However, he noted, the role of the broker is also a balancing act between clients and carriers. The broker, as advocate for the client, must sit down with a carrier to get the best possible deal on price and coverage. By the same token, the agency needs to satisfy insurers, who frown upon those who bring them poorly-performing books of business, so loss control is crucial.

Agents also get caught in the middle of client-insurer disputes, particularly when it comes to claims disagreements. It is the broker's job to try to keep the peace and make sure both sides get some satisfaction–that's what ultimately affects the clients cost of risk, the insurer's loss ratio, and the agency's value to both, he added.

“It is a challenge for agents and brokers in their relations [with clients and insurers] because they have to be able to deal with the parties in such a way that they do not shoot themselves in the foot,” Mr. Davidian remarked. “Both need to be upfront relationships, not an adversarial transaction. A client might be thinking one way; the insurer might be thinking another. We need to take care in our work.”

Such care does not mean acquiescing to the whims of either party, but instead working to be informed about both the clients and carriers businesses so an intelligent case can be made, whether in placing coverage or settling a claim. Then, for the agency, the key is delivering on the products and services promised.

This approach, in the 25 years DW&P has been around, has produced a premium volume of $200 million through six offices throughout Southern California, staffed by 170 employees. While it may be based in California, its reach is international, with clients doing business both nationally and globally.

Five years ago, DW&P put in place an Employee Stock Ownership Plan, which bought out the agency's founding principals. The ESOP “empowered” the management team with new freedom and incentives to refocus its energies, Mr. Davidian revealed.

“We increased our focus on the client,” Mr. Davidian explained, contending that the ESOP freed the team to extend the agency beyond property-casualty insurance services.

Educating clients on the risks facing them and how to improve their exposure profile is one important program at DW&P. Clients and their employees attend the DW&P Employer School, where a day is spent at their location going over such topics as reserving; workplace, legislative and human resource issues; and loss control. They also hold mock trials to help clients better understand how a suit against them could actually play out in the legal system.

Serving as a risk management and human resources consultant rather than merely a peddler of insurance policies, many clients turn to DW&P for advice on liability questions, often related to employee relation issues, before calling their own attorneys.

However, Mr. Davidian stressed, while the agency offers guidance on issues such as how to prepare litigation-proof employee handbooks, they advise clients to review all such moves with their legal department or outside attorney before taking final action.

When handling employee benefits, the agency makes certain that employees have easy access to human resource information by providing it online, so workers can review company policies from their desks or their homes.

The Internet also plays a big part in delivering certificates of insurance more efficiently. Certificate delivery is “no longer a time bandit,” the agency says, with access easily available online, in real time.

As beneficial as technology has proven to be, it has also been a “bittersweet” experience for the agency, Mr. Davidian pointed out. While all agency operations are automated, there have been the “typical problems with the system being down.” The cost of going hi-tech is not something to take for granted, either. “It used to be an item that you passed over in your budget; now the cost for one year gets your attention,” Mr. Davidian observed.

The agency elected not to develop any unique software, but to use proven systems off-the-shelf. There are two full-time information technology people on staff, along with an outside consultant to offer support services. He said the agency learned that it was not worth purchasing “no-name stuff,” and now buys only brand-name technology that can be exchanged and upgraded every three years. The agencys technology strategy is to eventually become paperless.

In terms of its carrier relations, DW&P enjoys “personal relationships” with CEOs and division leaders of major carriers, said Mr. Davidian–a relationship that they have been “invited into.” These include such carriers as AIG, CNA, Chubb, Firemans Fund, Hartford, Kemper, SAFECO and Travelers on the property-casualty side, along with Blue Cross & Blue Shield, and ManuLife, to name a couple, on the life and health side.

Outside of standard carriers, DW&P looks at setting up captives and self-insured programs based on “what the client's drive and needs are,” Mr. Davidian noted.

However, sometimes it is the job of the brokerage to “throw a bucket of water” on a client who shows interest in the alternative markets, he admits, as the risks involved and the investment in money and time are explained. DW&P takes an analytical approach to alternative risk-transfer programs, and does not make decisions on whether to take a client into a self-insured facility “just based on price,” he added.

“The client has to feel there is value to what we propose, like lawyers and CPAs, and not make them think we are car salesmen,” Mr. Davidian remarked.

In the years ahead, said Mr. Davidian, the agency is looking to stay independent, and continue to grow as a “producer-driven organization.”

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, September 23, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.