How to Build a Productive Insurance Underwriter/Broker Relationship
When I consider friends and family who have been blessed with happy partnerships, I realize there are many roads to establishing a successful relationship. Yet, I also recognize there are a number of common factors which exist throughout the process. The same, I believe, can be said for the underwriter/broker relationship.
While there are many roads leading to success, there is a common set of rules to establishing a productive long-term productive underwriter/broker relationship. Following are a few observations I have gained during over 20 years working on the insurance company and brokerage sides of the business.
It is a relationship.
Try to find the human endeavor that does not include a relationship and you are likely to be looking for a long time. The keys to success in just about any relationship apply to the underwriter/broker relationship. Keys on the ring include respect, honesty, regard for each other’s abilities, an understanding of each other’s constraints, reasonable expectations, collaboration, communication and consistency.
Brokers often play offense, while underwriters typically play defense.
While insurance brokers and underwriters share a common goal – a long-term, mutually profitable relationship, there are also basic differences potentially sabotaging this relationship. A broker, by nature, is usually extroverted, competitive and persistent. On the other hand, an underwriter may be more analytical, possess a more conservative view and be specifically task focused. By understanding the view through the eyes of the other side as well as each other’s points of view, you are more likely to build a trusting, productive relationship.
Submission quality is critical.
Each time an insurance broker provides a submission to an underwriter, he or she hopes to receive a timely acknowledgement; however, this response is predicated on the quality of the information provided. A thorough description of operations, historical and future exposure data, currently valued loss information to include detailed summaries of large losses, completed and in-progress risk management initiatives improving the insured’s risk profile are vital to the triage process and underwriter assessment on whether to dedicate resources to move forward.
Waste, plain and simple, is wrong. It is wrong whether the item being wasted is food, water, money, talent, effort or precious natural resources. It is also wrong when the resource being wasted is time. Any time a broker takes shortcuts in crafting a submission, he or she is wasting the underwriter’s time. Imagine the underwriter as a quarterback with a finite amount of time left on the game clock.
(Which one of us does not have a finite amount of time left on his or her game clock?) The quarterback has time enough to run only a certain number of plays.
The submission sent in by a broker is the equivalent of one of those plays. By presenting a poorly constructed submission with inadequate detail and information, a broker is using up one of the underwriter’s valuable plays. This is why insurance brokers must help underwriters to manage the clock by only sending in opportunities with a reasonable chance for success and “points on the board.”
Pick your partner.
As previously noted, it’s a relationship. And, it should go without saying, not everyone was meant to end up together. Carriers typically have defined areas of expertise and underwriting appetite. Brokers have a responsibility of understanding these parameters but, when appropriate, underwriters should be approached through a phone call or in-person meeting to discuss the interest level and viability of an opportunity. During this process, underwriters have a duty to listen to the story until a final determination can be made.
No is not an answer, it is a choice.
Underwriters do not like to say no to a broker’s submission, as there are no winners in this situation. In an ideal world, all submissions would result in a quotation being delivered adequately balancing risk with expected return for the carrier. While there will inevitably be the occasional judgment call, a broker who has done his homework regarding both the prospective insured and the underwriter’s appetite for risk will be able to determine with a high degree of confidence whether or not the submission will receive the desired response.
The underwriter, who will typically be long on pending proposals and short on time, will appreciate the consideration shown by a broker who does not clutter his in basket with born losers. In turn, the underwriter should appropriately show his or her appreciation by considering proposals submitted by brokers who have demonstrated a clear understanding of the respective carrier’s underwriting appetite by responding in a timely manner.
Work hard for each other.
Insurance brokers need underwriters to insure their clients. Underwriters need brokers to present new opportunities for profitable growth. Neither party can exist or succeed without the earnest efforts of the other. As in any codependent relationship, neither party will achieve its full potential if one half of the relationship is simply dialing it in. Brokers and underwriters owe it to each other to show up, challenge each other and succeed together.
Insurance brokers and underwriters both have a job to do.
Although brokers and underwriters are engaged in a mutual effort, each one has separate and unique responsibilities. Brokers must continually generate a sufficient flow of high quality, profitable leads for carriers. They must also service their book of business with dependable back-room support, resulting in long term client satisfaction. Carriers must maintain financial stability, diverse product offerings and a credible reputation of prompt, amicable claim resolution.
Each party must be able to depend on the other’s consistently earnest effort. It is unjust for the carrier to supply high quality products, while the broker delivers poor quality service. It is equally unjust for the broker to provide high quality deliverables, while the carrier struggles to deliver on its contractual obligations.
Underwriters should leave mystery to the Sphinx.
The more brokers know about an underwriter’s appetite for risk, the better able brokers will be to deliver reasonable submission flow. Upon rejecting a proposal, the underwriter should clearly specify the reasons to the broker. Do so in a constructive manner meant to help the broker submit stronger, more targeted opportunities in the future. Insurance brokers, on their part, should look past rejection to gain insight potentially resulting in greater opportunities for success.
Represent your company while remembering you also represent yourself.
How many of us will work for only one company throughout our career? The answer is a precious few. While each one of us owes a debt of loyalty to the company whose name is on our paycheck, we must at all times also represent our own sense of right and wrong. Your reputation is the most important thing you possess throughout your professional career.
Spread the joy.
Both underwriters and brokers are engaged in the risk management business. It is only reasonable, therefore, that neither party place too many eggs in too few baskets. While diversity for diversity’s sake is not a good idea, establishing multiple high quality relationships is a good idea.
Underwriters should take special care to support new brokerages.
The industry needs the large brokerages, regional representatives and the new, talented organizations working to establish themselves. The insurance community will only become stronger with the addition of new, talented brokerage competitors and distribution channels as they pump fresh energy and ideas into the industry. Be on the lookout for talented newcomers and support them to the extent of your ability. They are the stepping-stones leading all of us to a brighter future for the community as a whole.
Respect the confidentiality of each insurance underwriter/broker relationship.
Each broker works with many underwriters, just as each underwriter works with multiple brokerages. Honoring the confidentiality of each relationship is not only the right thing to do; it is the smart thing to do. The betrayal of a confidence can lead to the loss of trust irreparably damaging a productive, profitable relationship.
Remember to have fun.
Each spring, our company hosts an annual party to which we invite underwriters. We see this as an opportunity to express our gratitude to the underwriting community and celebrate our mutual successes. We are on a shared journey with our carrier partners, and like all journeys this one becomes more enjoyable if we can have a few laughs together.
Keith Boyer is a Managing Partner with KMRD Partners (reprinted from Carrier Management)
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