay, others will look to do roll overs. USLI will seek retailers. Some they will get but certainly not all. That’s the nature of sales whether it is the insurance business or any other business. Who is to say how this will shake out short or long term and quite frankly, who cares? I’m too busy during the day trying to sell insurance but here I am at home after a long day, reading and posting more trash on this string.
Time will tell what will happen. No business is disolution proof whether it is USLI, wholesalers or agencies like mine. All of us have to hustle to survive. And guess what friends, 5 years from now, no one will really care about this.
I now find it funny that wholesalers are posting and implying that us retailers need to stick together with them when we were being trashed early on. When it makes sense for my business, I will partner with anyone if there are benefits for both of us but I’d like to think that I’m smart enough to know that any business cant go without changes year after year, otherwise how can you compete? Shame on anyone who believed otherwise. Peace.
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This maybe a foolish question so I hope I can get an MGA response along with a USLI response.
What happens to the people that were hired under the USLI/MGA 50/50 program?
Are these people out a job? Are they still marketing the USLI product were they must visit at least 20 retailers a week for that MGA but also have to report to USLI?
For those who do not know the program that’s when USLI & a wholesaler split the salary of some one up to @$25k a piece for up to 2 years while that person nust visit at least 20 retailers a week & report back to the wholesaler & USLI almost each week.
For those Wholesalers who are in this situation were do you go from there?
To USLI what happens as well? Do you keep that person & pick up his/she whole salary while they now market directly to you?
I’m jusr curious & hope those in the program can shed some light on what happens to that person?
Thank You
Nancy, nobody is slamming “USLI for doing what was in their best interest.” I agree, there would always have been some grumbling, however.
USLI is being slammed for their duplicitous behavior over the years, taking a virtual blood oath that they would never go direct to retailers — while worming their way into agent offices and making contacts with the very retailers that they are now approaching. It’s an ethical complaint — not a business plan complaint.
That said, I don’t think it is a very good business decision either. Give competitors three months to gear up and I believe you will begin to lose business at a much faster rate than you anticipate — and at a much faster rate than you will be able to replace it. Guessing, you will lose 1/2 to 3/4ths of your current wholesaler book by the end of 2011. And at the same time, I think you have seriously underestimated the difficulties of finding, training and managing the hundreds or even thousands of retailers that you will need to offset those losses and grow your book.
But that’s just a difference of opinion about “what is best for USLI” and is a far cry from “slamming” you for doing what Nerney thinks is best.
Yoda out…
Maybe it is a kool-aid brewery? Or maybe a cult temple?
Or the brain washing training facility……never know what is up that guys sleeve.
Hi Sue Nelson!!!!
No one is slamming USLI for doing what is “in their own best interest” Even that is debatable, though — the number of retailers they are going to have to appoint to offset the volume they are losing from wholesalers (myself included) and the cost to service that many customers is going to FAR offset any additional commisisons you paid to wholesalers.
Additionally, you just don’t get it — apparently you and the other CPCU’s in your organization have not checked the CPCU code of ethics lately or you just don’t care!
YOU LIED!!!
You were practicing what many consider DECEPTIVE TRADE PRACTICES — you were out with wholesalers visiting retailers DAYS before this annoucement — you and other top managmeent knew the changes were coming. Yet you had your people out lying to your clients and to their clients all in the name of gaining access and forming bonds with their clients.
What part of LYING don’t you understand??
The 50/50 program is in run-off. It is now optional for the wholesalers to continue the program through the end of the 2 year commitment or drop out and take on the full responsibility for the individual. USLI has said that if there is an issue placing the 50/50 full time in the MGA, they would try and find something for them.
The interesting thing that I never knew existed was the catalyst program. Did anyone here have a catalyst in their shop? If so, I can’t imagine how betrayed the brokerage must feel.
With the exception of a couple of recent good questions, this thread has pretty much been talked out.
The young USLI trolls have had their content free strings of name calling. The young anti-USLI trolls have had their content free strings of name calling. Most of the adults have left the room, and the good conversation with them, and I hope I’m leaving early enough to still earn the adult label.
