Consultative Broker Briefing

First of all, some of you have noticed that we have not produced as many Consultative Brokerage Briefings this year, as in past years. I apologize for this, but I think you will like the reason for our perceived laziness . . .I have been completing a book. It is entitled Consultative Brokerage: A Value Strategy and is now ready to be ordered through National Underwriter.

So, if you like some of our thoughts over the past several years, here is a chance to delve deeper into Consultative Brokerage and Total Cost of Risk. Hope you like it.

The soft marketplace is here for awhile. Many firms are just now beginning to feel its wrath as the prices continue to erode beyond what we believe to be common sense. For those of us who have seen this before, we know the end is not in sight. First it is pricing, then underwriting, then terms and conditions. Eventually, the price sellers and their carriers will be holding their heads in their hands.

But, it is hard to convince many of this as we continue to find ourselves in the pricing abyss. How did this happen to us and when will it end? I will answer those questions in reverse order:

I do not believe this marketplace will end for a number of years. Why, because we are nowhere near the bottom. Oh sure the prices are eroding, but as of yet the triple death spiral of price, underwriting, and terms has not kicked in. Just wait, it will, as new capacity enters the marketplace and looks for a home. This will of course be fueled by the existing carriers appitite for marketshare.
How did this happen? We do it to ourselves. Over and over during each cycle. It is the pure definition of insanity. Each time expecting different results

Is there a solution? You Bet! Get off the treadmill and learn a different way to do business. Establish a value proposition that you can replicate from client to client. Institutionalize your firm’s culture and make certain that you know it, and can translate it to clients and prospects.

Here is the key: a value proposition must be quantified and shown to a prospect/client on their balance sheet. Unfortunately, you can’t do this when all you have is information geared toward underwriting decisions. You need to know not just what the claims are, but why they occurred. You have to be able to show the client how your resources have (or will) change their claims outcome.

It is not about changing the claims outcome in order to attract underwriters. Eventually that will happen anyway as the marketplace gets crazier. It is about helping clients reduce the indirect loss costs of these claims. That is where the action is. When you do that, the client will understand what you brought to the table. As the marketplace swirls around you, it will allow you to stand your ground and focus the buyer on the important things. It is the only cure for the growing insanity.

So, once again sorry for our absence, but we are back. I do believe you will like Consultative Brokerage: A Value Strategy. It is really groundbreaking and is the only book in our industry of it’s kind. Let me know your thoughts.