Making an informed choice when selecting commercial insurance can significantly impact a company’s bottom line. The process can be difficult. Understanding the dynamics of the commercial insurance market is helpful.

The quoting process is complicated because underwriters often lack information necessary to make quote comparison easy. There is a flux in the marketplace. Prices have been increasing. At the beginning of the process, brokers position a business with an insuring company.

The underwriting communities will be informed whether your business is seeking a new policy or a renewal. Competition level is also relayed to carriers by the broker. This is critical knowledge. Insurers provide only on broker with a quote for your business.

One broker submission is done because providing quotes is so time intensive. Carriers focus on business they feel they can win. Multiple brokers indicate aggressively shopped business. Competitive bids requests signal that price may be more important than value or long-term relationship. While cost is critical, insurers want prospects to consider the financial strength, claims paying reputation, and client service. Making underwriting decisions that have long-term profit potential is the force that motivates carriers. A company or broker’s pressing needs do not take precedent over risk management.

This article suggests the best commercial insurance choice is to have a reliable broker. There are three variations of choosing an insurance company. The choices are interviewing a broker, requesting a proposal, or soliciting competitive bids. Live interviews often uncover information that is not provided in written form. It is easier to understand strategy and tactics when explained by a person to prospective clients. While companies often request written documents, taking time to read and digest a proposal is seldom done. Selecting a broker provides adequate lead-time and avoids rushed decisions due to pending renewal dates.

A growing number of businesses are using the request for proposal method. Detailed questions about the capabilities of a broker are answered and submitted in writing. Talking with clients about issues and needs is barred.

Many brokers turn the task over to a proposal team to handle the time-intensive job. A compelling and visually appealing case is designed by graphic designers and writers. These individuals often lack the expertise needed for risk management. They have limited experience writing client proposals. Clients need to carefully examine Request for Proposal documents.

The multi-broker bid approach seems rational in theory. Often the process fails in its intended purpose. Experienced insurers and brokers are discouraged from participating in the process of rendering quotes.

Herndon Carr
10501 Six Mile Cypress Pky #101
Fort Myers, FL 33966