I expect those of us in the Florida market should see a pretty nice 2010. Premiums are finally headed up on the property side to match the risk, and auto rates are steady. On the commercial side of the house I expect to see a continued decline in premiums as the market fights for fewer businesses.
Florida has seen the worst of it already because of political involvement that is now tapering off.
If your agency is just sitting around and hoping the economy is going to get better, or hoping the market is going to get hard, you might as well sell now and escape with some proceeds from a sale. Agencies must become proactive. Expenses should have been cut already, and you should be lean already. Now you have to get proactive and creative and capture more market share.
As an underwriter, I’d like to see agents stop asking for price reductions and learn how to sell coverage vs. price.
I’d also like to see other underwriters actually underwrite. Half the submissions I see are incomplete and missing loss info. Agents dont’ even bother to look it over before submitting, let alone provide the missing info. What does that tell me? A few things. For one, the agents are NOT doing their jobs. Secondly, there are underwriters out there who are not only undercutting the already insufficient expiring premiums, but they’re doing it w/o even having an accurate perception of the risk they’re pricing. Do the agents care? Of course not. Most choose the path of least resistence which typically tends to be the cheapest price. Then they complain about commission being low. Don’t complain when you foster the soft market by being lazy and selling on price. My 5 yr. old could sell a policy based on price.
I know I know if you dont’ place the business with a cheap carrier, someone else will.
And people wonder why we’re still in this soft market?
Maybe i’m the bad guy for saying all this but surely there must be others who experience this on a daily basis but don’t speak their mind.
Bottom line is underwriters need to buckle down and use their heads. Agents need to step up their efforts, learn the forms you’re selling, don’t ask “why are you so expensive” Instead maybe you should ask why the other guy is so cheap before they end up blowing up and leaving you to move an entire book of business….AGAIN.
I think anyone who paints all agents as lazy or all underwriters as incompetent is uninformed.
Many of us do the job well, sell the coverages not the price. So sorry your agents don’t take that approach.
Oh, if only we lived in a perfect world! The professional agents I know are proud to sell their product based on coverage and services offered. However, Tough Love, when your best client sees the same coverages at 30% off, just exactly what do you want us to do? You seem to forget who is putting the roof over your head and the food on your table. We, the agents, are out there working like dogs to renew what we have and maybe write a little new business. If we don’t retain a client, at whatever premium, it doesn’t help us, nor does it help you. So we don’t like this market any more than you do. And there are times when we can sell our coverages. But today, we need the underwriters to go the extra step in many cases to keep what we have. This is the way it is until the reserves of the companies dictate otherwise.
I certainly didn’t mean to paint all agents with the same brush so to speak. I do work with a handful of very good agents who do their jobs well. Unfortunately those are far outweighed by the lazy ones who push cheap carriers and/or who place the business with carriers that pay higher commission. Apparently they don’t understand that lower premiums means lower commission.
To the agents who do their job and do it well, I would like to thank you. As an underwriter, I can tell you that your efforts most certainly are appreciated and remembered.
To those who play games and move accounts for reasons other than the insureds best interest, enjoy the E&O claims and moving your books when your cheap carriers get burned with claims. You’ll be in for a rude awakening when your markets dry up.
I believe that companies target a certain percentage of market share in states they are chartered to write in. They initially will go in with a lower rate compared to their competition, baiting clients in. Then the inevitable actuarial rate increase occurs.
Yes, this is a perputual cycle that each and every insurer exhibits. Thus, causing perpetual rate increases every time insurance companies want more market share. They are even narrowing the market risk they choose to write in by being able to factor in a risk assesment rate based on a persons credit, zip code of residence, occupation, gender amoung other criteria for which is compounding with more and more personl information be required of the policy holders. Discounts are offered for email addresses for crying out loud.
So while the preferred markets are getting more price competive the high rates are being passed on to the less prefered markets. But will eventually cyce back to the preferred market with higher rates due to the lack of premium for the non preferred. Why less premium from them? Because States don’t enforce the requirement to carry insurance.
The law exist but not enforced.
Home, commercial and other lines work similar and more successful due to lender requirements.
