Transparency, Authenticity, Empathy and More: What 40 Years of Brokering Experience Taught Vikki Stone

By: Vikki Stone | November 21, 2022

Vikki Stone is senior vice president at Poms & Associates. She can be reached at [email protected].

Topics: Risk Insider

I’ve spent 40 years in the commercial insurance industry. My focus has always been to succeed, but only if it is through the success of my clients.

If you wait for clients to come to you, for the claims to diminish themselves, you’re in the wrong line of work. To achieve success in this industry, you must be willing to work hard, be vulnerable and commit to your clients.

Choosing a path of transparency, being perhaps a bit unconventional yet polished, competitive and driven: These traits are all a part of the success formula.

Knowledge from Experience

As a third-generation insurance broker, I grew up in the industry and have observed many brokers over the years — including their experiences and industry knowledge — and I have established my own.

But what has been the best connection for me has always been the ability to empathize with business owners. Yes, it is important to know your trade and the technicalities of the industry, but you must be able to level with your clients in order to relay information in a way that benefits them.

Being an insurance broker is more than just exercising policy knowledge; it takes a level of dedication to your client.

There are certain things you learn from the experience of being a small business owner and not from a classroom or certification courses. That working knowledge and being in the shoes of a business owner gives you insight into how lonely it can be, making you feel like you have the world on your shoulders.

Our job as brokers is to dilute this feeling, acting as a cheerleader and protector in their corner. For some people, having someone they can trust with their livelihood can make all the difference.

When it comes to client success, there must be no ceilings and no walls.

Establish these expectations from the beginning, giving them stability of coverage and protection to work from. It should feel more like a partnership than a basic business transaction between a broker and client. It is helpful to view yourself as an extension of their business, acting as though their success is your success.

Empathy, Efficiency, Results

As a long-time player in the field, these are the things I pass along to anyone who is just starting out in their career.

You absolutely must be empathetic towards your client. Now, there are a few ways to get you there. Be authentic, be transparent, know your client, know your industry and, lastly, act with efficiency.

Knowing your client and their business is really the only way to get dependable results and information. I was once able to take a client that was six weeks from renewal and address some major workers’ compensation losses and premiums — because of how we knew the business itself.

This was possible, because we got to know them well quickly, established a strong relationship from the get-go and dove into the ins and outs of their company with urgency.

Because of this, we were able to leverage the information we needed in a very short amount of time.

Reviewing claims, policies and the facility itself, and promptly creating a report to implement change, support and feedback: Eventually, this turned into a creative coverage idea moving forward.

Supporting that came with a Broker of Record letter for all their policies.

The even bigger achievement was the growth of the client’s understanding of workers’ compensation and the fact that it is more about creating a company culture that reflects safety and good habits than it is about focusing on the claims themselves.

When working with clients on sensitive materials, it is important to act with awareness. Being the diplomat in some circumstances and having a “take no prisoners” attitude in others can be a good thing, when you’re advocating on their behalf.

But when it comes to the one-on-one client relationship, empathy and emotional intelligence go a long way. It takes a direct connection when you’re working to balance the act of generating business in a relationship and offering appropriate coverage to a client.

These are the decisions your clients depend on you to make the right way.

With a trusted relationship, your recommendations will mean big things for their business and for their bottom line. This is where it is absolutely necessary to know your industry, because there are always more comprehensive policies than the industry average presents.

For example, in transportation and manufacturing, I worked with a client that was overpaying for misguided coverage.

After putting in the effort to get to know the client and their industry, we found an opportunity to combine coverage, which had not been considered before. Despite some financial benefits of multiple coverage plans, giving the client the lowest premium for the most versatile coverage was the right thing to do.

What a Trusted Broker Truly Is

You must become the trusted broker, not because it’s what everyone expects but because you have to be the broker your clients need.

A word of advice: The devil is always in the details. Learn that early and it will save you a lot of time and effort.

Communicate all of the specific information early and your clients will thank you in the long run. If you take the time to review the particular elements of the client’s circumstances, you will usually find that there is more going on than initially meets the eye.

For instance, I once took a 17-year competitor-brokered client into a Broker of Record in as little as a week.

Sometimes, all it takes is the commitment to find a better solution, because odds are if you look hard enough, you will find one.

In this case, the client was unknowingly being underserved due to a lack of attention and care on the broker’s behalf.

I managed to offer them a new package and obtain 5% premium savings on the deal, and walked out with a Broker of Record letter — not for the premium savings but for the thought and care behind the service I provided.

Your Authentic Self

What separates good brokers from the crowd is authenticity.

When it comes to client management, do not shy away from having hard conversations. Be adamant about doing the right thing by all clients, every single time.

Once this relationship is established, do not be afraid to communicate increasing premiums or bad news (no one likes to be blindsided by tough surprises), because these are the things you do without question when you have your clients’ best interests in mind.

If you act in this way with authenticity, then the rest will fall quickly into place.

Not second to authenticity is transparency — for me, it’s the name of the game.

For client relationships to be successful, there should be nothing left unsaid. Having the ability to practice transparency and build trust will put you farther ahead than any other practical learning endeavor ever will.

As a broker, you must place ultimate value on building these relationships, in order to be a better advocate for clients — place a premium on emotional intelligence, as it is necessary to find success within your partnerships, whether that be in direct relationship with a client or when advocating on their behalf.

There is a clear distinction between personable brokering and a lack thereof.

With enough experience, it becomes apparent that your clients are your bottom line, and if you want to be successful, they must always stay that way. &

How a Carrier Partner Can Help Navigate a Challenging Management and Professional Liability Market

A combination of a choppy economy with increased claims frequency and severity could lead to rate increases in the Management & Professional Liability market.

