President's Message: Responsiveness is an important issue

The tremendous amount of growth in the surplus lines industry over the past decade may have made many of us forget about the difficulty one can have in finding and retaining business. 

But anyone working in the industry during the extended soft market of the 1990s is well aware that the surplus lines market’s primary role is that of a relief valve to step in when the standard market is unable or unwilling to write a risk.

Because of this nature we are under continual pressure to show that we bring value in order to remain part of the insurance transaction. Throughout my career in the surplus lines industry, the signature of our industry has been to show the added value we bring to a transaction through the expertise and experience we offer.

During the hard market of the early part of this decade, as some of us received more business than normal, at times we may have found it difficult to continually provide the highest level of support to our customers.

However today that hard market no longer exists. In 2007 surplus lines stamping offices reported an overall slight increase in premiums but a drop in number of items, according to the 2007/2007 Comparative Statistics report issued by the stamping offices.

Overall, premiums increased by 0.6% from $22.998 million to $23.143 million among the 14 stamping offices; however the number of items dropped 1.5% from 3,485,473 to 3,431,84. Gone are the days where we saw large increases in premiums and items each year.

With the market slowing down, we are finding retailers questioning the responsiveness of wholesalers, according to a recently completed survey of retailers by the Chicago marketing firm MKB.

According to the survey, the top attributes of wholesale brokers were that we provide coverage retailers can’t access directly and “experience and expertise.” 

Other top attributes were “access to insurance companies” and “knowledge.” In contrast, the attributes retail brokers rated as lowest for wholesalers were “reasonable pricing/commissions,” “problem solving capabilities” and “responsiveness.”

The survey results made it appear that some retail brokers don’t feel they are getting responsiveness from wholesalers. As a result, that  was listed as a reason why some retailers may not work with wholesalers in the future.

One can wonder if the “lack of responsiveness” issue is common throughout the industry or just representative of the relationship between a few brokers and retailers during the hard market. 

I have to believe that the vast majority of brokers are responsive to their customers. However, if this is an issue for retailers then we all need to work to make sure it is not an image that tarnishes our industry.

Our industry has always prided itself on the professionalism of the industry and there are many examples of the work members have done to increase the education and professionalism of the industry. From the schools NAPSLO offers, to the Associate in Surplus Lines Insurance designation, to the continuing education many of us complete, we are continually working to improve the industry.

In addition to these areas, there are many ways for members to improve on the professionalism of the industry, starting within each office and looking at how firms work with their customers to ensure that their needs are being responded to in a timely matter.

As an Association, we can look at developing best practices and standards for the industry, but it will be dependant on the individual firms to promote and carry through on these items. 

The best way to show retailers the value we provide is to ensure that we educate them about our role in the transaction and to make sure we are there in both good times and bad times.

Because the next hard market may be a few years away, the industry may find that business is tight for awhile and our customer relations will take even a greater role in our business.

We should all aim to make people think of the surplus lines industry as a professional, experienced and responsive industry, and one that our customers want to use.