Brokers Read

Should we get quotes from more than one broker to get the best rate?

As contradictory as it sounds, the fastest way to get a bad rate is to let three brokers shop you at once.

When I was an underwriter, one of the first things I was trained to do when a quote request came across my desk was check how many times we had seen the account and which brokers submitted it. If a group was out to market every year with multiple brokers, it was either an automatic decline, or, if the risk was favorable, a baseline proposal with zero investment while we waited to see what happened.

Underwriters only have so much to invest in proposals, and those dollars go to groups with a clear strategy and one broker. When several brokers request quotes on the same group, every broker gets the exact same proposal. That is called blocking the market. A note also goes into the carrier's system so the next underwriter knows the group's history. If your incumbent always seems to match the competition, it is usually because they sent the request first and blocked the market, not because they know something the other brokers don't.

Group health insurance is not home and auto, where shopping every year is normal. Pick your broker like you would pick your attorney or CPA. Find the one whose strategy you trust, give them the market, and let them attack it, create competition among the carriers, and drive them to their rock bottom price.

If you want a second opinion, interview brokers early, well before quotes go out, then commit to one.

Questions to ask

  • How many times have we been marketed in the last three years, and by whom?
  • What is our strategy for next year, in writing?
  • If we wanted a different broker, when would be the right time to make that change?

More answers

  • Brokers

    How do we switch benefits brokers, and will employees notice?

    You sign a short broker of record letter that tells each carrier and vendor which broker represents the account. Once the carrier accepts it, the new broker can request data, negotiate, and service the plan. Changing brokers is common and normal, and a good transition is quiet. Employees should never notice.

  • Brokers

    How does my benefits broker get paid, and how do I find out?

    Brokers are paid by percent of premium (roughly 2 to 7 percent), a flat per employee per month fee, or a flat annual service fee. Hidden compensation, like stop loss commissions, PBM per-script fees, and carrier bonuses, is where most problems sit. Since December 2021, brokers expecting $1,000 or more from an ERISA health plan must disclose their compensation in writing, so ask for the disclosure.

  • Brokers

    What one question tells me whether my broker is doing their job?

    Send one line. "Please send me the last 24 months of premium vs claims and large claim data." A broker who is on top of your plan can send it the same day. If you feel like you have to ask, it is probably time to re-evaluate the relationship when your schedule allows.

All questions

Contact

Want me to look at your numbers?

Send over your renewal and tell me what you are trying to solve. I will tell you what it says, in plain language.

Prefer the full picture? Use the complete form and include your renewal detail.

name@company.com

Fields marked * are required.