Insurance Business forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Broker: insurers’ BDMs do not understand us

Notify me of new replies via email
Insurance Business | 03 Sep 2012, 12:05 AM Agree 0
An Australian insurance broker has taken aim at insurers and their Business Development Managers (BDMs) who are “not qualified to understand the risk profiles we present”.
  • Peter Bloomfield | 03 Sep 2012, 11:28 AM Agree 0
    Bill your views as so correct
  • Rod Fitzgerald | 03 Sep 2012, 11:28 AM Agree 0
    Couldn't agree more! well written.
  • Peter Barfoot | 03 Sep 2012, 11:39 AM Agree 0
    Quite correct. Insurers need to empower & educate their BDMs to be competent to negotiate face to face with Brokers who are the ones that know their clients and their risk profiles.
  • Gary Everdell | 03 Sep 2012, 11:40 AM Agree 0
    Insurers do have soem degree of success with the current BDM structure , if their U/W's engage with the Brokers- but as we are always aware - its a two-way street. How many ops do we think Insurers are asked to consider in any week / or month ? Brokers must take some degree of control of the way the process works as well.
  • Daniela Zaccone | 03 Sep 2012, 11:41 AM Agree 0
    Well said!
  • Justin Geldart | 03 Sep 2012, 11:43 AM Agree 0
    Agreed. Insurers shouldn't hide behind online platforms. Every risk is differnt, and online platforms are not capable of catering for those intricacies.

    A similar problem exists for "sales" type BDM's where they are not involved in the actual underwriting process. There is a risk of important information being "lost in translation".

    With industries becoming more regulated, and clients becoming more focussed, a "one-size-fits-all" approach simply won't work. We need more specialisation - not less.
  • John duggan - AIS insurance | 03 Sep 2012, 11:48 AM Agree 0
    I don't totally blame the BDM, would go a step furthrt & advise insurers don't understand us. They are putting more of their workload onto the broker & (a) slowing the process down with common sense referrals & like bill said not giving us access to a competent decsion maker.
  • Phil McGuire | 03 Sep 2012, 11:59 AM Agree 0
    I commend and support Bill de Vos's comments. The role of the BDM in recent times has become devalued due to centralisation strategies employed by insurers and this problem is amplified many times in regional areas or interstate. The strategies employed by insurers these days is to disempower BDM's and make them responsible purely for sales of the insurer's products. Insurers can really go outside the "experience" of the industry and employ "wigett salespeople" to do the role as most BDM's no longer have any underwriting authority. The reliance on electronic delivery platforms is creating another problem - an industry driven by 'machine decisions' and not underwriting. If insurers do not give the "insurance" skills to BDM's which includes nothing less than some underwriting authority, then dealing with BDM's as the 'local' representatives of insurers and their products becomes totally farcical. I think the industry needs to re-evaluate the latest strategies as it will be the insurer that runs with the 'older' model of having BDM's who have underwriting authority that will ultimately win as the BDM will be knowledgable, engaging, credible and capable of making on the ground decisions, not play post office.
  • Arnold Getz/City Acceptance Corp | 03 Sep 2012, 12:01 PM Agree 0
    Agree! I am not sure that Insurance Companies really care about Insurance Brokers as they place more credence in advertising their DIRECT products on TV to ensure that their sales are placed direct over phone thus hindering broker/client relationships....
  • Richard Welch | 03 Sep 2012, 12:04 PM Agree 0
    Totally agree with all of the above and I feel in regional areas it is worse, as we encounter risks that do not go through the portals/platforms for various reasons including underwriting activities and the like!! Insurers offer supposed face to face "service" in the form of BDMs that cannot make a decision, except going for a referral tab on a portal.
  • Koert Slik - Chiswick Consultants P/L | 03 Sep 2012, 01:13 PM Agree 0
    Platform placements have evolved very quickly these past years with insurers adapting well to this form of securing new business sales.

    Brokers spend countless hours on face to face client engagement to retain and secure new business opportunities. This can be the significant point of difference between competing brokers that wins an account.

    It will be in my view,the signficant point of difference for the BDM who externalises their sales campaigning with their local brokers. They are the ones who head back to their office with a supply of newly won accounts because they build a relationship, know their brokers and their businesses and have the authority to assist.
  • Grant Goldner | 03 Sep 2012, 01:37 PM Agree 0
    Absolutely. If you ever see a postman (oops sorry) a BDM, most if not all seem to have no authority and need to find a reason to exist. This is usually trying to become an unnecessary middle man to break down, re-represent what you have spent hours professionally preparing for a mysterious and well protected underwriter. Imagine if an insurer gave some authority to a BDM - wow! or perhaps even gave some means of transport to an actual underwriter. Wouldnt that be amazing? Thesedays if we are ever lucky enough to be asked out for a lunch with a BDM, we now politely decline and ask if they can please arrange for their computer to take us out to lunch so we can have a decent chat with a decision maker.....
  • William Legge | 04 Sep 2012, 08:36 AM Agree 0
    Looking at the comments being expressed regarding this article may I recommend that insurance brokers take advantage of the specific and readily available skillsets of the Underwriting Agency market, this may be a solution for risks that are slightly outside the platforms appetite and could also provide an alternative proposition for you on behalf of your clients.
    William Legge
    General Manager
    Underwriting Agencies Council
  • Kay Jackson - Simplex | 04 Sep 2012, 01:00 PM Agree 0
    Well said Bill, I fully support your view - There are very few true Underwriters left, and those who are will prosper with the Broking Market in the future - I think some companies have forgotten the Broker is their client
  • John Kinch - Nepean Brokers | 04 Sep 2012, 03:02 PM Agree 0
    Absolutely agree. BDM's seem to be simply sales driven. Questions put to BDM's regarding the details of a particular risk usually have to be referred to an underwriter, who in turn usually is unwilling to step outside of the computer driven square. Consequently, the underwriting "craft" is fast disappearing which leaves brokers with little room to negotiate, or indeed to represent their clientele needs as they should. Carefully prepared slips which detail complex risk are of little use when processed by the limited computer models used by the Insurers. "Computer says no..."
  • Anonymous non-platform underwriter | 04 Sep 2012, 04:23 PM Agree 0
    Unfortunately this is all a sign of the times. Insurers are required to be price competitive and as we all know, rates have been reducing for a number of years. Coupled with inflation (particularly superimposed inflation which, for personal injury claims, has been estimated by some actuarial consulting firms as being as high as 12%) and with average loss ratios increasing year on year (per APRA NPCD results) insurers must find ways to reduce their costs. Without reducing costs in line with the margin squeeze being experienced, insurers will not make money. An unprofitable group of insurers doesnt help anyone. It is simply a matter of business, i.e. need to reduce costs --> employ fewer 'experienced underwriters' who are capable of making decisions and running their own book, centralise their knowledge and underwriting process into a computer system, employ data entry operators to punch the numbers into the computer, then employ salespeople to 'develop relationships' with brokerages to ensure that their distribution model includes that insurer's products. The only way this system will change is by tangible advantages being available to the end-client (the Insured) for business that is transacted face-to-face. Without that, there is really no need for business to move back from this electronic/online/BDM method of transation. We are all part of the problem, but from Mr Client's point of view, is there really a problem? If yes, how can you and your brokerage help fix it? Move away from online platforms and stop dealing with insurers that utilise BDM models? How will that loss of 'cost-competitiveness' impact your business?

    Food for thought.
Post a reply