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Selecting an Insurance Broker

David Blades's Profile

Hi Everyone, Hoping for some input on making a broker selection for our property and casualty needs. Our existing broker is available when called upon but doesnt seem to really engage in understanding our business or insuring that our needs are being met. This concerns me that maybe this same laid back strategy is being used when negotiating with the insurance carriers. I cant help but wonder if we could be obtaining a better rate with a different broker. That being said, I have been in contact with two other brokers. My understanding however is that I need to choose the broker and have that broker bid all the carriers rather than using multiple brokers. Is that accurate? How can I be certain that the broker I select will obtain the best rate and the best carrier to meet my company's needs? How often do most of you change brokers? Is it important to interview brokers every couple years to keep the existing broker on his toes, or do you prefer to maintain the same relationship for many years? Any input would be greatly appreciated. Thanks, Dave

Answers

Michael Jameson
Title: VP Finance
Company: Undisclosed
(VP Finance, Undisclosed) |

Shop around for brokers. I have "owned" liability insurance of every stripe at multiple companies and I always bid the business out. Even to people I have worked with for years I say, "no offense, but as a matter of practice I get multiple bids for every renewal". And I actually do. It keeps everyone honest when it comes to pricing, you might learn new things from new brokers about coverages, carriers, and certainly cost, and it only takes a few phone calls and emails.

You ask, and rightly so, about how frequently you should change. Despite bidding out annually, I actually change rather infrequently. Once I find someone who "gets it", that is gives my company both excellent service and great pricing, I tend to stick with them. But I still bid that business out every year!

And don't worry about hurting anyone's feelings inside or out of your company. If the broker is a friend of inside folks, you would do well to talk with them before you bid this out just to let them know what and why you are doing it. A desperate broker may call around and over your head if they think they might lose business. You want to be prepared for that. And as for the broker, treat them honestly and respectfully throughout the process (I always let my brokers know they are in a competitive situation) and you will have done right by them and given them every opportunity to keep your business.

Ginger Nance
Title: Controller
Company: Pleasants Construction
(Controller, Pleasants Construction) |

I usually select 2 or 3 brokers and ask them to give me the top 3 insurance carriers, in order of preference, that they want to use to quote our insurance. If there is any overlap, I decide which broker gets to market to which carrier. I then give each broker a broker of record letter for the carriers assigned to them.

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