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The problem with the traditional approach to commercial
insurance purchasing is that most people find a chosen
provider and develop a strong relationship with that
provider.
They get very comfortable with the relationship and
begin putting an amazing amount of faith in an
individual or a company. Many times when questions arise
about specific coverage the provider states, “of course
that is covered”.
In addition, most insurance agents or agencies get
complacent with a relationship and thus don’t market an
account as well as their new client relationships
causing their “mature clients” to pay more for their
insurance program than new clients joining the agency.
To combat this, most businesses have chosen to, every
year or every other year, "go to market." This is a
wonderful exercise where another agent or multiple
agents are brought in to give their professional
opinion, at no charge nonetheless, against the incumbent
agent.
Most times, the only analysis tool used is the bottom
line price of each proposal. Fruit analogies are helpful
here due to most people wanting Apples to Apples
proposal.
The problem with this scenario is that everybody has a
biased towards his or her own work. Everybody is trying
to sell the clients or the prospect on their program.
Why it's better, what's better, but the problem with
this whole system is that details get lost in this
process.
The purpose of outsourcing a risk manager to manage the
"process" allows for the analysis of those details. Many
times when a change is made in the commercial insurance
world, major coverage shifts occur that create amazing
gaps in coverage.
A third party with no bias can find these gaps and help
the chosen provider find the most cost effective way to
manage a companies risk.
Another reason for a 3rd party with no bias is that it
allows for a referee. Many times in the quoting process,
one agent will claim X and another agent will claim Y
and the client has no one to call to determine who is
correct.
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