Retail agents must think carefully about how many MGAs and wholesale brokers they work with and make sure they pick the right partners in today’s market, a CEO has advised.
“Depending upon your size, you need to pick a wholesaler or MGA, align with them and partner with them and move forward that way,” said Richard Kerr (pictured), CEO of Novatae Risk Group.
“If you don’t have a tremendously large block of business, do not spread it around with 10 different wholesalers.
“Take one or two, make a partnership with them, and that’s how you will get the best results, because all of these wholesalers and MGAs have more than they can do, they have more than they can quote, and they’re going to work for those that support them and are successful with them.”
The quote to bind ratio “isn’t good” for one-offs, Kerr told Insurance Business.
“They’re just not going to quote for you and then you’re going to be left high and dry,” the CEO said.
“Consolidate what you have, consolidate the wholesalers you deal with – pick one, two or three at the most and work with them.”
Kerr joined World Insurance Associate’s Novatae as CEO last November following the group’s purchase of MarketScout.
Agents have previously been warned that a “shotgun” approach to submissions may not stand them in good stead with wholesale and MGA firms in the current hard market and could put them in a tough position.
A “transactional mentality” will not cut it in today’s market, Burns & Wilcox corporate senior vice president, national personal insurance practice leader Bill Gatewood cautioned in January.
“I have instructed our practice that if we receive a submission that we know a retail agent has sent to five other wholesalers, we’re just going to pull out… and then move on to the next one, because we’ve talked about the amount of time and resource that we have,” Gatewood said during a Burns & Wilcox webinar.
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Do Kerr’s comments align with your experience in today’s market? Are you finding it a challenge to get quotes? Share your perspective in the comments below.
