A baby squeezing a kitten? Are you kidding me? Admit it – the main reason you’re reading this post is because of this picture.
If so, there’s nothing wrong with that. There’s something very powerful about the lure of a great embrace.
So, what does this have to do with insurance? Let me explain.
In recent visits with my retail clients, I’ve been talking a lot about a new insurance product aimed at the intersecting worlds of medical and social services. This product is specifically designed to extend coverage to those classes of social services business that are on the front end of the increasing integration of medical services – namely, behavioral/mental health and addiction medicine. As excited as I am about bringing this new option to my clients, I’m sensing some occasional reluctance. So I decided to look into why that might be and how we at Ethos might convince them to embrace a new option as unreservedly as sleeping kittens embrace one another!
Well, okay, maybe a little bit like that.
When considering the segment of the healthcare industry that intersects with social and human services, retail agents have some distinct product needs. In most cases, they need multiple lines of coverage quoted together as a package. Naturally, that means there’s a desire for serious and committed carriers to help them care for their insured clients. So when a new product for these lines of coverage emerges from a new brand or carrier, there’s a justified call for caution in embracing a new option too quickly. On the other hand, it’s important to explore new alternatives if they help us do a better job of meeting our customers’ needs.
I offer these six steps retail agents can take to determine whether or not they should embrace a new social/human services market:
Turn to a specialty wholesaler
Most retailers who focus on social/human service accounts access carrier products utilizing their own direct appointments with carriers, without needing a wholesaler. As such, retail agents are accustomed to working directly with underwriters. So when a retailer needs a wholesaler’s help, it’s imperative that they work with a specialist who understands the dynamics of the account, industry segment and product. As a wholesaler well-versed in this specialty market segment, Ethos knows how to add value rather than just being a simple conduit to a unique market.
Insist on commission transparency
It’s not uncommon for retailers to receive high commissions by accessing certain carriers directly. The higher those commissions are, the more difficult it can be to work with a wholesaler. Many wholesalers get greedy about splitting the commissions they receive from their carriers. Be sure to work with a wholesaler that’s open and honest about the commissions up front. At Ethos, we’ve also disclosed all commissions and split those commissions fairly so that the retailer doesn’t lose out by considering a product brought by us.
Honor existing carrier commitments
Retailers with direct access to carriers usually agree to specific production goals with those companies in order to retain those appointments. That means retailers are under some pressure to grow or maintain a certain size book with each carrier. When working with a wholesaler, a retailer should know if the same will be required. At Ethos, we require no such production commitment so it’s easier for a retailer to make non-pressured decisions that are best for their clients.
Watch for carriers with multiple distribution channels
Unfortunately, some carriers that write a lot of social service business will use multiple distribution channels to “chase an account.” That isn’t necessarily a bad thing, unless the carrier plans to win such chases at all costs. I’ve heard horror stories from some of my retail agents about when a carrier deliberately worked around them in order to get at an insured’s business. This kind of behavior deteriorates the agency-client model in a way that seems counter-productive. Still, it happens. When this sort of threat exists for Ethos’ retail clients, we always step up and serve as an ally in their efforts to combat such marketplace issues.
Evaluate the longevity of a new market
Many retailers fear that a new carrier or “market” may not be really committed to the social service industry segment for the long-term. Many agents tell us that they regularly hear from wholesalers about new markets that often come and go quickly in this segment. When a wholesaler presents a new market or product, make sure they provide a thorough review of the pros and cons of introducing a new name or brand. It takes time for carriers to establish trust and longevity among agents, brokers and insureds. Retailers should ask a lot of probing questions about a new market in order to find a level of comfort that they can trust. This should not be a difficult conversation to have. At Ethos, we’ve come to expect that kind of dialogue when we introduce a new product and we are totally comfortable with that investigation.
Analyze the product
When placing liability insurance for social/human services accounts, there’s an industry preference in having each carrier quote and provide multiple lines of coverage. That usually means being able to provide the professional, general and auto liability while also providing property and contents coverage. Agents also expect to see admitted paper and a choice of occurrence and claims-made coverage options too. Providing all of these features makes it harder for new markets to enter the field and compete well. Add to that the unique exposures related to sexual abuse and molestation risks, and you have a fairly complex set of policies to put together. That requires a retailer to carefully analyze any new product to see if it measures up to other products in the marketplace. As wholesale specialists, that also means that we at Ethos have to be well-acquainted and honest about our products’ strengths and shortcomings.
Embracing any new insurance product requires real effort and time. It may not be as fun as looking at photos of babies hugging tiny pets, but it shouldn’t be painful either. So keep these tips in mind when evaluating any new product. In the meantime, if you want to know more about a competitive new market for social/human services, feel free to contact us.
There are valuable and useful new insurance products being added to the ever-intersecting medical and social services markets.
Take the time and make the effort when considering new insurance product options.
Work with wholesalers who are well-versed in the specialty market segment and who have proven their trustworthiness.