Over the past couple of weeks, I have been writing about the need for seasoned underwriters. Last week, one of my broker friends called me to ask what about the need for seasoned brokers. I also had someone ask me what a broker really did in the industry. So this column is for the brokers working around the clock right now and those who want to know what a broker really is.

A broker works for the insured, the person purchasing insurance. A broker is responsible for representing the needs of his client to an insurance company including negotiating coverage, terms and conditions.

A broker must also know and understand policy forms of different insurance companies so that he can explain the major advantages and disadvantages to his clients.

Brokers play a key role in keeping the balance between insureds and insurers. In my opinion, a good broker is one who is friend to both the underwriter and the insured.

Speaking from experience when a broker represents his clients professionally and thoroughly, underwriters are more willing to listen to reason. But when a broker presents a sloppy submission to underwriters, underwriters are more inclined to give the broker and client a harder time.

Sloppy submissions immediately raise the red flag for underwriters because they become suspicious about what else the client and broker have neglected if they did not take the time to complete a proper submission. A submission consists of a signed and dated application, description of operations, financials, loss history and any other information requested by the underwriter.

Underwriters become suspicious of sloppiness because it indicates the client lacks a desirable level of professionalism and care.

Often underwriters believe the way in which an underwriting submission is presented is representative of the client's housekeeping within his company.

With the current hard market, the role of the broker has become vital again. During soft markets, clients feel they can get their deals done themselves because underwriters are competing for market share and are more inclined to try to keep their accounts than to lose them. Therefore, clients are able to get more for less and most times without any real tough negotiations. As a result, during soft markets, clients feel the role of the broker is redundant and question why they even have a broker.

However, during a hard market, clients quickly learn that having a skilled broker can make a significant difference to the way their insurance program is structured.

Hard markets separate the skilled brokers from the unskilled brokers very easily. It becomes evident which brokers have good or bad broking skills because it is during this period that really tough negotiations begin to take place.

Smart brokers who have been around the block a few times are more inclined to be able to meet the needs of underwriters as they are able to anticipate what the underwriters' hot buttons are. They are also able to prepare clients for tough underwriting negotiations. Consequently, they are able to allow the whole underwriting process to work more efficiently.

In the July 22, 2002 issue of Business Insurance, Douglas McLeod wrote a column called `Brokers working harder since impact of September 11'.

His article hits the nail on the head with his opening sentence being: "No change in the insurance brokerage landscape has ever come as suddenly and starkly as that of September 11."

He then goes on to say, "The workload for all brokers has increased markedly since September 11, in part because of the myriad claims arising from the attacks but also as a result of the dramatically tighter property/casualty market that followed.

Brokers are spending more time than ever structuring and marketing programmes in the face of coverage restrictions, reduced capacity and skyrocketing rates across a wide range of insurance lines."

The above excerpt from McLeod underscores the need for brokers who have been in the industry long enough to be able to piece together complicated programs for complex clients.

Brokers need to have in their heads a list of underwriters who like certain types of risks, where underwriters want to attach on a program, what limits underwriters are offering, exclusions and other key terms and conditions so they are not wasting their clients' time or underwriters' time.

Many of the brokers in Bermuda are concerned about the shortage of seasoned brokers because they are working very long hours to take care of all of their clients coming to the island as a result of the new capacity. Since September 11, we have seen several new insurance companies open.

That means in addition to the incumbent markets, clients also want to see the new insurance companies on the island. And because Bermuda is a broker driven market with little to no direct underwriting of business unless reinsurance is placed, brokers are the ones responsible for taking clients to the new carriers as well as the incumbent ones.

Not only are brokers faced with the task of getting to know the styles of the new underwriters on the Island, they are also challenged by the state of the market. To say they are being pulled in many directions is an understatement.

There is a need for seasoned brokers because they play an integral role in getting deals done. Good brokers lend invaluable support to both the underwriters and clients. Bad brokers hold up the process and make insurance purchasing not very enjoyable for any of the parties involved.

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Cathy Duffy is a Chartered Property Casualty Underwriter (CPCU) and is now a freelance writer. She is a former executive of Zurich Global Energy and has 15 years experience in the insurance industry. She writes on insurance issues in The Royal Gazette every Monday. Feedback crduffycwbda.bm