Chapter 3: What Wholesalers Expect of their Retailers

Wholesaler Expectations

As was discussed in the previous chapter, creation of a functional understanding of the procedural requirements and underwriting authorities of Wholesalers and Retailers is fundamental to the success of a continuing agreement. Both partners in this transaction are equally important and the better understanding each can have of the other, the more smooth this process is likely to be.

What the Wholesaler Should Expect from the Retailer

  1. Accurate risk submission information
  2. Complete underwriting data
  3. Adequate lead time for placement
  4. Prompt payment of accounts
  5. Follow through on requests for data
  6. Timely and complete submission of claims information

A preliminary review of the risk with the Wholesaler, accompanied by a brief outline of the submission, permits the Wholesaler to determine if a market is available. The Wholesaler can, at this point, inform the Retailer whether it already has been ap¬proached by another Retailer for placement of the account. The Retailer should also advise the Wholesaler if they have approached other Wholesalers for placement of the account The Wholesaler and Retailer can then determine the best and most equitable way to proceed in marketing the risk to an insurer.  The Wholesaler must know at the beginning of the negotiations which primary coverages are controlled by the Retailer.  The Wholesaler will also need to know the primary limits of the coverage, the premiums, and the terms and conditions of the primary forms before negotiations can be completed on Umbrella or Following Form Excess Liability coverages.

As partners in a productive agreement, it is important for the Retailer to realize that the Wholesaler may not be the underwriter and therefore shares a mutual concern with the Retailer for placement of the risk.  Retailers are encouraged to know the markets and capacities of the Wholesalers with whom they do business.  Wholesalers are counseled to recognize the fact that Excess and Surplus lines are not a regular market for Retailers.

Through shared knowledge of the necessity to operate within the parameters outlined above, the Wholesaler and Retailer can realize benefits not only to one another but to their respective agency clientele.  The agreement between the Wholesaler and Retailer will function at its best when it is considered to be a long-term partnership commitment.

The Wholesaler must also know the marketing restrictions they will encounter in dealing with the Retailer. These include:

  • Restricted market availability
  • Markets available to the Retailer
  • Procedures for use by the Retailer
  • Qualifying the Retailer
  • Authority of the Retailer
  • Access to the Insured

The following checklist should be used in selecting the Retailer:

  1. Who, in terms of volume, are the three primary companies used by the Retailer?
  2. What is the Retailer’s volume/product mix, i.e., Commercial to Personal Lines volume?
  3. What is the three-to-five year loss history of the Retailer with existing companies?
  4. Does the Retailer specialize in any particular type of insurance?
  5. Does the Retailer maintain adequate, in force Errors & Omissions coverage?
  6. What experience does the Retailer have in dealing with Wholesalers?
  7. Will the Retailer be a continuing source of business for the Wholesaler?
  8. What marketing and front-line underwriting services can the Retailer provide the Wholesaler?
  9. How long has the Retailer been in business?
  10. What is professional experience of the Retailer’s principals?
  11. Does the Retailer maintain an active membership in a trade association or professional organization, i.e., IIAA, PIA, CIC or CPCU?
  12. The names of current active agency credit references?

Sample Agency Profile (PDF)

Sample Prodcuer Questionnaire (PDF)

Sample Excess & Surplus Lines Broker Questionnaire (PDF)