
You must have heard the stories: -
During the 80’s insurance deals were done over a cocktail at lunch and agreed on a napkin.
During the 90’s insurance deals were done mostly in the morning.
During the 00’s insurance deals were done in offices with a nice lunch or dinner afterwards to celebrate the win.
During this time there was a huge amount of social interaction, trust and a flamboyant way of doing business.
The advantage with this was being able to tell a client’s story face to face, bringing accounts to life and creating social engagement for all stakeholders, the client, the broker and the underwriter.
The disadvantage was the inefficiency due to the various interactions in bringing a client to market, which involved standing in queues for hours and looking at the Lloyd’s walls.
A well-known story at the time involved an infamous supporting company underwriter wandering off in the middle of an underwriting session with a packed waiting room. When the brokers asked after his whereabouts, they were finally informed, “the Underwriter has left the building and is now on holiday!”
The art of the broke in London during these times was to negotiate a strong respected lead underwriter for the class, by having a comprehensive information booklet and an in-depth knowledge of the risk was key to achieving the best terms. Underwriters’ decisions were made very quickly, sometimes in seconds, due to the number of brokers in the queue and this led to good internal working practices.
As a broker, if you didn’t know your risk or were unable to articulate what you were trying to negotiate, you were literally thrown out and sent to read the submission and then rejoin the back of the queue in embarrassment. This was due to the supply and demand of the brokers waiting behind you.
The next art was to set up the supporting underwriters in such a sequence that the following underwriters would perceive you had a very strong placement just by looking at the players already on the slip. If you had the key players involved, it would fly round the supporting market - everything was very visual.
This was done with lots of social capital, reputation, trust and friendship.
To do this, you had to know everything about the client, have a strong written proposal that backed up your story and be able to represent your client to the market. Some of the larger broking companies were very disciplined with their presentations and did a really good job at this.
Since then, with Covid helping to speed up change, the industry has really pivoted on how it does business, but unfortunately the social/emotional ownership has been lost. The digital process, wherever you are in the world, works roughly the same:
The local broker collects the information and sends it to the market either directly or through intermediary brokers by an email, rather than face to face. It has become too easy to push the button and send the submission without any structure, basis or proposal.
Remember, previously, you had to have a polished proposal before you could step into the market. Ask yourself this question: does the recipient have all the information in a structured, easy to read proposal that sets out the terms you are looking for and makes life easy to qualify?
Everyone always says that we are a people business, so how do you get the opportunity to tell the clients story in the digital world and recreate the “art of the broke” of the past, bringing the clients story to life? Great question!
Observations!
If you chase an underwriter multiple times with no response – does that sound familiar? They are probably too busy, have no interest in the risk, the submission is too wieldy, or they are working on easier accounts.
Do underwriters respond quickly to a piece of business they like – normally yes if they can see the deal quickly. Especially when it’s put across in a quick and easy way to understand.
The art of the broke is no longer in the opening verbal line, “Hello, I have the best risk in the world waiting for your capacity!”, it’s now in the art of the presentation of the email or digital upload.
Let’s not forget about the important internal peer reviews too. All our underwriters will turn into our broking team when they need to gain approval from their manager for the risk they want to write. It’s up to us to get them up to speed as quickly as possible and on our side in order to present the risk in the best possible way.
The art of the broke is taking what we did well, previously face to face and putting it into a written short story the receiver can comprehend quickly and easily. Remember Underwriters time is very limited and in huge demand.
More questions!
Underwriters are without doubt overworked at present. Their inboxes are jammed with submissions, and they probably don’t have the resources they require, due to the shift in working practices and the overall results of the industry. So: -
Which accounts do they work on first?
How can you get your clients story over quickly?
How can they tell whether your client’s risk is within appetite?
Have you ever read a business plan? Sometimes they can be thick, chewy, and boring to read so to help the reader carry on, an executive summary is provided at the start which brings out the highlights of the plan. The reader can either read on or move on!
The “opening memo” of the new opportunity email should be the same as this, summarising what you have and what you would like / require from the underwriter.
We often receive emails with just information about risks, nothing is summarised, no explanation of what the broker requires in terms of coverage or structure, we are supposed to just know, so imagine a grumpy underwriter with an inbox full of emails?
Clients are paying us to obtain the best terms for them, however, submissions never seem to be a proposal anymore just a large sequence of attachments which are uncorrelated and need the reader to piece together the puzzle and to “solve the mystery”.
Everyone always leaves out the underlying problem of a large loss. Wouldn’t it be better to address it, tell the reader what happened and what the client has done to try and prevent reoccurrence.
Sending an email with multiple attachments is again problematic and overloading. If you receive more than 3 attachments ask yourself, which one do I open first? Do I have time to wade through this right now? Information overload, some of it is just padding anyway and doesn’t add anything to the reader.
Lastly, it’s very easy to send an email, it’s more difficult to refrain from sending one. The next time you send in a new submission ask yourself, is the recipient going to understand exactly what I am looking for or is there a “murder mystery” to be solved by the receiver? If so, then PLEASE take some time rethinking. Remember, you only have one chance, the last thing you want is a negative reaction from an underwriter, their original thought is normally their last.
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