Strategic? The problem with many “carriers” is they panic at the first sign of losses within two years without letting the market settle. Vacillating in which direction to go and what specific underwriting criteria to promote. I’ve seen too many times where they are just looking for excuses to hide tail and run. Lack of confidence comes to mind in many situations. When a new executive takes over a company or broker you know damn well changes are coming and 99% of the time it’s not going to be good for the agents.
Back in the 60’s and 70’s, there were companies that actually trusted their agents. They respected the experience and knowledge of these agents. Then, along came the MBA types that said, “who do these salespeople think they are?”. No respect was given for the face to face knowledge of the risk that the agents possessed. Instead of seasoned underwriters, who took years to gain that title, they hired 90 day wonders and made them instant underwriters. Who then proceeded to tell the agent what was a good or bad account, based on some underwriting book. The result was increased losses. The reaction, cut the agents commission to offset poor management planning. Require stupid premium goals from agents in areas where that volume did not exist. And above all, treat the agent as an unnecessary part of the process.
Companies should return to the tried and true, Special Agents with field underwriting authority. Agents with the authority to bind and issue policies. A company would not need a large premium volume to make a very nice profit. When you have a trusted agent, and a Special Agent who goes and walks the premises of the risk, you get a better insured. Get rid of the home office types who contribute nothing to the bottom line.
Strategic? The problem with many “carriers” is they panic at the first sign of losses within two years without letting the market settle. Vacillating in which direction to go and what specific underwriting criteria to promote. I’ve seen too many times where they are just looking for excuses to hide tail and run. Lack of confidence comes to mind in many situations. When a new executive takes over a company or broker you know damn well changes are coming and 99% of the time it’s not going to be good for the agents.
Back in the 60’s and 70’s, there were companies that actually trusted their agents. They respected the experience and knowledge of these agents. Then, along came the MBA types that said, “who do these salespeople think they are?”. No respect was given for the face to face knowledge of the risk that the agents possessed. Instead of seasoned underwriters, who took years to gain that title, they hired 90 day wonders and made them instant underwriters. Who then proceeded to tell the agent what was a good or bad account, based on some underwriting book. The result was increased losses. The reaction, cut the agents commission to offset poor management planning. Require stupid premium goals from agents in areas where that volume did not exist. And above all, treat the agent as an unnecessary part of the process.
Companies should return to the tried and true, Special Agents with field underwriting authority. Agents with the authority to bind and issue policies. A company would not need a large premium volume to make a very nice profit. When you have a trusted agent, and a Special Agent who goes and walks the premises of the risk, you get a better insured. Get rid of the home office types who contribute nothing to the bottom line.
We probably shouldn’t pick a company with a 131 or higher Combined Ratio like AIG or Allianz.