By Susan Henderson
When to reach out
To understand how the wholesale distribution system works in tandem with the retail industry, imagine the similarities between a medical patient/family physician and client/retail agent relationship. Just as a family practitioner has a broad understanding of medicine and is qualified to treat and diagnose a wide range of patients and illnesses, a retail agent has a general understanding of the entire insurance industry. For day-to-day medical issues, a trusted family practitioner is a great choice for many patients. Likewise, a retail agent who has a good relationship with his or her client offers trusted solutions for general insurance needs.
What happens, though, when a patient arrives in a family physician’s office with an illness that is either difficult to diagnose or particularly complex to treat? In that relatively common situation, respected physicians routinely refer patients to specialists who have extensive training in a particular discipline of medicine, rather than trying to treat it themselves. That referral not only provides the patient with the needed expertise to treat their condition, but also strengthens the patient’s relationship with his or her family physician. When a physician seeks expert counsel for a patient they build trust with that patient and their family and solidify their rapport for the future.
The same applies to the retail agent who seeks the expertise of a surplus lines professional when helping a client insure a complex risk. When faced with an insurance need that falls outside their typical sphere of expertise, retail agents who seek a customized solution with the help of a wholesale broker ultimately strengthen their client relationship. A client who walks away with the right customized policy is likely to come back for other needs.
Wholesale brokers can also help smaller, independent and more regionalized operations compete with national brokers for E&S business. A wholesaler adds value not only in recommending the various levels of coverage and the right carrier fit, but also provides expertise in areas retail agents may not have. “Retailers and insureds look to wholesalers for access to markets and specialized coverage they can’t find anywhere else,” said Westrope. “But the real value of wholesalers is the innovation they bring to the placement of specialty insurance.”
Why reach out
Wholesalers often specialize in one industry or a handful of related industries and the associated product lines, enabling them to be experts in an area. It also makes them excellent allies in preparing documentation for underwriters and ensuring that situations unique to that particular industry are considered. In essence, they can become an invaluable extension of a retail agent’s knowledge base.
Many wholesalers have underwriting experience which can be a powerful tool to assist retail agents as it increases their ability to respond to an agent’s needs with speed and agility. This experience also fosters flexibility and creativity when working in niche markets. For retail agents, cultivating a relationship with wholesalers is beneficial so that when a client walks through the door with a hard-to-place risk, the retailer is ready to respond with the help of a wholesale broker.
Ultimately, wholesale brokers streamline and add value to the process of insuring nonstandard risk for retail agents. Just as a medical patient expects a general practitioner to collaborate with a specialist, insurance clients expect their agent will provide a broad solution and trust all segments of the market have been considered. Wholesalers fill that role of specialist. They routinely deal in business that is nuanced and as a result are able to help efficiently discern not only what needs to be covered in a policy but also what is of highest importance to the client. The wholesaler is not just an aggregator, but is an innovator, who works each day in the arena where complex risk meets innovative solutions.
About the author
Susan Henderson is the Director of Marketing and Communications for the National Association of Professional Surplus Lines Offices (NAPSLO). She directs NAPSLO’s ongoing marketing strategy and its implementation across all of NAPSLO’s communications. A graduate of the University of Kansas, Susan holds a B.S. in Journalism from the William Allen White School of Journalism and Mass Communications, with emphasis in Advertising and Strategic Business Communications.