Consultative Broker Briefing - V. III, No. 11

The Consultative Broker™ Briefing
Volume III, Number 11
A Free Publication of C.R. Ekern & Company
888.670.1177
www.crekern.com
Copyright, C. R. Ekern & Company, 2001

"January 1 Strategies"

All the preliminary indications are that the January 1 renewal season will be much more difficult than it is currently. Those of you who just completed your October 1 renewals know exactly what I am talking about. Some of us with a little gray hair are beginning to fear that next year will rival or surpass the hard market of 1984/1985.

There are a number of signs that point to this.

Some reinsurers are exercising their right to audit company books in mid-year, looking for treaty violations. This will allow these reinsurers to change the terms or cancel treaties.
Brokers are reporting that some carriers have “pulled” standing quotes on expiring accounts, leaving the brokers without terms. The carriers are concerned about not having reinsurance recoverables.
Wholesalers are seeing activity like never before (at least in the last 15 years!) The phones are ringing off the hook.

As a Consultative Broker you know the importance of getting and staying ahead of the curve. We have talked about many of these techniques in prior editions of the Consultative Broker Briefing. Here are some additional thoughts concerning what you must do in the next sixty days for your January 1 accounts:

Speak With a Clear Voice. Remember that you and your clients are but one voice shouting to be heard by underwriters. You must make your submissions in a clear, direct manner with all the pertinent information. Without a quality submission, your voice will be lost in the clamor of the marketplace.
Don’t Expect a “Silver Bullet.” In the past, a good relationship with underwriters was enough to earn “Silver Bullets.” Unfortunately, some of these underwriters will not be given Silver Bullets by their management. In these cases, an excellent relationship will be required not to be “Nuked,” instead of a Silver Bullet bailout.
Book ‘em Danno! As January 1 approaches, some carriers will begin to get cold feet on terms they have already quoted. The underwriters will find themselves in a capacity and reinsurance crunch. Astute brokers will make certain they bind reasonable terms as soon as they are offered. Don’t wait, as you might get left out in the cold.
Don’t Become a Deer in the Headlights. Some brokers will be paralyzed by the breathtaking increases in premium. They will set things on the side of their desktops in order to avoid the terror of facing clients. Brokers that freeze will later have an even worse situation on their hands - An enraged client.

Those of you who have been learning and practicing Consultative Brokerage know that the coming months will yield tremendous opportunities. Keep reading the Consultative Broker Briefing - we will keep you and your clients in the loop.

Best regards to all Consultative Brokers,

Rob Ekern
President
C.R. Ekern & Company

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Thank you.
C.R. Ekern & Company