Yogi Berra once quipped, “Nostalgia ain't what it used to be.” Risk managers can relate. Even though Berra was not referring to relationships with an insurance broker, he very well could have been. On top of their many other roles, risk managers should expect to have to justify the current brokerage relationship to upper management, more so than ever before.

When risk managers “manage” the relationship with outside insurance brokers, they should prepare for headwinds from upper management. Bland assurances of value-added relationships may not placate the top brass. C-level executives and boards of directors feel heightened pressure to demonstrate transparency in all financial transactions. The Sarbanes-Oxley Act and other corporate governance initiatives require that directors and officers ensure that the organization gets full value from every business relationship. This includes the insurance brokerage arrangement. Risk managers must assure upper management that the current broker is not involved in contingent commission arrangements or bid-rigging.

Building the Case for Broker vs. Broker
The risk manager's case for choosing one broker versus another (or multiple “others”) must be well-thought out, rehearsed, and distilled to a concise essence. If the risk manager wants to change brokers, this is also a challenge that merits meticulous preparation. The risk manager may have 10 minutes (if that) before the board to advocate for a certain broker or to change partners.