I work for Handover Davenport Insurance Services and they have a great relationship with their carriers because they devote plenty of time with their clients Risk Managers. I guess being a small brokerage can pay off because we love long relationships with our clients.
I think that several posters got it right in terms of the relationship between insurance buyers and brokers.
Simply put, insurance buyers tend to be rewarded on reducing the cost of risk-which in most cases is the cost of insurance, TPA services and outside Loss Control Consultants, not the quality of managing risk, a component of which is cost. Likewise, Agents and Brokers aren’t compensated by the quality of the services they deliever, but in most instances, the lowest cost of insurance and if they are lucky, their ability to also sell TPA and outside LC services also at the lowest possible bid.
Given that, why is it any surprise that insurance buyers aren’t generally satisfied with the products and services they receive-price is forgotten long after the effects of poor taste of poor service and lousy advice have been felt and evidenced.
This isn’t really surprising. The industry operated at an underwriting loss from 1987 to 2003. During that time, there was little investment in claims and many other staffing areas, and technology. Now they are in a similar situation with state budgets; needing to invest at a time where they can ill afford to do so. The job market will rebound for claims personnel in the coming years. Those that have invested in training and loyalty will have a strategic advantage over those who have not. This is true as to traditional insurance as well as captive and brokered situations.
Corporate buyers push on price price price above everything else. And the brokerage ho’s kiss their butt to keep the account and place business with Gone Tomorrow Ins Co for a broader coverage and lower price that obviously can’t be sustained.
Then they complain they are not happy with service.
Corporate Risk managers have to justify their existence so whinning is the obvious method. Insurance Brokerage houses work on short term relationship and bragging is the obvious method. Put the two together and you’ve got a day time soap opera. Change the ego dynamics and there may be a higher degree of satisfaction.
I worked for one of the big brokers and know the story. They come on strong at the beginning, bringing in a team of experts, lots of loss control, risk management, software, training, etc. They dazzle the board, they thrill the CFO. Then, they disappear to go after another Fortune 500 firm leaving day to day service to people who management treats like abosulte garbage. The clients only care about the service in the long run both in how responsive and helpful the broker is and how the carrier responds when there is a claim.
I work for one of the brokers listed as “excellent” and couldn’t be happier with the publication of this article.
Personally, I think that high morale in the office provides the client with the best possible experience.
Corporate risk managers for years pushed for lower premiums, the corporate team look from brokers, and razzle dazzle. They forget a lot of the major brokers also have major overhead, and shareholders they have to answer to on a quarterly basis. New business and profits are paramount. Also since Spitzer, back end incentives have been eliminated. Time and talent is now at a premium and clients, especially the corporate ones are reluctant to pay for services. Actually smaller brokers are in a better position to profit and provide the services the larger companies need because they are more efficient.
I wasn’t able to tell from the article whether any of these risk managers were in healthcare, where the greatest focus is on cost and management of medical malpractice insurance and claims. Any ideas?
Having been in various roles in this industry a long time, I find it hypocritical for most risk managers to complain. Most are purely bottom line and beat the brokers up who beat the underwriters up over cost, cost, cost.
The ones who appreciate that you get what you pay for and who stick with the agent that helped him are few and far between.
In all my years, I have had only one risk manager call me up and apologize for a poor decision when he found out that the large agency who gave my company a BOR did not even bother to get a quote from us, the incumbent. He realized after our discussion the game that was played on him and what service and knowledge of his business and what real care his old (small) broker gave to him despite all the glossy charts the big boys came in with.
He was unique; others could care less.
I hope dealing with risk managers like the one above happens in every insurance career to restore our faith that there are somje good guys out there; they are a dying breed in this day of beat up everyone for the sake of the bean counters and the almighty bottom line..
They are reaping what they have sewn. Did they never hear the adage that you get what you pay for? As several other responents have pointed out, Risk Managers have taken advantage of the soft market to squeeze the price down – why should they be unhappy with poor service? Carriers and brokers have budgets and they also have shareholders who want them to operate within those budgets. Loss control and claims service are the first and second things to be cut. Risk managers need to look in the mirror when they want explanations for the poor quality of service.
