Marketing is the process of securing coverage terms from insurance companies. The expression “garbage in, garbage out” is applicable to the marketing process. The quality of underwriting submissions has a direct bearing on results. Therefore, we take great care in preparing compelling underwriting submissions that are complete, and well organized. Consequently, we seldom receive requests for additional information and, as a result, our submissions receive preferential treatment.
An effective submission is essential to assuring the best terms possible.
We believe in long term relationships because stability reduces frictional costs and allows underwriters to price policies over the long term. If an underwriter believes they might be on an account for only one or a couple years, they will price the policy to make money every year; as if their time on the program will be the inevitable, unprofitable underwriting year. Therefore, once a structure is perfected, we only go to market when the incumbent underwriter is unable to accommodate an important client objective.
To achieve truly long lasting client-underwriting relationships, we promote and facilitate regular contact between clients and their underwriters.
When we market policies, we take a selective approach. No underwriter wants to practice quote. So we prequalify underwriters and only submit to those that are able to address the client’s objectives.
We market directly to underwriters for large premium transactions, where the policy lives or dies on its own merits. Broker volume has little benefit in such cases. However, for highly specialized transactions, where unique relationships matter, we concentrate our volume with select expert intermediaries. In stark contrast to the “national” brokers, we engage specialists entirely on the basis of their expertise and not for their corporate affiliations or relationships.
We evaluate coverage against our own proprietary internal quality standards and seek changes where policies are non-compliant.
A schematic of the marketing process follows:
We analyze options on the basis of cost and quality.
Our cost analysis evaluates different structures on a net present value basis and considers the total cost of risk including premium, retained losses, taxes, service fees, and overhead.
Qualitative differences are evaluated from the standpoint of coverage, industry specialization or commitment, rating, and licensing. We evaluate coverage using proprietary, evolving coverage checklists. The checklists reflect the state of the market and therefore are constantly evolving as new coverage features become available.