“It’s like giving the keys to the inmates,” said Tokio Marine HCC Chief Executive Officer Christopher Williams.
Reminds me of when US Liability opened up directly for the retail brokers a few years back, cutting out the wholesalers they promised would always be their trusted partners??? Who can forget that disaster??
After paying actual claims, the largest expense for just about any insurance carrier is paying commissions to agents & brokers. They may focus on a plane all they like, but an insurer would be foolish to not better manage their largest expense after claims.
I understand the back and forth between underwriters and brokers negotiating price and commission. That’s the business were in. But when the brokers force back door commission deals down the underwriter’s throats (and I assume in many cases do not disclose to their insureds) that’s going too far. It’s like the reforms put in place by Elliott Spitzer’s actions never happened. In many ways its worse now than pre-Spitzer.
Dave, who do we blame for the collusion between Marsh-Mac and the carriers back in the big rigging scandals? I think there is enough blame to go around. What a disaster for several companies with the worst example of AIG.
I see the same arguments being made today as when I retired from the agency business ten years ago and when I entered the business forty-five years ago.
The truth is the commission should be determined by the ultimate payor – the customer. I did not have access to many “large” risks but when I did, I would ask them to help me determine a proper fee for my services. We would then ask the carriers to include that fee or quote ex commission.
No other way is truly fair to all parties, especially when rates are going down or up.
Who should take the greater hit on profit; carriers or agents/ brokers? That’s a dilemma not easily resolved. But, I offer this guidepost; which party takes the biggest risk? Whichever it is, that party should get the greatest reward for taking on the greatest risk among the two partners during soft markets with high price uncertainties.
What a lot of delusional garbage being spewed here. Commissions have been receding for years. You have to join a association or affiliate agents to even get access to a viable market for your clients. Then you’re splitting commissions unless your a direct appointed agent like Farmers or All State and even those guys are going to their agent friends to get business written their companies won’t entertain. The Insurance Companies have had their way for years. Having to deal with them and other large volume insurance agents who get you blackballed from submitting business with certain carrier programs has been a fight we’ve been in for a long time. Then you have another aspect where large brokers like “A Genl.” cancel your appointment citing baloney about too many clients with non-payment status while you’re collecting five figure commission checks from them on a monthly basis. We later find out one of our local large agencies “JGP” and “VB” took umbrage with our ability to write and maintain the Hispanic clientele locally. Having much more volume than us they went after us slandering our reputation and getting us kicked out of submitting and writing any business. It’s all good were still here and will survive and continue to be a thorn in their side! There is more than enough business to go around, but these Elks Lodge rednecks can’t stand competition.
It’s not a “meltdown” and were not back at college in English 101. If you can’t read and understand why did you reply? Apparently I hit a nerve with the “positive” replies and comments as agents are fed up with the status quo of companies wanting squeaky clean risk and leave everyone else to FAIR plan. WAKE UP!
It’s the same thing I tell the carriers and their management staff.. I, as an agent, pay the carrier through my customers 90% and sometimes higher.. What can you do for me for that type of pay?
I can appreciate viewing it this way. Agents and brokers do a lot of the leg work for building the relationship. That 90% should go toward providing your customers with exceptional service during the unfortunate event that requires the insurance company to become involved. All of the systems, paper, technology, and most of, people require that investment that you and your customer fund them with. While operating at a profitable temperature dictates everything at the end of the day, the customer experience and relationship is what keeps insureds and their agents/brokers. Sometimes carriers lose sight of this.
Here’s another scenario for the carriers… We agents and Brokers could get together and form our own company of carriers.. We would have a pretty good start rolling all them millions in premium into our newly formed company.. We agents and brokers hold the cards because we hold the customers.. I don’t know about you, but my customers will move where I ask them to…
Sure, you hold the customers. I am sure that your customers would not want to deal with your issues as you form your startup though. These “I could do your job better than you” sort of comments are so short sighted and only serve to prove that you really don’t know what you are talking about. Carriers respect and work with brokers that respect and work with them. Like any relationship, there is give and take. If you don’t like the carriers you work for, look for new ones.
“It’s like giving the keys to the inmates,” said Tokio Marine HCC Chief Executive Officer Christopher Williams.
Reminds me of when US Liability opened up directly for the retail brokers a few years back, cutting out the wholesalers they promised would always be their trusted partners??? Who can forget that disaster??
