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Switching Carriers on a Renewal Account

Access to the environmental insurance marketplace. Simply put, this is one of the main reasons why agents from around the country work with environmental wholesale brokers to find environmental coverage for their clients.

Having options is a great way to demonstrate your expertise and commitment to your clients. Clearly, this is a good approach with new business opportunities, but marketing a renewal and encouraging your client to switch carriers on an existing account needs to be carefully considered. In today’s market, many accounts are marketed to try to achieve a better price. While that is certainly a worthwhile goal, changing carriers on a renewal account may cause real problems. Here are a few issues to consider:

· The agent needs to be fully aware of the specific coverage differences between the expiring policy and the new policy. Although both forms may be appropriate for the insured’s needs, there may be discrepancies between them that could potentially create gaps in coverage.

· There will always be differences in the carrier offering the coverage. Where one may have a solid A.M. Best rating and a history of handling claims effectively, another may have a lower rating and not have a successful track record. Service and stability add a great deal of value.

· If the agent is aware that there are enhancements on the expiring policy that may not seem too significant; yet they are not offered on the newer form—and a claim is filed—the agency may be held liable and have an E&O issue.

· Aggressively marketing a risk every year gives the insured a reputation in the marketplace. Many accounts do not get reviewed by companies because they see them every year and never write them. Unfortunately, there may be a time where the insured really needs to switch carriers and the carrier declines to quote.

Here are some steps that wholesale brokers will want to take if you are considering marketing an account at renewal:

1 - Review the account 90 days before expiration.

2 - Discuss the coverage options that may exist in the market to assess if there is a better product

being offered.

3 - Assuming the insured is happy with the coverage and carrier on the risk, it is important to determine

This entry was posted on Monday, February 8th, 2010 at 4:34 pm and is filed under Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.