The first step toward determining what makes an insurance broker good is to define what it means to be a good insurance broker in the first place.
As with most qualitative assessments, what constitutes ‘good’ in this context may vary widely depending on one’s perspective. For example, from the perspective of insurance providers, a good broker might largely be defined as a great salesman who maximizes client satisfaction and retention while simultaneously minimizing claims paid out.
On the other hand, from the perspective of the company engaging a broker in order to procure commercial insurance coverage for their business and employees, the definition of what makes a broker good might be the polar opposite from the attributes and skills that the insurance provider is looking for in a good broker.
For our purposes here, the focus will remain on evaluating brokers from the perspective of the companies who are procuring insurance coverage. However, what makes for a good insurance broker can still vary considerably depending on a number of factors, including the size, market, preferences, and the specific insurance needs of any given business.
Many companies view insurance coverage as an expense to be minimized on their balance sheet, unrelated to the functioning operation of their core business. These particularly price-conscious insurance shoppers who prioritize low rates above any other consideration might define a good broker as the one who can get their company the best insurance deal possible.
Of course, how to define the ‘best’ deal requires some parsing out, as well, given the best deal in the short term may not be the best deal in the long term. Defining the ‘best deal’ would also depend upon a given company’s risk tolerance and what claims are ultimately made over the life of the policy, etc.
For the sake of simplification, however, let’s assume that ‘best deal’ means the lowest possible upfront rates for standard coverage.
Even with this simplified definition, however, merely finding the best rates may be trickier than anticipated. In some markets, for example, where businesses are seeking standard types of insurance protection with little to no company-specific customization required in their coverage plans - those companies may be surprised to find that they keep getting the same quotes from brokers representing the same payers with little price or coverage fluctuation.
In those circumstances, these standardized coverage options have become essentially commodified, which means finding a good insurance broker (or at least one that is relatively better than other available options) will require using other criteria by which to evaluate potential new insurance brokers.
On the opposite end of the spectrum from the broker who can quote the cheapest rates is the broker who can offer the most comprehensive coverage.
Of course, implicit in the notion of comprehensive coverage is that the coverage, while thorough, is tailored to suit the specific needs of your company and not superfluous or excessive in the operation of your business. Few would label a broker as ‘good’ simply because they sold you any and every type of insurance imaginable whether you needed it or not.
Therefore, the key to a good broker offering comprehensive coverage is the ability of that broker to accurately and specifically identify the needs of your business in order to shape an insurance coverage package that addresses all of your business’s areas of concern without going overboard into the unnecessary.
In this light, a good insurance broker might be one who is thoroughly versed in your industry. This could be either through direct experience or from comprehensively learning the space in order to provide the appropriate guidance to your company.How Can a New Insurance Broker Help My Business?
The other main idea implicit in the concept of comprehensive coverage is that you will in fact be covered and paid out for the events and incidents to which your company wished to limit its exposure. After all, what appears to be comprehensive coverage when crafting the policies initially may be of little value in situations when the insurance provider disputes that an event in question is actually covered.
Here, a good insurance broker might be defined by their ability to accurately anticipate and explain the scope of coverage so that there is no misunderstanding about when and how that coverage either will or won’t apply.
This definition of a good broker again harkens back to their experience or learned knowledge of your company’s industry and risk exposure. It also brings up a new consideration: the role of an insurance broker as an advocate for their clients, even when promoting a position adversarial to the position being taken by the payer in a given instance.
To be a good insurance broker in this regard is to put the client’s interests first and to champion their clients whether it be in seeking payment for claims, in making a case for reduced premium rates, and in any other cases where the interests of the clients and the providers may conflict.
For those companies interested in whether or not their current or potential broker meets this particular definition, it might be wise to simply ask for examples of when that broker has taken a position on behalf of their clients against the payer’s interest and gotten favorable results to their clients’ benefit.
Perhaps the most important attribute when defining a good insurance broker, and not coincidentally the only aspect listed that overlaps with an insurance provider’s definition of a good broker, is a broker that keeps their clients satisfied.
Presumably, client satisfaction is encompassed in all the good broker qualities discussed here thus far. For example, if a broker can’t get their clients a good rate quote, isn’t knowledgeable about their client's business, is therefore unable to tailor a comprehensive coverage package, and won’t be an effective advocate for their client's interest – then it’s unlikely that broker meets the threshold to be considered good in this context.
That said, beyond these previously discussed considerations, there are a number of other factors that brokers will likely have to meet in order to keep their clients satisfied. Managing communications comes to mind first and foremost, both in terms of regular communications under normal circumstances as well as communications in times of emergency when claims are being filed, which tend to be a regular occurrence in the insurance industry and require a greater sense of urgency.
Beyond the timing and effectiveness of communications, the tone of communications can be very important and speaks to other issues like culture, emotional intelligence, and the importance of building a productive working relationship between broker and client for maximum client satisfaction. This can be tricky when not all clients have the same expectations about the ideal form that such a relationship ought to take.
A good insurance broker will most likely get you a rate quote that you’re happy with, which may be fairly simple and commodified or relatively intricate and complex depending on your particular business.
A good broker will certainly be experienced in your field or at the very least eager to learn and independently research the area in order to make sure your coverage is appropriately comprehensive without making you pay for overkill coverage that you don’t really need.
Also, a good broker will certainly be a strong advocate on behalf of their clients whenever there is conflict with the insurance provider. Additionally, a good broker will keep their clients satisfied with their services through effective communication, culture, and relationship-building.
Most importantly, what you need is not a ‘good’ broker in the first place. What you need is an insurance broker that’s best for you.
There is no one-size-fits all definition of a good broker that will apply in any and all cases. With these ideas in mind, the best way to determine the broker that can best serve your company in administering your insurance needs is to first identify what aspects and attributes are most important to your company. Then, start narrowing your search by the criteria that you’ve chosen to prioritize by asking a lot of questions of as many brokers as you see fit.
To search for insurance brokers by geography, specialty, rating, provider affiliates, customer satisfaction or other relevant criteria you may have deemed to be important, search Mployer Advisor.
We help employers find top-rated insurance brokers for their needs. In addition to broker listings, Mployer Advisor showcases customer reviews and feedback to help employers compare and evaluate different brokers. Start your search today.Find Top-Rated Brokers Near You
At Mployer Advisor, our focus is creating transparency in the insurance and insurance broker, consultant and advisor space to the advantage of the employer. Analytics is our core and we will bring to light new information, tools and resources to aid employers in making more cost-effective decisions. As a phase I, we are here to help employers find the right broker or consultant and the right insurance company for them. Giving choice and initial transparency is a first step in creating an employer centric insurance marketplace.
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