Adam Torres and Justin Bose discuss insurance.
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Show Notes:
What should CFO’s be seeing from their brokers to better manage the increase in spend? In this episode, Adam Torres and Justin Bose, Senior Vice President at James P. Bennett & Company, explore the insurance landscape and how to manage expenses.
About James P. Bennett & Company
James P. Bennett & Company is a fourth-generation, owned-and-operated insurance brokerage firm. Since 1932, we have helped North American clients reduce risk and insurance costs and shape corporate culture.
James P Bennett & Company exists to simplify the insurance and risk management processes. Our method allows us to dig deep into our client’s needs and those of their clients. We excel at designing insurance solutions that make clients’ lives better.
Full Unedited Transcript
Hey, I’d like to welcome you to another episode of Mission Matters. My name is Adam Torres, and if you’d like to apply to be a guest in the show, just head on over to mission matters.com and click on BR Guest to apply. All right, today’s guest is Justin Bose and he’s a Senior Vice President over at James P.
Bennett and Company. Justin, welcome to the show Adam. Thanks for having me. All right, Justin. So we got a lot to talk about today. We’ll, we’re gonna talk about how corporations should look and manage increased insurance spend as it relates to benefit and benefits and risk. And I know as, we were talking about in our pre-call just with what happened on the Palisades and everything else, I think insurance is very much on the mind of many and it’s in the news.
So I think it’s very timely to bring you on the show. I guess just to get us kicked off here Justin. Then tell, talk a little bit more about how you got started in the industry. Like where’d all that begin for you? Gosh, I think insurance is one of those industries that nobody plans to get into. Adam.
I started out back right outta college. I met some insurance folks at a career fair and a family member of mine said, don’t go into insurance. And I, didn’t take the advice ended up in the group insurance business and. it’s been an unbelievable industry to get into. Hmm. So since college, so how many years have you been in the business now?
Just over a decade. Wow. Time flies. When you’re dealing with insurance, what’s your favorite part about working with business owners and corporations and entrepreneurs? Like, what’s your favorite part? A lot of ’em that listen to this show, by the way. Yeah, yeah.
No, I, I’m very familiar. The best part is every single corporation or person has insurance. Mm-hmm. So this is not a product or service that some people may or may not have. Everybody has it. And the myriad of different challenges that we get to solve is really exciting. So when I’m working with a manufacturer, the questions and problems and challenges that we are very different from.
A financial services corporation or a technology corporation, so mm-hmm. Although it’s insurance, being able to solve the different challenges for different industry subs it’s very interesting. You know, it’s, it’s cool. It’s. Hmm. I do like to normally work in, especially with somebody who’s been in the industry for a while, a little bit of a pay it forward question.
Because, you know, in the beginning when you first started you said, you know, based off of a friend or whatever you know, mentor, whatever it was that a family member, that’s what you said. I was trying to, I was trying to pull the word out. You said you’re going into insurance. They said don’t do it.
And you went ahead anyway and you found a very fruitful career. And I mean, I was, I had my insurance licenses once upon a time and I was in finance for almost 14 years. So I’m a huge fan and advocate of financial services industry just as a whole. For individuals that are looking to build a great career, work with great people.
I mean, some of the best people I’ve met are in the financial services industry, not the entertainment industry. Strangely enough. No. So my question, I just wanted to make sure I teed it up properly is what would you tell the next group of individuals that are, you know, coming outta college or just getting started, like about why they should consider the industry?
What would you tell them? I’d say the opportunities endless, Adam, the average age of the insurance professional or a licensed insurance professional is over 60. Wow. I had no idea. It’s, it’s grown, obviously. Yeah. So the industry as a whole we have a significant people problem. There’s not enough people.
We are seeing that on the brokerage side as it relates to underwriting. I mean, we have to start underwriting deals, you know, 90 to 120, sometimes 180 days before, just so that we have enough time because the insurance carriers don’t have enough people. To underwrite deals. And I think individuals see that on a claims level.
I mean, I, I know folks for example, who were impacted by the Palisades Fire who haven’t been able to have an insurance discussion yet on how this is going to play out. Wow. So for anyone new coming into this business if you’re looking for a roadmap of how to learn a business, master your craft. The elevation that you’ll see will happen dramatically faster as compared to other industries.
I mean, you can be a VP of underwriting in less than 10 years. Wow. Whether you’re in actuarial or you’re in sales, or you’re in customer service, the industry is looking at all ends from the carrier side to the brokerage side for young people to come in and really take over the knowledge transfer and execute.
In new ways with, what we’re seeing as the industry changes. Hmm. So speaking of the industry and the change why are corporations facing such large insurance renewals? Like, like talk a little bit more about the, now that we’ve talked about where you’ve been, let’s talk about what’s going on in the current landscape.
Yeah. So I’d say there’s two leathers levers that are being pulled on. For every business owner who’s listening to this podcast today, I’m sure you can all No. Your head and agree, your premiums have gone up. Mm-hmm. So as we’re looking at a corporation, right? You’ve got one half of your insurance portfolio, which is your health and benefits, and then you have your other half, which is your commercial lines.