After paying actual claims, the largest expense for just about any insurance carrier is paying commissions to agents & brokers. They may focus on a plane all they like, but an insurer would be foolish to not better manage their largest expense after claims.
I understand the back and forth between underwriters and brokers negotiating price and commission. That’s the business were in. But when the brokers force back door commission deals down the underwriter’s throats (and I assume in many cases do not disclose to their insureds) that’s going too far. It’s like the reforms put in place by Elliott Spitzer’s actions never happened. In many ways its worse now than pre-Spitzer.
Dave, who do we blame for the collusion between Marsh-Mac and the carriers back in the big rigging scandals? I think there is enough blame to go around. What a disaster for several companies with the worst example of AIG.
I see the same arguments being made today as when I retired from the agency business ten years ago and when I entered the business forty-five years ago.
The truth is the commission should be determined by the ultimate payor – the customer. I did not have access to many “large” risks but when I did, I would ask them to help me determine a proper fee for my services. We would then ask the carriers to include that fee or quote ex commission.
No other way is truly fair to all parties, especially when rates are going down or up.
Tom, what did you do when you had competition on an account? Did you take less commission to remain competitive?
See my previous comment. I did not get to check the “Notify me” box.
Tom Drawert
Who should take the greater hit on profit; carriers or agents/ brokers? That’s a dilemma not easily resolved. But, I offer this guidepost; which party takes the biggest risk? Whichever it is, that party should get the greatest reward for taking on the greatest risk among the two partners during soft markets with high price uncertainties.
What a lot of delusional garbage being spewed here. Commissions have been receding for years. You have to join a association or affiliate agents to even get access to a viable market for your clients. Then you’re splitting commissions unless your a direct appointed agent like Farmers or All State and even those guys are going to their agent friends to get business written their companies won’t entertain. The Insurance Companies have had their way for years. Having to deal with them and other large volume insurance agents who get you blackballed from submitting business with certain carrier programs has been a fight we’ve been in for a long time. Then you have another aspect where large brokers like “A Genl.” cancel your appointment citing baloney about too many clients with non-payment status while you’re collecting five figure commission checks from them on a monthly basis. We later find out one of our local large agencies “JGP” and “VB” took umbrage with our ability to write and maintain the Hispanic clientele locally. Having much more volume than us they went after us slandering our reputation and getting us kicked out of submitting and writing any business. It’s all good were still here and will survive and continue to be a thorn in their side! There is more than enough business to go around, but these Elks Lodge rednecks can’t stand competition.
We don’t need your insult, dude. I prefer those elitist Progressive Socialist agents can’t stand competition.
Meltdown!
Paragraphs are nice things.
It’s not a “meltdown” and were not back at college in English 101. If you can’t read and understand why did you reply? Apparently I hit a nerve with the “positive” replies and comments as agents are fed up with the status quo of companies wanting squeaky clean risk and leave everyone else to FAIR plan. WAKE UP!
It’s the same thing I tell the carriers and their management staff.. I, as an agent, pay the carrier through my customers 90% and sometimes higher.. What can you do for me for that type of pay?
I can appreciate viewing it this way. Agents and brokers do a lot of the leg work for building the relationship. That 90% should go toward providing your customers with exceptional service during the unfortunate event that requires the insurance company to become involved. All of the systems, paper, technology, and most of, people require that investment that you and your customer fund them with. While operating at a profitable temperature dictates everything at the end of the day, the customer experience and relationship is what keeps insureds and their agents/brokers. Sometimes carriers lose sight of this.
Customers to carriers are just numbers. They couldn’t care less about them, but the agents do.
Here’s another scenario for the carriers… We agents and Brokers could get together and form our own company of carriers.. We would have a pretty good start rolling all them millions in premium into our newly formed company.. We agents and brokers hold the cards because we hold the customers.. I don’t know about you, but my customers will move where I ask them to…
Sure, you hold the customers. I am sure that your customers would not want to deal with your issues as you form your startup though. These “I could do your job better than you” sort of comments are so short sighted and only serve to prove that you really don’t know what you are talking about. Carriers respect and work with brokers that respect and work with them. Like any relationship, there is give and take. If you don’t like the carriers you work for, look for new ones.
Hey Thinker, experienced agents know a lot more than you think they do.