Addressing the comments of Tough Love. I have been in the business for 30 years selling commercial lines. I find very little use for underwriters in general. Most do not answer e-mails or return phone calls on a timely basis. The Agency is doing all the work for underwriters with carriers allowing us to submit business by the push of a button over a Website. I would like to have a dollar for all of the mistakes we see when the carrier issues the policy. Plenty of underwriters and their assistants can not follow simple instructions on getting a policy issued correctly the first time. I could go on about this all day!!!
Pictometry Online; I was introduced to in July and it has paid off for me in ways I didn’t see coming. It’s like a sup up version of google earth, that has virtually helped me eliminate the need for field visit to either confirm or get a properties measurements. The biggest plus about it is I am able to get much quicker and accurate quotes that allowed me to beat my competition to the punch. I have seen my staff of seven producers increase it’s submission from about 4 to 5 more per month since using Pictometry Online..that’s will be about 60 more submission this year, than I had last year. This technology saved and brought my company a lot of business.
Weathered Agent,I’d have to reply by asking who you deal with. LM? Lex? As with Agents, Underwriters should not be painted with the same brush.
I can’t speak for any other underwriters, but I pride myself on doing my job and doing it well. That means prompt replies to brokers questions and concerns and frequent follow ups to make sure everything is done correctly the first time.
Sounds to me like you’re dealing with lazy underwriters or carriers who don’t give their underwriters enough authority to underwrite business on their own. With the wreckless pricing I see in the market, its no wonder.
Having been in insurance industry for 40 years (broker and underwriter), I can’t help but chuckle at all the carping and whining about the insanity of the “soft market”, the lack of disciplined underwriting, irresponsible pricing, idiotic and unresponsive underwriters and of course those dispicable brokers driving down prices yada, yada ,yada. The same old ‘stuff” you hear every 7 or 8 years as if it is somehow a new revolation……and as if the indsutry by simply sobbering up could cause the market to become a tranquile sea of rationality and stability.
At the end of the day, Insurance is nothing more that providing insureds “contingent access to capital.” As long as there is too much capital chasing too little business (as has been the case for the vast majority of the last 40 years)there is not much anyone (sober or otherwise) can do to change the reality of “the market.” It is what it is.
Underwriters can of course choose to stand on the sidelines (waitng for the next 18 months of supposed sanity) but unless they are firing people at the same pace they are losing business they won’t be around long. Agents and brokers can stand up for the industry and refuse to sell “irresponsiblly” priced products….but they won’t be around long either.
This is the reality of our business and despite it’s somewhat cylical nature, it can be rediculously competitive and is most of the time (those 18 occasional months of some crisis or another not withstanding).
Deal with it! Look for opportunities to change how we do business based on it’s long term realities….rather than wasting time and energy carping and whining or praying for hurricanes that will bring the next 18 month period of salvation…..and most likely a new influx of virgin capital. Then again this is the “insurance industry” and we seem more than comfortable doing the same things over and over again even though the results never seem to change.
I can tell you are an underwriter and you have never been in the “trenches”. Your paycheck is always THE SAME, you never have to worry about commissions or happy customers, etc.
Sounds like you are the usual lazy underwriter trying to figure out HOW NOT TO WRITE THE BUSINESS because that way you will not have to work and you will get paid the same.
Shame on you for being so lazy!
How does a broker sending incomplete submissions make the underwriter lazy exactly? Is it not the job of the agent to make sure they are sending underwriters complete submissions? Do you have any idea how much time is wasted requesting missing information only to never hear back b/c some cheap carrier underwrote off a half completed 2 yr old app? How exactly do you write business when the agents don’t provide you with complete underwriting info?
Do you feel its ok for brokers to send in outdated/half completed applications, then complain that they don’t get a timely quote? If you did your job right to begin with, you’d already have a quote. I know i know..its not your fault though. Somebody else dropped the ball right?
Also, what makes you so certain that underwriters pay does not vary?
Buddy– Here is a comment you probably hear from most of your brokers–I HAVE ALREADY MOVED ON. I am not a business blocking underwriter– I have work to do.
Carolyn, your previous comment from the first where uncalled for. You may want to read a book called “How to win freinds and influence people.” It’s a great read. Here is a link that can give you the fundamentals before you invest in the book. http://www.westegg.com/unmaintained/carnegie/win-friends.html
As an agent I have never found that a U/W is trying ever to prevent me from doing business. If you are having this issue(s) you may want to review how you communicate and perhaps not be so jaded at the industry.
