Filed Under:Agent Broker, Agency Management

Agent & Broker 2012 Outlook

Tightening underwriting and carriers courting independents seen as top trends

To gain some producer-level perspective on the outlook this year for the P&C business, NU spoke with some major players across the agent & broker spectrum to discover where the greatest opportunities—as well as the most daunting challenges—lie in the year to come.

Continue to see who we spoke to, about what's ahead.

________________________

David Eslick
Chairman and CEO
Marsh & McLennan Agency LLC, a subsidiary of Marsh

Kevin T. Kenny
Executive Vice President/Head of Distributed Insurance Brokerage
Wells Fargo Insurance Services USA Inc
.

We should not overcomplicate our role. Agents and brokers aspire to be trusted advisors to their clients, and in that role we must adapt intuitively to the needs and expectations of our clients. Times change, technology changes, the economy changes, regulations change…we must change, also.

Ken Crerar
President
The Council of Insurance Agents & Brokers

Consultative sales, where a broker works as a partner with the client in identifying and managing risks, is the way of the future. As more businesses embrace enterprise-risk management, the broker’’s role and value becomes more important to them. Many brokers are responding to customers by adding more professional services and expertise to assist the client. Brokers are morphing into consultants along the lines of lawyers, accountants and other similar professionals.

Brian Kawamoto
Executive Vice President/Managing Director
Lockton Inc.

Data analytics is growing in importance to clients in both our actuarial and our benefits and health-and-welfare practices. We are using data in a transformative way to guide our clients to make informed decisions.

Dave Evans
Senior VP, Independent Insurance Agents & Brokers of America
& Executive Director of Trusted Choice

As the direction of the insurance market starts to change—but before the broad market-price increases of a hard market—carriers begin to tighten their underwriting criteria, which tends to leave agents to scramble to find other markets to place risks that they have had for years. That is the one dynamic that we are going to see the most of in 2012 as the underwriting appetite tightens up. Independent agents will have to become creative in solving hard-to-place risks.

Jim Gault
President of Brokerage Services
Arthur J. Gallagher

We’re transitioning from a market that has been very soft to one that is much more underwriting-focused. It appears that for 2012 insurance carriers will be much more focused on underwriting for profit, especially in the lines of Property and Workers’ Compensation.

Christopher A. Brassard
Executive Vice President
Ten Eyck Group

The challenge for the independent agent in this firming environment is that they will have to work a lot harder and perform their due diligence for their clients. There is plenty of capacity in the marketplace, but carriers will continue to seek rate increases where they can. Losses have put pressure on earnings.

Keith Savino
President, Professional Insurance Agents of New Jersey
& COO of WRG

Independent agents and brokers can expect our field’s evolution to continue and even accelerate, as we and our clients continue to use new and improved tools. The continuous introduction of new channels of communication will allow those of us who plan for this to become more efficient and effective. While this is taking place, those of us who remember that the P&C field is a relationship-based business will prosper both in personal and commercial lines.

Matt Keeping
Chief Placement Officer
Willis North America

After many years of a soft market, the industry is in flux. We are not expecting a widespread hard market in 2012, but there is upward pressure on pricing, and we are seeing pockets of hardening.  

Leonard C. Brevik
Executive Vice President and CEO
National Association of Professional Insurance Agents

We just concluded an 18-month, nationwide research project conducted by the PIA Partnership, our company council, which focused on what insurance customers really want. Our research shows that insurance customers are looking for expert advice and counseling; personalized attention and interaction; the ability to receive comprehensive protection to meet individual needs; and excellent relationship-based customer service.

James R. Berliner
President, Professional Insurance Agents of Connecticut
& President, Berliner-Gelfand & Co.

We will see the market harden slightly in 2012, but not all at once and not consistently across all lines of business. The unusually heavy snowfall of early 2011, coupled with the storms we experienced in the Northeast in the fall of 2011, are going to contribute to a hike in prices. It will be the challenge of insurance agents in this area to explain to their clients that there are a multitude of factors that affect their premium prices, including last year’s increase in natural disasters and insurance-carrier rating changes/withdrawals. Agents may want to use tools provided by their associations to help educate their clients.

Eric Andersen
CEO of Americas
Aon Risk Solutions

We are optimistic about 2012 for our business and the industry in general. In this world of increasing risk and increasing awareness of risk and its complexities, we think there is huge opportunity for Aon and other players who can truly bring fact-based expertise to clients to help manage it, from the largest to the smallest companies.

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