Consultative Broker Briefing - V. IV, No. 2 - Marketplace Competitions

The Consultative Broker™ Briefing
Volume IV, Number 2
A Free Publication of C.R. Ekern & Company
888.670.1177
www.crekern.com
Copyright, C. R. Ekern & Company, 2002

"Marketplace Competitions - A Recipe for Disaster"

As the marketplace continues to change, your buyers and prospects are becoming more frustrated. They have been accustomed to reducing their insurance costs by seeking competition between carriers and agent/brokers. "We have decided to seek alternative quotes this year," they proclaim. "What three carriers would you like to be assigned?"

This is a recipe for disaster, as this antiquated process serves no one's best interests. As a Consultative Broker you fully understand the reasons why the "old" marketplace selection process is no longer viable for clients:

At this time, like never before, the ability to market a client's program must be done in a very skillful manner. The marketplace selection process does not account for the different skill levels of brokerages. It is based solely on who is assigned markets.
Sending multiple agent/brokers into the marketplace is not in the client's best interests. This is because they need their story told by one strong, consistent voice in the marketplace. During this time of upheaval, a confused underwriter equals higher costs. Also, the agent/broker must have the authority to "lock and load" when the right terms are negotiated.
In many cases there are not three carriers available, let alone enough for multiple agent/brokers to compete. As the recent C.R. Ekern & Company Marketplace Survey reported, in 45% of the cases there are two or less carriers with the appetite for any given risk, and you probably represent them both!

The next time you are informed by a client or prospect that they intend to hold the "old" marketplace selection process, you need to "stop the presses!" It is not in their best interests to proceed and you must tell them so. As a Consultative Broker you need to educate them on the significant potential downside of going to the marketplace in this manner. There will be no consistency, and therefore the results will be frustrating to them.

The alternative is educating the client to utilize the "Brokerage Selection" process in competition. This process is by far the most effective method of selecting an agent/broker. It provides buyers with the best value and you with a method of differentiating your organization. It is a much better system of competition.

Our next Consultative Broker Briefing will feature the Brokerage Selection Process and how to work with it effectively.

Best regards to all Consultative Brokers,

Rob Ekern
President
C.R. Ekern & Company

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Thank you.
C.R. Ekern & Company