I work for Handover Davenport Insurance Services and they have a great relationship with their carriers because they devote plenty of time with their clients Risk Managers. I guess being a small brokerage can pay off because we love long relationships with our clients.
I think that several posters got it right in terms of the relationship between insurance buyers and brokers.
Simply put, insurance buyers tend to be rewarded on reducing the cost of risk-which in most cases is the cost of insurance, TPA services and outside Loss Control Consultants, not the quality of managing risk, a component of which is cost. Likewise, Agents and Brokers aren’t compensated by the quality of the services they deliever, but in most instances, the lowest cost of insurance and if they are lucky, their ability to also sell TPA and outside LC services also at the lowest possible bid.
Given that, why is it any surprise that insurance buyers aren’t generally satisfied with the products and services they receive-price is forgotten long after the effects of poor taste of poor service and lousy advice have been felt and evidenced.
This isn’t really surprising. The industry operated at an underwriting loss from 1987 to 2003. During that time, there was little investment in claims and many other staffing areas, and technology. Now they are in a similar situation with state budgets; needing to invest at a time where they can ill afford to do so. The job market will rebound for claims personnel in the coming years. Those that have invested in training and loyalty will have a strategic advantage over those who have not. This is true as to traditional insurance as well as captive and brokered situations.
Corporate buyers push on price price price above everything else. And the brokerage ho’s kiss their butt to keep the account and place business with Gone Tomorrow Ins Co for a broader coverage and lower price that obviously can’t be sustained.
Then they complain they are not happy with service.
Nothing ever changes in this business.
Corporate Risk managers have to justify their existence so whinning is the obvious method. Insurance Brokerage houses work on short term relationship and bragging is the obvious method. Put the two together and you’ve got a day time soap opera. Change the ego dynamics and there may be a higher degree of satisfaction.
I worked for one of the big brokers and know the story. They come on strong at the beginning, bringing in a team of experts, lots of loss control, risk management, software, training, etc. They dazzle the board, they thrill the CFO. Then, they disappear to go after another Fortune 500 firm leaving day to day service to people who management treats like abosulte garbage. The clients only care about the service in the long run both in how responsive and helpful the broker is and how the carrier responds when there is a claim.
I work for one of the brokers listed as “excellent” and couldn’t be happier with the publication of this article.
Personally, I think that high morale in the office provides the client with the best possible experience.
Corporate risk managers for years pushed for lower premiums, the corporate team look from brokers, and razzle dazzle. They forget a lot of the major brokers also have major overhead, and shareholders they have to answer to on a quarterly basis. New business and profits are paramount. Also since Spitzer, back end incentives have been eliminated. Time and talent is now at a premium and clients, especially the corporate ones are reluctant to pay for services. Actually smaller brokers are in a better position to profit and provide the services the larger companies need because they are more efficient.
I wasn’t able to tell from the article whether any of these risk managers were in healthcare, where the greatest focus is on cost and management of medical malpractice insurance and claims. Any ideas?
Having been in various roles in this industry a long time, I find it hypocritical for most risk managers to complain. Most are purely bottom line and beat the brokers up who beat the underwriters up over cost, cost, cost.
The ones who appreciate that you get what you pay for and who stick with the agent that helped him are few and far between.
In all my years, I have had only one risk manager call me up and apologize for a poor decision when he found out that the large agency who gave my company a BOR did not even bother to get a quote from us, the incumbent. He realized after our discussion the game that was played on him and what service and knowledge of his business and what real care his old (small) broker gave to him despite all the glossy charts the big boys came in with.
He was unique; others could care less.
I hope dealing with risk managers like the one above happens in every insurance career to restore our faith that there are somje good guys out there; they are a dying breed in this day of beat up everyone for the sake of the bean counters and the almighty bottom line..
They are reaping what they have sewn. Did they never hear the adage that you get what you pay for? As several other responents have pointed out, Risk Managers have taken advantage of the soft market to squeeze the price down – why should they be unhappy with poor service? Carriers and brokers have budgets and they also have shareholders who want them to operate within those budgets. Loss control and claims service are the first and second things to be cut. Risk managers need to look in the mirror when they want explanations for the poor quality of service.