Either way, college football season kicks off soon — Go Dogs! — and I need to get my beer lifting arm in shape.
To Tom Nerney, shame on you. As Warren Buffett has said, “It takes twenty years to build a reputation and five minutes to lose it. If you think about that you will do things differently.” (Tao #11) You should have thought about that…
A man’s word is supposed to be his bond. If making the promise was a mistake then you shouldn’t have made it. And having made it, you should have lived with it. At the very least, you should have given a year’s notice or something — a year without making the promise and without sending your employees into retailers’ offices with your GAs. Nobody is upset with the decision; everybody is upset with how you implemented it. They are upset because they believed you and apparently they shouldn’t have.
To USLI senior management — including Tom Nerney — I wish you the best of luck, I honestly do. There’s enough business out there for everybody.
But I think you’re going to find that not only have you underestimated the response of your wholesalers, you have also underestimated the difficulty of finding, appointing, training and managing a large number of retailers.
They are not “stupid”, as one poster said. But a disproportionate number of small accounts tend to be handled by entry-level personnel and I cannot imagine that your rather complicated hodge-podge of products will be something that they will master easily.
I strongly encourage you to simplify your product offerings and your underwriting criteria. No retailer is going to use you to a low quote/hit ratio for very long — the premium and the income on each write is too low. It is a lot easier to send it to a wholesaler and let them fool with it. In my opinion, more than any other company than I can think of, USLI needs wholesalers to screen their business.
To USLI’s employees, I wish you the best of luck too. Tumultuous times are ahead but, remember: in great chaos lies great opportunity.
To retailers, I really don’t give a rip whether or not you take on a USLI appointment. That’s your call. Your wholesalers will look for new or better or cheaper products — products that you need, and that USLI doesn’t offer. Life will go on.
Finally, to my fellow wholesalers, I’m done with this. Truthfully, I’m way more worried about you and what you have up your sleeves than I am about USLI. And you should be way more worried about me. I’ve have got some kick-butt improvements that I’m about to introduce in my program and I am going to whoop you big time on that class. Be afraid. Be very afraid.
Yoda out…
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Yes there’s one in a large E & S brokerage in Philly, One or two in Chicago & one of them being a large brokerage house.
There maybe @ 10-15 wholesalers that have them in there shop. I’m just wondering what do they do? Do you keep them on board I’m just curious what the future holds for this young insurance professional just starting his career.
Can someone comment?
Thank You
We all feel betrayed — some more than others, but we were ALL betrayed nonetheless.
I heard that one of the catalysts down here in FL came to work one day and was told by the MGA that they can pack their things and go home. Little solace to the MGA as I’m sure the catalyst had already taken all the info that USLI needed.
I happen to be a retailer in SE Pennsylvania that has not as yet decided if I want to file an agency application with them. While my office is not in the same area as the USLI building, I happen to live not far from there.
USLI has hired contractors to build an addition to their exisitng building. I guess they have been at this for about a year but the building now looks near completion (and actually looks quite nice on the outside). What strikes me though is that the addition seems much larger than their current building so unless some new tenants are coming on board, they are adding a lot of office space with a defined purpose in mind. Mind you, the construction has been going on well before this announcement.
I’m not going to take any digs at their senior management as I personally don’t know them but I’ve got to sense that they had to know that this news would not be well received by many and potentially could reduce their book in half if not more. With this loss coupled with the extrodinary expense of a new facility, I’ve got to imagine that if their management is bright (I know, some of you would argue that), they would have to expect for there to be, at a minimum, great short term losses with the hopes of rebuilding their business over time.
Does anyone think that their parent has afforded them with the flexibility to do this, particularly since they only make up a small part of BH? If not, I’m not sure I would take this risk for fear that it would blow up in my face. It just doesn’t add up to me. Any thoughts?
Thanks for the final comments; Y-ou O-ut D-id A-ll.
I love the way you declare the end of the postings. I’ve learned a lot. Like how to put my computer down my throat to make myself vomit. You clearly are the all time champion of non-stop narcissism. Just one question: Would you mind keeping your other personalities around so I can continue to be nauseated by your never-ending garbage? Please don’t stop!
