Financial Loss · Insurance · Risk Management

Your Insurance Broker Has No Incentive to Retain You as a Client!!!!

Skin in the game – that means your insurance broker actually having a vested interest in your success and the level of service you receive year in and year out.  Skin in the game does not mean your broker having a greater financial interest in year one compared to subsequent years yet that is how most brokers are paid. Most brokers get paid a set percentage for new business and then see that drop significantly after year one, and at some of the largest brokers that percentage might actually go to zero.  If your broker is always looking for the next deal to maintain their income how do you think that aligns with your interests?  You might say that the service team is incentivized to keep the account, but that is rarely the case, the service team’s is usually paid a salary and a small component of their bonus might be based on how well they service the customer.

At Alliant we believe that we should have a vested interest in your success and that your success leads to our success.  How do we do this?  We as individuals get paid the same percentage every year as long as we retain you as client, we don’t get paid more to bring in new clients or take a haircut after year one.  In fact, if we lose you as a client we feel that in our wallets because that income is gone.

Why am I telling you this?  I tell you this because it demonstrates that we value our existing clients just as much as our new clients.  A lot of brokers come in and tell you a story about service and how good their service is but can’t point to a reason as to why that service level will continue – we can.  We can point out that we actually get paid or, if the service is not good, not paid based on how we service your account – we put our money where our mouth is, we have skin in the game.  How many times has your service fallen off, even just a little bit in each year (cumulatively this could add up and you might not even recognize what good service is anymore), from the initial engagement?  Unfortunately, this is just considered part of how insurance works and what one can expect but it shouldn’t be.  That is why my firm strives to be different, we are not interested in a slow deterioration of service for our clients but a firm and consistent model of service that is the same in year one as it is in year eight.

I probably will get emails from brokers saying you shouldn’t be sharing this information but if we are being transparent about how much the firms are getting paid shouldn’t we be transparent about know how the individuals servicing your account are being compensated?  I am not saying W2’s need to be shared but knowing the structure and how it aligns with a service model I believe are good pieces of information to have because it can be a predictor of the future.  Maybe you are different than me, but when I deal with a “service” provider I want those individuals servicing my account to have repercussions if the level of service is not there but sadly in the insurance industry that is seldom the case.  With Alliant that is exactly the case, if the service drops we feel it in our wallet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s