Agents Will Thrive In Hard Mkt.

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Anyone who thought the hard market would be short-lived is infor a rude awakening. Indeed, the most recent survey by the Councilof Insurance Agents and Brokers documented what it characterized as“the deep and deepening distress of the commercial insurancemarket.”

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“Consumers, carriers and brokers alike are clearly on thecutting edge of pain now spreading to all segments of the U.S.economy,” according to CIAB President Ken A. Crerar.

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As reported by NU's Mark Ruquet, of the 136 brokerssurveyed during the past three months by CIAB, including July 1renewals, 60 percent said premium rates rose between 10- and 30percent, while 22 percent said rates soared between 30- and 50percent.

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“Many industry consumers had hoped the market would settle downby the July 1 renewal period,” Mr. Crerar said. “But our surveyproves categorically that did not happen.”

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What's an agent or broker to do? Be prepared to help clientsmanage a much larger deductible than they've been accustomed toself-insuring in the past. Consider going the captive route. Be farmore aggressive in promoting and providing loss control services sothat a client can get their exposures under control and present thebest risk management profile possible.

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Any agent or broker merely shopping accounts on price or tryingto beg their way into overwhelmed wholesale markets are out ofluck. There's no room for Willy Loman in the insurance business.Instead, clients need their intermediaries to be multitalented riskmanagers with a host of solutions, not just policies, to offer.

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Luckily for consumers, we believe the bulk of producers are upto the challenge. This is a difficult time, but agents and brokerswill prove their added value to a public that not too long agosuggested that “disintermediation” was the way to go.


Reproduced from National Underwriter Property &Casualty/Risk & Benefits Management Edition, August 5, 2002.Copyright 2002 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.


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