INSURANCE BROKER

Insurance Broker

Insurance Broker

Factors that I would have considered in reaching Decision

The current hard insurance market has created a return to the days of doubt and concern for obtaining quotes from insurance carriers. This is a condition not seen since the early 1990's. For many, it has even brought consideration for using the dreaded "assigned risk" pool again. So how does a company determine the options available with this market? The first step is to determine my insurance desirability; that is, how attractive I are to the insurance carriers.

Determining my insurance desirability involves many factors. When an underwriter gets my submission, he is going to focus on certain points to determine if my account is favorable to even consider a quote, much less give a competitive price. Therefore, I must package my submission in such a way that it provides the underwriter with the information he needs quickly, conveniently and completely. Otherwise, he will just decline the submission and send I elsewhere (remember it is now their market).

The five primary types of information an underwriter considers are Exposure Base, Underwriting History, Risk Management Program, Insurance Program Type and Company Financial Position. Failing to include any of these pieces of information jeopardizes the opportunity for receiving the quote. Since my first goal must be to get a quote, it is critical that each of these components is present. Once I have determined that they are there, I will want to work on the attractiveness of each section. Let us look at each of these areas in detail.

Steps In Obtaining Quotation For My Client

The Exposure Base is used to determine the type of business on which my company focuses its operations. Are I clerical, light industrial, industrial, technical, medical or a combination thereof? Many staffing company owners assume that clerical has the least exposure and will be the easiest to insure. That is not necessarily the case. Although clerical exposures tend to have fewer incidents, often they can be very expensive claims (carpal tunnel for example). When I consider that clerical premium rates are among the lowest, not much premium exists for funding losses that may occur. Therefore, it only takes one or two claims to make my account unprofitable for the carrier. The most attractive mix of business for carriers is a combination of clerical and industrial exposures. This provides them with the comfort of knowing adequate loss funds exist to pay claims.

Changing my exposure (from light industrial to clerical for example) is not something that is easy to adjust in a short period of time. I only have limited control over making my company attractive in this component. The best approach is to provide complete and accurate payroll projection information. Projecting too low to get a lower quote will only send up red flags that I are either hiding payroll or expect a business slump. Since carriers like to insure companies that are in a steady growth position, I are best served to be optimistic, yet realistic, in my ...