(This is the part where poor Yoda writes postings under the names of others to defend himself. Remember people, Yoda has no life.)
YODA = SYBIL (9 different personalities)
If, as he promised, that REALLY was Yoda’s last post, then I have only one thing to say.
There IS a God, and he DOES answer prayers.
I’ve never taken a Nautilus person to visit my retailers and they’ve not contacted any of my retailers that I introduced them to just 10 days before.
Again, it’s not the fact that they changed the business model, it’s the way they did it.
It’s now been 4 weeks and I ask what are we doing about this, other than complaining? The answer….not much.
Consider this. USLI was not the first company to offer surplus lines capacity to retailers. Berkley set up a division OVER 12 MONTHS ago called Berkley Regional Specialty that works directly with retailers. Where is the screaming about this?
As you know, Berkley is the parent company of Nautilus. So instead of Nautilus going direct, Berkley sets up a separate company. Think I’m wrong….read about it here http://www.wrberkley.com/our_business/berkley_regional/index.shtml .
So Berkley goes direct and how much business to we as wholesalers continue to send to Nautilus? As much as we did before they took this action. So USLI decides to go direct but doesn’t form a separate company like Berkley did. And how much business will they continue to write? I’ll bet as much as they did before.
I posted previously yeah, everyone is upset but what are we going to do about it? In the 4 weeks since the announcement – we’ve done very little. People say it takes time. Garbage. Berkley set up BRSIC over a year ago and Nautilus is still writing 250M of DWP. What did people do about it – exactly nothing…other than complain.
So you have two players, USLI writing 400m DWP and Brekley, writing who know how much premium, but Nautilus is writing 250M in DWP, and as wholesalers we’re feeding these markets every day. We obviously aren’t too upset. If we were, there are CLEARLY other markets where we can place this business.
And we wonder why they go direct to retailers? The answer is very simple….because they can, they have, and the affects to wholesaler-provided premium are minimal.
So we have two large players now going direct. Who’s going to be next? As wholesalers we’re asleep at the wheel.
Time to send the message to these carriers. If you don’t, what are we telling the other carriers. Our distribution model for binding authority business is clearly changing….and it’s changing fast.
Anyone who feels what Mr. Nearny or other CPCU’s on the “Executive Leadership” Board at USLI did is a violation of the CPCU Code of Ethics mentioned before in this thread, should file a formal complaint with the CPCU Society.
These must be sent in writing and signed.
The proper person to send them to is as follows:
Jim Marks
% CPCU Society
720 Providence Road
Malvern, PA 19355
There is already at least one complaint filed — possibly more.
You are free to disagree that it is a violation…this is for those who’s own personal case with USLI was a blatant lack of ethics: i.e. those with 50/50 employees that were “spying”, those who went on recent customer’s customer calls, etc.
All you USLI employees are free to flame away…though perhaps if you are a CPCU you should go back and study the Code of Ethics a bit more.
Wow! Since Yoda left (except for the Unhappy post – which was one of his 9 personalities), there have been no other posts! Yoda seemed to be the only one expressing his grievences – a disproportionate amout – and now it’s nice and quiet. Except for those of us expressing our happiness! Nice to see. Happy! Now Yoda, exhibit some self control and follow through on your promise!
It is not the issue of going direct or changing their business model to also go through retailers. You don’t get it.
US Liability is the only E&S carrier who committed to only work through professional wholesalers. They told their wholesalers this multiple times. They used it in their advertising. Because of this the wholesale brokers let them deeper into their operation than they normally would. When the wholesalers heard rumors that they would eventually go to retail agents they contacted the company and were repeatedly assured that USLI only dealt through professional wholesalers.
When the underwriters asked to go out on retail agent visits with the wholesaler, the wholesaler agreed and trusted that they were JUST looking to help the wholesaler write more business with that retail agent. Now, that information gathered might be put to a different use.
