Broker of Record Letters are NOT the Devil, Shoptalk Series – Episode #17

In this episode of The Power Producers Podcast, David Carothers and co-host Kyle Houck talk about the Broker of Record letter, how it can be utilized as a tool in the industry, and why a lot of people see it as a devil in the insurance industry.

Episode Highlights:

• David mentions that he loves the broker of records, but a lot of people don’t. (5:38)
• Kyle mentions that the broker of records letter is a wonderful topic. (5:43)
• David explains why people don’t like it. (5:49)
• David shares that a small percentage of agents and agencies are a little bit sly with how they present a BOR. (6:15)
• David mentions that the BOR is a tool that was developed by their industry. (7:33)
• David shares that he doesn’t understand why an agent should think that they can do a poor job, or deliver average results and retain an account. (8:08)
• David shares a fun fact. (8:36)
• David shares that the reason why agents get upset is that they don’t realize, they’re inadequate in what they’re delivering. (10:09)
• David mentions that in this period, you have to understand that you can’t be a salesperson and retain your accounts. (10:45)
• Kyle mentions that customer service is expected. (11:34)
• David shares that from a claim standpoint, they’re managing the loss ratio in their book of business with the carrier because they want to make sure they get their own profit-sharing and contingencies, at the end of the year. (12:42)
• David gives an example of a man that was complaining about a longtime account that started with him. (12:59)
• David mentions that the cheapest insurance policy is typically the most expensive, in the long run. (15:10)
• David shares that you cannot tie your compensation to the sale of a product, you are not a trusted adviser in that role. You are a salesman or a saleswoman, in that role. (15:32)
• David mentions that if you don’t want to lose your business, work to keep it. (19:13)
• David shares that simply because you’re doing the work that needs to be done to improve premium losses, doesn’t mean your client knows you’re doing that. (22:06)
• David mentions that if you can’t provide graphics or something that they can touch and feel in real-time, your account could be in jeopardy, all the time. (22:36)

Tweetable Quotes:

• “What I’m talking about is the whole actual tool of the agent of record or broker of record letter, and that in and of itself is not bad. It is not sleazy and it is not slimy. It is a tool that was developed by our industry. So that the client can pick the agent that they want.” – David Carothers
• “The agencies that are using the BOR and AOR the correct way, are operating well within the framework of what the industry gives us, and we’re not hiding behind it. I’ve never taken an ASR and slipped it into a stack of papers, and just had somebody sign it.” – David Carothers
• “It’s like I tell my kids don’t lie to me. I’m gonna get you eventually. Then I go back and remember when I asked you to be honest with me, and you weren’t. There are far fewer consequences if you’re honest with me, on the front end.” – David Carothers
• “People, value is not a cheap premium. Cheap premium is great, but if you have uncovered things because the premium is cheap, then guess what, it’s either your E&O or out of your client’s pocket, but then it’s added to the total cost of risk.” – David Carothers
• “You can only go so low on the premiums, you can only get so many discounts and multi-line, or whatsoever. I mean, once you’re on the floor, you’re on the floor. If that’s all you’re going in with and you have no value then, of course, you’re going to get that swipe.” – Kyle Houck
• “The problem is insurance salespeople, agency owners that focus on selling insurance and not delivering value, have to understand that it’s not smoke and mirrors, people. That’s a value proposition.” – David Carothers
• “Everybody else out there, brokers of record letters, are not the devil. Quit selling insurance and start delivering value. Quit doing customer service and start offering an awesome client experience. That’s it. It’s not rocket science, you just got to get off your rear end and do a little something, once the deal is done.” – David Carothers

Resources Mentioned:

• David Carothers LinkedIn
• Kyle Houck LinkedIn
• Florida Risk Partners
• The Extra 2 Minutes