How Do You Plan to Use the Surplus Line Market in 2001′ Readers Respond

In the Sept. 4, 2000, issue of Insurance Journal we ran a one-page survey in hopes of finding out how you, our readers, plan on using the surplus line market in 2001. Four of the 32 respondents returned the form via fax, while the other 28 accessed the survey online via www.insurancejournal.com.

Our first question asked retail agents/brokers what type of risks they will be looking to place with wholesalers. An overwhelming 72 percent said that they would use a wholesaler to place individual risks. Meanwhile, only 9 percent said that they’d use a wholesaler to place program business. Nineteen percent replied that they would be looking to place both individual risks and program business with wholesalers in the upcoming year.

Agents clearly don’t enjoy wasting time waiting for a wholesaler, as indicated by responses to the next question asking agents to rank the most important factors in choosing a wholesaler. Options included price, quote turnaround, customer service, commission levels, relationship with marketing rep, market expertise, relationship with underwriter and a write-in space for other factors.

Quote turnaround speed received the first place vote as the most important factor, though respondents also felt that customer service, market expertise and the relationship with the underwriter also played a big role when choosing their broker.

Other important factors written in by some agents were a lack of another available market or the wholesaler’s competitiveness of coverage as well as price.

As far as the number of different wholesalers that retail agents and brokers use on a regular basis, 59 pecent of the 32 respondents said that they use 3-5 wholesalers; 19 percent use 1-2; 16 percent use 5-7 and only 6 percent said that they use eight or more wholesalers regularly.

While producers and CSRs do occasionally determine which wholesaler an agency will use, typically the agency principal/
owner makes the decision. One agent who responded to the survey indicated that the marketing manager could also make the decision.

Technology was another focus of our survey. Basically, we wanted to see whether or not the Internet has drastically influenced the way agents and brokers conduct business today. We conducted a web poll on this question, placing it on the homepage of our website and tallying the results. In total, we received 100 responses: 32 never use the Internet to place risks; 22 are just starting; 19 said sometimes; 13 said that they utilize the Internet all the time to place risks; and 14 said that the question did not apply to them.

The most common use of the Internet by our respondents was for submitting risks, getting quotes and finding markets. As far as binding coverage, only 19 percent said that they bind online.

Waiting for a quote-or slow quotes- ranked as the most frustrating part of
working with wholesalers. Other pet peeves included lack of knowledge about products
or coverages, followed by no return phone calls.

Typically, most agents are using wholesalers more than they were five years ago. A majority of the agents (69 percent) indicated they are using wholesalers more than they were in the past. Only 19 percent said that they submit about the same amount of business, while 12 percent said that they actually submit less than they did five years ago.

With so many wholesalers to choose from, one of the goals of this survey was to determine the best (and worst) out there. Thus our next question asked agencies which wholesalers they have had the most success with in the past. Agents were asked to list the best and worst wholesalers for customer service, pricing, quote turnaround, underwriting expertise, commission levels/agents incentive, claims service, market/carrier availability and policy issuance.

Many different wholesalers were listed, and no single one came out ahead as a clear-cut favorite. In fact, most of the major wholesalers were just as likely to receive a positive vote in one category as they were to receive a negative vote by another respondent in the same category. Many survey respondents listed one or two companies as positive or negative in all eight categories. The bottom line is that most agents seem to prefer working with wholesalers with which they have developed a strong working relationship in the past. In addition, having various markets and programs with one particular wholesaler is important to a lot of agents.

Seems like tried-and-true advertising
still works the best for getting the word out there-50 percent of the survey respondents said they hear about wholesalers’ programs through advertisements in trade publications; 31 percent said through referrals; and 19 percent said that they use directories to find their wholesalers.

Topics Agencies Excess Surplus