Chubb’s Greenberg Clarifies Criticism of Wholesale Brokers

By | April 26, 2017

  • April 26, 2017 at 1:20 pm
    Tom Andersen says:
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    Greenberg is right on all points of the message………as usual!

  • April 26, 2017 at 2:01 pm
    London says:
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    I also admire Evan and his industry knowledge, his wisdom and his fearless ability to say what’s on his mind. However, while his finger pointing on this issue is not unwarranted, there is a strong counter argument which, in part, will go something like this….there are about 40,000 insurance in the US and probably at least 75% of those wouldn’t stand a chance to gain access to the likes of Chubb if it weren’t for the positioning and facilitating of these wholesale brokers and MGA’s. The costs to administer and monitor the 75% falls on the wholesale broker. The administration involved to communicate fully, legally and compliantly with those brokers following the rules, regulations and processes imposed by the Chubb’s of this world falls on the wholesale broker.

    I could go on and on but I hope you get where I’m coming from. Is there ANY distribution chain in the world in or outside the insurance industry where every party doesn’t put out a palm to be crossed in silver?

    And, just for information, I’m an agent, not a wholesale broker or MGA…and I for one appreciate the role they play in enabling me to play in the same field as the big boys, albeit for a few points less commission.

    • April 26, 2017 at 2:57 pm
      Terry Schuck CPCU says:
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      Mr. Greenberg is criticizing brokers, not wholesale brokers.

      • April 26, 2017 at 3:44 pm
        London says:
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        I thought it said he was criticizing the mission of wholesale brokers bundling high volumes of similar risks to a single insurer for a greater commission?
        I appreciate he later clarified and focused his accusatory finger outside of the US, particularly at London, but I still read it as wholesale brokers being the accused.

    • April 26, 2017 at 3:11 pm
      Agent says:
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      Hidden due to low comment rating. Click here to see.

  • April 26, 2017 at 3:01 pm
    Terry Schuck CPCU says:
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    Yet, insurance carriers will provide cover to say XYS soft-drink bottlers for package, auto, and workers’ compensation program and allow brokers to exclusively sell those products to members of that association.

  • April 26, 2017 at 3:34 pm
    London says:
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    counter argument – yes. Stronger argument – why?

    My typical target client is very high profile – professional athletes being the most common – and this represents the majority of our business.

    For me, E&S markets via wholesale brokers is a must have and I rely on them heavily on a daily basis. That doesn’t make it wrong, it just means it suits my requirements but isn’t suited, for example, for your usual needs.

    And, getting back to the original point, let’s not forget who has been happily opening their wallets to pay these “abusive” commissions in the past. Yes, times change, technology develops, efficiency improves – Greenberg probably has a very valid point…but let Chubb make a stand and lower the commissions to what they deem comfortable and see where free market takes it.

    • April 27, 2017 at 10:14 am
      Agents says:
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      London, different strokes for different folks. It depends what your market is. Tell me, does your Wholesale Brokers pay you contingency bonuses for placing good business with them or just a commission? As an Independent Agent, we earn substantial bonuses each and every year. We don’t count on them, but they are very nice to receive.

      • April 27, 2017 at 3:36 pm
        London says:
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        Nope, no contingency bonuses, just commission and priority service for offering them business for which they have sound and reputable insurers for.
        Sure, I’d love a bonus for making them and insurers money but, at the risk of sounding overly angelic, isn’t that what they expect from me and my agency?
        So “Agent”, tell me, is your position on all this that the Greenberg criticism is unfair and unfounded? Could he be referring to others similar to the situation you are in that earn “substantial bonuses each and every year”?

        • April 27, 2017 at 5:29 pm
          Agent says:
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          London, I was brought along in the Agency business many years ago and have always been a Standard Market Agent and have never had more than 10% of my volume with Wholesale Brokers whose business is often non-admitted and policy fees and taxes added to the premium and offering no payment plans except for premium finance agreements. They also pay less commission since it goes through the Wholesale Broker who also gets a piece of the action. You do your business your way and we will do our business our way.

          • April 28, 2017 at 11:14 am
            London says:
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            Did someone poke the bear?

  • May 1, 2017 at 10:51 am
    Underwriter says:
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    I would be more interested if Mr. Greenberg addressed the real issue which is the large alpha houses have giant pay to play schemes and are steering business to “partner” companies that agree to buy their client lists for huge amounts.



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