Right? And I think in both cases we’re seeing a consolidation of insurance carriers and insurance brokers. We’re seeing a rise in claims costs, and those two levers, I think are, are some things that people aren’t talking about that it’s fruitful for you to better understand. As it relates to consolidation.
As a business owner, you have an insurance broker, right? You cannot go direct to an insurance carrier. Well, the insurance brokerage landscape is pretty much owned by 10 firms. 96% of all insurance commissions, what you pay, your broker is controlled by the top 100, of which, mm-hmm. The top 10 have 66% of. So what does that mean for you as an employer?
If you’ve got a small to medium sized operation, you’re running at 20, 30, 40, $50 million in annualized revenue, your insurance spend may not be enough. To get the attention that you need to see the best renewal results.
so what do people do? What do people do? Like, how, how do they, I don’t wanna use the word fight back, but how do they, like, how do they manage this? if you’re a business owner, you’re gonna ask for more, right? Mm-hmm. What I see oftentimes is a lot of insurance brokers will do a no bid strategy.
So that’s like, Hey Adam, you got a 20% renewal increase. You know the current carrier, they’re being real nice. We’re gonna drop it to 12%, which is health trend if we don’t market to anyone else. So that’s very easy for an insurance broker to take that renewal and not go through the actual marketing process.
Mm-hmm. So as a business owner, I want to see alternative options. Mm. Hey. This is the first insurance carrier. We’ve been with them for three years or two years. I want to see three other options from three other insurance carriers. I want to see the competition. Mm-hmm. And oftentimes what we’re seeing is that renewal that you would’ve accepted of 12%, we’re seeing down around five or 6%.
Hmm. And so why do you think more people don’t do this? I’m curious. I think it’s, it’s just a lack of understanding of how the brokerage model works. Oh, wow. Okay. We’ve, mm-hmm. We’ve seen so much acquisition. In 2023 alone, there was 789 acquisitions of insurance brokers. Hmm. These mega firms are not growing organically.
They’re go, they’re growing through acquisition, so. As a business owner asking the hard questions of your insurance broker, Hey, do you have time to actually market our coverages? Hmm. Do you have the time to make sure that we are getting the best deal for the best coverages? Mm-hmm. If you’re getting a no, a no bid renewal strategy year over year, that tells me that your broker is not doing their due diligence.
Mm-hmm.
Yeah. that seems like it would make sense. Like you, and especially if you’re doing that consistently, right? Like, like you, you would think you’d shop around, right? And you’d have to, but if that’s not happening, then how would you know? And if you don’t know the broker model. Yeah, I think it all makes sense.
Justin, so I don’t wanna use the wrong word or anything, but I don’t know. Is it complacency? Yeah. No, it’s, it’s not complacency. , it’s a lack of capacity is the better question. And, and because of the acquisition model, the growth model for the, the largest firms we are seeing.
Less people managing larger books of business. Hmm. Going back to what I said about what young people can expect from this industry, we need more bodies and every firm, both on the brokerage side and on the carrier side is struggling with, we don’t have enough people. And due to the growth model of acquisitions, a lot of these large firms don’t necessarily need the current team.
Who’s 60, 62 plus. So we’re seeing the average team size in the brokerage firm in the large firms managing 10, 15, $20 million blocks of business with half the people. They really need to do the due diligence for customers who are not, it’s top down, right? The customers who are, who are worth about $50,000 in commissions are, generally the ones who are looked at last because.
Outta that $20 million book. You know, there may be a publicly traded corporation who spends a million dollars in commissions, you know? Mm-hmm. If I have 24 hours in a day, where am I gonna focus my time? So it’s, it’s really a capacity issue, not a complacency issue. Yeah. Well, Justin, this has been great having you on the show today and learning more about the, the trends that you’re seeing.
That being said, if somebody is listening or watching this and if they wanna follow up and learn more about what you do and connect and maybe get a quote or, or figure some things out with you, with your firm how do they do that? Yeah, so my LinkedIn is, you just look me up. Justin Bose, the website’s.
JJC Bennett Company, Adam, I’ll even give you my cell phone. It. 3 1 0 7, 1 0 2, 4, 4, 2. I think the best thing that people can do is just talk. Mm-hmm. Let’s have a discussion if you’re open to understanding what else is available. That doesn’t mean going to get quotes. That doesn’t mean doing any actual work.
It’s really, you know, are you in a good position? Do you feel like you’re getting the attention and the service that you need to make sure that your programs and your costs are in the best place? So happy to have that discussion with anyone who wants to discuss a little deeper. Awesome. And for everybody listening to this, just so you know, we’ll definitely put the links in the show notes so you can just click on the links and head right on over.
And speaking of the audience, if this is your first time with Mission Matters and you haven’t done it yet, hit that subscribe or follow button. This is a daily show. Each and every day we’re bringing you new content, new ideas, and hopefully new inspiration to help you along the way on your journey as well.
So again, hit that subscribe or follow button. And Justin, thanks again for coming on the show. Hey, thanks Adam. Really appreciate the.