Are BoRs adding to the problems?

It's time we address the secret weapon of insurance sales, the BoR, or broker of record letter. For the lazy sales person they are an easy way to get business, promise something better and deliver the same. However, for the astute brokers they are a smart tool that can help an insured find service and value not provided before but that's if we're all transparent about what's really happening in the market.

Too often I have experienced lost business to BoRs that have nothing to do with our service as a sales team or brokerage. It's the insurance company driving the experience and the problem. Now more than ever renewals are late or, in some cases, non-existent by presentation date and no one can give the client terms or guidance so they can make an informed decision about their insurance needs and insurance. This problem is only magnified by capacity and risk appetite challenges, issues which already make providing clients advice and expertise difficult.

Let's be fair to insurance companies though (I'm an equal opportunity whiner), brokers and agents are frequently looking for the fast way through and not providing necessary information in timely fashion. That issue however does not diminish the issue of what a client understands about the broker-client relationship and how this industry works. We all have some work to do about transparency so the client understands what we are doing for them.

Back to the gripe line. A few times this first quarter business has been lost because a client has been unsatisfied with the service related to a policy renewal and details, plus rate, plus options. But the insurance company did not lose the business, we did. It did not affect their retention, it did not affect a person's income, nor did it affect measurable KPIs or revenue like it did for us, let alone CPC calculations.

Through persistent calls, often not returned, and emails, quick replies or none at all, the insurance company deals with internal workloads but puts the broker's needs down the list. These are the needs we have been reminded about for years from insurance companies to address for our 'customer journey' with them. The needs they want us to address for data that leads solid and accurate underwriting, often never shared back to broker partners. The client hangs onto empty promises and grows weary, eventually they look at a business card or email from another broker and decide to finally ask 'hey can you help me here, my broker can't get me a policy on time'. The response, and we've all done it, is said with a charming smile 'I can help but need you to sign this letter authorizing me to act on your behalf.' *nudge nudge, wink wink*

In comes the broker of record letter just as the policy and terms are being finalized and out it goes to the new broker. Sometimes there is a required, or not, new application but the damage is done and any discrepancies can be addressed later. The client sees a solution and the incumbent broker left wondering what they could have done better? Who could have helped sooner? What they could have explained to the client to prevent frustrations and a desire to look elsewhere.

In conversations with companies I respect their position to support all partners, that's necessary because our company wants the same treatment.

But is this fair or equitable?

If it was fair the insurance company would inform the client that the incumbent broker was not at fault and affirm the position of the incumbent as a valuable and respected partner, capable of serving the customer to standards the company expects from partners. If the situation is to be equal, the new broker should not hear anything for 3 weeks, then asked for more information before responding the following week with a policy so the client has had the exact same experience because clearly that experience was acceptable to begin with.

Truth be told, companies should demand more from broker of record letters. In fact perhaps a declaration that has to be signed by the client to show the new broker was transparent about the underlying issues. Transparency is everything and clients should know how this industry works behind the scenes, particularly when it comes to efficiency and experience. However, what is the incentive on the side of the underwriters to act differently? They are overloaded, overworked, behind on so many fronts and if they can get one more account off their desk does it matter to whom?

What's the solution?

That's a tricky question to answer because it means getting into the weeds of why we are at this point. Yes, staffing is brutal on all sides but let's be honest, this staffing time bomb has been staring everyone in every industry in the face for 20 years, demographics are not a trade secret. Insurance companies are in a constant state of transformation with technology and growth and more. As my wife likes to say to the kids, 'poor planning on your part does not constitute a crisis on my part'. Brokers are practically victims due to so many challenges they face with insurance company transformations. How many brokers have received email bulletins these past few years saying 'we can't accept much new business right now' or something similar? Then there is the capacity and reinsurance challenges no one thought about 3 years ago. How many times are brokers with large accounts hearing 'I'll get back to you about this once I price in more reinsurance?'. Finally, split-rating. 'Oh we can't lead, our system cannot do that, not allowed to participate'. Don't get me started on that front.

What we have here is more piling on with broker of record letters adding to the chaos and the simple solution is a business rule. Like the ones like we have with underwriting that we're all familiar with and manage everyday. If a policy or terms have not been issued within 30 days to the incumbent broker decline the broker of record letter. Tell the new broker that until terms are issued and the client has reviewed them with their broker, reassignment will not happen. Simple right?

Well nothing is ever simple but something has to give, and as an industry if we are true to our partnerships, our purposes, the client journey and experience, we should act to account for these conditions. Financial services are built on trust and insurance is no different. Once trust begins to erode it can trickle down in other ways and take a long time to be rebuilt. The mutual clients between insurance brokers and companies need to trust our relationships are there to help them. Furthermore, one broker should not be able to work against another for the same client when another party is determining the experience and outcome. That last part we can control and brokers should start asking for it and I hope insurance companies are receptive.