Feeding Brokers At The Expense of Starving Ones

By Bill Rusteberg

In 1982, after nine years of corporate servitude, I left the inner sanctums of a large health insurance company and the comfort of receiving a corporate paycheck every two weeks whether I earned it or not.

It was time to move on to something new and exciting. The independent brokerage world seemed to be a promising opportunity where one earns exactly what their worth, no more and no less.

With what meager savings I had at the time, I opened my employee benefits brokerage firm. I was confident I would be in the Big Bucks faster than a melting raspa in deep South Texas on an August afternoon.

Cold calling is my strength. I like meeting new and interesting people. What better way than to drop in unannounced 8 to 10 time a day. Fear of rejection was not a consideration as I conquered that in my previous life as a door-to-door salesman while attending college (that’s a story for another day!)

Selling is a numbers game. Cold call ten prospects and you will get 4 to bite and one will eventually buy. “Yes, sure, please give us a quote” and off I would go with the information to send to the insurance carrier world for quotes.

I was a NEWBY. None of the insurance carriers knew who I was. “Now, who are you? I’ve never heard of you, do you have an office or do you work out of your home? Do you work with an agency? What can I do for you? was a common reaction.

So I would send in requests for quotes to all the carriers I knew to be in the market. That was back in the day before fax machines and cell phones were invented and no one knew what the internet was.

I eagerly waited for proposals, checking my mailbox every morning for yesterday’s mail. The first response in letter form went something like this: “Thanks for sending us ABC Fence Company for a quotation. Unfortunately we have received a request from another broker. We only honor requests for proposals on a first come , first served basis. Please continue to think of us on future prospects.”

I received similar rejection letters from most of the carriers except a few. I received no proposals on one particular employer group so I visited with the owner and gave him my sad story – “Sir, unfortunately I am not able to get any proposals for you. Apparently there are other brokers vying for your business that got ahead of me. How do their quotes look” I asked.

“Interesting you said that” replied the owner. “We have been inundated with unsolicited offers to help us on our group health plan since you called on us.¬†

It was apparent my proposals were being doled out to favored brokers. “Hey John, we just got a request to quote on ABC Fence Company! You should call on them ASAP

“How on earth am I going to address this” I thought. So I called various carrier reps. I suspected were working against me and confronted them. “I know what you did on ABC Fence Company and I don’t appreciate it! This better not happen ever again” I warned.

That seemed to end the shenanigans for the most part. I began to write business, although the going was slow. But I suspected the practice was still going on and I had to think of something else in order to become a trusted and valued broker among insurance company reps. I wanted to be on the “fed” side of the dinner table, rather than the “starving” side.

So I took a bold decision to invest $4,000 in a week-end retreat on South Padre Island and invited every insurance company rep. I knew. I rented a block of condos and a refurbished minesweeper named the Thunderbird refitted for deep sea fishing.

I called each individually and said “I would like to invite you and your spouse¬† to join me for a deep-sea fishing trip down at South Padre Island. I’m paying for your condo and all expenses, all you have to do is show up on Friday next at 5:00. I didn’t tell any of the reps. that I was inviting others too.

So on the appointed day about 12 reps. and their spouses show up at South Padre Island at a local bar I had selected. Surprise was followed by laughter when all realized what I had done. We had a great time visiting as beer flowed easily and friendships flourished and grew. And the sharing of “War Stories” began.

Over the next two days I listened to the chatter. It was fascinating. They compared notes on brokers they collectively worked with. I learned valuable competitive information about my competitors. One for example was a broker out of Corpus Christi. All the carrier reps. hated him as he was demanding and arrogant. Yet he produced one hell of a lot of business. I learned who his main clients were and took note of that.

I learned that another key broker was wanting to sell his block of business as he was near retirement age. And I learned which brokers put the most business with each of the carrier reps. “John places all his business with Blue Cross, Gary places all his with Humana”, etc.

Was my $4,000 investment worth it? The answer is YES. I started getting calls that went something like this: “Hey Bill, we just got a request to quote on ABC Fence Company! You should call on them ASAP.

And the Big Bucks began to roll in………………….