Updated October 16th, 2023.
You have just received renewal terms from one of your wholesalers a couple of days prior to an account’s expiration date. You noticed that not only was the quote delivered to you extremely late but the carrier is pulling back coverages due to the current hardening market cycle. You request an extension on the current policy and sit uncomfortably waiting to see if your calls and emails will be returned at least confirming that someone is looking at the issue for you. Whether or not you receive the extension, you realize that your wholesaler has only gotten you loss runs for the most recent carrier placement, not the additional carriers they helped place with you for the last 5 years (if they sent you loss runs at all).
3 Ways to Regain Control Over Your Accounts
Agents have gone through this or similar experiences for as long as there have been wholesalers. The unfortunate truth is that an imbalance in power and priority means that you have everything to lose and there is not a lot that you can do about it. That imbalance, the loss of autonomy and control, is why so many agents absolutely hate working with wholesalers.
The fact of the matter is that you’re the customer, and you deserve better. You shouldn’t have to rely on a wholesaler who underperforms and has a negative impact on your business. So then, what can you do to take your business back into your own hands and regain your power, autonomy, and control?
1. Drop E&S From Your Book
For one, you can do what many agents attempt to do and deploy the nuclear option: you can choose to avoid E&S business as much as possible. The more you stick to admitted business the better your chances of having access to direct markets that can satisfy your clients’ needs. Of course, this continues to be difficult as the needs of your healthcare clients change and as the market continues to progress towards hardening.
2. Write It Direct
You can choose to simply strive to write your business direct wherever and whenever physically possible. After all, you’ll never have more control than when you’re the only one touching the policy. On the flip side, there are many markets that are wholesale distribution focused. This means that as your client’s needs change with the growth of their businesses, writing all your business yourself will prove to be increasingly challenging. If your available markets are primarily admitted focused, a direct-only approach also opens you up for competition if another agent can wedge themselves in with your client or someone else in the organization and use the market reach of a wholesaler to take your business.
If you have access to E&S markets, there is an obvious cost of surplus line licensure, extra time and money associated with changing compliance requirements, filings, filing errors, audits, and payment of applicable taxes and fees (monthly, quarterly, or annually depending on the state), etc. With all this change that is occurring in real-time, you probably know that your client and your agency are not as well served with solely this option.
3. Find A Specialist Who Gives You Control
A big part of how wholesalers keep the scales of power and control tipped in their favor is by limiting your access to tools and information along the way. So then, the most direct way to deal with a negative wholesaler experience without having to forgo all the benefits you gain by working with a wholesaler in the first place is to use a wholesaler that gives you the tools to keep in control of the relationship from moment number one.
Ethos operates exclusively in the healthcare professional liability (HPL) space. While we might not be the right fit for you if you’re not looking for someone to assist with HPL, we think we can serve as a great example of the sort of wholesaler you need to be looking for.
As wholesalers ourselves we give you all the information you need to ensure that you have power, autonomy, and control over your accounts. We communicate well before the expiration dates of issues and dialogue about solutions. Baked into our services is the expressed belief that it should not be left solely up to you to ensure coverages are similar between the expiring policy and the renewal quote by being proactive in sharing our marketing summaries, coverage comparisons, and proposal matrices on a weekly basis. Similarly, we do not hold back loss runs from carriers that we helped you place business with.
Quality wholesalers are proactive in reporting to agents when carriers are unwilling or unable to offer the same terms. This happens more often through the current hard-market cycle and is why wholesalers need to press to get renewal terms well in advance of the expiration date. Only then can they assist you in finding additional options. This is a difficult task at times considering how busy underwriters are currently, but in the cases where they believe there will be delays in obtaining renewal terms, we can often get confirmation of where pricing and terms will likely end up. Regardless of the industry of the policy that you are trying to place you shouldn’t settle for any less.
Picking The Right Option
The one thing that is 100% clear is that your current situation must change. For the well-being of yourself and your business things cannot proceed as they have been, and no amount of lip service from your currently underperforming wholesaler can get them to enact a meaningful change in the way that they operate. At the end of the day, you need to pick what’s right for you.
Should you drop E&S and wipe your hands of the situation? Would you rather market your account directly? Or is it time for you to take a serious look at finding a wholesaler that better serves your needs in place of the wholesaler that you have simply grown accustomed to working with?
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