I feel it is time for me to vent some frustration I have had over the last year or so. I hope you will indulge my tirade and understand where I am coming from. It has always been my belief and continues to be, that insurance agents are professionals and are smart business people. They would look to the market and select carriers that they felt would provide good coverage for their clients at a rate that was competitive with the market. Notice that I didn’t mention the cheapest rate. A computer can tell me the cheapest rate and if that is what the client is looking for, then they don’t need an agent. Rather, it is my opinion that the client wants to solve a problem and the broker’s responsibility is to find the best answer to that problem. Lately, I have noticed that there are brokers who even when the best answer may be with a certain carrier, they are putting with another carrier so that they don’t offend someone and risk having their contracts cancelled. Examples are out there of brokers who took a stand and found themselves having their contracts cancelled for no cause, and all commissions that they earned, lost and captured by the carrier. Yet, the broker community has continued to side with carriers that take those dollars. Brokers have even allowed some carriers to go direct to consumer and have decided to compete against themselves. I am not sure if it is fear or greed that drives these brokers to continue to represent such a carrier but I would think it is probably a little of both. So with that in mind, I suggest we allow all carriers to narrow who they allow to write business with them. In fact, why don’t we just have brokers become captive agents and forget about an open marketplace? If I were in charge of distribution of health insurance with a carrier, I would look at how the market reacted in Nebraska and work with a few key brokers and not work with others.
It is time for the brokers in Nebraska to make a decision on how they run their business. You can’t continue to run a business if it is not profitable and yet, in some cases that is what is being asked. Cutting of commission, cutting the broker out of the picture, and harming those brokers who take a stand should not be tolerated. Why hasn’t there been a louder voice by the broker community? Are we really so old and ending our careers that we just sit on our hands and hope it doesn’t affect us? Young brokers coming into the business need to be able to run their practices profitably and it must be confusing to them when consultant fees which can lead to rebating are so easily manipulated. Let’s get the market back to what it should be and that is an open market where an insurance broker is valuable. If you want to narrow distribution, then I suggest you continue adversely showing one carrier. At the same time, you may want to become an employee as I know most companies provide great benefits. Remember, we are all in this together and carriers are looking at how the broker community reacts. I would suggest choosing wisely how you proceed or you could find yourself on wrong side of distribution. Thanks for listening and feel free to contact me with your thoughts.