The Consultative Broker™ Briefing
Volume III, Number 13
A Free Publication of C.R. Ekern & Company
888.670.1177
www.crekern.com
Copyright, C. R. Ekern & Company, 2007

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"The Lost Art of Broking"

I was speaking with a broker several weeks ago about the importance of providing underwriters full information in this hard marketplace.  You see, many of the carriers do not have full underwriting files on accounts they have insured for several years.  Therefore, when a home office underwriter reviews the file, it is not complete and the renewal process stalls.

This broker had an observation that was very interesting.  “We tried providing our carriers with full information and it created problems,” he moaned, “We found that the more information we provided, the more confused the underwriter became.  And then they ultimately declined the renewal!”

Our British cousins call it “Broking,” and it is a lost art to many of us.  A Lloyd’s underwriter makes a decision to commit capacity based upon a two page written document and the London broker’s ability to succinctly explain the risk.  It is a streamlined process based upon integrity, account knowledge, and anticipating underwriting appetites.

On this side of the pond, many of us have lost the art of broking during the prolonged soft marketplace cycle.  It is understandable due to the crazed downward cycle that gripped our industry.  Over the last fifteen years, underwriting information became an obstacle to doing business, not a conduit.  The worm has now turned!

Here’s the deal - You are now facing the responsibility of making two sales.  The first is to the carrier, and the second is to your client or prospect.  As a seasoned broker who flourished in the last hard market, here are some thoughts on the lost Art of Broking:

1. Boil it Down – As a professional, you should be able to take any account and boil it down to less than two pages.  These pages should contain key underwriting loss ratio results by line, compilation of underwriting data (payrolls, receipts, etc.,) prior premiums and key client financial ratios.
   
   

2. Include a Narrative – In your two-page account summary, you must include a narrative description concerning the key issues that the client is facing.  Some agent/brokers find this difficult, as they do not know the issues!
   
   

3. Anticipate the Questions - This narrative must describe your account forthrightly, while at the same time anticipate an underwriter’s concerns.  Astute underwriters will use your ability to anticipate questions as a sign of your competence.  After all, if you don’t know the questions, you will not have the answers.
   
   

4. Prepare to Hold the Underwriters’ Hands – There is nothing more frustrating than preparing a quality presentation and then having it picked apart by frontline underwriters.  In this event, the quality of your information must be the vehicle by which you constantly refocus their concerns.  It is the only way you can keep all eyes on the macro issues rather than the micro ones.
   
   

5. Pre-select your Underwriters – Never send an account into the marketplace without knowing in advance the underwriters’ appetite for the risk.  You should have a short dialogue with each potential underwriter to save each of you time.  Failure to do this will create a great deal of “wheel spinning.”
   

In this time of diminished capacity and underwriter constriction, the Consultative Brokers who understand the “Art of Broking” will weather the gale.  In fact, these producers will flourish as their competition flounders.  There are a number of excellent accounts that can be written simply by understanding the principles of skillful broking!

By the way, for those of you looking for more information on Consultative Brokerage techniques, please take a look at an article which we recently had published in the October 8th, 2001 edition of National Underwriter.

Best regards to all Consultative Brokers,

Rob Ekern
President
C.R. Ekern & Company

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Consultative Brokerage® Techniques are utilized by agents and brokers across North America in the development and retention of upper middle market revenues.  The Consultative Broker Briefing is delivered electronically free of charge to selected agents, brokers, and other insurance professionals across North America.  To subscribe to The Consultative Broker Briefing, please click here.

Copyright 2007 C.R. Ekern & Company