NAPSLO is set to spend nearly half-a-million dollarscommunicating 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 the lack of it--as demonstrated by follow-upphone calls, is one of the things separating good wholesalers frombad ones, according to retailers who completed a survey distributedby the National Association of Professional Surplus Lines Offices,Ltd., last month.

According to NAPSLO, 1,601 retailers responded to an e-mailedsurvey about wholesale broker, giving the distribution system highmarks overall.

During a conference call for NAPSLO members, Gary Kimball, anassociate for McKnight, Kurland Baccelli, a Chicago-based marketingfirm that completed the research, revealed that 82 percent ofrespondents rated specialty insurance wholesalers highly--givingthem 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, notingthat only 3 percent had strong negative views of wholesalers.

In addition, 86 percent of retail broker respondents were "verylikely" to work with wholesalers in 2008, and 96 percent were atleast "somewhat likely" to work with them.

Going on to discuss answers to two specific questions about whatqualities would prompt the wholesaler to use or not use awholesaler to place specialty business, Mr. Kimball highlighted onefactor that appeared on both lists--responsiveness. He explainedthat the appearance of this factor as both a potential positive andnegative in rating retailer experiences indicates this is acritical differentiator between wholesalers for retail agentcustomers.

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

"It's almost the juxtaposition of responsiveness," she said. "Ifsomebody is not responding to you and you're compensating them in away that you think is not fair" or extreme, "then you're going tosay, 'They're not operating with professionalism becauseprofessionals give me value for my dollar.'"

Like Mr. Kimball, Ms. Heaton, who is also co-chair of theCommunications & Technology committee of NAPSLO, whichdeveloped the 17-question survey, noted that the overallsatisfaction scores were much better than NAPSLO wholesale brokermembers thought they would be.

"I think sometimes we misinterpret the market cycle with ourreputation," she said, noting that with the market softening, somemembers linked cycle impact on their businesses withdissatisfaction.

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

"That's a wonderful message for our membership," she said.

However, Ms. Heaton--a senior vice president of marketing forDeerfield, Ill.-based Shand Morahan & Company Inc., a unit ofMarkel Corporation--admitted to being surprised by statisticalevidence and written comments on the surveys focused on the twoareas for wholesaler improvement.

"As an insurance company and as an association, our perspectiveis that we deal with the best of the best. And these were theirdatabases," she said, referring to the fact that the names ofretailers to contact for survey purposes were supplied by largewholesale broker members of NAPSLO.

If customers "don't see responsiveness on the part of thewholesaler, they don't see responsiveness on the part of Markelbecause 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, accordingto Mr. Kimball.

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

During an interview at the NAPSLO conference, Alan Kaufman, CEOof Burns & Wilcox--a Farmington Hills, Mich.-based wholesalerand MGA--told NU that his firm has done its own independentresearch that also reveals a retail focus on service andtimeliness.

"The number-one reason they choose a business partner in ourworld 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 oftechnology, working to continuously improve in-house applicationsin order to quote and bind more efficiently.

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

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

"Clearly there's a potential opportunity within NAPSLO to createstandards of excellence so that people understand [what] clientshave told us they need to be effective, she said, suggesting thatthe organization "in some fashion" will recognize and supportpeople who work to achieve standards of excellence.

She said NAPSLO's immediate plan is to share survey results withthe membership.

"We'd like to spend $480,000 on a positioning and advocacycampaign that gets people to act on the things the survey tells usour agents--your customers--want us to do," she said. But firstmembers need to validate an action plan.

Initially, a letter will go out summarizing the results and thebudget and asking for feedback. It will ask, "'Are we serious aboutthis as an organization? Will you support it? Will you do thethings we need to do to make sure that we can deliver what arecustomers are asking us?'" she said.

One survey result NAPSLO will seek to build upon as it movesahead with the task of marketing of value of wholesaler brokers isa finding about the main reason retailers come back towholesalers--because they provide access to insurancecompanies.

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

Ms. Heaton noted that access involves more than simple contactwith insurers, but also wholesalers' understanding of what eachinsurance market can do, when and how, as well as an ability tocustomize solutions. "There seems to be a gap between the effortsand [an understanding] of the value that wholesalers bring," shesaid.

Summing up, Ms. Heaton told NU the next step, "if we're seriousabout this" is for NAPSLO membership to embrace a comprehensiveaction plan. "It doesn't mean just go ahead and spend money to getthe value-added message out. [Members] need to take seriously theinput they got."

"We're pretty well respected for our expertise and for ourmarket access. We'll start by celebrating that first," shesaid.

She added, however, "We can't start talking about beingresponsive until we are."

Ms. Heaton envisions a "very grassroots" campaign emerging. "Itwill be a campaign in the traditional sense, not just advertisingand promotion," she said, noting that NAPSLO will provide materialsthat members need to go out to talk the value points to theirclients.

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

Also on the agenda is an effort to gauge the opinions ofultimate customers--risk managers--about wholesalers. While anattempt to get their views an e-mail survey to a small list of riskmanagers was unsuccessful--only two responses emerged from roughly2,000 surveys sent out to what NAPSLO now believes was not awell-targeted list--the plan is to conduct direct interviews with afocus group, perhaps at the April meeting of the Risk and InsuranceManagement Society.

See related article, "High Scores For Wholesalers" for moredetails of survey responses.