“I know I’m not my broker’s only or biggest client, but the teammakes me feel that way.” That’s the response you get from LoriSeidenberg, ARM, RF, senior vice president, risk management, forHCP Pacific Asset Management LLC, when you ask her about herrelationship with her broker, one that’s lasted for seven years.“My broker is there for the bad times and the good.”

|

Seidenberg’s comments echo those voiced in a recent study of large business commercial insurance customersconducted by J.D. Power and RIMS, published in December 2014. Thestudy found that most risk managers want to have a strategicrelationship with their brokers, not merely purchase insurancecoverage through them. The study also found that the most importantfactor in customer satisfaction among risk professionals was howeasy it was to contact the broker, followed by the broker’s abilityto understand the customer’s needs.

|

National Underwriter interviewed a cross section ofrisk managers and brokers to get their views on how to build astrong broker relationship and what they recommended as bestpractices. The risk managers and brokers NU spoke with allagree on the need for open and honest communication, from the timethe request for proposal (RFP) is issued throughout therelationship to its termination. They also agree that trust on bothsides at all levels is key to making the relationship work.

|

Here are 10 strategies that risk managers and brokers say makestheir relationship stronger.

|

Business men and woman shaking hands

|

(Photo: Stephen Coburn/Shutterstock)

|

1. Invest time in the relationship

|

A strong relationship takes time and effort on everyone’s part.The risk manager has to invest the time to educate the broker aboutthe company’s business and its place in its industry so the brokercan be successful in the market, says Gary Pearce, vice presidentof the Risk Management Group at workforce solutions company KellyServices Inc. The broker has to be willing to invest the time tolearn about the client’s organization as well.

|

“The risk manager/broker relationship, like a good marriage,needs time and attention to prosper,” says C. Nahua Maunakea,director of global risk management for IHS Inc., a global source ofcritical information and insight, headquartered in Englewood, Colo.He switched brokers in July 2014 as the result of an RFP that hiscompany requires every three to five years, and he says there wasan adjustment period. But his risk management team and the broker’steam meet weekly to review open items, giving both teams anopportunity to work through issues and raise questions. “It’s allabout good communication and managing expectations,” he adds.

|

Laurie J. Champion, chief operating officer and accountexecutive practice leader for Aon Risk Solutions, Atlanta,recommends that you hire the best broker for your industry and thenspend the time to educate the broker about the specifics of yourbusiness. She advises risk managers to “introduce the broker’s teamto your executive leaders, take them to see the operations, and letthem work a shift.”

|

A broker that understands both the client and its industry doesa better job of representing the client in the marketplace. Thebroker can use that knowledge to present a more complete picture ofthe client to the underwriters, explaining any past losses and riskfactors.

|

Broker wordle

|

2. Become a trusted adviser

|

The brokers and risk managers NU spoke with agree that the mostsuccessful and long-term relationships are those in which thebroker acts as a business consultant as well as buying appropriateinsurance coverage. “When you gain the trusted adviser role, therelationship is most successful,” says Jeffery W. Colburn, managingdirector at Marsh Risk Consulting. This trust allows the broker torespectfully challenge some of the client’s assumptions or businesspractices and provide solutions that may better fit the client’sneeds.

|

“Insist on and participate in effective strategic andoperational planning for renewals and risk management projects,”advises Champion. She recommends that both the broker and the riskmanager include actions, tasks, and deliverables in that plan sothat it’s comprehensive and everyone can see how the pieces fittogether. When there is a good plan in place, both the risk managerand broker teams can manage expectations and hold each otheraccountable.

|

New_Ideas_Scrabble_SS_Victor Correia

|

(Photo: Victor Correia/Shutterstock)

|

3. Anticipate client needs

|

When brokers anticipate their clients’ needs or suggest new waysof doing things, they can substantially improve risk mitigation andloss control across the client’s organization. Sarah Perry, ARM-P,risk manager for the city of Columbia, Mo., says, “Don’t just waitfor me to ask you questions. Bring new products and coverages tome, and alert me to issues.”

|

Perry also wants brokers to be open to new ideas from her, ideasshe may get from conversations with colleagues. A broker that is astrategic partner and trusted adviser should help the client reviewthe pros and cons of such new ideas, leading the client to awell-thought-out business decision regarding new coverages or otherchanges.

|

Business meeting reviewing documents diverse hands SS Pressmaster

|

(Photo: Pressmaster/Shutterstock)

|

4. Make specific recommendations

|

Matt Edelheit, senior vice president, department manager, riskmanagement, for Lockton Companies, finds that the bestrelationships are those in which brokers and risk managers trusteach other implicitly, are accountable to each other, and are bothworking toward a common goal. He believes that having a “line ofsight” into the client’s business is the best way to help hisclients achieve solutions to their objectives. Without thatperspective, it’s difficult to provide any specificrecommendations.

|

The broker also serves the client’s interest by pointing outchanges the client could make that would allow the broker to bemore efficient for example. Maunakea notes that his new brokerreviewed statement-of-value worksheets that he had been using forseveral years, asked questions about why certain information wasincluded, and showed him what data could be left out withoutcompromising the integrity of the information and its value tounderwriters. “I appreciated the broker’s suggestions on how toimprove our process,” he says.

|

0s and 1s with error in red SS Pressmaster

|

(Photo: Pressmaster/Shutterstock)

|

5. Address issues promptly

|

Risk managers have to communicate clearly when something isn’tworking and give the broker an opportunity to fix what’s goingwrong. Brokers also have a responsibility to let the clients knowif there are problems from their perspective that need to beaddressed. Pearce and his team regularly have discussions withtheir broker around what’s working and what’s not, and ask forfeedback on what the risk management team can do better.

