Having read so many subjective (and some vitriolic) comments, I am disappointed in not seeing a single, objective mention of current industry loss experience and trends. Can some knowledgable underwriting source provide some meaningful information in this regard?
$2500….$4500….I am sorry, that sure doesn\’t seem like alot of money to pay upfront in return for the promise of defense monies of probably $500,000, or perhaps $1 million. Insurance agents should be slightly more sophisticated insurance buyers than the average customer, don\’t you think? After all, if price is your main consideration, then I suppose you will get what you pay for.
Allstate agents have it good. They have a special program through Calsurance. Average E&O for an Allstate agent is about $800 a year for a million in coverage. And that with only a $500 self insured retention.
Insurance Agents are consumers as well as our customers. Because we work in the insurance industry does not prevent us from being \”smart\” shoppers and/or informed consumers. When you run a business you check to make sure you are getting the most competitve rates for all of your services. As far as your comment regarding price, if anyone in my agency ever said to a customer \”if price is your main consideration, then I suppose you will get what you pay for,\” they would be fired.
Well, Lisa does have a point-the only thing you mentioned was price-you didn\’t mention the quality of the carrier, if the form was competitive,if the carrier has expertise in Agents E&O or how well the carrier defends and pays claims.
Seems to me that we as insurance professionals are supposed to present all of these things and help an insured make a good decision Nancy.
There might be fewer E&O claims if we did all of this with consistancy.
I\’m a small semi-captive agent/broker as well. I pay $5,904 annualy for $3mm in E&O coverage. It looks like I might be seeing a 2% increase next year as well.
When I started my own E&S brokerage agency in 2004, I was lucky to find coverage for only $3000. with an AIG Company. Paid $3000. again 05-06.
This year I shopped like a crazy person after AIG stopped writing Ins. Agent\’s E&O in my state. I swear I must have completed seven different 4-8 page applications! I ended up with only two firm quotes (they hate wholesalers)but I was lucky enough to find an admitted carrier to write me for $2500.
I will have to agree w/ Lisa here. You DO get what you pay for. Not saying all non-admitted paper is bad but I don\’t think the claim handling and coverage would compare with a more prominent, admitted carrier. I know the carriers are limited here in CA so I\’m sure many agents are with Lloyds, Arch, etc.
Also, in response to Walter- I don\’t think it\’s unreasonable to tell a client you get what you pay for. Insureds already have the wrong mentality when it comes to buying insurance. An insured is not going to pay a signifant amount more for a better policy form / coverage- maybe in a different dimension…
As far as Allstate agents having it lucky for E&O? Yes. Competitive insurance products? Nope.
Nancy,
How much would you like to pay for your coverage? You said that you pay $4500 but you haven\’t had a claim. Isn\’t that the way insurance works? The insurance company combines everyone\’s premium to pay the claims of a few.
If you were to pay less when you don\’t have a claim, how much more would you expect to pay after you DID have one? Or should the insurance company just \”magically\” come up with the money to pay claims?
Myt agency pays over $60,000 for E&O and it goes up every year. I don\’t mind because the increases are due to our growth. In Florida, we watch out for the excess & surplus carriers for E&O because of several clauses: A rated only, defense outside vs inside of limits, and indemnity vs paying on behalf of.
Walter, I mentioned what our agency\’s E & O premium is in reponse to the Insurance Journal\’s article and now you are lecturing about how to be a good insurance professional. I don\’t understand the correlation.
Things could be worse: Once upon a time we were a fairly large, privately owned independent agency. The owner retired and sold us off to a bank. 2 years ago our E&O costs were $600,000 for $5M coverage with a $250K SIR. For renewal, the carrier wanted to increase the premium & our retention, so we went self-insured. I\’ve got my hands full with E&O claims, due partly from our growth. But on the other hand I believe our nameplate simply attracts most of these lawsuits, seeking deeper pockets, for things the same customer would not sue a mom & pop agency over.
