Whole sale insurance brokers are people or agencies who are licensed to offer specialized insurance products to retail agents and brokers. It is the purpose of the wholesale insurance broker to provide their expertise to their clients. The term wholesale is usually included to show that the wholesale broker offers services to other brokers and retail agents. The wholesale traders do not therefore deal with clients seeking insurance services. In most cases the specialty insurers only deal with the wholesale brokers. Retail agents and brokers cannot be able to access specialty insurers directly. These professionals also underwrite the hard to place insurance. One type of a wholesale broker is a tenant risk wholesale broker. The function of such of the brokers is also to place both admitted and surplus lines professional liability insurance.
One of the services that a wholesale insurance broker offers to the retail agent is proving expertise for specialized accounts. The brokers also provide the retail agents with their share of commission which comes from the specialty markets. One of the question that arise is the importance of having the wholesale brokers. The biggest need for the wholesale insurance traders is that they provide expertise and helps gain access to a wide range of specialty markets for the professional liability placements.
For the unique and difficult accounts that require placement, it is the work of the wholesale insurance broker to ensure that they are placed. Commercial insurance brokers obtain their specialization by dealing with the specialty markets. It is important to note that the wholesale brokerage operates in the specialty line markets. Admitted insurers and the excess and surplus line insurers (E&S) are the two types of insurers allowed to operate in the specialty line markets. Those who identify themselves as the excess and surplus line category are also known as the non- admitted. One of the crucial aspects of the wholesale insurance brokerage is the surplus line market. This is because it benefits the clients through customization and availability of specialty insurance.
With a wholesale brokerage, the process of placing a business is similar to the process that is applied when placing a business in the standard markets. various procedures are involved in the process. The first process involves submitting an account to the wholesale broker. The account is submitted with appropriate application together with other necessary information. The second stage involves a review of the submitted information by wholesale trader. The wholesale trader then makes an analysis of the risk and tries to identify a potential market. A third step involves presentation of the of the account in each market for consideration and underwriting.Each of the requested underwriter then responds with an acceptance or decline. Once the account has received bids, it is returned to the retail agent who then guides their client.