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  • Chris Burand

What to do if your favorite carrier is sold to your least favorite carrier

Updated: Aug 25

You walk into your office to read your email and find an over joyous message stating that your very favorite carrier is excited to announce they have "joined" with a carrier you mostly abhor. The "merger" (your carrier was actually bought) is going to give them the capital and ability to do even more magnificent things for you, their awesome agent whom they really respect.

The seller has been your mainstay carrier for twenty years. Their profit sharing is solid. You have personal relationships with their people. You even know their top executives. They have good coverage forms and clients love their claims service.


The buyer is a company you would eliminate if you could. Their profit sharing is minimal, and they are a scourge on claims. Their reputation from past acquisitions is to make a mess of the acquired firm. Their organic growth is negative and their profits are negative, a testament to their inability to manage a company well. In so many ways they are the anti-thesis of your favorite carrier. You grew easily with the acquired company and cannot grow, no matter how hard you try, with the buyer. How or why they even think this merger makes sense given such completely different cultures and success rates is beyond the imagination of rational people (buyers are not always rational -- hence the reason they think the merger will be successful).


Give this scenario or some version of it some thought. Consider your personal favorite carrier being consumed by one of your least favorite carriers. Think past the flowery words and requests to drink their Kool-Aid. Twelve months later, how are you succeeding at making lemonade out of lemons?


The odds are high you will still be complaining and that you will still be bemoaning how a great carrier was ruined. Beyond the emotional toil, what did you do or what are you doing to first, protect your agency, and second, take advantage of the situation? I suggest the following steps:

  1. Compare your pre- and post-merger compensation methodically. Do a full analysis of your commissions, contingencies, perks, and any applicable over-rides. Do not leave it, as most agents do, at the level of, "I just know." Put the analysis in writing. If their merger costs your agency money, you only have leverage if you document precisely how much you have lost due to the merger.

  2. Track your retention rate. You need to document clients who left your agency because the claims service or rates or whatever of the buyer were not acceptable to them.

  3. Do a forms comparison relative to any forms that change. This is important from an E&O perspective. It is important in order for you to do a good job for your clients, especially if the rate stays the same but coverage materially decreases.

  4. Review your new contract(s) carefully, very carefully.

  5. Then, when you have all your data, if the results are not good, cut a deal and roll the book.

If you decide to roll a book in this situation, consider the following steps:

  1. Complete a thorough analysis of the book far before the roll begins. Understand your book from an underwriting perspective, a rating perspective, an overall perspective.

  2. Then choose at least two carriers rather than just one to which you want to roll the book. If you only roll it to one carrier, the retention will be too low unless you can get that carrier to offer a guaranteed rate, underwriting, and coverage match. Some carriers will do this, with limitations.

  3. Be professional but expect anger from the incumbent carrier. This is where all that documentation can be particularly helpful, especially with the carrier employees with whom you have relationships. You can show your decision is a business decision and not a personal one.

  4. Prepare your staff and train your staff on how to handle the rollover process and how to constructively communicate with clients. Some clients will be loyal to that carrier. They will not easily understand the carrier they liked so much is no longer the same carrier. Train your staff to deal with situations like this.

  5. Give yourself about 18 months. Rollovers are problematic if they take more or less time.

If your favorite carrier is bought by a lousy carrier and you do not move business, especially if you complain to your other carriers about what has happened, please understand the message you are sending to all the other carriers: You are telling them loud and clear, you really don't care if they deteriorate their services, their claims, and your compensation. Agents need to walk the talk or shut up.


Most carriers are under intense pressure to cut expenses. In many cases, they are hesitant to do so because they fear blowback from agents. However, if they see other carriers with lower expense ratios do an acquisition, take over a book, degrade services and commissions, and the agents do nothing, they will lose their fear.


I hope you never face this situation, but I expect you will. Around 900 P&C carriers exist and 90 of them write about 90% of all premiums. The bottom 450 carriers are effectively meaningless to the industry. The bottom 700 are really not that important except for a handful of very niched carriers. Consolidation is therefore almost certain. Many of the smaller carriers are run and staffed by the friendliest people with wonderful claims service and agents have very personal relationships with the carriers' staff. Hopefully the buyers will also be staffed by wonderful people and will have the same ethics. Should you count on this being the outcome?

NOTE: The information provided herein is intended for educational and informational purposes only and it represents only the views of the authors. It is not a recommendation that a particular course of action be followed. Burand & Associates, LLC and Chris Burand assume, and will have, no responsibility for liability or damage which may result from the use of any of this information.

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