The main problem is that most agents (not all) make insurance a commodity and forget about the coverage. What is your price? I get so sick of hearing that question however it is a big part of the offer as most want to save.
I know I do but at the same time, will it meet my needs? This is an important consideration. We are the agents who suggest and recommend and tell the prospect why they need coverage. It is a cost of doing business and should be looked at that way. How do you offset the cost? Write more or bigger premiums to make up for it.
hey nancy, maybe you should consider working at a better company. Lisa is absolutely correct with respect to the saying \”you get what you pay for\”. It happens all the time with my clients.
Nancy-Not sure how you don\’t get it. If you lead with price and do not include coverage or the quality of the carrier with your client, then if and when there is an uncovered claim you stand a greater risk of having an E&O suit. Price IS important, but you better make sure that your insured is properly covered first, and then get him or her the best price you can.
Don\’t worry Nancy. Walter is a lecturing butt hole that took your legitimate comment about your rising E and O cost and used it to attack your professional conduct. Don\’t even reply to that butt hole.
Just my ten dollars.
Don,t even bother answering Walter because I know how stupid you are.
\”My premium rose to $$$$ and I never even filed a claim \” should never be uttered by an insurance agent. The answer to that question is something you provide to your insured.
The answer to your question is contained in your renewal questionnaire.
most of the comments i see are from insurance agents, we know that the cost of the insurance we sell is based on the risk of that individual compared to the law of large numbers (insur 101, as someone put it earlier)…
fm the days of llyods of london to today, we still are taking risks and calculate the $$$ for that risk…
if you think it\’s bad here, think of the malpractice coverage that have been rising and putting doctors out of business or move to a different state because of the cost…
so where does the risk go? again, just like a consumer, you have to shop for the quality of the product w/the price that fits our needs and budget…i am happy to say i work for a company that believes in its employees and pays for it (not sure whom they use or the cost)…
finally, remember we are insuring folks for the various activities from autos, cars, homes and etc. if they shop as a consumer, why should we not shop as a company for the same reason?!
instead of worrying about the minimal price hike you take on your e&o take control of your business and stop selling price which will enable you to stop selling your lower commission companies which will lead to bigger profits cancel your progessive type low commission appointments and any other company that wants you to work for peanuts
We are paying more for E&O because the companies are paying claims on agents that have losses, some of these are agents that are posting on this blog and some is due to the character of the agent and the risks they are willing to take in business.
It is probably a good thing that more E&O carriers do not pull credit checks on the principals or the rates may go up more. Face it folks we have customers that good and bad and we have fellow agents that are good and bad, this is not to say that you are bad if you have an E&O claim. If these agents don;t understand why the E&O rates are going up I am glad they are not my agent.
It would be impossible to cancel contracts with companies that offer lower commissions, especially for agents along the gulfcoast and Florida, since most of these carriers are chopping commissions or sticking them with HUGE non commissionable fees. I just wish that more companies thought of agents as a good resource and a profitable partner instead of a way to cut expenses by lowering commissions.
Having reviewed the previous comments, some of which are very pointed and others very immature, I find my self wondering the size (premium volume or review) of these agencies with $2,500 and $4,500 APs.
One of the best things we can remind our clients of is that we are consumers also. We, too, are affected by the insurance cycles along with them. And they should feel confident we take the same due diligence reviewing their policies, coverages forms & carriers as we do our own.
This is only a profession if we all act like Professionals. It’s a shame the Attorneys General like Spitzer et al don’t think of us as such. They have taken the actions of a “corrupt” few and painted us all with the same brush, and the Carriers are “rolling over” to accommodate them. Oops, I’ve moved to another issue.
It may be just as well if insurance agents started thinking of setting up amongst themselves a captive mutual insurance company for this type of cover
Having read so many subjective (and some vitriolic) comments, I am disappointed in not seeing a single, objective mention of current industry loss experience and trends. Can some knowledgable underwriting source provide some meaningful information in this regard?
