Trading with Us
We have positioned Encompass in an area of the market where having people involved in the broking of a risk brings benefit. There are many risks that can be considered non-complex and dealt with via electronic online methods with little involvement of insurance placement specialists and insurers provide an abundance of products that meet these requirements. Whilst we do operate an entirely paperless office and obtain efficiencies through electronic data transfer, Encompass do not provide products that are of an online nature regarding the decision making. We negotiate each and every placement directly with underwriters.
We would prefer to work on a fee basis (as opposed to a split of the commission) as this provides benefits to you and your clients; no conflict of interest where we earn more if the premium should increase, reduced taxes for the Insured and you retain the full commission offered by the Insurer. However, we do recognise that some of our clients prefer our remuneration to be incorporated into the premium as a split of brokerage so please let us know if this is the case and we can accommodate.
We always offer complete transparency when declaring / negotiating our earnings and we will do so on each case at the quotation stage. As at September 2019, we do not receive any contingent commissions or profit shares etc. from any of our Insurer partners, neither do we intend to. We are not undertaking any Underwriting functions for / on behalf of our insurer partners and, to avoid any conflict of interest, we intend to keep it that way. However, we may undertake an administrative function on behalf of insurers in the future, e.g. preparation and issuance of documentation, for which we will be recompensed. We will declare any activities together with any remuneration received for this activity, at the time of quotation. However, please do be assured that it is, in our view, of paramount importance to us that we never create any doubt over our combined mutual interest which is to offer you and your clients the best policy at the best premium that is available to us. The only area where we act in our best interest is when negotiating our fees with you. Please see the the 'MGA' tab for further information about how Encompass interacts with its associated company, MGA Encompass.
Marketing and re-marketing: When you ask us to market a risk on your behalf, if required, we will work with you to present a more detailed, informative analysis and understanding of client exposure to risk and subsequent management of those exposures. We will then ensure that client exposure is appraised against insurer product and appetite prior to marketing to minimise inefficiency and confirm the insurers we intend to approach keeping you advised during the broking process. We take an approach of selecting the most appropriate insurers for the risk available to us and never saturate the Market with presentations.
We work most effectively with Brokers who take pride in preparing good presentations that illustrate that some time has gone into understanding your prospect’s / client’s exposures and provide enough information for all parties to be able to assess risk accurately. We are happy, of course, to help source advice from our contacts in situations where you have clients with unusual requirements, indeed, this is one of the many areas where we can assist.
There are many successful wholesalers who offer 'full market' exercises and/or ask the Market to 'log' risks in an effort to close down competition and there are retail brokers who perceive value in that approach (or have clients who perceive value), but we have taken the deliberate decision to avoid Market auctions as we truly believe that it does not offer meaningful results for your clients. In our opinion, it is also inefficient and costly, especially if such exercises are undertaken at every renewal. Ultimately, these costs are borne by the Insured both in higher fees / premium and opportunity cost. In addition, we have been successful in over-turning competing Broker's previously 'declined' or 'logged' business by presenting more accurate and detailed information coupled with a desire to work with a specific Underwriter so we would also question the effectiveness of these strategies in achieving the intended goal of client retention. Should you find that you are under competition and feel that your client's requirements are best met by their current insurers, we're more than happy to give you our opinion on the incumbent's premium and coverage competitiveness and possibly (with your prior agreement) ask for an opinion from the Market. If this helps you and your client to have confidence in the current proposition, we're happy to help. Perhaps a a little cliché, but we have no desire to compete against you, we value long-lasting partnerships.
No doubt some Brokers will be hesitant at our approach, and that’s fair enough, there are many wholesalers who will happily meet their demands of ‘full Market’ exercises and moving Insurers every year for minimal premium savings – we do not advocate this. We value longer term partnerships between Brokers and Underwriters who really understand their clients’ business and offer understanding and flexibility to provide valued, flexible, risk mitigation and indemnity solutions. This promotes a genuine feeling of partnership with clients, a partnership that strengthens over time. We work best with Brokers, their clients and Underwriters who recognise that pro-active risk management can reduce the number of claims, their quantum and their likelihood which, in turn, reduces premium - arguably one of the most effective retention tools.
So how do we broker your client’s requirements? We set out to be as simple, fair and transparent as possible – it’s what partnerships should be like. Therefore, we expect the same courtesy in return, both from our broker clients and our insurer partners. If we are asked to place a risk on your behalf, in the first instance we will assess whether our insurer partners are likely to be competitive and/or provide a compelling proposition. If we think we could source viable options, we will approach the insurers we feel are most likely to offer the best proposition and obtain indicative terms. If these terms are of interest, where you hold the business, we would like you to approach existing insurers and ask for their ‘best terms’ at this stage (if not already done). This saves Encompass and our Insurer partners incurring costs preparing and presenting full terms only for them to be used as leverage against existing insurers to negotiate lower premiums. Naturally, we understand that this information may not be available on business that you are prospecting. Presuming our sourced option remains competitive, we will present full terms on the basis that you will offer these as one of your recommended options. Both Encompass and our insurer partners appreciate that we will not win every case - for good reasons, an Insured may prefer to remain with their existing insurer- we fully understand and, in fact, support this. However, we do expect that we are only asked to obtain full quotations on cases that have a realistic chance of moving for the right premium and proposition.
We hope that you will recognise that our methodology seeks to reduce our costs so we are able to fee appropriately for each client on a case by case basis as opposed to utilising fees on one case to pay for fruitless expenditure providing bench-marking services for prospects. By containing costs, we are able to offer our clients competitively priced fees (subject to certain minimum fees per case) that reflect our costs for that individual case - the more work we have to do, the more we charge and vice versa - simple and fair.
Encompass operate a simple and efficient structure. Our overheads are low and we have no debt to service. Therefore, we have no need to pursue a strategy of aggregating premium in order to maximise earnings to help pay for high value property leases, expensive management structures, acquisitions and generous shareholder returns etc. choosing to offer choice to our Broker clients over maximising profits seems like a good long-term strategy to us.
Finally, call us old-fashioned, but we think that policy premiums should be paid to Insurers promptly. We operate a strict credit control term with effect from inception - not invoicing (see our TOBA) that enables premiums to be paid promptly and always within Insurers terms of credit. In some instances, we are able to offer premium and fee discounts if the premiums are paid to Insurers prior to inception.
For more information about how we can work together, please contact us to discuss your requirements. In addition, if you disagree with our approach, we would welcome your feedback as, while we like to think that we are not often wrong (!), we are not infallible and no two Broker's requirements are the same, so let us know what you think.