Rancho Mesa's Alyssa Burley and Director of Surety Matt Gaynor discuss the client/broker/carrier relationship specifically for surety bonds.
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Director/Host: Alyssa Burley
Guest: Matt Gaynor
Producer/Editor: Lauren Stumpf
Music: "Home" by JHS Pedals, “News Room News” by Spence
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Transcript
Alyssa Burley: Hi, this is Alyssa Burley with Rancho Mesa's Media Communications and Client Services Department. Thank you for listening to today's top Rancho Mesa news, brought to you by our Safety and Risk Management Network, StudioOne. Welcome back everyone. My guest is Matt Gaynor, Director of Surety with Rancho Mesa. Today we're going to discuss the client-broker-carrier relationship, specifically for surety bonds. Matt, welcome to the show.
Matt Gaynor: Thanks, Alyssa. Great to be back in the studio.
AB: Well, thanks for joining us. So over the years, I'm sure you've had conversations with potential clients who may not understand Rancho Mesa's role as the broker, and they may not know if we're working for the carrier, the bond company, or them, the contractor. So, what is the relationship between the client, broker, and carrier?
MG: That’s a good question. While we're approved to issue bonds by the 20 + carriers we are appointed with, make no mistake that we work 100 % for our clients. The bond companies understand that is also the case. I recently had a potential new client mention to me that he felt his broker was not working very hard on his behalf to increase his aggregate bond program. During a phone call where the client was providing the broker with a narrative of information to pass along to the bond company, the broker mentioned that he didn't want to push too hard because he had a number of accounts with the bond company and did not want to negatively affect that relationship. The contractor felt the agent was favoring the relationship more than supporting the client.
AB: Wow, okay, so I understand professional relationships are important, but that doesn't seem right. Is that typically how it works?
MG: No, it's not. I agree that relationships with our bond underwriters are very important. You want to do business with companies that will give you an upfront answer on your account submissions and how they can best support your client. But whether a broker has one or ten accounts placed with a particular carrier, you should ethically treat each account individually, working as hard as possible to create the best program for your client. Our industry promotes very high standards. regarding the servicing of our accounts and the state of California requires agents to complete three hours of ethics training every two years. So I'm certain this is covered during that training.
AB: I can't imagine that a carrier would make an underwriting decision solely based on the broker's other accounts if there wasn't any evidence to support the decision. Wouldn't that cause issues?
MG: Yes, it could cause a lot of issues. Looking at this from the carrier view point if the bond company supported an account mainly because a broker placed numerous accounts with that company, yet the underwriting of the account did not meet the bond company requirements, that would open a door for them to accept undue risk of future losses. At some point, one of these accommodation type accounts will fail and cause a loss to the bond company that could have been avoided. Ironically, I worked as a bond underwriter for seven years at the start of my career. While we wanted our broker partners to send us a large number of submissions, the good brokers appreciate when you tell them upfront their submission does not match the underwriting criteria and you are declining the account. So that gives them additional time to submit to a market that might be able to accommodate.
AB: Matt, this is all really good information, so it's safe to say that we work for our client the contract and if you're a contractor and that's not the relationship that you have with your broker maybe reach out to Matt. So if listeners have questions about their bond program what's the best way to get in touch with you?
MG: I can be reached at 619-937-0165 or mgaynor@ranchomesa.com.
AB: Matt thank you for joining me in StudioOne.
MG: I appreciate the time.
AB: This is Alyssa Burley with Rancho Mesa. Thanks for tuning in to our latest episode produced by StudioOne. For more information, visit us at RanchoMesa.com and subscribe to our weekly newsletter.