Some wholesalers participated in their 50/50 program (where USLI agreed to pick up half the salary to have a person in the wholesalers office to call on retail agents to sell USLI products) Now that information will be used in a different way.
USLI has retail web quote, where you can go up to the wholesalers website and get USLI quotes. The retail agents input their name, agency and e-mail address. USLI could now monitor which retail agents were registered and quoting business with that wholesaler. They could even monitor hit ratio with that retail agent. Again the wholesaler trusted that this information would only be used to help the wholesaler hopefully write more business. Wholesalers let USLI deep into their operation and now that trust has been broken. The wholesaler has no idea how the valuable information that USLI gathered will be used.
Any why was this decision made? USLI was not happy with the amount of business they were writing. While nearly every E&S carrier (except new entrants) were down significantly in volume, USLI was slightly up or at worst flat. So rather than add new programs or product lines or coverages they broke the extreme trust they built with the wholesale brokers and changed their business model. At least with Philly, wholesalers know that they use both wholesalers and retail agent, while USLI attempted to differentiate themselves from Philly by committing to only work through professional wholesalers.
In many wholesale broker’s offices, USLI was given first look at business because of their ease of use. Now all things being equal, wholesalers who still use them will write the account elsewhere. The level of commitment will drop.
The number of wholesalers contacting other markets to potential roll business has been extremely active. It does take time and there are details to be handled. The number of markets contacting the wholesalers to ask for the USLI business has wiped into a flurry.
Just to be clear, USLI had its downsides prior to this decision.
1. They were true box underwriters. It either fit or it didn’t fit. No exception underwriting. No accounts over $25,000 in premium.
2. If the wholesaler was sued due to a claim denial, they were on their own. Many E&S carriers will look at the reason the wholesaler was named in the suit and will provide defense if the wholesaler was not at fault.
3. They do not offer contingent commissions.
4. They have “quirks”. An example of this is that they won’t write any apartment risks who has evicted a tenant.
5. They were already doing business through wholly owned wholesale brokers.
Bottom line they built a deep, deep level of trust with their wholesale brokers and the wholesale brokers responded by letting them deeper into their business than they would any other insurance company. THEY BROKE THE EXTREME LEVEL OF TRUST THAT THEY BUILT! If other E&S carriers decided to go direct to retail agents there would not be this backlash because the level of extreme trust is not there.
Wholesalers add a significant value to the transaction. If they didn’t they would be out of business. Wholesalers are not asleep at the wheel I can assure you.
What has been done in the mean time? A lot! Most of it has been behind the scenes. Give it another 30 to 60 days and you will see significant changes. Already the submission count is down 40%. 40% is nothing?
Why should USLI be trusted by ANYONE going forward? Much like a devoted husband who professed he would never cheat and then does, they have little basis for being trusted going forward. I venture to guess the saying that once a cheater, always a cheater holds true. Insurance agents hold grudges for a long time. They remember when a company screwed them 20 years ago and can tell that story like it was yesterday. Retail agents watch your back.
Isn’t an insurance policy a contract of trust?
Reading the comment from “Off the sidelines” It is all so true……….this was the way they conducted business across the board……….I honestly don’t know how Tom Nerney can look himself in the mirror or sleep at night (I know I would feel like complete crap, ashamed and a very unworthy/disgusting person).
Sorry Happy, I made no promises to leave. I merely said that the thread was dying out, that little was left to say that was new, and so I was done.
However, while I try not to respond to trolls like you, I did want to make clear that I have not posted under any other name but Yoda. There are no 9 personalities.
Have a nice day.
Yoda out…
I’ve worked in two industries in my 50+ years, construction and insurance, and I’ve never seen a more adversarial group than insurance “professionals”. No wonder we’re so disrespected by the public. We can’t even stick together on a silly message board. And, apparently, integrity (which USLI seems to lack) isn’t important enough for us (retailers & wholesalers) to value in the same way, if at all. It’s a sad commentary on our industry. Thanks for the response, Yoda. Go get ’em!!
I am NOT Yoda and I can guarantee you, Tom, Drew, Sue and the other USLI employees posting here there are dozens of people posting here and we are NOT the same so quit disillusioning yourself.
