Why use an independent agency instead of directly engaging an insurer?

Why use an independent agency instead of directly engaging an insurer?

July 18, 2016

model-t-fordHenry Ford said it best; “Any customer can have a car painted any color that he wants so long as it is black.”

There are over 16 different credit insurance companies operating in North America. Even more when we include those offshore. 75% of the insurers do not sell directly, working only through specialty agencies. However 100% of the insurers sell via specialty agencies – including the direct sellers.

What are the differences between insurers?

  • Each covering different customers
  • Each covering different regions
  • Each with a different contract
  • Each with different price
  • Each with different payment terms

Won’t I get a better price by engaging one of these insurers directly?

No. 100% of the programs we handle are less expensive than similar programs directly purchased. 75% of the market is only available through specialty agencies and that controls the costs. Depending on the program the in price can be as much as 50%.

Will I get more customers covered and higher $ amounts approved for our customers?

Yes. This is the meat of why companies should use an independent specialty agency. While there are a number of other differences between insurers, this is the primary factor that determines which insurer a company wants to engage. Insurers can differ in # and amounts of coverage offered for customer coverage by 100%.

Bottom line?

Specialty agencies make sure you get the most credit available for your company’s customers with the most contract flexibility at the best price. Don’t get stuck fitting your company’s business into an individual insurers capabilities. Have insurers ‘win’ your business by demonstrating what they can do to make your Sales, Treasury, Finance, and Accounting succeed and make your business a success.

Why use a specialized credit insurance agency?

Companies sometimes make the mistake of asking their property insurance agency to place their credit.

Why ask a plumber to fix the electricity? Commercial credit is a financial risk. There may be agency exceptions but for most part, specialty credit insurance agencies are managed by financial professionals. In many instances the property insurer only knows 1 or 2 insurers, and often those are the direct sellers. A specialty credit agency has access to all the markets and ensure that executives receive a deep and competitive program. Companies don’t call the property insurer when they need customer finance, and neither should you.

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Dawson Beattie

Dawson Beattie leads CreditEureka as President and founder. He has helped companies navigate international credit markets through nearly 20 years of shifting market conditions. He has helped companies in retailing, mining, technology, life sciences, and agriculture.