Its getting tougher and tougher to get appointments with P&C companies. To many agents are writing to much bad business just to get a commission check.
Dan
Officially Appointed
- Thread starter nyc2phi
- Start date
Its getting tougher and tougher to get appointments with P&C companies. To many agents are writing to much bad business just to get a commission check.
Dan
- 414
Amen, many companies (Erie, Safeco, Travelers) are terminating agents with high loss ratios. This will make it even harder for new agents to get appointed as well.
NYC - I took the special contract but I have Progressive, Foremost, AIC, and Hartford in addition to Erie. As long as you are selling most with them the first 3 years you are good to go.
- Thread starter
- #14
Tony I am interested to hear a response on your question as well since I really do not have a good answer.
I think part of it comes down to knowing your client and making sure they are telling you the truth when it comes to certian information.
Binding authority.
Binding authority allows agents to write bad business and issue the policy, even if its outside of company guidelines. Agents ARE the underwriters in many cases, especially for standard business. Many agents forget this is part of their job, to make sure the risk fits the rate and that the rates are set on having the right risk.
I'll give you an example from my own experience, though I can ramble off many, many examples......
I had a prospect call me and say they wanted to come in and finally get their policy started for her car. This was a younger gal and I had her parents insured for years. Her and her mom were coming to get the policy in a couple of hours. Okay, about time.
They get there, with her car. They park the car outside my office. Big window, I see it. I walk around it to make sure it is reasonable and no pre-existing damage. We write the policy, chit-chat, they leave.
Next day, claim filed. I get a call from the investigator asking me why I issued the policy and did I see the car. Usually, this isn't a big deal, but they had an accident the SAME day as the policy was issued, this raises red flags. I assured the investigator I had seen the car and there was no accident damage, just normal road wear.
Turned out, they had gotten into an accident PRIOR to coming to my office to get the policy, in fact, the accident is what prompted her to finally get the policy started. No real damage to her car, but reasonable damage to the car she hit. Of course, the other party is the one that filed the claim.
I realized I never asked if there were any potential claims to be filed when I issued the policy. I should have, but didn't. In this case, it only cost the hassle of the investigation and the denial, but that is real cost to a policy that should not have occurred.
Dan
P.S. An underwriter wouldn't have caught this either, but that is why they have agents underwrite policies.
- Thread starter
- #16
Yeah this is basically what I was getting at.
I had something similar that I caught before hand..
Was going to insure a home with no prior, before I bound it, I went into there to take pictures of the property to find that parts of the roof were missing and it was in a neighborhood that looks like an episode of the first 48... I decided not to write that policy.
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Why does this company make it so tough?
Do they have an exclusive product?
???
Do they have an exclusive product?
???
- Thread starter
- #18
Appointing a scratch agency can be very risky for a company. Erie is one of the few carriers that will appoint one. In doing so, they want to make sure you are a perfect fit for their model and they want to be the # 1 carrier in the life of your agency.
They have plenty of agents already.
It costs money and time to bring on an agent. Other good performing agents get irritated. Unless it has a net positive, no need to do it.
Also, a lot of P&C companies don't need additional business right now. They have tightened up underwriting guidelines to steer any real risk elsewhere. Add to that, much more on the P&C side, companies only want a certain amount of exposure in a given geographical area and if they have a lot of agents in an area, they can get over-exposed.
Think about the homes in Joplin, OK with the tornado this year. Would you like to be a carrier that insured 25% of those homes or the carrier that insured 5% of those homes? Losses can add up quick if you have a big exposure in one area. Ask Allstate with Katrina. Many examples of carriers being overexposed.
Dan
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