Filed Under:Agent Broker, Agency Management

The Four Cs: The Model Agent/Company Partnership

Most know that Florida’s homeowners’ insurance market is poles apart from other lines and other states. For agents, one of the more challenging differences with a landscape dominated by domestic carriers and managing general agents (MGAs) is the appointment decision-making process. Specifically, what type of appointment should be made? Limited or regular, Citizens Property Insurance Corp. takeouts only or new business,  other options? Then there is the critical question of whether the partnership will produce a result satisfactory to the carrier, the agency, and ultimately the agency’s customers.

Some may recall a time when agency appointment decisions were based on the three Cs: competitiveness, contract, and commissions: Is the product competitive from both a price and coverage standpoint? Is the company’s contract acceptable? Are the commissions adequate to provide a reasonable return on servicing the business?

Before Florida’s residential property market relied almost exclusively on mono-line domestics, there was also a fourth C: compatibility. From the standpoint of automation and workflow, was the company a good fit?

The Web-based survey was sent to those agency domestic carriers writing over 90 percent of Florida’s homeowners’ policies. Accuracy is paramount, so after agent panelists assembled the original draft, it was screened and revised by half a dozen carriers for both accuracy and relevancy. An advanced hard copy was then forwarded so companies could better prepare to give accurate and complete answers on the final electronic version.

Once completed, the answers were returned to each carrier for another review, final revision, and the opportunity to write in qualifying comments. The final data set was then reviewed by agents of each company and, to the extent possible, inconsistencies were resolved, results corrected, and totals again recalibrated. The survey questions and the final report, due out shortly, will be available on FAIA’s website for agency members only and will be the most comprehensive survey of its type ever conducted in Florida.

An agency may know it will receive a 10 percent commission on new business, but are commissions paid on the gross premium? Do commissions differ by peril, territory, risk, size of agency or other factors?  Are commissions paid on an annualized basis or as earned? These issues matter, and can cost the agency many dollars by each year’s end, and certainly over the long haul.

Speaking of costs, what about inspections? How are they handled? Are 4-point photos, sinkhole inspections, and mitigation re-inspections required? If so, under what circumstances and by whom?

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