Rates in the management & professional liability (M&PL) markets were on the rise from 2020 to early 2023 and are now falling rapidly.

M&PL divisions manage a number of different insurance products including management liability (D&O), professional liability (E&O), employment practices liability (EPL), fiduciary liability policies, cyber, etc. In 2023 and into 2024, a big influence on the marketplace has been the extremely aggressive and softening public company D&O market.

Though these rates have been softening for management liability, that may change over the next few years as companies continue to adjust their business models motivated by economic uncertainty. Layoffs were up nearly 200% last year, Forbes reported, even as other recession indicators, like the inflation rate, improved. A recession could lead to an increased claim activity and force carriers to raise rates.

“Whenever there is a meaningful downturn in the economy, we tend to see claim frequency pop up,” said George Schalick, Jr., senior vice president of the Management and Professional Liability Division at Philadelphia Insurance Companies (PHLY).

With continued fiscal uncertainty, businesses potentially already burdened with pandemic-related claims should seek a carrier with a long history in M&PL products. They will provide much-needed risk management guidance and be better positioned to support their insureds during market fluctuations.

Why Insureds Might See an Uptick in M&PL Claims

George Schalick, Jr., Senior Vice President of the Management and Professional Liability Division, Philadelphia Insurance Companies

The current soft market might come as a bit of a surprise as it does not track with previous underwriting cycles and economic conditions. Afterall, many privately held and non-profit organizations struggled during the early days of the pandemic with shutdowns and rapidly declining revenues. But the Government assistance programs, like the Paycheck Protection Program loans, helped keep many afloat during the tough times.

“During COVID many organizations stopped doing business until they were able to sort out all of the health and safety challenges,” Schalick said. “They were forced to lock down, but then all the government assistance programs allowed them to keep people employed. The increased volume of claims we anticipated we would see coming from the lockdowns and restrictions that were imposed upon businesses in the U.S. didn’t manifest at first.”

“Just because there wasn’t an onslaught of reported claims at the beginning of the pandemic, doesn’t mean the circumstances that would give rise to a claim being reported didn’t occur. Courts and the judicial system were closed or slowed and now that they are back open, we’re starting to see the circumstances that occurred during the COVID lockdowns becoming claims today,” Schalick said. “Litigation is progressing.”

Added to the delayed pandemic litigation is a concern over newer claims that might be filed as the country inches toward an economic downturn. Though a recession was avoided in 2023, experts think a soft dip could occur in 2024, with 76% of economists saying there’s a 50% or less chance of an economic downturn this year — that almost always results in more management liability claims.

“During the Great Recession in 2008, we saw an almost immediate spike in claims because of the economic conditions and the pressure it placed on organizations. They were making personnel changes with significant belt tightening almost immediately.” Schalick said.

What’s in Store for M&PL Policy Rates in 2024?

Despite an uptick in claims and increased economic uncertainty, management liability rates haven’t increased, resulting in market-wide pricing levels that may not meet the increased pressure of rising settlements and jury verdicts.

“Rates are going the other direction and settlement values are not falling,” Schalick said.

The mismatch between rates, claim frequency and severity is, in part, because carriers experiencing the dramatic soft market in the public D&O market are seeking premium gain in the private and non-profit market.

“In the public company market, the rates have been decreasing significantly. The rates were increasing in the private, not-for-profit market, and rightfully so, but there’s a desire to supplement overall mid-size D&O for carriers who also write private not-for-profit, and they see that as an opportunity to aggregate premium,” Schalick said. “So the always competitive landscape in the private, not-for-profit market has dramatically increased in the last 18 to 24 months.”

Still, companies of all sizes and types should be concerned about management liability rates in the future. Legal system abuse is resulting in increases in both the amount of litigation and the size of verdicts plaintiffs are receiving.

Certain areas of the country are particularly vulnerable to this type of legal system abuse. As a result, insureds in these localities are likely to be vulnerable to rate increases.

“The environment is so positive for the plaintiff that forces premium increases so carriers are able to stay in that market long term,” Schalick said.

Why a Tenured Carrier Partner Can Help Insureds Navigate An Uncertain Market

It’s clear that insureds are facing an uncertain M&PL market over the next few years. Fortunately, carriers with a long history in the M&PL space will be there to offer stability.

Philadelphia Insurance Companies has been supporting this market for 35 years. PHLY is committed to offering long-term rate stability, even as economic and claims trends start to push premiums upwards. They have an appetite for all sorts of companies, large and small, for-profit and nonprofit alike.

“We’ve been at this game for a long time and are one of the most tenured underwriters in this space,” Schalick said. “We like to stay very consistent.”

PHLY has worked with both for-profit and non-profit on management liability policies. With dedicated M&PL teams throughout the company’s 13 regions, PHLY provides the support agents and brokers are looking for on behalf of their clients. The teams know their regions well and can respond to local trends. They’re also dedicated to making the renewal process as easy as possible for their partners and policyholders.

“We have real confidence in our results, so we focus a lot on making the renewal experience as painless as possible for all agents and insureds,” Schalick said.

The company is also investing in tools to help insureds avoid losses. Earlier this year, they launched a new online risk management platform, PHLYGateway, which offers resources for insureds on how to create an employee handbook and trainings on issues such as recognizing workplace sexual harassment and discrimination.

If insureds have questions, they can consult a Best Practices Help Line, provided via the platform. That way, they can get on the spot risk management guidance to help them prevent claims.

To learn more, visit: https://www.phly.com/mplDivision/managementLiability/default.aspx.

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Philadelphia Insurance Companies. The editorial staff of Risk & Insurance had no role in its preparation.