Our agency\’s premium is $4,390.00. We\’ve never filed a claim. We are a small agency. I\’m not sure why we are paying so much!
$2500….$4500….I am sorry, that sure doesn\’t seem like alot of money to pay upfront in return for the promise of defense monies of probably $500,000, or perhaps $1 million. Insurance agents should be slightly more sophisticated insurance buyers than the average customer, don\’t you think? After all, if price is your main consideration, then I suppose you will get what you pay for.
Allstate agents have it good. They have a special program through Calsurance. Average E&O for an Allstate agent is about $800 a year for a million in coverage. And that with only a $500 self insured retention.
Insurance Agents are consumers as well as our customers. Because we work in the insurance industry does not prevent us from being \”smart\” shoppers and/or informed consumers. When you run a business you check to make sure you are getting the most competitve rates for all of your services. As far as your comment regarding price, if anyone in my agency ever said to a customer \”if price is your main consideration, then I suppose you will get what you pay for,\” they would be fired.
Not true.
Well, Lisa does have a point-the only thing you mentioned was price-you didn\’t mention the quality of the carrier, if the form was competitive,if the carrier has expertise in Agents E&O or how well the carrier defends and pays claims.
Seems to me that we as insurance professionals are supposed to present all of these things and help an insured make a good decision Nancy.
There might be fewer E&O claims if we did all of this with consistancy.
I\’m a small semi-captive agent/broker as well. I pay $5,904 annualy for $3mm in E&O coverage. It looks like I might be seeing a 2% increase next year as well.
When I started my own E&S brokerage agency in 2004, I was lucky to find coverage for only $3000. with an AIG Company. Paid $3000. again 05-06.
This year I shopped like a crazy person after AIG stopped writing Ins. Agent\’s E&O in my state. I swear I must have completed seven different 4-8 page applications! I ended up with only two firm quotes (they hate wholesalers)but I was lucky enough to find an admitted carrier to write me for $2500.
Hey Folks,
I will have to agree w/ Lisa here. You DO get what you pay for. Not saying all non-admitted paper is bad but I don\’t think the claim handling and coverage would compare with a more prominent, admitted carrier. I know the carriers are limited here in CA so I\’m sure many agents are with Lloyds, Arch, etc.
Also, in response to Walter- I don\’t think it\’s unreasonable to tell a client you get what you pay for. Insureds already have the wrong mentality when it comes to buying insurance. An insured is not going to pay a signifant amount more for a better policy form / coverage- maybe in a different dimension…
As far as Allstate agents having it lucky for E&O? Yes. Competitive insurance products? Nope.
I tell it like it is…
Nancy,
How much would you like to pay for your coverage? You said that you pay $4500 but you haven\’t had a claim. Isn\’t that the way insurance works? The insurance company combines everyone\’s premium to pay the claims of a few.
If you were to pay less when you don\’t have a claim, how much more would you expect to pay after you DID have one? Or should the insurance company just \”magically\” come up with the money to pay claims?
Myt agency pays over $60,000 for E&O and it goes up every year. I don\’t mind because the increases are due to our growth. In Florida, we watch out for the excess & surplus carriers for E&O because of several clauses: A rated only, defense outside vs inside of limits, and indemnity vs paying on behalf of.
Walter, I mentioned what our agency\’s E & O premium is in reponse to the Insurance Journal\’s article and now you are lecturing about how to be a good insurance professional. I don\’t understand the correlation.
you really can\’t be in insurance if you don\’t know why premiums go up…that\’s insurance 101……..
Things could be worse: Once upon a time we were a fairly large, privately owned independent agency. The owner retired and sold us off to a bank. 2 years ago our E&O costs were $600,000 for $5M coverage with a $250K SIR. For renewal, the carrier wanted to increase the premium & our retention, so we went self-insured. I\’ve got my hands full with E&O claims, due partly from our growth. But on the other hand I believe our nameplate simply attracts most of these lawsuits, seeking deeper pockets, for things the same customer would not sue a mom & pop agency over.
