For decades, wholesale insurance brokers were seen as a secondary resource - useful but not essential. That’s no longer the case.
Wholesale brokers have moved from playing a supporting role to being indispensable, especially in high-risk markets like California, said Mark L. Kaufman (pictured), executive vice president, partner at private equity backed XPT Specialty.
“The marketplace has shifted from wholesalers merely stepping in when standard carriers couldn't write an account, to now where our market share and our ability to help retailers write business in this crazy marketplace is really needed,” Kaufman said.
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The retreat of standard carriers from the admitted market has only reinforced this reliance on wholesale expertise.
“For example, in California, the standard markets are no longer writing personal lines policies, and that's where they need the expertise and the handholding, if you will, of the wholesaler,” he said.
Exclusivity in market access gives wholesalers a competitive edge, but Kaufman insists it’s about more than just placing business - it’s about relationships.
“I think the difference between wholesalers and standard carriers, where they go direct to their standard carriers as retailers, is we do a lot of handholding; we do a lot of explaining of coverages, and we try to tailor each account specifically for that particular retailer and that insured,” he said. “[As a result], the retailers see that value added of us being involved in those day-to-day accounts.”
It’s a far cry from the transactional relationships retailers often have with direct carriers. Instead of just pushing through submissions and discussing production numbers, wholesalers like XPT do “a deep dive into each insured and each submission with those retailers,” Kaufman said.
A long-standing reality in wholesale insurance is that many firms prioritize large accounts. But XPT has taken a different approach, one that reflects a growing awareness that small and mid-sized accounts can be just as valuable when serviced properly. For retailers, this commitment means they can offload small business accounts without sacrificing service or profitability.
“It’s one of our core differentiating pillars to support small business,” Kaufman said. “We want to be the one-stop shop for our retailer customers, and so we emphasize the small- to mid-size accounts.”
As the market continues to evolve, Kaufman sees wholesalers playing an even bigger role. The combination of increasing risk complexity and the retreat of standard markets means more retailers are turning to wholesalers not just for placement, but for guidance.
“Retailers see that value in us being involved; we’re not just moving paper - we’re actively helping them get deals done in a market where they need every advantage,” he said. “It's not just about access to markets; it’s about understanding the retailer's needs, the insured's needs, and putting the best possible solution together.”
And as long as retailers continue to need that expertise, the role of the wholesaler will only grow.
“The days of wholesalers being an afterthought are long gone,” Kaufman said. “If anything, we’re more essential than ever.”