Your lack of ETHICS is astounding and I have NO clue how you sleep at night or look at yourself in the mirror in the morning knowing what you are doing!
JINX…pinch & poke you owe me a coke!
Yoda – we need 9 jinxes! for your 9 identities! 9 pinches. 9 pokes. 9 cokes!!!!!!!!!
I don’t think it is an ethical violation (CPCU) and I don’t think it was a “lie” per se. Or at least I have seen nothing that leads me to believe that this decision was the thought out culmination of a plan to gather information that could then be used to steal wholesalers business. I have never seen anyone at USLI who was so lacking in integrity nor have a seen any hint that anyone at USLI might be so lacking in integrity. It runs counter to everything I believe about those folks.
I think what it was a poorly vetted business decision, and nothing more. They saw business going away — including a big chunk of it at one time — and they saw the potential for a lot more of it to do the same.
I think they felt the need to react decisively and I think they horribly underestimated the extent to which their GAs had relied upon their promises and would feel betrayed by the way that the change was implemented.
I don’t believe that they have an General Agent’s Advisory Committee. If they did, it failed them miserably. If they didn’t but had had, I don’t think this decision would have been made in this way.
I still think that they are good people — but good people screw up to.
Yoda out…
I agree Tom hired some eager, good young talent who had nothing but the best intentions following the direction of upper management who they looked up to and respected. I have no doubt most of the USLI employees had no idea of the ultimate goal. However I think it would be naive and foolish to think this wasn’t premeditated and calculated.
Tom is a smart businessman. And smart businessmen dont make such drastic and impulsive decisions overnight.
If you’d had them visit your clients with you DAYS before and then target ALL of those clients (including physically visiting some) AFTER they promised they’d be put on a do not call list, you would feel differently.
Clearly Yoda is not the only one posting here, but it is rather amusing to read your weightless posts defending USLI and the deceitful senior management team. Everyone is allowed to have an opinion and Yoda isn’t alone in his. You’re obviously brainwashed and don’t realize that you work for people who are completely out for themselves.
Everyone needs to calm down and think of your own businesses. It’s a shame that everyone thinks they work for free. I work to make money! If your business is going downhill wouldn’t you do whatever it takes to bring in the cash from fresh companies?
Ethically — yes, but I wouldn’t be unethical. If I couldn’t save my business ethically, I don’t deserve to be in business.
A lack of coporate ethics is why we have Enron, Tyco, Worldcom, Bernie Madhoff etc.etc.etc.
Those are all business that “did whatever it took to save their business” We certainly do NOT need more of that.
There are ways to save a business and be ethical.
Boo Hoo! Ok what are sale people for in insurance! Cheats and unethically ripping insured off! Talk about victims… All Insurance Industries are UNETHICAL
Sorry you feel that way!
How quickly you forget who indemnified you when your car was destroyed by hail or when you rammed into the van in front of you. And how much cash do you have stashed away to rebuild your home when it burns to the ground?
I would move further into a business insurance example but clearly someone with your lack of intelligence is employed BY someone.
This industry keeps commerce moving, don’t forget it.
Friends and Foes: We were so close to silence forever and you had to screw it up with your brilliance.
Do you just crave the last word or do you sometimes feel left out?
I am sorry they feel that way as well. The insurance industry certainly has it’s share of “bad apples”, but no more or no less than any other industry out there. Unfortunately, consumers (and businesses) don’t take the time to do due dilligence on who they are working with — i.e. checking up on designations to make sure people actually hold them in good standing; checking with their department of insurance to see if the person is really licensed without any fines/penalities and how long they are licensed (most states have that available on line now); checking the ratings of carriers; and checking up to make sure things are as they seem on all levels. After all, when it comes down to it, unless you have a claim, we are selling you a piece of paper that makes a promise — that paper better be worth it’s weight in gold.
In my over 27 years in this industry I’ve seen crooked agents pull it all — but the one thing that is and has remained true — that is LESS THAN one percent of the agents I’ve come in contact with.
