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The Insurance Market Continues to Show Itself to be Anti-Competitive

In January we wrote an article entitled      How The Insurance Industry Hides and Protects Their Bottom Line  —  Disrupt How the Game is Played and Take Back Control  article here .

We submitted it to CFO Magazine and they published it with their own edits, sharpening the focus and changing the title!  CFO article here   It’s all good;  they have their own way of communicating, and they know what interests their readers — CFOs — so we’re all in favor.  CFO did sharpen the focus on one area, the anti-competitive nature of the market with their subtitle: The insurance industry is fundamentally anticompetitive despite having a huge number of competitors, a risk management consultant says.

Not a month later, in the course of our work for a client, a broker steps up, right on cue, to offer a beautiful illustration of the point.

We have an incumbent broker on the client who is doing a good job.  Nevertheless, we want to periodically approach the market via other brokers to generate a competitive process by which we will obtain lowest cost and best terms.  The client CFO put me in touch with a broker he knows and likes for the purpose of obtaining quotes for the upcoming renewal.  Here’s that broker’s reaction:

“Frank:  Thank you for letting me know of the process you want to advocate for the procurement of the Executive and Professional lines for [CLIENT]. Further, thank you for the opportunity, but we will decline. We strongly believe that [CLIENT] would be better served by having one insurance broker approaching the entire market on [CLIENT’S] behalf. Once again, thank you for your consideration.”

I’ll translate, though that might be superfluous for savvy readers:

“Frank: I prefer to maneuver myself into positions where I have no competition, while convincing you it is for your client’s own good.”

Frank Licata
[email protected]

 

 

Feb 18, 2018

Licata Risk Licata Risk & Insurance Advisors, Inc.
137 South Street, Second Floor
Boston, MA 02111-2848
617-451-2140     [email protected]
LicataRisk Advisors is an independent risk management and insurance consulting firm. We are not brokers and we do not sell insurance. We are not connected to any insurance company or product in any way and do not receive commissions. This is an important difference as you will have an expert on your side who is only committed to you.