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Why Shotgun Marketing Is Bad for Insurance Agents

March 5th, 2024 | 14 min. read

By Jason Esparza

A healthcare professional liability insurance agent stressed out after having used a wholesaler who shotgun markets.

The last time you received a marketing summary with a lengthy list of carriers approached by your wholesaler, were you comforted believing that the market had been scoured on your behalf? Did you believe that the best options had to be available for your client simply because so many carriers were approached? Perhaps you thought, “I have so much of the marketplace blocked so I will not have to worry about competition on this account this year.” 

So then, is shotgun marketing, simply marketing to a large list of carriers because your wholesaler has access to them, the best approach for you and for your clients?  

The short answer is no.  

When there is an extensive list of approached carriers who do not have an appetite for the applicant’s business, it is clear that you are working with a wholesaler that is not familiar with the business they are trying to place. While it seems like shotgun marketing leaves no stone unturned, the chance of getting your client the best terms and pricing is greatly diminished. There are several reasons this is true, especially regarding healthcare professional liability placements. In this article we will focus on the effect of shotgun marketing on relationships with the underwriters who actually get a deal written. 


While this article uses healthcare professional liability (HPL) as the primary framing device, the information within is relevant to all specialized classes of business.

How Shotgun Marketing Hurts Insurance Agents

Young asian businessman sitting at the table and rubbing his eyes over gray background

Like in most highly specialized classes of business, underwriters who work on healthcare professional liability are solely focused on healthcare professional liability. They are evaluated by their ability to write business that pays out losses at an acceptable ratio across the entire book they manage. Their success is determined by their ability to gather detailed and accurate information during the submission process. Poorly marketed accounts signal a lack of HPL knowledge and expertise that motivates underwriters to protect themselves by offering less favorable terms and pricing to keep their books as profitable as possible.   

Some background: Prior to coming to work at Ethos, I spent 10 years working for a national, healthcare professional liability focused carrier. I worked on the E&S side of the business and my products were exclusively distributed through wholesalers. Therefore, I can say with certainty that it is extremely difficult for a wholesaler to hide the level of their experience and expertise from their underwriting partners. Conversely, it is much easier for a wholesaler to hide their lack of experience/expertise from agents. Underwriters can assess if wholesalers are sending in complete submissions, and they can tell if a wholesaler understands the applicant’s industry. Underwriters want to work with wholesalers based on the trust generated by their prior experiences together and the expertise exhibited by the wholesaler, which is why working with someone a carrier both trusts and is an expert in their chosen industry is best for you and your clients. 


Underwriters Are Busy

Tired businessman sleeping in his office

There are two camps of underwriters that could be approached for any deal. The first group are underwriters and carriers who are not a good fit for the risk. The second group is made up of carriers and underwriters who have an appetite for the risk profile and would like to offer terms in earnest. Shotgun marketing, in the simplest of terms, treats both camps equally poorly, and in either case wastes the underwriters’ time. 

Was Never the Right Fit 

Wrong Fit-1

From an underwriter’s perspective, few things are as frustrating as when a wholesaler sends you accounts that are not in your risk appetite. It’s straightforward, the broker sending you submissions that you have no interest in is wasting your time, and therefore, you give them less and less thought over time. When wholesalers send multiple submissions over time that demonstrate that they do not understand their carrier’s appetite, they miss out on developing strong relationships with underwriters. The only relationship being established here is a negative one. 

Could Have Been the Right Fit 

Could Have Fit

As an underwriter, if I know (or at least, suspect) that someone is marketing an account all over the place, they have done nothing to establish a good faith relationship with me and are likely wasting my time. Why then, would I spend my time and mental capital on offering terms when someone else is likely to get the business? Instead, it is in the best interest of both me and my employer if I focus on doing my best work for the accounts that I receive from wholesalers that communicate well with me and give me fair opportunities with each of their submissions. 


Strong relationships are the key to getting coverage for difficult clients in the future, which is why the E&S market exists in the first place. When your wholesaler shotgun markets accounts, their hit ratios suffer and they lose the chance to demonstrate their proficiency to underwriters, negatively impacting their carrier relationships. Your wholesaler’s damaged relationships ultimately hurts your chance of helping your clients who have difficult needs. 

Shotgun marketing may seem like it could be a good strategy for easy to place clients since they do not require as strong relationships as difficult clients, but they still require expertise. Generally, underwriters are conservative when it comes to the pricing and terms they will offer, even to their best clients. If they can offer weaker terms and less competitive pricing, they often will just to quickly move through the massive amounts of work that they see on a weekly basis. Having strong relationships and focusing solely on healthcare professional liability driven business means that a focused wholesaler knows what the marketplace is offering and has the expertise to negotiate better terms and pricing. 


Why Does Shotgun Marketing Happen in the First Place?

It takes a lot of time, energy, and resources to properly train staff and keep up to date with the marketplace. Shotgun marketing is the easiest direction to give to people marketing accounts. “Here is a list of our carriers, send it to all of them.” Therefore, shotgun marketing most often occurs when staff are undertrained or otherwise unprepared for the marketing on an account.  

