When faced with myriad business
insurance options, including complicated policies and ever-changing requirements, business owners know the
value of retaining an advocate in the insurance industry who can act in their best
interest. More and more, the most successful brokers are taking on the role of adviser when it comes to the health and wealth
of their clients’ bottom line.
Though cost is always a concern, Ken
Ewell, vice president of marketing with
The Graham Company, points out that
achieving the “best rate” is not the sole
function of a broker. A low-cost policy with
inadequate coverage could jeopardize a
“Given the importance of a broker’s role
in achieving the best outcome on your
behalf, a broker must stay sharp from a
technical standpoint on any changes in policy coverage forms as well as the status of
the marketplace,” he says.
Smart Business asked Ewell to expand
on what makes a broker a true advocate
for business owners.
Beyond selling policies, what else should be
required of a good insurance broker?
The best brokers help their clients to
manage and mitigate risk. The most visible
part of this process is related to insurance
placement identifying the risks facing
clients, designing an insurance program
that will best protect them, negotiating
terms and conditions with competing
insurance companies and proposing a few
options to their clients. This is the traditional part of the business insurance process with which most people are familiar.
The other thing that the best brokers do
is to help their clients reduce the likelihood
of claims and aggressively manage the
claims that do occur. Reducing claims is
done through loss prevention and safety
services. For each client’s particular industry and business processes, the best brokers will help figure out ways to make a
product, a process, or a facility safer. They
will also aggressively and proactively manage the claims that couldn’t be prevented.
The best way to reduce your long-term
insurance cost is to reduce the cost of your
insurance claims. The best brokers have
figured this out and are willing to invest the time and resources necessary to make an
impact in this area.
Discuss the qualities of a highly effective
relationship manager in the Property
Our business is interesting we essentially have two key relationships to manage. First and foremost, we have to understand and take care of the needs of our
client the person or company buying the
insurance policy. Secondly, we have to
manage and maintain good relationships
with our insurance company partners who
provide the insurance products that our
clients need. If an insurance broker neglects either relationship, it will cause problems.
The best brokers find a way to give their
clients the best products and services available, while still being able to keep their
insurance partners happy. It can be a challenge because multiple insurance companies often compete for the same client. The
insurance company that doesn’t win the
business may get upset.
The best way to handle this is to clearly
define the expectations at the outset. For
example, we put together coverage specifications and service expectations that clearly define the insurance coverage and safety/claims services that must be provided in each competing insurance company proposal. At the end of the day, the insurance
company that puts together a proposal that
meets the specifications at a competitive
price will usually win the business.
What are some things that a business owner
should ask a potential new broker?
It’s usually a good idea to be cautious of
the broker that walks in your front door
and promises to save you money on your
insurance program before he or she has
done any serious analysis of your particular situation.
Assuming that you are at least relatively
comfortable with the potential broker (e.g.,
they serve clients in your industry, etc.), we
recommend starting with some analysis.
Give the potential broker some information about your company, your current
insurance policies and your loss history.
Ask him or her to review the information
and come back to you with recommendations for improvement. This will give you a
chance to ‘test drive’ the new broker without making any commitments. When you
see the results of the broker’s analysis,
you’ll have a better feeling of whether or
not it makes sense to take the next step.
The next step should probably be to talk
to a few of the broker’s clients who have
similar risk management issues. You may
even want to visit the broker’s offices and
talk with some of the people who would be
working on your account.
What is the bottom line that business owners
should keep in mind when selecting an insurance broker?
Given the dual nature of a broker’s role
representing the client in negotiations with
the insurance company underwriter, it is of
paramount importance that your broker is
committed to advocating your interests
above his or her own.
The challenge for you is that all brokers
sound so much alike. However, it’s the broker that executes with expertise, reliability
and integrity that develops a trusting relationship with a client.
KEN EWELL is vice president of marketing with The Graham
Company. Reach him at [email protected] or (215) 701-5281.