|

Everyone makes mistakes, Maunakea points out, but what isimportant to him is whether the broker acknowledges the error andthe way mistakes are corrected. Early on, his new broker’s supportteam made a mistake with his account which caused the broker’s teamto be penalized as specified in the performance guarantee. Theaccount manager took full responsibility and used the opportunityto improve the process.

|

Customer satisfaction chart

|

6. Consider "customer service" from the client’s pointof view

|

The phrase “good customer service” was repeated by all thebrokers and risk managers that NU spoke with as necessary to astrong relationship. But customer service is more than justshopping the client’s account in the marketplace and findingcoverage that meets the client’s needs at the lowest price. It alsoinvolves how well the broker handles claims when there is a lossand how well the broker’s internal processes function separatelyand together.

|

Seidenberg has found that some brokers are good at the strategicside of the relationship but their claims handling process isinadequate because the different broker segments operate in silos.That makes it difficult to do business with the broker andincreases the client’s frustration.

|

Victor Parker, director of risk management for the City of LosAngeles, relies on his broker for advice on a wide variety of riskissues. But he has found that sometimes “brokers get complacent andthink more about revenue than making customer service their toppriority.”

|

Good customer service includes staying involved in the entirerisk management program, beyond recommending insurance coverage,according to Perry. Her broker also participates in claims reviewmeetings, making suggestions on how to improve the process.

|

“The client always comes first,” says Demetri Lembesis, CPCU,executive vice president, Willis Group, and Parker’s broker. In hisview open and candid communication is key to maintaining goodcustomer service. “It’s important to explain what you’re doing tohelp manage risk and, more importantly, why you are doing it,” headds.

|

Business man and woman meeting SS Gajus

|

7. Make time for face time

|

In 2015, the world is so interconnected that where the broker islocated in relation to the client shouldn’t matter—but it does, atleast to Perry. She wants her broker geographically within a coupleof hours’ drive time at the most so the broker can come to her orshe can visit the broker’s office in person when it’s necessary orvaluable. “Face-to-face meetings are still important,” she says. Ithelps both sides develop a stronger working relationship.

|

Seidenberg agrees that proximity and in-person meetings go along way to cementing the broker/risk manager relationship. Suchmeetings help her connect with the broker’s team on a personallevel and make it easier for the broker to represent her in themarketplace. Seidenberg also meets with brokers and markets inperson once a year, which is easier to do if they’re geographicallycloser.

|

|

Insurance claims form with money

|

8. Maintain transactional competence

|

After the deal is concluded, Pearce finds that transactionalcompetence is significant in maintaining the relationship. Forexample, does the broker’s administrative services team issuepolicies accurately, provide certificates of insurance as neededand process claims cost effectively and efficiently? How well doesthe broker manage the day-to-day operations? Some brokers can placemore emphasis on their internal policies and processes than on whatbest meets the customer’s needs.

|

Perry agrees that ongoing customer service, especially in claimsmanagement and loss control, is important. She has a service planin place with her broker, and they review it regularly, makingmodifications as necessary. “With a service plan I know what toexpect and so does my broker,” she says.

|

Lockton’s Edelheit says that when employees are assigned to anaccount, they’re involved in all aspects of managing the account,from advising the client on what coverage to buy to claimsprocessing and loss control. This approach eliminates silos andensures that the person responsible for underwriting the account isaware of all the client’s concerns and potential issues with theaccount. It also allows problems to surface and be resolvedquickly.

|

Road sign change SS Andy Dean Photography

|

(Photo: Andy Dean Photography/Shutterstock)

|

9. Plan for change

|

It’s essential for managing risk and overall business planningto have continuity in the service team from the broker. “When youinvest time in the relationship, you want it to last longer than afirst date,” says Pearce. Discontinuity has caused him to switchbrokers in the past. He understands the need for career developmentof the broker’s team, and values a fresh perspective, but “thebroker should plan for the transition and be sure to maintainservice levels” he says.

|

Colburn agrees that the traditional consultant model can bedisruptive to the client if not handled correctly. He believes thatthe introduction of new talent to the client can be a positivething, as long as the broker matches the new consultant’s industryexpertise and working style with the client’s situation.

|

“We plan a six-month overlap when a member of a client team istransitioning,” says Champion. The person who is leaving trains thenewcomer and doesn’t officially leave the team until the new personis ready to take over.

|

Woman with long nose SS Kaspars Grinvalds

|

10. Bottom line: Be honest

|

The risk managers and brokers all agreed that honesty wascritical to the relationship. The risk managers also agreed thatpretending to have knowledge the brokers didn’t have or trying tobluff would cause the risk managers to rethink therelationship.

|

“I respect my broker more when he tells me ‘I don’t know, butI’ll find out’,” Perry says. She also appreciates the brokertelling her that something isn’t a good idea but that he’ll helpher find the right solution for her situation.

|

Seidenberg has found in the past that some brokers weren’tcompletely honest with her because they don’t want to deliver badnews. She would rather have the bad news up front so she can manageexpectations internally, she says.

|

In keeping with the J.D. Power and RIMS study’s findings, therisk managers NU spoke with were pleased with theirbrokers’ performance and would recommend them to otherorganizations. For example, Seidenberg says that she “absolutely”would recommend her broker. Maunakea, Pearce and Perry also saidthey would recommend their brokers based on their strategicbusiness advice and good customer service.

|

Parker puts it best: “I would highly recommend my broker toother municipalities. He works hard and earns my business everyday. He also has the courage to give me the best professionaladvice and not tell me what he thinks I want to hear.”

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

  • All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Rosalie Donlon

Rosalie Donlon is the editor in chief of ALM's insurance and tax publications, including NU Property & Casualty magazine and NU PropertyCasualty360.com. You can contact her at [email protected].