The stereotypical insurance salesman couldn’t be more demonstrative than from the “Ned Scenes” in Groundhog Day.

Thankfully the insurance industry is one of the most professional and highly regulated in the U.S…perhaps in large part due to the “Ned’s” of this world.

Fortunately, professionalism is at the heart of the true experts who are delivering meaningful value to serious insurance buyers. There is a lot on the line and colossal complexity related to risk transfer strategies, people safety, policyholder provisions, exclusions and ultimate management of escalating insurance premiums. They are, at a minimum, challenging concerns and not for the faint of heart. With all of the insurance organizations claiming “excellent customer service” and “expertise” the obvious question that emerges is “how does one go about quantifying an organization’s ability to deliver on its claims”?

The answer to that question brings clarity to that very tough question.

There are two defining considerations when an organization is endeavoring to decide which insurance organization to work with.

• What are the limitations of doing business with a direct writer representing one insurance company compared to an insurance broker that represents many?
• How does one determine selection criteria when there are many insurance brokerages to choose from?

It’s these questions and beyond which form the basis for informed decision making; each of these talking points are of worthy consideration.

• What are the limitations of doing business with a direct writer representing one insurance company compared to an insurance broker that represents many?

  At the most basic level insurance companies are in business to pay claims for a profit. That’s why they exist. However, insurance companies must decide how to get their product into the market. Direct Writers are those companies which choose to provide their products through “captive” or exclusive insurance agents. Captive insurance agents represent the company that is branded on their business card. Choices are limited because it’s one company providing the end to end client solution. Insurance brokers represent many insurance companies and are perceived to be more objective because they have many companies that they represent which compete against each other for the customer’s business. The independent insurance broker’s job is to evaluate the best terms, conditions and pricing recommendations from each competing company and then represents those services to the customer. This is one significant reason that most business insurance buyers use a broker rather than going direct.

• How does one determine selection criteria from so many insurance brokerages to choose from?

  Competition reigns in the brokerage industry which is very good for the consumer. The most prominent selection determination distills to four important categories:

  • Deep Expertise
    • Credentials are important. Licensed agents in the insurance industry are not only required to take continuing education credits but there are a number of ways to receive professional designations. Ask your broker which designations are represented in their organization. Ask him or her how many people are designated professionals. Learn to what degree the organization provides ongoing learning and training venues for its clients.
    • The star in a movie is important but so are supporting actors and actresses. Therefore, ask about the brokerage supporting team. Who is serving the client beyond the point of contact? What expertise resides within the supporting team? What are they specifically doing which add to client value? What technologies are delivered to existing clients?
    • Who owns the morale weight of the ultimate deliverable? Who will advise the client on strategy and outcomes related to claims, risk control and safety? What access is given to whom and when…if an incident arises during non business hours?
  • Narrow & Broad Experience
    • How long a brokerage has been in the business does make a difference. The reason is simple; market credibility. Insurance companies do not give brokerages access to their product and services unless brokerage credibility is validated and client commitments can be made. Once those commitments have been realized the brokerage gains even more market credulity and even more insurance companies are standing in line to do business with them. Over time, good brokerages can represent 100 companies or more. Representing a number of insurance companies is good for the brokerage and good for the consumer. Expertise is grown within brokerages that represent many companies and many of those agents within those brokerages become deeply involved with specific industry interests. This, too, is good for the buying consumer. More access, more choices, more ability to obtain that which is needed to successfully navigate a rapidly changing marketplace.
    • Niche expertise is also a significant issue. The degree to which the marketplace is becoming more and more complex demands a growing amount of niche expertise. Gone are the days of generalists. Today each category and line of insurance demands a growing and dynamic expertise. The question is how much backup the organization can provide to clients? Who in the organization will actually deliver the tactical client value? Who reviews contracts? Who recommends the best coverage and policy form options? Who is on the other end of the phone that will be available when urgent matters need to be addressed?
  • Credible Relationships
    • We live in the most transparent generation the world has ever seen. Client references are more important than ever. Google search is being used by most insurance buyers to learn more about who it is that is that is trying to win their business. It’s critically important to evaluate specific client referrals before choosing which insurance brokerage to choose from. Ask for a private telephone call from an existing client. I would look long and hard if the broker isn’t willing to give you access to their client for a private conversation.
    • Ask how many clients the brokerage serves within a specific industry. Ask about how engaged the broker is within the relevant trade association or other complementary organization.
    • What about giving back? What specific areas are the owners and employees participating in their local communities and giving back with philanthropic intent?
  • Delivering long term client value beyond the transaction
    • What is the strategic value that can be driven to the organization?<'li>
    • Who do they know that I want or need to know?
    • How will the brokerage provide venues and introductions that will propel my business?

What is done, how it’s delivered, and who is doing it are the defining issues related to delivering value to insurance buyers. At the end of the day, despite the hilarity of “Ned” I’m grateful for the degree of regulatory oversight that raises the bar of excellence for all of us who are fully committed to delivering real value to our clients.