Managing two broker relationships requires removing potential business conflicts
Posted On: Apr. 29, 2007 12:00 AM CST
Managing two brokers could be challenging for a risk manager, as each broker could suspect the other will try to leverage inside knowledge to grab both shares of the client's business.
Yet Harrah's Entertainment Inc. contracts with Atlanta-based Beecher Carlson Holdings Inc. for casualty placement services and London-based Willis Group Holdings Ltd. for property placement services, and pays fees in excess of $2 million annually for their services.
Lance J. Ewing, the gaming and entertainment company's vp-risk management, said he "believes in the two-broker system" because it provides multiple sets of eyes watching over Harrah's risks.
It also requires the two brokers to learn about each other's operations.
For example, Beecher Carlson manages two of Harrah's captives, including a Bermuda-based facility that supports Harrah's property program. That requires Beecher to learn the details of Harrah's property program placed by Willis, said Bradley Darr, senior client executive for Beecher Carlson in Brentwood, Tenn.
Mr. Ewing manages the two brokers' relationship "probably better than any risk manager I have ever worked with," Mr. Darr said. "If Lance didn't manage the relationship, that could cause problems. Lance takes that conflict completely out."
Harrah's risk manager does so by assuring that the two brokers build personal relationships and understand that their roles are not threatened as long as they provide excellent service.
"Lance makes it very clear that as long we both do our jobs, Willis isn't a threat to us on the casualty (program) and we are not a threat to Willis on the property (account)," Mr. Darr said.
Among other opportunities to pull his brokers together, Mr. Ewing hosts an annual golf outing so they can socialize, discuss the year's insurance programs and market conditions for Harrah's account.
"I'm trying to build a better broker-client relationship where it becomes all about the client and not just all about the fees, or the line of coverage, or the ego," Mr. Ewing said.