The main problem is that most agents (not all) make insurance a commodity and forget about the coverage. What is your price? I get so sick of hearing that question however it is a big part of the offer as most want to save.
I know I do but at the same time, will it meet my needs? This is an important consideration. We are the agents who suggest and recommend and tell the prospect why they need coverage. It is a cost of doing business and should be looked at that way. How do you offset the cost? Write more or bigger premiums to make up for it.
My two cents!
K
hey nancy, maybe you should consider working at a better company. Lisa is absolutely correct with respect to the saying \”you get what you pay for\”. It happens all the time with my clients.
Nancy-Not sure how you don\’t get it. If you lead with price and do not include coverage or the quality of the carrier with your client, then if and when there is an uncovered claim you stand a greater risk of having an E&O suit. Price IS important, but you better make sure that your insured is properly covered first, and then get him or her the best price you can.
Don\’t worry Nancy. Walter is a lecturing butt hole that took your legitimate comment about your rising E and O cost and used it to attack your professional conduct. Don\’t even reply to that butt hole.
Just my ten dollars.
Don,t even bother answering Walter because I know how stupid you are.
\”My premium rose to $$$$ and I never even filed a claim \” should never be uttered by an insurance agent. The answer to that question is something you provide to your insured.
The answer to your question is contained in your renewal questionnaire.
most of the comments i see are from insurance agents, we know that the cost of the insurance we sell is based on the risk of that individual compared to the law of large numbers (insur 101, as someone put it earlier)…
fm the days of llyods of london to today, we still are taking risks and calculate the $$$ for that risk…
if you think it\’s bad here, think of the malpractice coverage that have been rising and putting doctors out of business or move to a different state because of the cost…
so where does the risk go? again, just like a consumer, you have to shop for the quality of the product w/the price that fits our needs and budget…i am happy to say i work for a company that believes in its employees and pays for it (not sure whom they use or the cost)…
finally, remember we are insuring folks for the various activities from autos, cars, homes and etc. if they shop as a consumer, why should we not shop as a company for the same reason?!
instead of worrying about the minimal price hike you take on your e&o take control of your business and stop selling price which will enable you to stop selling your lower commission companies which will lead to bigger profits cancel your progessive type low commission appointments and any other company that wants you to work for peanuts
We are paying more for E&O because the companies are paying claims on agents that have losses, some of these are agents that are posting on this blog and some is due to the character of the agent and the risks they are willing to take in business.
It is probably a good thing that more E&O carriers do not pull credit checks on the principals or the rates may go up more. Face it folks we have customers that good and bad and we have fellow agents that are good and bad, this is not to say that you are bad if you have an E&O claim. If these agents don;t understand why the E&O rates are going up I am glad they are not my agent.
It would be impossible to cancel contracts with companies that offer lower commissions, especially for agents along the gulfcoast and Florida, since most of these carriers are chopping commissions or sticking them with HUGE non commissionable fees. I just wish that more companies thought of agents as a good resource and a profitable partner instead of a way to cut expenses by lowering commissions.
More than my 2 cents worth
Having reviewed the previous comments, some of which are very pointed and others very immature, I find my self wondering the size (premium volume or review) of these agencies with $2,500 and $4,500 APs.
One of the best things we can remind our clients of is that we are consumers also. We, too, are affected by the insurance cycles along with them. And they should feel confident we take the same due diligence reviewing their policies, coverages forms & carriers as we do our own.
This is only a profession if we all act like Professionals. It’s a shame the Attorneys General like Spitzer et al don’t think of us as such. They have taken the actions of a “corrupt” few and painted us all with the same brush, and the Carriers are “rolling over” to accommodate them. Oops, I’ve moved to another issue.
Contact me in the 4th quarter of 2007 to discuss whether or not a new coverage is available for release. it will revolutionalize insurance agents E&O.
I would really like to see what you have.
Thaniks,
Eric