NAPSLO is set to spend nearly half-a-million dollars communicating the value of wholesale brokers to their customers, but the process has to start in individual wholesalers' offices, with actions as simple as picking up the phone.

Responsiveness--or lack thereof--as demonstrated by follow-up phone calls, is one of the qualities separating good wholesalers from bad, according to retail agents who completed a survey distributed by the National Association of Professional Surplus Lines Offices last month.

According to NAPSLO, 1,601 retailers responded to an e-mailed survey about wholesale brokers, giving the distribution system high marks overall.

During a conference call for NAPSLO members, Gary Kimball, an associate for McKnight, Kurland Baccelli--a Chicago-based marketing firm that completed the research--revealed that 82 percent of respondents rated specialty insurance wholesalers highly, giving them a score of "7" or higher on a 1-to-10 scale on which a "10" represents an extremely positive view.

"The result is far better than expected," he reported, noting that only 3 percent had strong negative views of wholesalers.

In addition, 86 percent of retail broker respondents were "very likely" to work with wholesalers in 2008, while 96 percent were at least "somewhat likely."

Going on to discuss answers to two specific questions about what qualities would prompt the wholesaler to use or not use a wholesaler to place specialty business, Mr. Kimball highlighted one factor that appeared on both lists--responsiveness. He explained that the appearance of this factor as both a potential positive and negative in rating retailer experiences indicates this is a critical differentiator.

Another factor turning up on both lists was professionalism, Letha Heaton, a member of NAPSLO's board, told NU during an interview at the NAPSLO midyear conference last month in Scottsdale, Ariz.

"It's almost the juxtaposition of responsiveness," she said. "If somebody is not responding to you, and you're compensating them in a way that you think is not fair" or is extreme, "then you're going to say, 'They're not operating with professionalism because professionals give me value for my dollar.'"

Like Mr. Kimball, Ms. Heaton--who is also co-chair of the Communications and Technology Committee of NAPSLO, which developed the 17-question survey--noted that the overall satisfaction scores were much better than NAPSLO wholesale broker members thought they would be.

"I think sometimes we misinterpret the market cycle with our reputation," she said, noting that with the market softening, some members linked cycle impact on their businesses with dissatisfaction.

What's probably the most important takeaway "is that now is the time to differentiate yourself" if you're a wholesaler, she said, referring to the conclusions about responsiveness and professionalism. "We know what it takes to be effective, and there's less opportunity [for business] out there. Let's get that done."

However, Ms. Heaton--a senior vice president of marketing for Deerfield, Ill.-based Shand Morahan and Company Inc., a unit of Markel Corp.--admitted to being surprised by statistical evidence and written comments on the surveys focused on the two areas for wholesaler improvement.

"As an insurance company and as an association, our perspective is that we deal with the best of the best, and these were their databases," she said, referring to the fact that the names of retailers to contact for survey purposes were supplied by large wholesale broker members of NAPSLO.

If customers "don't see responsiveness on the part of the wholesaler, they don't see responsiveness on the part of Markel because that's how they know us," she said. "It's critical to us. We want that channel to be highly effective."

Written comments explaining retailers' views were very basic, she said.

"All I want is a phone call back," one comment said, according to Mr. Kimball.

"It wasn't responsiveness in terms of 'you don't give me the lowest price or the best coverage,'" Ms. Heaton noted. "It was, 'I don't know where you are at in the process as my advocate. I don't know when you're going to get back to me'--very basic customer service."

During an interview at the NAPSLO conference, Alan Kaufman, CEO of Burns and Wilcox--a Farmington Hills, Mich.-based wholesaler and MGA--told NU his firm has done its own independent research that also reveals a retail focus on timeliness.

"The number-one reason they choose a business partner in our world is because of service," he said. "You have to be agile, quick" as a wholesaler, he said.

Mr. Kaufman said his firm continues to harness the power of technology, working to continuously improve in-house applications to quote and bind more efficiently.

"We feel in this market, however, we have to act even quicker," he said, noting his firm is "very keen on increasing the magnitude of [its] underwriting authority." Burns and Wilcox has authority in-house on a lot of products, he noted. "We think that will definitely put us ahead."

Working with results from its survey, NAPSLO--which counts both excess and surplus lines carriers and wholesale brokers among its members--is developing the next steps at the board level.

"We'd like to spend $480,000 on a positioning and advocacy campaign that gets people to act on the things the survey tells us our agents--your customers--want us to do," said Ms. Heaton, noting that first members need to validate an action plan.

Initially, a letter will go out summarizing the results and the budget, asking for feedback. It will ask: "Are we serious about this as an organization? Will you support it? Will you do the things we need to do to make sure that we can deliver what our customers are asking us?" she said.

"The concept of adding value is the heart of what we need to get at," said Lisa Brenner, an MKB executive who led the research, explaining that marketing efforts need to stress the value wholesalers bring beyond access. Speaking during the February conference call, she said any campaign should demonstrate that retailers' placements of specialty business would be "much more complex and not as qualitative if done without wholesalers' support."

Ms. Heaton noted that access involves more than simple contact with insurers, but also wholesalers' understanding of what each insurance market can do, when and how, as well as an ability to customize solutions. "There seems to be a gap between the efforts and [an understanding] of the value that wholesalers bring," she said.

Ms. Heaton envisions a "very grassroots" campaign emerging. "It will be a campaign in the traditional sense, not just advertising and promotion," she said, noting that NAPSLO will provide materials that members need to go out to talk about the value points to their clients.

"Everybody needs to be behind it--to embrace it, act on it, walk it and talk it."

Also on the agenda is an effort to gauge the opinions of the ultimate customers--risk managers--about wholesalers. While an attempt to get their views with an e-mail survey to a small list of risk managers was unsuccessful--only two responses emerged from roughly 2,000 surveys sent out to what NAPSLO now believes was not a well-targeted list--the plan is to conduct direct interviews with a focus group, perhaps at the April meeting of the Risk and Insurance Management Society.

Special Reports /

Retail Agents Give Wholesalers High Overall Marks, But Seek More Contact

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