Do a little homework on the people you are doing business with – not just in insurance but in all things you do.
There are many very fine and extremely ethical people in this industry — which is probably why so many of us are so “hostile” about this issue because our industry has enough “image” trouble without something like this.
There is no “silence forever” — people may grow tired of posting on here — but at industry events I can assure you they are still VERY willing to discuss this and it is a VERY hot topic.
Though I suppose you like the silence on here because then your employees can’t read it.
Has USLI been hounding anyone else about their renewals that didn’t renew through them?
We have had a few situations lately where they seemed overly aggressive in finding out why something didn’t renew (almost felt like they were digging for something).
Not yet, but I am sure that is to come….stay tuned!
*chirp*
*chirp*
* the thread that would not die *
What is the latest? What percentage is their new business submissions down? How is their renewal retention going? How many retail agents have they appointed?
USLI will NEVER tell you the truth – though industry rumors are many key (and good) underwriters have jumped ship. Weird, though, even the ones we know to have jumped (because they have popped up at other carriers) – well, their email doesn’t bounce, someone else just answers it and never explains why the intended person isn’t responding.
Rumor also has it from attending industry functions, many MGA’s have began moving business and they are hurting.
Their new strategy — Preferred Wholesalers — hmmmmm??? Does this mean they lie to their preferred wholesalers less?
Time will tell – a good sign to watch is AM Best over the next 6-12 months. That will tell you without any doubt if they are losing volume.
I’m sure their heads are spinning, though, that people are still posting here.
I spoke with their management last week (job interview) They are apparently interviewing for about twenty underwriting/business development execs across the country. Interesting to note that one thing they wanted was to set meetngs with retail agents AND their customer
It’s nice to see that this string is still alive.
As if it is not already known. Other markets are stepping in and handing USLI their lunch.
It is really easy to beat USLI. USLI relied on trust to place business. That is gone.
It is hilarious that USLI expects that people will not tear them apart at any chance they get.
USLI puts up quotes that do not cover the client correctly in many circumstances.
I would advise all wholesalers to continue beating their brains in with alternative markets.
I would advise all retailers to be very careful. These people are looking to go after your client direct.
The only why you can sell crap coverage is by selling it direct to an uneducated consumer under the guise commercials staring geckos with horrible accents.
At least that gecko is not a rat.
Ha ha.
Just got a copy of letter from national GA. They are cutting ties with USLI December 1. Claim to have at least 3 carriers to pick up business. HOw many more to follow.
To Ga & Bravo – there are many more following.
Keep an eye on AM Best – no company can withstand a sudden mass exodous of business and not create major concerns with AM Best.
Remember Kemper?? Others?
I wonder what the Vegas odds would be on where their rating will be next year this time???
As much as I’d like to see them squirm over this, it won’t happen due to the A++ carried by Berkshire…
Oh, but didn’t they always say that their rating was “independent of Berkshire Hathaway”???
At some point Uncle Warren is going to get tired of supporting the rebellious child…. having a lizzard in the family is far different than a snake.
No, they always said (and told us to say on the road) that they had the A++ prior to Uncle Warren’s buyout…
Uncle Warren is making too much free float on USLI (even if the written premium declines 30% or more) for him to do anything drastic.
Hmmmmm,, know of a national wholesaler who turned in their contract. It was a matter of ethics. Why deal with a carrier who flat out lied to you? Just like if a retail agent flat out lied to them, they would cut them off.
Plus their policy forms are not all that fantastic…. all their applications are warranty applications….. and they ARE calling on the retail agents of the wholesalers they are dealing with….. not sure why ALL of their wholesalers are not turning in their contracts.
And when it declines 70-90%?? Uncle Warren will have to do SOMETHING.
It’s declining more than 30% — every day we hear about another MGA turning in their contract. When the volume/revenue hits a 50% decline, things will start to happen.
me either…
Did you get the job? When I interviewed there, an employee had advised me “Smile a lot and act real happy!”
Hope you were bright and sunny and under 40!
Does he/she want the job?????
