Ethics Case #2 - What Price For Client
Moderators: Josh, independent guy
-
- Insurance Journal Addict
- Posts: 309
- Joined: Thu Sep 22, 2005 6:35 pm
- Location: Mississippi
- Contact:
Ethics Case #2 - What Price For Client
As an agent, you are quoting on a new commercial account. Your best insurer is quite anxious to write the business and quotes $50,000 but lets you know that there is some fat in the quote. The underwriter tells you she can go to $45,000 if you need it.
The prospect has said that he is unhappy with his current agent's service. He has promised to move the account to you as long as you are under $55,000 "" his current premium. You have known the prospect for 20 years. You know he is a man of his word. There is no question he will move if your quote is $55,000 or less. You found several areas of coverage that were lacking in his current program. The dramatically improved coverage is included in the $50k quote from your insurer.
What premium do you quote your client and why?
The prospect has said that he is unhappy with his current agent's service. He has promised to move the account to you as long as you are under $55,000 "" his current premium. You have known the prospect for 20 years. You know he is a man of his word. There is no question he will move if your quote is $55,000 or less. You found several areas of coverage that were lacking in his current program. The dramatically improved coverage is included in the $50k quote from your insurer.
What premium do you quote your client and why?
Scott Simmonds, CPCU, ARM
Insurance Consultant
Insurance Consultant
I would write it at $50k. I would do it because I am very simple minded. I do not look at the philosophy of the matter and worry maybe I should have given him a better deal because he was a friend for so long. Plain and simple, he said he will go with me for under $55K and I am at $50k. Get signature, collect check, thanks by, and collect commission.
That is what I would do so save the long winded debate.
That is what I would do so save the long winded debate.
Always Be Closing!
ethics
OK, I'll be first to bite...
My entire business is operated simply by following the "Golden Rule". Years ago my mentor told me that if you want to sleep at night to never falter from following this simple rule... and it works. What we sell is not always the cheapest, but the service and price I do offer is always in the best interest of the client. Period. If the underwriter can offer it at $45K, then that's what I'd offer the client.
Swymmer
My entire business is operated simply by following the "Golden Rule". Years ago my mentor told me that if you want to sleep at night to never falter from following this simple rule... and it works. What we sell is not always the cheapest, but the service and price I do offer is always in the best interest of the client. Period. If the underwriter can offer it at $45K, then that's what I'd offer the client.
Swymmer
-
- Insurance Journal Addict
- Posts: 212
- Joined: Mon May 15, 2006 1:44 pm
- Location: Northern CA
$45k
The underwriters I work with know I don't haggle or give second looks. They are OK with that because I also don't give their competition the last look either. I ask for the best quote the first time out.
The problem is they don't always offer the best quote. I have had quotes get lowered by half from the original quote. there is no reason why an underwriter should not always offer their best quotes.
It doesnt look good to the client when you take a 10k quote down to 5k with the same coverage. Each quote I always ask to apply any/all discounts applicable.
It doesnt look good to the client when you take a 10k quote down to 5k with the same coverage. Each quote I always ask to apply any/all discounts applicable.
I always go with the best quote I can get from the UW. It's been my way since day one.
Big Dog wrote:hmmmm....isn't this the sort of stuff that got Marsh, AIG and others in trouble with the Spitz?
Bottom line - the carrier needs to give their best quote - period. The days of having a better quote in your back pocket are history.
-
- Insurance Journal Addict
- Posts: 366
- Joined: Fri Oct 13, 2006 9:10 pm
- Location: Southern California
Ethics
As a wholesaler, I hear this all the time....'my client is unhappy with XYZ Carrier and wants to move....". Now, why would an insured have issues with their carrier? Only 2 reasons I can think of....the coverage isn't what they were promised(bad retailer or wholesaler), or they had a claim that was mishandled. Otherwise, your insured doesn't even know the name of his carrier, let alone have any feelings about them.
So, Scott, when you pose this question, I would have to posit back to you that without a better handle on this risk from my retail agent, I would not even have gotten to the point of quoting.
Someday, we will all learn that it isn't Price....it is coverage and form. If my retailers don't get that, we don't do alot of business together. Questions like this just hammer home the conception that all we do is put out a number, and there is nothing else of value to our industry.
So, Scott, when you pose this question, I would have to posit back to you that without a better handle on this risk from my retail agent, I would not even have gotten to the point of quoting.
Someday, we will all learn that it isn't Price....it is coverage and form. If my retailers don't get that, we don't do alot of business together. Questions like this just hammer home the conception that all we do is put out a number, and there is nothing else of value to our industry.
"It's a typical day, on the road to Utopia.."
Leaving Money on the table
Underwriters have been doing this since day 1 and I have over 30 yrs in this professional industry. The buck starts with the carriers, no wonder consumers don't like the whole buying cycle. When you go out for dinner does the restaurant owner give you 2 prices for your meal. It all starts and ends with your underwriter...they control the pricing...why can't they give you their best price right out of the box, maybe this is why the online sellers are gaining ground
-
- Insurance Journal Addict
- Posts: 41
- Joined: Mon Nov 06, 2006 3:11 pm
- Location: houston
There's another issue that I think isn't being considered here...if you always insist that your carriers always offer their rock bottom price, then at some point their rock bottom price is going to go up.
With that said, what's wrong with partnering with your carriers to develop a premium that's fair for both the client and carrier, with rock bottom not always being fair to the carrier?
With that said, what's wrong with partnering with your carriers to develop a premium that's fair for both the client and carrier, with rock bottom not always being fair to the carrier?
-
- Insurance Journal Addict
- Posts: 212
- Joined: Mon May 15, 2006 1:44 pm
- Location: Northern CA
[quote="rcenters"]There's another issue that I think isn't being considered here...if you always insist that your carriers always offer their rock bottom price, then at some point their rock bottom price is going to go up.
With that said, what's wrong with partnering with your carriers to develop a premium that's fair for both the client and carrier, with rock bottom not always being fair to the carrier?[/quote]
I agree that you cannot always demand max credits for every account regardless of performance but it is the underwriters job to decide what is an adequate premium for the risk. I get annoyed when I am given a quote and when I advise the UW that they are not going to be presented, they can magically reduce their rate by 10-20% or more. Either they have actuarially sound rates or their don't. It seems like some carriers, specifically E&S carriers, are just trying to charge as much as they can get away with. I want what my clients want, the best rates and terms available, nothing more nothing less.
With that said, what's wrong with partnering with your carriers to develop a premium that's fair for both the client and carrier, with rock bottom not always being fair to the carrier?[/quote]
I agree that you cannot always demand max credits for every account regardless of performance but it is the underwriters job to decide what is an adequate premium for the risk. I get annoyed when I am given a quote and when I advise the UW that they are not going to be presented, they can magically reduce their rate by 10-20% or more. Either they have actuarially sound rates or their don't. It seems like some carriers, specifically E&S carriers, are just trying to charge as much as they can get away with. I want what my clients want, the best rates and terms available, nothing more nothing less.