Ethics Case #2 - What Price For Client

scott · Post by **scott** » Fri Feb 09, 2007 12:31 pm

As an agent, you are quoting on a new commercial account. Your best insurer is quite anxious to write the business and quotes $50,000 but lets you know that there is some fat in the quote. The underwriter tells you she can go to $45,000 if you need it.

The prospect has said that he is unhappy with his current agent's service. He has promised to move the account to you as long as you are under $55,000 "" his current premium. You have known the prospect for 20 years. You know he is a man of his word. There is no question he will move if your quote is $55,000 or less. You found several areas of coverage that were lacking in his current program. The dramatically improved coverage is included in the $50k quote from your insurer.

What premium do you quote your client and why?

Porter · Post by **Porter** » Fri Feb 09, 2007 1:28 pm

I would write it at $50k. I would do it because I am very simple minded. I do not look at the philosophy of the matter and worry maybe I should have given him a better deal because he was a friend for so long. Plain and simple, he said he will go with me for under $55K and I am at $50k. Get signature, collect check, thanks by, and collect commission.

That is what I would do so save the long winded debate.

wlunday · Post by **wlunday** » Fri Feb 09, 2007 1:32 pm

OK, I'll be first to bite...

My entire business is operated simply by following the "Golden Rule". Years ago my mentor told me that if you want to sleep at night to never falter from following this simple rule... and it works. What we sell is not always the cheapest, but the service and price I do offer is always in the best interest of the client. Period. If the underwriter can offer it at $45K, then that's what I'd offer the client.

Swymmer

volstrike3 · Post by **volstrike3** » Fri Feb 09, 2007 1:53 pm

The underwriters I work with know I don't haggle or give second looks. They are OK with that because I also don't give their competition the last look either. I ask for the best quote the first time out.

loudmouth · Post by **loudmouth** » Sun Feb 11, 2007 12:35 pm

The problem is they don't always offer the best quote. I have had quotes get lowered by half from the original quote. there is no reason why an underwriter should not always offer their best quotes.

It doesnt look good to the client when you take a 10k quote down to 5k with the same coverage. Each quote I always ask to apply any/all discounts applicable.

Big Dog · Post by **Big Dog** » Mon Feb 12, 2007 7:30 am

hmmmm....isn't this the sort of stuff that got Marsh, AIG and others in trouble with the Spitz?

Bottom line - the carrier needs to give their best quote - period. The days of having a better quote in your back pocket are history.

etimer · Post by **etimer** » Mon Feb 12, 2007 10:55 am

I always go with the best quote I can get from the UW. It's been my way since day one.

Big Dog wrote:hmmmm....isn't this the sort of stuff that got Marsh, AIG and others in trouble with the Spitz?

Bottom line - the carrier needs to give their best quote - period. The days of having a better quote in your back pocket are history.

tsntyler · Post by **tsntyler** » Mon Feb 12, 2007 12:15 pm

Does your State allow agent fees? Texas does.

You write it for $45,000 and add a $2500 fee for your efforts.

Both sides (consumer AND agent) win.

Quit giving this stuff away. You LIVE by price, you DIE by price!

LadyBroker · Post by **LadyBroker** » Mon Feb 12, 2007 5:31 pm

As a wholesaler, I hear this all the time....'my client is unhappy with XYZ Carrier and wants to move....". Now, why would an insured have issues with their carrier? Only 2 reasons I can think of....the coverage isn't what they were promised(bad retailer or wholesaler), or they had a claim that was mishandled. Otherwise, your insured doesn't even know the name of his carrier, let alone have any feelings about them.

So, Scott, when you pose this question, I would have to posit back to you that without a better handle on this risk from my retail agent, I would not even have gotten to the point of quoting.

Someday, we will all learn that it isn't Price....it is coverage and form. If my retailers don't get that, we don't do alot of business together. Questions like this just hammer home the conception that all we do is put out a number, and there is nothing else of value to our industry.

badger · Post by **badger** » Tue Feb 13, 2007 7:20 am

Underwriters have been doing this since day 1 and I have over 30 yrs in this professional industry. The buck starts with the carriers, no wonder consumers don't like the whole buying cycle. When you go out for dinner does the restaurant owner give you 2 prices for your meal. It all starts and ends with your underwriter...they control the pricing...why can't they give you their best price right out of the box, maybe this is why the online sellers are gaining ground

92builder · Post by **92builder** » Wed Feb 14, 2007 4:07 pm

I have NEVER had a company give me two prices. However, I would probably sell it at the $45K level and tell the insured I got them a great deal down from $50K. I think if I sold it at the $50K level and the word ever got out I could have done it for $5K less, I'd be in worse shape.

houstonagent · Post by **houstonagent** » Fri Feb 23, 2007 2:44 pm

I went into the insurance business for two things,

First, I wanted to do something that I really love doing and could get paid for it and make a living from it

Second, If I can lower someones premium rates and still get paid for it then at the end of the day we both sleep happy!

rcenters · Post by **rcenters** » Sat Mar 31, 2007 8:25 pm

There's another issue that I think isn't being considered here...if you always insist that your carriers always offer their rock bottom price, then at some point their rock bottom price is going to go up.

With that said, what's wrong with partnering with your carriers to develop a premium that's fair for both the client and carrier, with rock bottom not always being fair to the carrier?

AAI · Post by **AAI** » Mon Apr 02, 2007 10:52 am

The best possible price and the best possible coverage is the only way!

volstrike3 · Post by **volstrike3** » Mon Apr 02, 2007 11:06 am

[quote="rcenters"]There's another issue that I think isn't being considered here...if you always insist that your carriers always offer their rock bottom price, then at some point their rock bottom price is going to go up.

With that said, what's wrong with partnering with your carriers to develop a premium that's fair for both the client and carrier, with rock bottom not always being fair to the carrier?[/quote]

I agree that you cannot always demand max credits for every account regardless of performance but it is the underwriters job to decide what is an adequate premium for the risk. I get annoyed when I am given a quote and when I advise the UW that they are not going to be presented, they can magically reduce their rate by 10-20% or more. Either they have actuarially sound rates or their don't. It seems like some carriers, specifically E&S carriers, are just trying to charge as much as they can get away with. I want what my clients want, the best rates and terms available, nothing more nothing less.

Ethics Case #2 - What Price For Client

Ethics Case #2 - What Price For Client

ethics

$45k

Ethics

Leaving Money on the table