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Middle-market insurance buyers have a new tool to benchmark the service performance of the nation's largest insurance brokerages.
After unveiling its Carrier Quality Index last October, Greenwich, Conn.-based financial services research firm Greenwich Associates this week will release its Middle-Market Broker Quality Index.
Greenwich interviewed 13,472 insurance buyers whose companies generate between $10 million and $500 million in annual revenues for the index to obtain brokers' middle-market penetration. It then interviewed 1,330 of those buyers whose brokers were among the 100 largest in terms of U.S. business to evaluate the firms on 20 key quality measurements. More than 1,100 of those buyers reported less than $100 million in annual revenues.
The index was done in response to demand from buyers, insurers and brokers that want to know where brokers stand in relation to their peers in service quality, according to Bill Bruno, a Greenwich Associates senior vp and consultant.
"From the insured's perspective, this gives a very valuable benchmark of what their peers think of their service providers," he said.
The middle-market broker quality index benchmarks the 11 largest brokers and groups the remaining smaller regional firms into one "other regional brokers/agents" category.
From the largest broker's group, Greenwich did not identify brokers A, B, C, or D in the index to "protect those that are trying to improve," Mr. Bruno said. Those brokers are Marsh Inc., Aon Corp., Willis Group Holdings Ltd. and Brown & Brown Inc., although not necessarily in that order. The index plots specific brokers' quality scores ranging from 0 to 1,000 against the brokers' market penetration.
For example, the 2007 BQI found that Briarcliff Manor, N.Y.-based USI Holdings Corp. had the highest quality score, but was used by only a 1% of the more than 13,000 buyers polled. Conversely, "other regional brokers/agents" represented the vast majority of middle-market buyers, but they scored behind the middle of the quality score range.
"What we see happening is, as the market is getting more and more sophisticated over the last several yearsÖ(buyers') demands are outstripping the available resources of the regional brokers and agents," Mr. Bruno said. As a result, there is a "tremendous opportunity" for the big national and global brokers to tap into this market, as evidenced by the index, he said.
Respondents said the most important quality measurements were: overall customer service, the ability to provide value through useful and creative advice, the ability to provide customized and tailored solutions, and the ability to provide objective evaluations of underwriters.
For more information on the Broker Quality Index, contact Greenwich Associates at firstname.lastname@example.org.