Distribution Trends


In the flight to quality, retail agents and brokers are working with fewer wholesale partners, but establishing deeper relationships with them.


“I continue to hear stories about the death of the wholesaler, but they seem to be alive and well and they seem to be having to provide products and services that the marketplace wants to have.”


Dick Bouhan, NAPSLO


Any wholesaler, regardless of size, that can effectively add value to a transaction will continue to have a role to play in the market. In choosing their key partners, retail clients put value on technology, modeling, claims advocacy and carrier relationships. While smaller wholesalers may not have the scale and resources of larger competitors, they can thrive by staying very focused on a specialized niche. The key to creating solutions for clients for wholesalers of any size is to stay close to them and develop a deep understanding of the risk issues they face.


One discouraging trend is the effort by retailers to cut wholesale brokers out of the transaction. However, insureds should know that doing so does not reduce their insurance costs. The carrier pays the wholesaler out of its profits, so the savings from cutting out an intermediary will go to the carrier’s bottom line. Meanwhile, the insured may be losing the added value the wholesaler brings to the table.


Copyright © 2012 by A.M. Best Company, Inc. All rights reserved. No part of this report may be reproduced, stored in a retrieval system or transmitted in any form or by any means; electronic, mechanical, photocopying, recording or otherwise.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17