Why Undertrained Staff Shotgun Market 

Thoughtful young man in the living room

If undertrained, wholesalers working on an account don’t know which carriers are interested in what types of business. Healthcare Professional liability placements require a depth of knowledge when putting together a deal for a client. Properly marketing an account to carriers is a basic first step that serves as a key indication that at least, the wholesaler doesn’t understand the carrier’s appetite, and at worst, the wholesaler doesn’t understand the class of business they are marketing. Neither are good scenarios.  

If a wholesaler does not understand the carrier’s appetite it opens the door for underwriters to offer less competitive terms (especially up front) and is compounded when they haven’t had much success in writing business with that wholesaler. If a wholesaler doesn’t understand the class of business which they are marketing, it opens up more risk for the underwriter. Since loss ratio is a key component of how underwriters are evaluated, lack of trust between the underwriter and wholesaler will produce fewer options up front for the client. 

Why Unprepared Staff Shotgun Market

Businessman stressed out at work in casual office-1

If unprepared, the agent/broker’s flow of business has increased to the point where less thought is going into the strategic marketing of an account than is needed. Like most companies today, wholesale organizations are trying to grow with minimal increase to their bottom line. Proper training is often forgone for newer team members and a “throw them in the deep end” strategy is employed. This means that newer account managers and brokers are often given a list of available carriers and simply directed to see who is interested by throwing it up against the proverbial wall. 


Unfortunately, you are not often privy to the inner workings of your wholesaler’s team’s training. The truth is with large wholesale organizations, the expertise varies greatly from team to team as well as over time as employees come and go from the organization. While there are ways you can eventually flesh out the experience of your wholesaler’s team’s expertise through conversations and experiences you have with them, seeing that they are shotgun marketing your accounts is a helpful early indicator that you are working with someone unable to properly market your accounts and service them in the long run. 


Oh No! My Accounts Have All Been Shotgunned! Now What? 

An elegant businessman standing with his back in front of urban wall full of arrows pointing in different directions concept

Shotgun marketing is a clear indicator that your wholesaler is not up for the task of handling your business. By now you understand that shotgun marketing signals much larger issues that your wholesaler is concealing from you regarding their level of expertise, relationships, and staff. So, what can you do?  

If you need to solve a client’s need with the use of an external partner, we encourage you to evaluate your wholesale relationships well before you have your next impending need. Angelo Joseph Gioia, founder of the Professional Lines Underwriting Society (PLUS), details the importance of finding the right wholesaler who is focused on their approach to the marketplace, solves problems for their clients, and has specific and superior knowledge regarding their chosen specialties.  

Remember, since not all Wholesalers are created equal, it is extremely important as an agent/broker that you take your time when looking for the right Wholesaler. Picking the right partner can not only save you time but if you understand how they work and the value that they bring, you will realize that they also can become a natural extension of your own marketing efforts.” – Joseph Gioia 


I Just Want My Wholesaler to Bring Me Some Options

Ethos Insurance Wholesaler Scorecard

In the modern era, you need to think differently about what you are getting from your wholesaler. Gone are the days when wholesalers were used solely for market access. When evaluating your wholesaler, you must rely on clues that show their proficiency in the marketplace. If you see consistent shotgun marketing, their knowledge of market appetites and their carrier relationships are weak and lacking. The best time to evaluate your wholesale broker is before you run into your next issue. 

To assist you in your evaluation of your wholesaler, we have created a Wholesaler Scorecard to help you quantify all your wholesaler relationships and determine if you have the right partners in place to make transacting business better in the future. 


In Summary 

Carriers know when they are working with a true specialist in healthcare professional liability. True specialists gather the appropriate information, understand the risks they are presenting for coverage, and are deeply knowledgeable about what the rest of the market is doing. A wholesaler who is consistently shotgun marketing your accounts is a clear sign to you of what underwriters already know, that you are not working with a healthcare professional liability focused wholesaler. If your client is not proficiently placed by a true specialist wholesaler today, they will find a better option in the future with an agent who is working with a competent, healthcare professional liability focused partner. It is only a matter of time until they are called on by another agent that agrees to do a policy review. If your clients aren’t placed well today, there will be coverage issues pointed out to them tomorrow. 


What’s Next? 

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Jason Esparza

Since starting in the insurance industry in 2000, Jason has held diverse roles, including underwriting, agent support, and business development. As Ethos' VP of Business Development since September 2020, he focuses on growth and innovative solutions. Jason, equipped with a BA, MBA, and MDiv, excels in bridging communication gaps between agents and carriers, ensuring customer needs align with underwriting requirements. Committed to transparency, he fosters open communication at Ethos. Outside of work, Jason, a family man and endurance sports enthusiast, brings a competitive spirit, having won multiple swing dancing national championships and completed three Ironman triathlons. Dedicated to Ethos' mission, Jason aims to leverage his experience, transparency commitment, and results-oriented focus to position Ethos as a pioneering force in the insurance industry.