Ethics Case #2 - What Price For Client

[traevaughan]

None of you folks are undewriters, are you?

[volstrike3]

[quote="traevaughan"]None of you folks are undewriters, are you?[/quote]

No, most of us are retail and wholesale agents & brokers. Please enlighten us how a carriers rates can vary by 20%+ when none of the underwriting information has changed. The only difference is that you have competition.

[njexpat]

Missing from this ethics lesson, Scott, is whether we are acting as a broker or an agent. While this response seems pretty black and white, the answers should follow: brokers should present the 45k offer; agents the 50K offer, as each has a duty to place a different party's interests first.

If you accept this position, an interesting question becomes: how do you react if you are personally licensed as a broker, and your employer has an agency agreement with the carrier.

BTW - this is a FAR CRY from the bid rigging activities that Marsh 'brokers' were orchestrating.

[wlunday]

Volstrike3, the issue isn't mearly competition. Many Sr. Underwirters develop a relationship with the producers that allows for what I call "underwriting credits".

For instance, if your agency, and you in particular, are producing a good block of business with the company, in a particular industry, and you have a long-term track record of high profitability... the underwriter can use some discretion when pricing for you.

Me, on the other hand, not having said relationship or track record, will only be offered the "rack rates" or manual rates for the same submission.

This is what helps great agents maintain carriers and relationships. Commercial production is nothing like personal lines quoting. It is as much about relationships as the risk itself.

Swymmer

[volstrike3]

I am with a large commercial agency and I primarily work on large commercial accounts. I am also very familiar with credit authority. My issue is with UW's that do not give their best quote and then expect a second or third look. I expect what my clients expect, your best numbers the first go around. Underwriters that don't like "to leave anything on the table" do not get a lot of business from me. I bring them good, clean business and they bring me their best shot. My relationship is with my client and I will do everything I can to provide exceptional service and bring them the best rates and terms.

[scott]

Recap... The underwriter told you the quote is 50 - she can go to 45. The client said he will move for 55.

So, do you quote the 45k, 50k, or the 55k to your client?

This isn't about the underwriter. It's about you and the price you give to your client.

Do you give the client the best price or the price they asked for? Perhaps you split the middle?

[njexpat]

....this question / exercise was framed as an "ethics"

[volstrike3]

[quote="scott"]Recap... The underwriter told you the quote is 50 - she can go to 45. The client said he will move for 55.

So, do you quote the 45k, 50k, or the 55k to your client?

This isn't about the underwriter. It's about you and the price you give to your client.

Do you give the client the best price or the price they asked for? Perhaps you split the middle?[/quote]

She would need to go to $45k.

[badger]

this has been going on for years, will for another 100, why make this an ethics case. pricing is subject to who's eyes and appetite are loking, wake up