I think we all should be prepared for the worst. As long as we have an, Un-American, anti-business President we all are in for a very long ride. I expect to see alot of insurance agents on the soup line very soon.
In Fl the most fool-hardy underwriting is done by standard carriers. They are writing props at rediculous rates the e&s market won’t touch. They will get their noses bloodied again the next time the wind blows.
Even the top sales person has to deal with pricing issues when the joker down the street is pounding on the door. The customer/client (or “insured” as you underwriters so impersonally call them) views the issuing paper as a commodity with rare exception. Usually those exceptions are not positive ones, such as fighting 3rd party claims, loss control that involves the the client in safety meetings etc. They are usually negative, such as over reserving, slide in ratings, etc. As a carrier if you are drinking the company kool aid to think that your product is so much better than your competition, you are sadly mistaken. It often falls on the agent to take the commodity out of the equation. For a small business with few claims and little service needs, there is very little an agent can offer but remarketing for the best pricing in order to show that they are still working on “the customer’s” behalf. I have been on both sides of the fence. Underwriters should never talk about selling if the have never done so. Agents should not talk about poor underwriters if they have not actually sat in the desk with a mound of submissions in front of them and 30%-50% are for the sole purpose of blocking markets. Of the remaining 50%, less than 50% of those are full submissions.
There are lots of issues on both sides of the table. Rarely does the agent sit with an underwriter and show what he has (not Acord submissions either) and ask, how can we partner to make this a profitable move for both of us and win this together.
When that happens, both the agent and the carrier has a “customer” (not some indifferent term “insured”) for a long time.
Underwriters should also look at what the gossip is on their company out on the street. Having the right coverage in place is no guarantee that the carrier is going to do the right thing, especially when it comes to property valuations on first party claims.
I expect those of us in the Florida market should see a pretty nice 2010. Premiums are finally headed up on the property side to match the risk, and auto rates are steady. On the commercial side of the house I expect to see a continued decline in premiums as the market fights for fewer businesses.
Florida has seen the worst of it already because of political involvement that is now tapering off.
If your agency is just sitting around and hoping the economy is going to get better, or hoping the market is going to get hard, you might as well sell now and escape with some proceeds from a sale. Agencies must become proactive. Expenses should have been cut already, and you should be lean already. Now you have to get proactive and creative and capture more market share.
As an underwriter, I’d like to see agents stop asking for price reductions and learn how to sell coverage vs. price.
I’d also like to see other underwriters actually underwrite. Half the submissions I see are incomplete and missing loss info. Agents dont’ even bother to look it over before submitting, let alone provide the missing info. What does that tell me? A few things. For one, the agents are NOT doing their jobs. Secondly, there are underwriters out there who are not only undercutting the already insufficient expiring premiums, but they’re doing it w/o even having an accurate perception of the risk they’re pricing. Do the agents care? Of course not. Most choose the path of least resistence which typically tends to be the cheapest price. Then they complain about commission being low. Don’t complain when you foster the soft market by being lazy and selling on price. My 5 yr. old could sell a policy based on price.
I know I know if you dont’ place the business with a cheap carrier, someone else will.
And people wonder why we’re still in this soft market?
Maybe i’m the bad guy for saying all this but surely there must be others who experience this on a daily basis but don’t speak their mind.
Bottom line is underwriters need to buckle down and use their heads. Agents need to step up their efforts, learn the forms you’re selling, don’t ask “why are you so expensive” Instead maybe you should ask why the other guy is so cheap before they end up blowing up and leaving you to move an entire book of business….AGAIN.
Boy am I glad to see the posting from Tough Love. I am also an underwriter and I couldn’t have said it better myself. Thank you, thank you!!!
I think anyone who paints all agents as lazy or all underwriters as incompetent is uninformed.
Many of us do the job well, sell the coverages not the price. So sorry your agents don’t take that approach.
