The E&S Distribution System

Transcription

1 The E&S Distribution System Glenn Hargrove All Risks, Ltd. Managing Director 2017 Excess & Surplus Lines June 4-7, 2017

2 Learning Objectives 1. Who? Who are these wholesalers? 2. What? What do they do and what do they look like? 3. When? When do they participate in the insurance process? 4. Where? Where do they fit in relationship to other entities? 5. Why? Why do they exist and why should they continue to exist?

3 Who? Managing General Agent (MGA) Excess and Surplus Lines Broker Program Manager MGU Lloyd s Broker Retail Agent and Broker

4 Where do Wholesalers Fit? Insured Retail Agent/Broker Wholesale Broker Underwriting Manager MGA Lloyd s Broker Insurance Company Lloyd s Syndicate

5 Managing General Agent What Do They Do? The MGA has Binding Authority with a Company or Companies They Underwrite the Risk Carrier prescribed Underwriting Guidelines Rates, Limits, Territory, Classes, Etc. Responsible for Marketing, Underwriting & Loss Reporting Responsible for Policy Issuance Typically does not share in the risk directly, but frequently receives profit sharing or contingencies.

6 Managing General Agent THE RESPONSIBILITIES OF THE PEN.

7 Excess & Surplus Lines Broker What Do They Do? The E&S Broker represents Brokerage Markets They often Specializes in Larger Risks No Binding Authority Carrier Underwrites the Risk Rates, Limits, Territory, Classes, Etc. May Arrange Reinsurance They do not Issue the Policy, Carriers do Usually Handles Large and/or Complex Risks

8 Excess & Surplus Lines Broker What Do They Do?

9 The Program Manager What Do They Do? Has Authority for One or More Programs Nationwide or Regional Owns the Program(s) and the Rights to It Typically Broader Authority than an MGA Responsible for Marketing, Underwriting, Loss Reporting & Policy Issuance for Risks that Fit the Program May Act as the Branch Office of the Company for a Specific Program May Arrange Reinsurance & Involved in Program Design Markets the Program to Retail Agents or in Some Cases to Other Wholesalers May be Tied with the Company or Client of the Retailer electronically.

10 The Program Manager A Can t Miss Program!!

11 The MGU What Do They Do? Operates Like a Non-owned Branch Office for a Risk Bearer May Have Specific Geographic Responsibility - States, Regions Markets the Program to Retail Agents and/or to Other Wholesalers May be Tied with the Company or Client of the Retailer Electronically Can Be Line of Business Driven or Specific Customer Group Driven May Operate on Monoline Coverage or Multi-line (Depending Upon Product) MGU Underwriters Select and Price Individual Surplus Lines Risks MGU Rates, Quotes and Issues Policies in Office May Adjust Claims May Place Reinsurance.

12 Diversity of Wholesalers Variety of Operations S, M, L, XL, XXL, Husky Boy Different Ownership Structures Territories and Locations Specialist or Generalists Varied Operating Structures Different Distribution Methods

13 Relationships of a Wholesaler Primary Relationships Market Relationships Client Relationships Other Relationships Insureds Trade Associations Government Authorities Rating Agencies Claims Professionals Legal Vendors Press Investors Public

14 WHY? Deliver Value or How to NOT get Eliminated The Intermediaries Value Proposition

15 Wholesaler s Code of Ethics Don t Ever Lie Full Disclosure (Even if You Don t Ask, We Tell) Be Professional Learn to Say No Focus on Quality not Quantity Reputation is Everything

16 The E&S Distribution System Glenn Hargrove Excess & Surplus Lines June 4-7, 2017