Consultative Broker Briefing - Volume III, Number 2

The Consultative Broker® Briefing
Volume III, Number 2
A Publication of C.R. Ekern & Company
888.670.1177
www.crekern.com
Copyright, C. R. Ekern & Company, 2001

"The Marketplace Strategy"

I had lunch this week with an old friend who is now one of the top underwriting managers at a large insurer. Some of the things we discussed should be of interest to Consultative Brokers across North America. Here is what he told me:

The treaty renewal terms for January were absolutely breathtaking. One major carrier experienced a six-fold increase in their quoted terms!
The catastrophe coverage for property has gone away. Many carriers are no longer able to reinsure for this. This is especially true for coastal exposures.
Quake coverage is virtually non-existent in the marketplace.
Reinsurers are placing retentions and large deductibles on programs that were previously freely written.
Several reinsurers have gone out of business.

Here is what this means to Consultative Brokers - Expect NO Relief for your July accounts! Consultative Brokers should take this course of action:

Begin the renewal process early. NOW!!! (120 days in advance for the rest.)
Involve the client in the process. Make certain you discuss the marketplace fully and candidly with them and talk about their options (If you don't someone else will!)
Look at alternatives such as retentions, deductibles, captives, and cash flow mechanisms.
Do not blanket the market with half-baked submissions. Now is the time when a skillful Consultative Broker can utilize his/her quality underwriting relationships.
Make certain your underwriting files are current (loss data, program information, client financial information.) You should expect carriers to demand information like never before.
Do not panic or become afraid of the renewal. If you have provided your clients with valid information and involved them in the process, you will be fine.

This is the time when a Consultative Broker demonstrates the lasting value of his/her firm. You must make certain that you have consistently shown the client how your firm has impacted their Total Cost Of Risk (TCOR) over the course of time, not just one renewal period. This is best done with a Stewardship Report - the subject of an upcoming briefing.

Best regards to all Consultative Brokers,

Rob Ekern
President
C.R. Ekern & Company

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Thank you.
C.R. Ekern & Company