Exclusives with Carriers

Aug 26, 2016

  1. GoingIndy
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    GoingIndy Expert

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    Is it legal for insurance companies to enter into exclusive relationships with Brokers thus preventing other Brokers from accessing those Carriers?

    I don't mean from a quoting standpoint, I mean strictly just access. I'm noticing more and more insurance companies entering into these relationships with certain Brokers thus making my job more and more difficult to succeed in.

    I don't see how these relationships benefit the client at all. They're forced to work with Brokers they may not want to deal with but have no other choice if it means writing with a Carrier that gives them the best package.
     
  2. Matt37
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    Matt37 Super Genius

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    I was on the agency side for about 10 years and then the carrier side about 12 before going out on my own with an RRG and I will say on the carrier side I love exclusives.

    two things I always looked for were exclusives and franchise opportunities.

    Looking back I remember a hand full of exclusives I did .. one for Godard Schools, now defunct Chi-Chi's (remember those Mexican restaurants) .. yup insured all of them.. remember why it is now defunct?? .. yup that was a nice claim.

    The reasons I liked them was a few reasons: 1) for franchises they wanted to deal with one agent and have a clean channel for franchisors to go through.. when a franchisor bought a Chi-Chis franchise they had no choice.. they just simply got a dec page the first day of opening and were told where to send the premium.. makes it much less messy than every location being with a different market.

    From a carrier perspective they are nice.. because they are cookie cutter, all exposures are exactly the same.

    Similar mindset, I liked working with one broker because you can create your own apps for that broker, get comfortable with their submission process, and its just uniform.

    I tried slimming down the agency pool as much as possible, and wholesalers and aggregators were out immediately.. their submission were horrendous.

    But again: each carrier is different and it depends on what their goals are.

    Some agencies that write BOP type business want a massive agency force, I didn't.
     
    Matt37, Aug 26, 2016
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  3. GoingIndy
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    I can't tell you how many times I have a client tell me they want to stay with me but because we've been "blocked" from access to a particular Carrier that we know offers a better package, we end up losing the business. And as I mentioned, I don't mean blocked from quoting, I mean blocked because of an exclusive relationship another Broker has with that Carrier. So it forces the client to switch Brokers even if it means them being unhappy with them.

    I've known Brokers with exclusives with horrible service issues. It's as if they know it doesn't matter because where else is the client going to go?

    I can see how it makes sense for the Carrier but no sense for the client and isn't that who's most important?
     
  4. insurance1822
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    insurance1822 Guru

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    ^That's what scum carrier reps like to say...but no of course not. They do what's best for the company's bottom line.
     
  5. shawnmwalker
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    shawnmwalker Guru

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    I would love to hear more about the Chi Chi's thing if possible.... HEP A! 606 contracted cases. 4 Dead?

    I would LOVE TO HEAR MORE! even a PM and a Quick call. I would love to hear more!
     
  6. Matt37
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    Matt37 Super Genius

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    Lots of sleepless nights my friend.

    The onions were tainted by supplier in Mexico but in PA..liability laws states Restaurant is responsible for their suppliers... So that wouldn't have worked.. Plus they didn't have deep pockets so why go after them.

    I will say not to much surprise in a claim
    This large .... They didn't have nearly enough coverage

    We had it layered ... I do remember GenRe had a big excess chuck.. They wrote like a $25M check or so.. And they had just filed chapter 11 and had to get the judges approval to use funding to pay the deductible ... Which if I remember was $500,000 or so... Some of the layers were first dollar coverage though!!!!!

    Was a good insurance story for my kids for sure.
     
    Last edited: Aug 26, 2016
    Matt37, Aug 26, 2016
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