Oh, if only we lived in a perfect world! The professional agents I know are proud to sell their product based on coverage and services offered. However, Tough Love, when your best client sees the same coverages at 30% off, just exactly what do you want us to do? You seem to forget who is putting the roof over your head and the food on your table. We, the agents, are out there working like dogs to renew what we have and maybe write a little new business. If we don’t retain a client, at whatever premium, it doesn’t help us, nor does it help you. So we don’t like this market any more than you do. And there are times when we can sell our coverages. But today, we need the underwriters to go the extra step in many cases to keep what we have. This is the way it is until the reserves of the companies dictate otherwise.
I certainly didn’t mean to paint all agents with the same brush so to speak. I do work with a handful of very good agents who do their jobs well. Unfortunately those are far outweighed by the lazy ones who push cheap carriers and/or who place the business with carriers that pay higher commission. Apparently they don’t understand that lower premiums means lower commission.
To the agents who do their job and do it well, I would like to thank you. As an underwriter, I can tell you that your efforts most certainly are appreciated and remembered.
To those who play games and move accounts for reasons other than the insureds best interest, enjoy the E&O claims and moving your books when your cheap carriers get burned with claims. You’ll be in for a rude awakening when your markets dry up.
What recommendations do you have for a new guy starting out with an independent agency.
It seems like when I have been talking with prospects they have felt like their agents have been complacent with their business.
Bait and switch is all the insurers can do now.
I believe that companies target a certain percentage of market share in states they are chartered to write in. They initially will go in with a lower rate compared to their competition, baiting clients in. Then the inevitable actuarial rate increase occurs.
Yes, this is a perputual cycle that each and every insurer exhibits. Thus, causing perpetual rate increases every time insurance companies want more market share. They are even narrowing the market risk they choose to write in by being able to factor in a risk assesment rate based on a persons credit, zip code of residence, occupation, gender amoung other criteria for which is compounding with more and more personl information be required of the policy holders. Discounts are offered for email addresses for crying out loud.
So while the preferred markets are getting more price competive the high rates are being passed on to the less prefered markets. But will eventually cyce back to the preferred market with higher rates due to the lack of premium for the non preferred. Why less premium from them? Because States don’t enforce the requirement to carry insurance.
The law exist but not enforced.
Home, commercial and other lines work similar and more successful due to lender requirements.
Addressing the comments of Tough Love. I have been in the business for 30 years selling commercial lines. I find very little use for underwriters in general. Most do not answer e-mails or return phone calls on a timely basis. The Agency is doing all the work for underwriters with carriers allowing us to submit business by the push of a button over a Website. I would like to have a dollar for all of the mistakes we see when the carrier issues the policy. Plenty of underwriters and their assistants can not follow simple instructions on getting a policy issued correctly the first time. I could go on about this all day!!!
Pictometry Online; I was introduced to in July and it has paid off for me in ways I didn’t see coming. It’s like a sup up version of google earth, that has virtually helped me eliminate the need for field visit to either confirm or get a properties measurements. The biggest plus about it is I am able to get much quicker and accurate quotes that allowed me to beat my competition to the punch. I have seen my staff of seven producers increase it’s submission from about 4 to 5 more per month since using Pictometry Online..that’s will be about 60 more submission this year, than I had last year. This technology saved and brought my company a lot of business.
Weathered Agent,I’d have to reply by asking who you deal with. LM? Lex? As with Agents, Underwriters should not be painted with the same brush.
I can’t speak for any other underwriters, but I pride myself on doing my job and doing it well. That means prompt replies to brokers questions and concerns and frequent follow ups to make sure everything is done correctly the first time.
Sounds to me like you’re dealing with lazy underwriters or carriers who don’t give their underwriters enough authority to underwrite business on their own. With the wreckless pricing I see in the market, its no wonder.
Having been in insurance industry for 40 years (broker and underwriter), I can’t help but chuckle at all the carping and whining about the insanity of the “soft market”, the lack of disciplined underwriting, irresponsible pricing, idiotic and unresponsive underwriters and of course those dispicable brokers driving down prices yada, yada ,yada. The same old ‘stuff” you hear every 7 or 8 years as if it is somehow a new revolation……and as if the indsutry by simply sobbering up could cause the market to become a tranquile sea of rationality and stability.
