• broking

Your broker software runs the book. What runs the trade?

Ask a broker where a complex placement lives while it’s in progress, and the honest answer is usually a spreadsheet and an inbox. It isn’t the CRM, which tracks the client relationship, or the broker management system, which keeps the policy and accounting records once the deal is done. The part in between, where the broker is actually trading the risk, mostly happens somewhere else.

That’s the part worth paying attention to, and it’s the part of the job technology has done the least for.

Where the broker’s time actually goes

Specialty quotes rarely line up neatly. Ten underwriters come back with different prices, limits, retentions and terms, often with several options each, and the best option isn’t always the cheapest. A client may prefer a certain deductible, or want to stay with an insurer if the price is close.

A carrier worth paying 5% more for in one room is the one everyone avoids in another. That’s broker judgment, and software shouldn’t pretend to replace it.

The problem is how much time goes into everything around that judgment. Submissions get reworked for each market. Quotes come back by email and get keyed into a spreadsheet.

When a market offers a big line but needs it structured differently, the broker has to rebuild the placement and go back to everyone else. Every change means someone updates the sheet and sends it around again.

The mud map test

Our President, Eric Joost, wrote about this process in What a mud map actually looks like. When people say they want to digitise the mud map, we ask if they mean the one at the end of the process or the one in the middle? They almost always say the middle.

A few questions later, it’s usually clear they want a cleaner picture of the spreadsheet the broker filled out afterwards.

That’s reporting, it isn’t trading. And it’s why so much “placement technology” ends up documenting the deal instead of helping to do it.

Don’t make one system do everything

The answer isn’t one platform that does it all. Selling, trading and record keeping are different jobs, and forcing them into one system tends to make each of them worse. What they need is to connect, so what happens in the trade flows into the book without anyone rekeying it.

If you’re evaluating broker software

If you need policies, accounting and compensation handled, a broker management system is the right tool. If you want to improve how your team gets risk placed, ask different questions:

  • Can it work with the data inside submissions and quotes, or does it only store the files?
  • Does it keep up while the placement is moving, as terms, capacity and participants change?
  • Does it connect to markets and to the systems you already run, or create one more place to rekey?

That’s what we’ve built at Artificial. Submissions are structured once and matched to the markets most likely to write them. Underwriters can check a risk against their appetite and portfolio and respond quickly.

When terms or layers change, the update carries through without anyone retyping it. The calls about which carrier and which trade-off stay with the broker, who gets to make them with current information and more time to think.

Your broker management software runs the book. Your placement technology should help you run the trade.

Get in touch to learn more.