How many brokers should we approach when we look for alternative quotes?
This is a question I am often asked when clients are seeking to source alternative commercial insurance quotes. There is no simple answer and ultimately its always down to the insured’s preference however here are a few points that might be worth considering:
1. There is only a limited number of commercial insurance companies. These companies tend to have procedures in place for dealing with presentations that have come in from multiple brokers. With a few exceptions the majority tend to allow the first broker in “to set the lead” which means they issue one quote and all other brokers receive the same quotation. Armed with this knowledge it may be preferable for the insured to control which brokers can approach which insurers.
2. Underwriters are human and relationships do come into play. This might mean that the first broker through the door might not be the one that will be able to obtain the best terms from that insurer. Perhaps it may be worthwhile asking your brokers who they are going to go to and why and manage them this way.
3. Too many brokers confuse the picture for insurers. In my opinion Insurers prefer to work with their chosen broker, when too many approach them on the same risk they do not know who to work with or who has the clients preference. Often insurers will no quote a risk if they have seen it from more than 3 brokers.
4. Insurers, like most businesses, want to win new clients. They also have quote logging systems and they are able to view how often they see a presentation from the same client. If every year they are asked to quote but never pick up the business they will be less inclined to do lots of work to get the best quote over to the brokers presenting the risk. After all its human nature to go for the business that you think you might win. This is why brokers often advise that it is not best to “go to market” every year.
A skilled broker should be able to manage the long term insurance objectives of their clients. After all, many business without insurance would not be able to trade legally. Having the knowledge will help you make sure you make the right decisions for your business.
The above is an opinion piece by Nicholas Hems, I am always happy to help so feel free to contact me on 0800 7797 880