One of the qualities I admire in an insurance client is the willingness to take a proactive approach and take a real interest in the policies which may one day be the difference between financial ruin and roaring success. Clients who are engaged always make more informed decisions and have a better understanding of their risk positions. However, there is a point where I see so many prospective clients thinking they're getting ahead of the game and in actual fact, they're penalising themselves.
Let me explain... A business decides it's time to review their insurances as they're just not confident that their existing broker is meeting their needs. Despite this, they want to see what the existing broker comes up with at renewal so they give him the information that he needs. At the same time, they're referred to another adviser by a trusted associate and decide to give him a call. They then decide that they like to support local business too, so on to Google they go and find the nearest broker to them. Last but not least, they believe their company has now reached a size where they may need to deal with a large international broker - of course, they get in touch and the international is all too happy to assist.
Now in this case we now have four brokers attempting to do the same thing. To some this may seem ridiculous, but we've had examples where a client has up to six brokers on the case – an absolute logistical nightmare. To others, maybe they can see the logic... The more advisers you have working the case, the more likely you are to get the outcome you want, right? In actual fact, nothing could be further from the truth.
Amongst advisers and brokers, we have access to potentially hundreds of different markets. For the most part, every broker will have access to each other's insurers - insurance companies don't mind where the money comes from, as long as it's in their pockets. Now although there are so many markets, for any given risk a good broker will already know the 5-8 insurers who are going to be serious contenders. As a result, we all end up in the same places talking to the same insurers. By the time the insurer has spoken to the third broker about the same risk and each broker has slightly different interpretations of the information at hand, the insurer is ready to shut off. By the time it gets to this stage, you will rarely if ever see competitive terms. The insurer simply decides that the market has been flooded and that there are better uses for their time than this. This is why the best results we see are when a broker and underwriter work with each other exclusively to fine tune something magical.
So that's all great, but what's the solution? Surely a client can't be expected just to choose a broker sight unseen and then expect that pot-luck will prevail and they will end up with a winner. On the contrary! Screen your brokers vigorously, interview them, question them, interview them again and then make a decision as to who you would like to review your program. For those playing at home, the step-by-step process goes like this:
1. After deciding you want to review your insurance, formulate a list of companies or individuals you would potentially like to deal with. Leave your existing broker in there for the sake of a benchmark, but this may also include the local guy, the international and the highly recommended gun.
2. Give each of them a call (hint: if you repeatedly can't get a hold of the person you are looking for - run for the hills). If you prefer to work face-to-face, this could also be arranged but I would suggest not asking all candidates to meet with you unless you feel they have a genuine chance of working with you – this is purely based on respect.
3. Explain clearly what you're looking to do and that you respect their time enough to screen them without asking them to put together a full submission. During this conversation you want to firstly explain your business in detail to them and then ask them what they think about the types of insurance you might like to consider. You will get a feel from this immediately as to whether they have a good understanding for risk, insurance and your business. And perhaps more importantly, you can also confirm:
Whether you actually like this person and you could see yourself having a good working relationship with them (also known as the BBQ test)
Information about their relevant qualifications and experience Ethics of the individual (i.e. how concerned are they about understanding your business vs quickly closing a sale)
4. Ask them to send you an email with their contact details on it - the time taken to do this simple task may give some indication as to their keenness to work with you.
5. Reduce your pool to a short-list aiming for one single broker (in addition to your current broker, not applicable if you haven't used one before).
6. If you cannot get to one single broker, the final step is to provide each of them with a copy of your insurance program and ask them to come back to you with a brief summary of issues and additional exposures that they would address if appointed as your broker. The submission which is the most insightful and convincing, wins.
7. Provide them with a signed authority and all of the necessary information to provide you with a full submission.
Now, this all seems like a bit of a process right? Realistically, you should be able to knock this over in about 30 minutes. However, in case you’re unsure – you will make this time back 10 fold! Think about it like this, the longest part of the process is fact finding, discussing and reviewing the completed submission and then making changes. The wider the pool of brokers you have providing you a submission, the more times you have to do this.
So in terms of what we learned here, when it comes to reviewing your insurance it’s not a case of ‘the more brokers the merrier’. In fact, this is one of those instances where less truly is more but the key is, you MUST get the quality of brokers right.
If you’d like guidance or to have one of our quality brokers review your portfolio, please just get in touch.