At the end of the day, Insurance is nothing more that providing insureds “contingent access to capital.” As long as there is too much capital chasing too little business (as has been the case for the vast majority of the last 40 years)there is not much anyone (sober or otherwise) can do to change the reality of “the market.” It is what it is.
Underwriters can of course choose to stand on the sidelines (waitng for the next 18 months of supposed sanity) but unless they are firing people at the same pace they are losing business they won’t be around long. Agents and brokers can stand up for the industry and refuse to sell “irresponsiblly” priced products….but they won’t be around long either.
This is the reality of our business and despite it’s somewhat cylical nature, it can be rediculously competitive and is most of the time (those 18 occasional months of some crisis or another not withstanding).
Deal with it! Look for opportunities to change how we do business based on it’s long term realities….rather than wasting time and energy carping and whining or praying for hurricanes that will bring the next 18 month period of salvation…..and most likely a new influx of virgin capital. Then again this is the “insurance industry” and we seem more than comfortable doing the same things over and over again even though the results never seem to change.
I can tell you are an underwriter and you have never been in the “trenches”. Your paycheck is always THE SAME, you never have to worry about commissions or happy customers, etc.
Sounds like you are the usual lazy underwriter trying to figure out HOW NOT TO WRITE THE BUSINESS because that way you will not have to work and you will get paid the same.
Shame on you for being so lazy!
How does a broker sending incomplete submissions make the underwriter lazy exactly? Is it not the job of the agent to make sure they are sending underwriters complete submissions? Do you have any idea how much time is wasted requesting missing information only to never hear back b/c some cheap carrier underwrote off a half completed 2 yr old app? How exactly do you write business when the agents don’t provide you with complete underwriting info?
Do you feel its ok for brokers to send in outdated/half completed applications, then complain that they don’t get a timely quote? If you did your job right to begin with, you’d already have a quote. I know i know..its not your fault though. Somebody else dropped the ball right?
Also, what makes you so certain that underwriters pay does not vary?
Buddy– Here is a comment you probably hear from most of your brokers–I HAVE ALREADY MOVED ON. I am not a business blocking underwriter– I have work to do.
Carolyn, your previous comment from the first where uncalled for. You may want to read a book called “How to win freinds and influence people.” It’s a great read. Here is a link that can give you the fundamentals before you invest in the book.
http://www.westegg.com/unmaintained/carnegie/win-friends.html
As an agent I have never found that a U/W is trying ever to prevent me from doing business. If you are having this issue(s) you may want to review how you communicate and perhaps not be so jaded at the industry.
I think we all should be prepared for the worst. As long as we have an, Un-American, anti-business President we all are in for a very long ride. I expect to see alot of insurance agents on the soup line very soon.
In Fl the most fool-hardy underwriting is done by standard carriers. They are writing props at rediculous rates the e&s market won’t touch. They will get their noses bloodied again the next time the wind blows.
Even the top sales person has to deal with pricing issues when the joker down the street is pounding on the door. The customer/client (or “insured” as you underwriters so impersonally call them) views the issuing paper as a commodity with rare exception. Usually those exceptions are not positive ones, such as fighting 3rd party claims, loss control that involves the the client in safety meetings etc. They are usually negative, such as over reserving, slide in ratings, etc. As a carrier if you are drinking the company kool aid to think that your product is so much better than your competition, you are sadly mistaken. It often falls on the agent to take the commodity out of the equation. For a small business with few claims and little service needs, there is very little an agent can offer but remarketing for the best pricing in order to show that they are still working on “the customer’s” behalf. I have been on both sides of the fence. Underwriters should never talk about selling if the have never done so. Agents should not talk about poor underwriters if they have not actually sat in the desk with a mound of submissions in front of them and 30%-50% are for the sole purpose of blocking markets. Of the remaining 50%, less than 50% of those are full submissions.
There are lots of issues on both sides of the table. Rarely does the agent sit with an underwriter and show what he has (not Acord submissions either) and ask, how can we partner to make this a profitable move for both of us and win this together.
When that happens, both the agent and the carrier has a “customer” (not some indifferent term “insured”) for a long time.
Underwriters should also look at what the gossip is on their company out on the street. Having the right coverage in place is no guarantee that the carrier is going to do the right thing, especially when it comes to property valuations on first party claims.