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  #1  
Old 07-25-2019, 09:53 PM
MC_montecarlo MC_montecarlo is offline
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Default Renewal rights acquisition

What does it mean when one company "acquires the renewal rights" for a portfolio? From the acquiring company's perspective? From the policyholder's perspective? From the agent's perspective?
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Old 07-26-2019, 09:30 AM
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Knowing a policy policy's expiration date is a convenience for marketing; people don't want to change things if it's "all ready paid".

For the acquiring company, this is simply having (or "owning") the list of customers and their corresponding expiration dates for their current policy/policies.

For the policyholder, this only amounts to who exactly is contacting them and sending them a "renewal notice".

Technically, this likely has no impact on *agents* so much as for brokers. Agents typically represent one company. They might be employees of that company, or are independent "contractors" with an agreement to place business with a single company (these are called captive agents, and have freedom to place coverage with another company if their "primary" company doesn't write the coverage in the agent's state).

Brokers are independent contractors, but will cobble together the insurance coverage(s) requested from various companies (or a single company) for a customer. At renewal, the broker might "change" companies for the customer if another insurer has a better rate (or a higher commission for the broker). The customer's advantage is a single stop for their coverage with the broker doing to footwork for the best price.

For the agent/broker, there is the question of "who owns the expiration date" of a book or set of customers. For the agent, it is typically the insurance company; so if the renewal rights are "sold," then the agent either has to set up an agreement with the new company (if they're an independent contractor) or there's zero impact. For the broker, it should be clear what the impact would be.
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Old 07-26-2019, 09:35 AM
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Originally Posted by Vorian Atreides View Post
Agents typically represent one company. They might be employees of that company, or are independent "contractors" with an agreement to place business with a single company (these are called captive agents, and have freedom to place coverage with another company if their "primary" company doesn't write the coverage in the agent's state).

At least with respect to personal lines, are non-captive Independent Agents non-existent now?
It has been a decade or so since I looked into it, but I thought they were still a decent presence in the marketplace.
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Old 07-26-2019, 09:46 AM
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At least with respect to personal lines, are non-captive Independent Agents non-existent now?
It has been a decade or so since I looked into it, but I thought they were still a decent presence in the marketplace.
That is why I had said "typically". I've seen some signage around town for "independent insurance agent" . . . but haven't looked too deeply into their operations.

But I do believe that the one of the key differences between "agent" and "broker" is who owns the renewal rights.

And with the increased availability of "online" and direct binding, non-captive independent agents may not be around for too much longer; except for some niche markets.
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Old 07-26-2019, 10:37 AM
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Quote:
Originally Posted by Whiskey View Post
At least with respect to personal lines, are non-captive Independent Agents non-existent now?
It has been a decade or so since I looked into it, but I thought they were still a decent presence in the marketplace.
Quote:
Originally Posted by Vorian Atreides View Post
That is why I had said "typically". I've seen some signage around town for "independent insurance agent" . . . but haven't looked too deeply into their operations.

But I do believe that the one of the key differences between "agent" and "broker" is who owns the renewal rights.

And with the increased availability of "online" and direct binding, non-captive independent agents may not be around for too much longer; except for some niche markets.
Prevalence may vary by geographical market, but I can confirm that reports of independent agents' death has been greatly exaggerated. The carrier I work for partners with hundreds of them, and from what I hear their numbers are growing. And independent agents definitely own their books, not the carriers. If anything, it's captive agents that may be the dying breed, as carriers are beginning to opt to place business via a combination of direct marketing and independent agents. Nationwide is going through this process right now; their fleet of captive agents are being disowned and given the option to buy the rights to their books and become independent agents.
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Old 07-26-2019, 03:01 PM
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Originally Posted by Whiskey View Post
At least with respect to personal lines, are non-captive Independent Agents non-existent now?
It has been a decade or so since I looked into it, but I thought they were still a decent presence in the marketplace.
Independent agents still have about 30% of the personal lines market.
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Old 07-28-2019, 02:01 PM
jerrytuttle jerrytuttle is offline
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I was under the impression that an independent agent (both words are significant) legally owns the rights to his or her renewals. If independent is changed to captive, or agent is changed to broker, then the rules change.
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Old 07-28-2019, 06:07 PM
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Quote:
Originally Posted by manaknight14 View Post
Prevalence may vary by geographical market, but I can confirm that reports of independent agents' death has been greatly exaggerated. The carrier I work for partners with hundreds of them, and from what I hear their numbers are growing. And independent agents definitely own their books, not the carriers. If anything, it's captive agents that may be the dying breed, as carriers are beginning to opt to place business via a combination of direct marketing and independent agents. Nationwide is going through this process right now; their fleet of captive agents are being disowned and given the option to buy the rights to their books and become independent agents.
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Independent agents still have about 30% of the personal lines market.
Quote:
Originally Posted by jerrytuttle View Post
I was under the impression that an independent agent (both words are significant) legally owns the rights to his or her renewals. If independent is changed to captive, or agent is changed to broker, then the rules change.
Okay, thank you all for responding.

I thought I had entered the bizarro world where the long predicted death of IAs had finally happened.

Very happy that hasn't occurred, as I was felt like they provided a significant service to their customers.
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Pappy Van Winkle-Family Reserve 15yr & lot "B" 12yr
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Blanton's
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Basil Hayden
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Woodford Reserve
Jack Daniel's-Gentleman Jack, Single Barrel & Old #7
Four Roses Small Batch
Noah's Mill
Kirkland Bourbon - 7yr

Rye(6)
Angle Envy's - Finished Rye
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Bulleit
High West - Double Rye
Whistle Pig - 10 yr
Old Overholt

Scotch(4)
Glenfiddich - The Distiller's Edition
Tomatin 12yr
The Dimple Pinch - 15 yr
Dewar's White Label

Irish(6)

Middleton Very Rare
Redbreast 12yr
Bushmill - Single Malt 16 yr
Connemarai
Jameson - Caskmates Stout and Regular
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