If I was interviewing and did my research and came across this and asked some questions in the industry, there’d be NO WAY I’d take a job with a company with this kind of publicity — but, then again, lots of people out of work that need a paycheck willing to compromise their ethics.
Has anyone seen the 3rd Q financials? It was June 21st when “the letter” came out, so it will be interesting to see what they post.
Sure, one national MGA has returned a contract, but there were suppose to be several all go at the same time. Anyone know where the “other” GA’s are?
Also, understand Nerney takes home a good salary, that being north of $15MM. Whoa is all I can say about that…
No, I won’t be working there ever.
Where do I sign up to get that kind of work??? I’ll screw up a company for a fifth of that for one year!
As someone who has worked there, it was a terrible experience and I couldn’t get out of there fast enough…very interesting inside of those walls.
Their employee retention is consistently between 95% and 100% each year. If you were in a hurry to leave it was probably because you couldn’t deliver what they demanded. You are correct if your point was that USLI isn’t for those who are unmotivated.
So what is the retention at this year? I know a number of people have left…. I am willing to bet the retention was NEVER 100%!
Betterinformed, since you obviously work there, how much is production down?
Somebody’s been drinking the Kool-Aid.
HAHAHAHAHAHA – thanks for the laugh – I know SEVERAL who have left over the years -should we list them?
You might have had 95% retention (prior to this), but that means five people out of 100 have left — how many employees does USLI have?
The retention rate cannot possibly be 95%. Many people have left and many will continue to leave. Those who actually enjoy going there everyday are the hand picked royalty that are programmed to do as told and nod so that they can try and make it trickle down through the many layers of leadership created as a joke. Team leaders, Directors, assistant vice presidents, second vice presidents, vice presidents, senior vice presidents, executive vice presidents…The list goes on and on. It’s all a game and the employees become nothing but meaningless pawns.
Wasn’t one of the vice presidents a personal trainer in the gym? Now a vice president? Funny how things work out.
I am curious, does anyone know how this change has affected USLI now that a few months have gone by? Did agencies cancel their conract with USLI? Stop sending in NB submission? Replace renewals? Did USLI do anything to help their MGAs remain loyal? Why is it such a terrible place for which to work? Thank you for your response and time.
Dear Mickey (Mouse??):
I will attempt to answer your question, but I’m just looking at it from one perspective – your milage may vary with others who are lurking here (especially the koolaid drinkers that remain at USLI)
I am curious, does anyone know how this change has affected USLI now that a few months have gone by?
**Sources say, they are losing business in LARGE percentages and the indians are getting restles thus the chiefs are acting in desperation… They were last evaluated by AM Best May 2010 (www.ambest.com) — courious they waited until AFTER their annual rating to make this announcement — anyhow, look for the new rating in May 2011 to get your “official” answer.
Did agencies cancel their conract with USLI?
Some, yes.
Stop sending in NB submission?
Many, yes.
Replace renewals?
Sources say many, yes.
Did USLI do anything to help their MGAs remain loyal?
“token” meaningless gestures, empty words and hollow promises.
Why is it such a terrible place for which to work?
I suppose if you are a mindless drone who has never worked anywhere else in our industry and LOVE hundreds of layers of meaningless management to just stroke people’s egos, it’s a great place to work.
You might ask some of those that have left – I can count several, but will not call them out — it is up to them if they will post or not. You’d probably get a better response if you figure out who they are and ask them “off line”.
The Grimm Reaper—You are completely right…nothing but egos. It doesn’t matter about good management.
To anyone who doubted USLI’s ultimate goal is to even go around the retailer and directly to the risks (insureds) — look at their sister company – Medical Protective.
Medical Protective has quitely cut relationships with MGA’s — and instead of trying to go to the retailers, they are soliciting the insureds directly.
Berkshire Hathaway’s goal is to make all of their insurance companies like the little lizzard…
What’s the verdict ? Did Tom’s gamble pay off or did they loose tons of business.
USLI’s web music video. This is not in fast motion, they really do have to run around the office at that speed.
http://www.youtube.com/watch?v=NcB4v9HKrIs
Hmmm, video’s gone…link goes no where